POLICY DECISIONS following the energy review should not be based on whether the government wants nuclear new builds but on how far carbon emitters should be punished, a select committee heard this week.
Keith Palmer, vice chairman of merchant bank NM Rothschild, said low carbon generation should be encouraged, not through government subsidies but through penalisation those who use fuels that emit more CO 2. He told the Trade & Industry select committee that it should be left to the market to decide how to deliver the country's energy.
The UK is unique in that it forces the risk of cost and performance onto the private sector.
This then drives investment into the technology with the best return.
Palmer said this makes the price of gas fundamental to any new nuclear effort as gas will be its greatest competitor.
This puts a major dampener on investment in nuclear power stations that will have a design life of 40 years, because 'gas price can not be predicted 40 days in advance let alone 40 years, ' he added.