Monday, November 28, 2005

New tax may fund nuclear stations - Sunday Times -

New tax may fund nuclear stations - Sunday Times - Times Online

The Sunday Times November 27, 2005

New tax may fund nuclear stations
Jonathan Leake, Science Editor

LEAKED documents reveal proposals by Tony Blair?s chief scientific adviser to put a levy on consumers? power bills to pay for up to 20 new nuclear power plants.
Sir David King has proposed the charge as a way of ensuring that a resurgent nuclear industry ? which has always run at a huge loss ? could get three or four decades of guaranteed profit on new reactors.

The Sunday Times has obtained transcripts of a meeting King held with senior nuclear industry executives at which he said that Britain should aim to get 35% of its future electricity from nuclear generation. ?I would say getting 30%- 35% of our power from nuclear would be probably optimal,? he said.

At present 20% of Britain?s electricity comes from nuclear plants, but the reactors providing it are old and most will be decommissioned by 2015. There is no legal obstacle to prevent power companies building replacements. But the industry?s disastrous financial history and the uncertainty over future electricity prices mean that investors would never take the risk.

King?s charge ? provisionally named the ?security of supply levy? ? would remove that uncertainty by giving nuclear operators a premium on every unit of electricity generated.

The same system applies to electricity generated from renewable sources and is responsible for the rapid and controversial expansion of wind farms. Under the system they can claim nearly three times the market value of the electricity they generate, an extra cost ultimately met by consumers.

?For the nuclear new-build industry to go ahead, they would need some assurance that they would not be faced with short-term competition,? King said.

King, who is one of Blair?s more trusted advisers, suggests that the same system should now be adapted to fund the far greater costs of building a new generation of reactors.

The disclosure comes ahead of an announcement by Blair of a review of Britain?s energy policy. In a speech on Tuesday he will warn that Britain could face serious power shortages over the next 15 years unless additional power stations are built.

It will reinforce concerns that the prime minister has made up his mind that a new generation of nuclear power stations is the best way to secure Britain?s energy supplies and meet targets for reducing carbon emissions.


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