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Nuclear power needs price guarantee to develop


THE GOVERNMENT must underwrite risks in the energy market if nuclear power is ever to play a future role in the UK's energy mix, engineers said this week.

'Economically there needs to be some sort of initiative to prompt companies to invest.

They need some sort of guarantee on a minimum price for nuclear generated power, ' ICE energy board chairman David Anderson told NCE.

Anderson's comments came after prime minister Tony Blair told the Labour party conference last week that nuclear power would be included in an energy review (News last week).

'Three years ago the ICE urged the government to hold a consultation in its State of the Nation report. Our concern was that only one page in the 130 page Energy White Paper was given over to nuclear.

'At the time I was quite categorically told that nuclear power was dead, but we said that it couldn't be because of security of supply issues, ' said Anderson. 'Now it seems that the government has caught up with us.' limate change minister Elliot Morley, also speaking at the Labour party conference last week, highlighted a lack of private sector interest in building a new nuclear power fleet.

'People are not knocking on the Department of Trade & Industry's door saying let us build more nuclear power stations, ' he said.

Nuclear experts said this is because there is too much uncertainty in the market.

'The industry needs a guaranteed market, continued high prices, clear government policy and a long term waste storage solution. The government has to remove all of the unknowns, ' explained ICE energy board nuclear expert Stuart Dagnall.

'Financing is a thorny issue, ' added Anderson. 'Finance houses need a guarantee of constant production at a certain rate but there would be issues with how it sits in the existing market.

'Other generators would see it as preferential treatment, ' he explained.

One option for taking risk out of the nuclear market without direct government subsidy could be the introduction of a nuclear obligation. 'This could operate in the same way as the renewables obligation. It would place a requirement on supply companies to take a proportion of new generation from nuclear power, ' said Anderson.

The issue of nuclear waste disposal remains another serious obstacle. The Nuclear Decommissioning Authority has been charged with developing a new waste strategy and is expected to announce a solution sometime next year.

Bernadette Redfern NCE's Nuclear Decommissioning Conference is on 27 October: www. ncenuclear. co. uk

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