UK may give Hinkley Point nuclear OK by year-end

Aug 14 (Reuters) - Britain's nuclear regulator said it may resolve all its issues regarding plans for a new nuclear power plant at Hinkley Point C by the end of the year.

The Office of Nuclear Regulation said on Tuesday that two Generic Design Assessment (GDA) issues had been closed. The regulator had raised them earlier this year with French energy companies EDF and Areva with regards to the design of a third-generation nuclear reactor at Hinkley Point Somerset, England.

The issues included concerns about monitoring of irradiation damage to material and evidence that concrete used at the reactor provided adequate shielding to ensure that workers and the public would be protected from radiation.

The regulator said work was ongoing with EDF, Areva and Centrica's joint venture company, NNB Generation Company, on improvements that would increase confidence it would be able to safely operate the new plant.

"If EDF and AREVA sustain these improvements for the significant number of submissions that are still to be delivered, and if they remain responsive to any questions that we raise, then we believe that the programmes that are set out in the revised resolution plans can be achieved," the Office of Nuclear Regulation said.

"In that case, and if we are satisfied by the safety, security and environmental arguments that they put forward, we might be able to close all of the remaining GDA Issues by the end of the year," it added.

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UK - Nuclear more popular than gas

With crunch decisions imminent on the UK's energy and climate change future, a new poll suggests government policy is out of step with public opinion.

Decision time is fast approaching for the UK's big energy and climate change choices, from how the government can keep companies interested in building new nuclear power stations to how quickly subsidies for new renewable technologies should taper down. So it's good to get a reminder of what the British people actually want, courtesy of a YouGov opinion poll, paid for by EDF.

EDF, of course, is the nuclear giant 83% owned by the French state and just about the only serious nuclear power player left in the UK. But most of the questions asked were straight, although there were no questions on cost or energy efficiency. What the polling shows is that while nuclear power has survived a small dip in popularity following the Fukushima disaster, it remains short of an absolute majority. Wind power, in contrast, does.

Those polled were asked "how favourable or unfavourable are your overall opinions or impressions of the following energy sources for producing electricity currently?" In June 2012, 40% were very or mainly favourable about nuclear power, compared to 36% shortly after Fukushima and 43% in 2008. Those expressing very or mainly unfavourable opinions on nuclear made up 27% of the poll in June, down from 34% after the Japanese catastrophe, and almost the same as the 28% in 2008. These results echo previous polls that showed the "Fukushima effect" was far more toxic in boardrooms - with companies such as RWE, E.on and Siemens pulling out of nuclear - than in people's living rooms.

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UPDATE 1-UK talks to nuclear firms about fixed power price

* EDF Energy, Centrica in talks with govt about nuclear contract
* Low-carbon power to compete without intervention in late 2020s
* Govt would not oppose regulator decision to run nuclear longer
* Govt considering option of multiple contract counterparties

By Karolin Schaps


LONDON, May 22 (Reuters) - The UK government has started talks with two nuclear operators about fixing a price for power generated from their proposed new nuclear plant in what is the first indication that industry is preparing for the government's power market reform.
The reform, a draft of which was introduced to Parliament on Tuesday in an important legislative step, proposes to guarantee producers of low-carbon electricity, including nuclear power, a minimum price for sold electricity in a bid to encourage investment in forms of energy that do not emit carbon.
Utilities EDF Energy and Centrica plan to build the country's next new nuclear power plant at Hinkley Point in Somerset and locking in a future electricity price would guarantee the operators long-term returns on a project which costs several billions of pounds to build.
"We are starting negotiations with EDF and Centrica over Hinkley Point C, they have only just started," Secretary of State for Energy and Climate Change Edward Davey told journalists on Tuesday.
The first so-called contracts-for-difference guaranteeing the minimum price will start in 2014, but the ultimate aim is for low-carbon technologies to cost-effectively compete in the market without government intervention by the late 2020s.
The government's incentive plan for new plants was thrown into doubt in March, when E.ON and RWE decided to put their UK nuclear new build joint venture Horizon up for sale.
Britain's electricity market reform will push through new rules to help reduce carbon emissions, ensure demand is met by supply and shelter consumers from extortionate bills.
With around 200 billion pounds of investments needed to decarbonise Britain's energy market and global energy prices estimated to rise, energy bills are certain to increase in future, but the government says its power reform could limit household power bill increases to 100 pounds by 2030, compared with 200 pounds if no changes were made.
POWER SUPPLY SQUEEZE Britain also faces a power supply squeeze by the middle of this decade as around 15 percent of ageing and polluting capacity will shut down and further station closures, including nuclear plants, will increase the supply gap by the early 2020s unless the market offers incentives to build new plants.
Energy Minister Charles Hendry said on Tuesday the government would not oppose a nuclear regulator decision should it rule UK nuclear power plants were safe to run for longer.
The government's price guarantee to low-carbon generators was proposed to be backed up by one central counterparty, but it said on Tuesday it was considering installing several counterparties after requests from industry stakeholders.
On top of guaranteeing low-carbon power generators a price, a minimum cost of carbon will be introduced in April 2013 at 16 pounds per tonne of CO2 to further discourage carbon emissions.
The reform also proposes a mechanism to pay holders of backup capacity, mainly aimed at gas-fired power plants, who can switch on or off power plants at short notice to balance out intermittent renewable energy plants such as wind farms.
An Emissions Performance Standard (EPS) will also set a maximum level of carbon emissions from fossil fuel power plants.
Most electricity market stakeholders welcomed the government's reform, but some expressed concern about the timing and complexity to push through necessary changes.
"I applaud government's appetite for reform, but pulling so many levers at once in such a complex area risks losing sight of your original objectives," said Volker Beckers, CEO of RWE npower, the UK subsidiary of German utility RWE.
Other industry analysts said investors will need much more detail on the technicalities of the reform proposals to make final investment decisions on new power generation capacity.
"The critical challenge over the next 12 months is for the debate on market reform to converge on agreed and workable solutions," said Bill Easton, director of utilities at consultancy Ernst & Young.

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Centrica Threatens To Pull Out Of Nuclear Plant Plan

LONDON –  Centrica PLC (CNA.LN), the only U.K. company in the running to build a new generation of atomic power plants in the U.K., said it could scrap its plans because of uncertainty over the government's energy policy, the Financial Times reported Sunday.

"Nuclear power stations cost GBP6 billion each and we must know what the return is going to be on that kind of investment," a person close to the company told the Financial Times. "If we don't get the right answers, we won't proceed."

The government has enacted reforms to attract investment in low-carbon generation and provide support for nuclear plants, though it has not said how much support it will give, the newspaper reported.

U.K. nuclear plants are crucial for meeting carbon-reducing goals. A spokesman for the Department of Energy and Climate Change would not comment on Centrica.

Centrica spokesman Greg Wood said its position on new nuclear power plants was "unchanged", adding that much needed to be discussed before building the new plant at Hinkley Point.

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