Private cash must fund nuclear power | This is Money

Private cash must fund nuclear power This is Money

Robert Lea, Evening Standard27 January 2006
CHANCELLOR Gordon Brown has pulled the plug on any Treasury financial support for the building of new nuclear power stations, City bankers and energy executives will be told today.

WANT TO KNOW MORE?
SWITCH & SAVE: Cut your bills
POLL: Who should pay for nuclear power?
POLL: Who should pay for nuclear power?
OTHER STORIES
House prices could still crash
Banks warned over family debt
Strong end to year for mortgages
Market report: Friday 09.00
Pendragon bids to be car king
THE EDITOR'S CHOICE
TOP STORY: Get £50k - no questions
TOP QUIZ: Take the 'finance exam'
MONEY BLOG: Credit card tips
At a private meeting with around 50 financiers, top lawyers and the power industry, Energy Minister Malcolm Wicks will make clear that, if the Government gives the green light to new nuclear build, the private sector will be made solely responsible for finding the financing.
Speaking ahead of the first formal presentation to the City of the Government's latest Energy Review, Wicks told the Evening Standard in an exclusive interview: 'There will be no writing of cheques by the Treasury in full or in part, if we decide to go down the route of building new nuclear power stations.'
Questioned on whether the review could see the Government prepared to underwrite the bondfinancing of new nuclear build - just as the Treasury supported Network Rail and the Channel Tunnel Rail Link - the minister was unequivocal.
'There will be no endangering of the public finances,' said Wicks. 'We will not be landing the Treasury with a large cheque.'
The decision leaves a big question mark over whether the Department of Trade and Industry can find private sector backing to build what would be the firstever non-state funded constructionof nuclear power stations in the UK.
Ageing nuclear power stations and the decommissioning of environmentally unclean coal-fired plants will, says the DTI, leave the UK with a 20,000-megawatt power black hole within two decades - almost a third of the UK's current capacity, and a shortfall equivalent to the output of up to 15 new major power stations.
Launching the Energy Review earlier this week, Trade and Industry Secretary Alan Johnson made it clear the UK needs to get away from dependence on gas, which by 2020 will see Britain 80% reliant on imports.
Confirming that there have already been informal meetings with a number of international banks and major power companies-such as German nuclear generator E.On, Wicks said: 'There is significant interest in investing [in new nuclear stations].
'There is an investment appetite and significant interest in the investment opportunities. But we are not yet in a place where we have sat down with the big companies and asked. 'Are you willing to build new nuclear?''
Wicks further admitted that the hurdle of credible financing must be cleared before new nuclear can be included when the Energy Review is completed this summer.
Public worries about nuclear waste must also be resolved. The industry's past record of secrecy made it 'easy for demons to be conjured' if the public continues to confuse nuclear weapons issues with the safety of nuclear power.