Britain announced plans to finance a new generation of nuclear power plants as well as renewable energy facilities, in a move that illustrates the differences in energy policies among European Union countries as the bloc grapples with the challenge of reconciling economic and environmental objectives. Read More

By Stephen Castle in New York Times (22 May 2012):

Britain announced plans Tuesday to finance a new generation of nuclear power plants and renewable energy facilities, in a move that illustrates the differences in energy policies among European Union countries as the bloc 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, says he hopes to reduce his country’s reliance on it, the British government appears to be moving in the opposite direction with its proposals, which are intended to attract $175 billion in investment to build new reactors and renewable energy plants.

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

Britain’s proposals, announced in draft legislation by the Department of Energy and Climate Change, appear to be calculated to sidestep European Union restrictions on government aid that might prevent direct subsidies for the construction of nuclear power plants. Instead, they 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 it could be a tough battle. In March, Britain’s nuclear program suffered a serious setback when two German companies, RWE and E.On, announced they would not proceed with a £15 billion, or roughly $24 billion, joint venture in Gloucester, 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.

To add to the difficulties, the main architect of Britain’s energy policy, Chris Huhne, quit the government in February to fight charges stemming from a speeding offense in 2003.

His successor, Edward Davey, said Tuesday that the 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.

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 to around 50 percent from 75 percent and shutting 24 of the country’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 Npower, RWE’s British operation, said the required investment would amount to around £8,000, about $12,600, for every household in Britain.

“I remain concerned by the amount of change being implemented in the energy sector and the time it is taking,” Mr. Beckers said. “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.”

Source: www.nytimes.com