United Kingdom: Cumbria needs new nuclear power plant - and no more wind turbines

County council leader Eddie Martin demanded action from the government at a special meeting in London.
He believes a replacement for Sellafield would spare the county from being saturated with turbines.

A committed opponent of windfarms, Mr Martin says Cumbria has “more than its fair share” and is not prepared to accept any more.

Mr Martin and the leaders of Allerdale and Copeland councils travelled to Westminster for a meeting with Baroness Verma, junior minister at the Department of Energy and Climate Change, to discuss nuclear power and waste disposal in the county.

He said: “We need nuclear power at Sellafield now, not in five or eight or 10 years’ time.

“If the government were to encourage, persuade and cajole the private sector to build a new power station, we could dispose of all these windfarms.

“A nuclear power station is not as destructive as an avalanche of windfarms.”

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Britain Charts Way to Wider Nuclear Investment

By STEPHEN CASTLE    --   Published: May 22, 2012 

LONDON — Britain announced plans Tuesday to finance a new generation of nuclear power plants and renewable energy facilities in a move that illustrates divergent energy policies within the European Union as it grapples with the challenge of reconciling economic and environmental objectives.  

While Germany intends to phase out nuclear power and France’s new president, François Hollande, aims to reduce his country’s reliance on it, the British government appears to be moving in the opposite direction with its proposals, aimed at luring investment of £110 billion, or $175 billion, to build new reactors and renewable energy plants.

The 27-member European Union sets climate change targets and co-ordinates efforts to reduce energy dependency, but decisions on energy sources remain with national governments.

Britain’s proposals appear to be drafted to sidestep E.U. restrictions on state aid that might prevent direct subsidies for the construction of new nuclear power plants. Instead the plans, announced in draft legislation by the Department of Energy and Climate Change, would guarantee prices for low-carbon electricity and pay producers for backup supplies when renewable sources like wind power fail to meet demand.

Britain hopes that this guaranteed price, to be paid by businesses and consumers, will secure the financial commitment from energy utilities to construct nuclear reactors and clean-power projects needed to meet European targets and reduce Britain’s reliance on natural gas plants.

Recent developments suggest that could be a tough battle. In March, Britain’s nuclear program suffered a serious setback when two German companies, RWE and E.On, announced that they would not proceed with a £15 billion joint venture in Gloucester. The energy giants balked at the huge capital costs involved, blaming the economic crisis and arguing that the German government’s plan to phase out nuclear power had put additional pressure on their balance sheets.

According to British news reports, Centrica has threatened to pull out of a project to build a new nuclear power plant at Hinkley Point in Somerset in a joint venture with EDF Energy, the British subsidiary of the French giant EDF.

To add to the difficulties, the main architect of Britain’s energy policy, Chris Huhne, quit the government in February to fight charges that he perverted the course of justice over a speeding offense in 2003.

His successor, Edward Davey, said Tuesday that new plans were in the national interest and would support as many as 250,000 jobs.

“By reforming the market, we can ensure security of supply for the long-term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonizing the power sector during the 2030s,” Mr. Davey said in a statement.

That formulation hinted at a less ambitious timetable for reducing carbon emissions than that proposed by the British government’s independent advisory body, the Committee on Climate Change.

The proposals have intensified debate over the cost and safety of nuclear power after the Fukushima disaster in Japan and the decisions by Germany and by Switzerland, which is not in the European Union, to phase out nuclear reactors.

During the recent presidential election campaign, Mr. Hollande suggested reducing France’s dependence on nuclear power from around 75 percent to around 50 percent and shutting 24 of France’s 58 reactors by 2025.

Critics attacked Britain’s determination to renew its nuclear capacity. “This proposal has distorted policy in order to try to disguise the massive subsidies nuclear will need, but they remain so huge that the policy will fail anyway,” said Tom Burke, a former environmental campaigner and visiting professor at Imperial and University Colleges, London,

Industry reaction was far from euphoric. In a statement, Volker Beckers, chief executive of RWE Npower, said the investment required would add up to around £8,000 for every household in Britain.

“For Britain to remain an attractive market for investors, energy policy must be given adequate priority and resource across government,” he said.

“I remain concerned by the amount of change being implemented in the energy sector and the time it is taking,” Mr. Beckers added. “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. What the energy sector needs now is simplicity and clarity.”

Nuclear power stations currently produce around a third of the electricity and 15 percent of the energy consumed in the European Union, according to the bloc’s executive, the European Commission.

In Britain, 16 reactors in nine nuclear power stations provided around 16 percent of electricity in 2010. But the government says that all but one of the existing nuclear power stations will have to be shut by 2023.

Within the European Union, there are 147 nuclear power reactors, according to unofficial data collated by European officials. A new unit is under construction in Finland and France, and two each in Romania and Slovakia. A further seven have been approved by the national authorities, with five or six planned but not yet approved.

