Britain looks a safe haven for nuclear power
By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
LONDON — The UK is starting to look like a safe haven for nuclear power. Britain’s decision to set a floor price for electricity generated from fossil fuels is not an explicit endorsement of new reactors. But it may help tip the balance for companies contemplating investment in new capacity. It’s not obvious that Japan’s disaster has set back Britain’s nuclear ambitions very far.
In the wake of the leak at the Fukushima plant, Western governments have been quick to placate public concerns about nuclear power. At the extreme end of the scale, Germany suspended operations at some ageing reactors. But the UK has been more measured, saying that while there will be lessons from Japan, there should be no rush to judgment.
The UK’s chief nuclear inspector is due to report to the government on those possible lessons in May. But it’s already clear that the UK is keeping a very open mind. The proposal to enforce a minimum price for carbon is designed to push up the cost of electricity from non-renewable sources, thereby encouraging the 110 billion pounds of investment in low-carbon electricity the government says is needed by 2020. While the floor benefits all forms of renewable energy, it makes a particular difference to near-term investment decisions in nuclear.
As alternative energy sources go, nuclear is among the cheapest. But without this kind of market intervention, it would still be uncompetitive when compared to gas. For nuclear operators like France’s EDF, the introduction of the floor price represented an amber light to start construction work on new reactors.
EDF is planning 20 billion pounds of investment in four new-generation nuclear plants in the UK starting in 2013, with the first power coming on stream in 2018. A government white paper on electricity, due by the summer, may provide the green light.
Japan’s nuclear crisis is not yet over. It may not even have passed its nadir. Early fears that it might lead to a huge global rethink of nuclear remain valid. But if the UK is anything to go by, the imperatives of energy security and emissions reduction remain potent forces keeping nuclear ambitions alive.