UK: nuclear future remains in doubt

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2 December 2011, Nuclear, Solar, Wind

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Datamonitor believes there is significant doubt concerning the construction of all eight proposed new power stations in the UK. This is despite the July 2011 UK government White Paper highlighting nuclear as a crucial component of the country's electricity mix. Some nuclear new builds will have to go ahead, as around a quarter of the UK's existing plants will need replacing by 2020. Somewhat reassuringly, the Infrastructure Planning Commission recently passed EDF's Hinkley Point C plant through the first stage of approvals.

However, RWE and E.ON have questioned becoming involved in UK nuclear, as the costs of the pair's Horizon Nuclear power joint venture are estimated to total GBP1m a week. Earlier in the year, EDF said that it would issue an "adjusted timetable" for the construction of its EPR reactor in the UK, referring to the Hinkley plant. In September, Scottish and Southern Energy ditched its nuclear plans in favor of gas, wind, and biomass, a move that implied the business case for UK nuclear is relatively weak. Siemens also withdrew from the nuclear industry, more for political than economic reasons. These moves paint a negative picture of the future of UK nuclear.

Furthermore, the findings of a recent Ofgem study could, if implemented, slash the cost of feeding renewables into the Scottish grid by 80% by sharing the costs equally around the UK, thereby undermining the case for nuclear new builds. The conclusions to the report will be published by the end of 2011. In addition, the case for nuclear has been damaged by the House of Lords Science and Technology Committee's conclusion that the UK government does not have a credible plan to deliver a nuclear future.

In a recent BBC poll only 37% of British people supported the building of new reactors, which implies that there is much work to be done to sell nuclear expansion to the public. Memories of the Fukushima disaster of March 2011 remain vivid, and have clearly had a major impact on public opinion.

In view of these factors, it would be unsurprising to hear an announcement that one or more of the eight new nuclear power stations will not go ahead in future years.

Source: Datamonitor

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