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Great Britian: Energy bill expected to favour nuclear and gas over renewables

The energy bill is likely to favour fossil-fuel sources like gas, for which power stations can be built quickly and cheaply. Photograph: Chris Ratcliffe/Getty Images

 

A dash for gas, a major fillip for nuclear power and blows to renewable energy – these are widely expected to be the contents of the government's much-anticipated draft energy bill, the main contents of which will be outlined by ministers in the afternoon.
The nuclear industry is expected to be one of the big winners, with a set of policies designed to favour low-carbon power – which will, controversially, include atomic energy as well as renewable sources such as wind and solar.
But renewable companies are concerned that they will lose out, because the current system of subsidies will be replaced with a complex new system of support that could favour big companies over their smaller rivals.
This new system – known as contracts for difference – would allow companies to sign long-term contracts to supply electricity. But the prices on such contracts could be higher or lower than the price of electricity in the wholesale market – the attraction to companies is supposed to be that the long-term nature of the contracts gives them the stability and certainty they need to invest.
However, several renewables companies told the Guardian they thought the contracts would push smaller suppliers out of the market. Dale Vince, founder of Ecotricity, called for an exemption for small suppliers in order to encourage competition in the market.
"This is a complex subsidy mechanism designed to artificially raise the price of electricity and make it more attractive for big companies to build new nuclear plants, but as a result no suppliers will be able to accurately predict the cost or volume of electricity that must be budgeted for at the start of each year," he said.
"The level of risk in getting that prediction wrong will be a big problem for the big six energy companies, so imagine how much the risk is magnified for small energy suppliers. This risk does not exist under the current support mechanism for renewables."
The Department of Energy and Climate Change said its research showed the contracts for difference would provide good value for money for consumers.
Gas will also be a major focus of the new policy. It is seen as a relatively easy option to "keep the lights on" as many of the UK's ageing coal-fired power stations and nuclear reactors are due to be taken out of service by 2020. Renewable energy, such as offshore wind, is not being built fast enough to close the potential "energy gap" between supply and demand.
Gas-fired power stations, by contrast, can be built very quickly – within less than two years on average – and relatively cheaply, so if there is a threat of energy shortages they can be a stopgap, and they produce less carbon than coal.
A new "dash for gas", however, would be fatal to the hopes of building a low-carbon economy in the UK, according to green campaigners, and could leave consumers hooked on an increasingly expensive fossil fuel, with the soaring price rises that could entail. The UK's own supplies of natural gas in the North Sea are being rapidly depleted, making consumers heavily dependent on imports and the price volatility that brings. As any new gas-fired power stations would be expected to carry on operating – and producing CO2 – for at least 25 years, this would also make the UK's climate change targets in the 2020s increasingly hard to meet.
John Sauven, the executive director of Greenpeace UK, said: "This is a looming energy omnishambles. The energy bill could be a huge opportunity to get energy bills and carbon emissions under control, and to bring security to our power supplies. But ministers seem hell-bent on scuppering all of these aims by encouraging a big increase in our dependence on burning expensive gas to generate electricity.
"This would increase the burden on families and businesses, and see money from bills going to countries like Qatar and Norway instead of back into the British economy."
Much of the content of the new policy has already been discussed, but there could still be surprises in the form of some of the details, which have still to be set out, and in the timing. Two years into the coalition, the government has come under fire for failing to tackle energy issues sooner – and any further delays will be greeted with dismay by sections of the industry and investors who have repeatedly said that policy certainty is essential if the hundreds of billions in investment needed to revamp the UK's creaking energy infrastructure are to be flow.
Renewable energy companies believe there is still time for the government to show them more support in its energy plans. Gaynor Hartnell, chief executive of the Renewable Energy Association, said: "The government needs to enrich its understanding of the benefits of renewable energy investment. There is frustration that government leadership is missing in practice … Several countries, from America to Japan to Germany, have realised that taking the long-term view and investing in renewables is a significant step on the route out of economic malaise."
Ed Davey, the secretary of state for energy and climate change, said the reforms were needed in order to bring forward the estimated £110bn that will be needed for new low-carbon energy capacity, and said they could generate as many as 250,000 new jobs. He said: "Leaving the electricity market as it is would not be in the national interest. If we don't secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiralling energy prices and dangerous climate change. These reforms will ensure we can keep the lights on, bills down and the air clean."
Davey said the reforms would reduce the UK's vulnerability to rising global energy prices: "By reforming the market, we can ensure security of supply for the long term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonising the power sector during the 2030s."

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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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Russia looks to nuclear power expansion in UK

Russia’s state-owned nuclear holding company Rosatom is considering building two atomic power stations in the UK through buying a $24 million stake in Horizon project.

­Kommersant daily reports Rosatom has long been interested in the U.K. nuclear industry, but this opportunity came up as two German companies, RWE and EON, said they are willing to sell their share in the project.

The Horizon project involves the building of two nuclear stations in Wales and in Gloucestershire. They are set to replace two old plants due to be decommissioned in 2012 and in 2014.

Rosatom pointed out it is interested in the Horizon project, but the final decision will be made when terms of redemption will be announced, the Kommersant Daily reports. The company also announced a tender for public relations support in order to build confidence in Russia’s nuclear projects abroad.

RWE and EON plan to sell their stake in the Horizon project due cost escalation and a longer than previously expected payback period.

The British Department of Energy and Climate Change (DECC) is going to establish the rate of return on investment in May, which could force the Germans to quit says Kommersant.

Though German energy companies promised to find buyers for Horizon as soon as possible, their decision has already raised concerns about the UK reform of the electricity market that includes building up to 12 new generation reactors. The country is set to cut 12 GW or 13% of its installed coal generating capacity in 2015 and a further 7GW of nuclear capacity by 2020 in order to reduce greenhouse gas emission.

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