The government gave the go-ahead for a new generation of nuclear power stations on Thursday. Understandably not every one is happy about the decision.
John Hutton – environment minister – said atomic power was needed to reduce carbon and the growing reliance on energy imports and insisted that private companies building new reactors would have to pay for the entire cost while "meeting the full costs of decommissioning and their full share of waste management costs"
A campaign by led by French power company, EDF, appears to have persuaded the government to offer an attractive financial framework which would make nuclear generated electricity cost-effective compared to coal and gas generated power
Coal and gas power stations emit relatively large quantities of CO2 for which they will need costly permits while atomic power is virtually carbon free.
The government could ultimately pay for all decommissioning of new plants and waste disposal or cap the price private firms will have to pay for dismantling reactors at the end of their life. The current bill for dismantling existing plants is estimated at over £70bn with an additional £20bn for the disposal of waste.
The cap will reduce private sector risk and make it cheaper and easier for companies to borrow to fund construction.
The Government wants to further back the industry by declining to put any artificial cap on the amount of nuclear energy provided to the grid. The Government has won support from the Conservatives ensuring investors can be confident the political climate will remain supportive of nuclear power in the long term. Greens and Lib Dems are opposed to any expansion of nuclear power.
Previously the Tories have only backed nuclear power as a last resort, but Alan Duncan, the shadow business secretary, said: "Our position is, by and large, similar to the government's. If business wants to invest on that basis, it should be free to do so, and it should know that the investment climate will remain stable under any Conservative government."
Companies with vested interests in nuclear energy including EDF, Eon, and Centrica, all gave an enthusiastic welcome to the move saying it was a vital step towards a new generation of facilities. Vincent de Rivaz, chief executive of EDF in Britain, said: "EDF will now step up its plans to take part in building a series of four new nuclear new plants in the UK, using European pressurised water reactor technology, with the first one completed by the end of 2017."
The New Economics Foundation accused the government of "fixing the market". Its policy director Andrew Simms said: "Nuclear power will not survive on its own in the market place. The government will have to use voodoo economics to underwrite capacity.The only beneficiaries are the big energy companies.".
Other hidden subsidies not included in the white paper could be the cost of adapting transmission lines from any new plants which are expected to be considerably larger than existing plants. Security and transporting waste fuel which can run into millions of pounds a year would also come from the public purse.
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Hutton, John MP