Key planks of the UK energy strategy are the development of new nuclear reactors, a push for more renewables and clean coal, in particular the development of a commercial-scale carbon capture and storage demonstration project for a coal-fired power station.
The government is not itself proposing to build nuclear power stations but has reached the preliminary view that private sector energy companies should have the option of investing in new nuclear stations and believes “it is likely that energy companies will come forward with proposals for new nuclear power stations.”
A key factor in government thinking is the conclusion that not allowing energy companies the option of investing in new nuclear would increase the risks of not achieving long-term climate change and energy security goals or of reaching the targets “at higher costs.”
Based on a conservative analysis of the economics of nuclear power, the government believes that such stations would yield economic benefits to the UK in terms of reduced carbon emissions and security of supply benefits under likely scenarios for gas and carbon prices. Under central gas and nuclear cases, and with a future carbon price of €36/tCO2, the net present value over 40 years of adding 10 GW of nuclear capacity would be of the order of £15 billion ($30 billion) the government says. Nuclear power also becomes the cheapest generation technology by around 2023.
Conversely, according to government economic modelling, in the period from 2020-2030, not allowing investment in new nuclear power stations would increase the risk to security of energy supplies because between 2-4GW less new capacity will be built and would put upward pressure on wholesale electricity prices. At the same time, UK carbon emissions in the period between 2020-2030 could be around 4MtC higher, on average, than if nuclear was included.
However, particular concerns that have been raised with regard to reprocessing of spent nuclear fuel have led the government to conclude that any nuclear power stations that might be built in the UK should proceed on the basis that spent fuel will not be reprocessed and that accordingly waste management plans and financing should proceed on this basis. Instead, spent fuel would be held in interim storage before transport to a long-term geological repository.
Despite the apparent government endorsement of new nuclear the issue is the subject of a consultation which was launched simultaneously. The closing date for submissions is 10 October.
The DTI has also published a new report setting out possible siting decisions for new nuclear developments. 'Siting New Nuclear Power Stations - Availability and Options for Government' by Jackson Consulting concludes that existing nuclear sites would be the most appropriate for new developments, followed by sites on which existing large scale, conventional generators are currently installed such as Didcot. Several existing nuclear sites in the South of England appear to be strong candidates as potential locations for new nuclear build funded by the private sector with the top four the British Energy-owned sites Hinkley, Sizewell, Bradwell and Dungeness.
With the low carbon strategy set out in the White Paper the government also unveiled a number of measures designed to support more renewable generation.
Key among these are proposals for legislation to band the Renewables Obligation support mechanism to benefit wave, tidal and other “emerging technologies” which will receive two ROCs per MWh, double the current level. The government will also raise RO levels to up to 20% on a “guaranteed headroom” basis to keep it ahead of the actual levels of renewable generation. The White Paper also includes measures designed to improve grid connection for renewables projects, along with a consideration to reform the rules relating to grid access in order to improve the opportunities for more renewable projects to connect earlier.
The government also intends to publish a “statement of need for renewables” supporting planning applications for proposed renewable developments that may not directly benefit the local community but yield significant benefits to society and the wider economy.
The government will work to ensure there is a market price for carbon into the long-term by strengthening the EU Emissions Trading Scheme (EU ETS) and setting out plan to triple the amount of electricity we get from renewables by 2015.
Along with the push for renewables and new nuclear the government recognises that fossil fuels will remain the dominant energy resource for the foreseeable future and both its abundance and security of supply benefits appear to have ensured a significant role for coal in the future energy mix of the country.
In order to address the environmental concerns the government strategy focuses on improving the efficiency of coal-fired stations, co-firing coal with biomass and developing carbon capture and storage (CCS) technologies.
While the White Paper does admit that “it is likely that CCS would not be commercially viable unless costs fell substantially” the government is launching a competition for a 300 MW CCS demonstration project in November this year which should see a project operational by 2011-14.
The government is also “actively pursuing recognition of CCS in Phase II of the EU Emissions Trading Scheme and full inclusion within the scheme beyond 2012.”
In a related move, the government also launched a planning White Paper, titled ‘Planning for a Sustainable Future’. The document sets out radical changes to the planning system to enable timely, efficient and predictable decisions on key national infrastructure. The government plans to introduce the necessary legislation as soon as possible with the aim of introducing a reformed system in 2009. The proposals include three key elements in which ministers set a clear national case for important energy infrastructure; a streamlined and efficient decision making process which allows decisions to be taken by an independent body; and a new obligation on developers to consult before they submit applications.
"With a third of our power stations needing replacing by 2020 these new proposals will help industry make the investments that the country needs," said Darling.
Commenting on the White Paper, Richard Lambert, director-general of the Confederation of British Industry (CBI) said: “Only a combination of nuclear and renewable sources, alongside more efficient gas, coal and oil generation, can deliver the reliable energy supply we need whilst tackling carbon emissions. With a third of UK power plants due to be replaced by 2025, time is against us if we are to avoid power shortages.”
The Energy White Paper is available on the DTI website at
http://www.dti.gov.uk/energy/whitepaper/page39534.html while the full nuclear consultation document may be found at:
http://www.dti.gov.uk/energy/whitepaper/consultations/nuclearpower2007
The deadline for responses is 10 October 2007.
The 'Planning for a Sustainable Future' White Paper can be found at http://www.communities.gov.uk/index.asp?id=1510503
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