Monday, October 31, 2005

Once it was a dirty word, now it offers the clean answer for energy

Utilities, Utility news, Times Online

By Christine Buckley

JUST OVER 18 months ago the Government launched an energy White Paper extolling the virtues of renewable energy and calling nuclear power “an unattractive option”.
Yet now the future seems distinctly nuclear. Tony Blair said recently that it should be considered and much energy is about to be expended in the Department of Trade and Industry (DTI) to produce a new White Paper that will look very different to the last one.

So why the about-turn? Possibly ministers feel able to tackle the nuclear issue just after a general election rather than just before one. Furthermore, soaring fuel prices have concentrated minds on broader energy issues, which so far have been been left largely to the market.

Power prices have jumped markedly over the past year, pushed by the oil price, and the issue has become one of the main concerns of business. Industry groups believe that higher energy costs in Britain will force business overseas.

Security of power supply is another factor. As North Sea yields dwindle, Britain is importing more power and soon will become a net importer. That has sparked fears that it will become reliant for fuel supplies on less stable parts of the world.

According to critics in business and the unions, security and diversity of power supply is something that the Government has failed to tackle, leading to the allegation that it has no real energy policy.

The Confederation of British Industry, which by its nature prefers light-touch government, greeted the last White Paper — which pinned great hope on industry’s voluntary development of renewable power — with dismay. It said that it was difficult to see any substance in the paper, nor any means by which renewable targets would be achieved.

The last White Paper was not the Government’s first crack at energy. It produced a White Paper in 1998 in response to a crisis in the coal industry, when ten of just over twenty pits were threatened with closure because of supply contract problems. Peter Mandelson, then the Trade and Industry Secretary, blamed the Conservatives for “a policy of drift towards over-dependence on a single fuel source, distorted markets and prices higher than they needed to be”.

Recently the DTI calculated that by 2020, 70 per cent of electricity will be generated by gas and that 90 per cent of that gas will have to be imported.

The acknowledgment of nuclear power is also likely to be a nod to climate change. Britain is committed to carbon dioxide emission reduction targets of 60 per cent by 2050 and many doubt that this can be achieved without a shake-up in the mix of fuels that generate electricity. Nuclear power has the greenhouse virtue of producing virtually no carbon dioxide emissions.

Another factor helping nuclear power is the rehabilitation of British Energy, the nuclear generator whose financial crisis required a government bail-out three years ago. When British Energy nearly went into administration in 2002, it seemed symbolic of nuclear power’s ailing fortunes. If it could not even make money, it seemed there was little to commend it. Now that British Energy is back on its feet and is profitable, nuclear power appears to make business sense.

Nuclear power has been dogged by concerns over safety since it was introduced into Britain in 1954. Safety fears grew when Windscale, now called Sellafield, had a reactor fire in 1957. Pressure against nuclear power grew alongside the peace movements against nuclear weapons in the 1970s and 1980s. The explosion of a reactor at Chernobyl in 1986 still hangs as a spectre over the development of nuclear power, despite undoubted advances in technology and the absence of any major incident for years.

So if the Government does announce a programme for nuclear power by the end of next year, it will be highlighting long-term energy needs and climate change considerations.


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