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Costs: that’s what might kill off Britain’s nuclear power industry

Nuclear power risk http://main.omanobserver.om/node/127641 , 13 November 2012 By John McGarrity – Britain’s nuclear power generation future may be at risk as the list of potential operators shrinks due to concerns about the high costs of entry.

The British government wants to build around 10 nuclear power stations by 2025, which it says are necessary to keep the lights on in future decades, reduce dependence on foreign gas and meet tougher carbon targets.

But persuading potential operators to invest in nuclear generation could involve guaranteeing minimum power prices far above what cash-strapped government departments and households would be willing to pay, analysts said.

“The rewards from nuclear are likely to be far below what companies would require to justify this level of investment. The risks are enormous,” said Tom Burke, a consultant with environment and energy advisory E3G and former adviser to the government on energy policy.
The Emirates Nuclear Energy Corporation (ENEC) is in talks with Japanese conglomerate Hitachi about taking a share of the Horizon nuclear project, which last week was sold by EON and RWE after the German utilities cited unacceptably high costs of building new plants.
Hitachi last week has started considering which other potential operators it could approach for the Horizon nuclear plants, a company spokeswoman said. Analysts say that ENEC would not be an optimal partner since it so far has no experience in operating a nuclear plant itself. The first of its Korean-built reactors is expected to come online in 2017.

Sweden’s Vattenfall, which runs reactors in Germany and Sweden,
previously stated its interest in UK nuclear operations, but the
company told Reuters it had no plans of investing in the Horizon
project.
“Vattenfall has no plans for nuclear power operations in the UK. Our
activities there focus on renewable energy (offshore and onshore wind)
and R&D (wave power),” a Vattenfall spokesman said. Exelon, the
largest US nuclear operator, also said it was not interested in the UK
nuclear market.
Analysts say the cost of market entry for new nuclear power plants is around 140 pounds per megawatt-hour, which is comparable to offshore wind power parks.

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November 15, 2012 - Posted by | business and costs, UK

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