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Operators to snub nuclear power programme plans

Private firms will refuse to build and operate new nuclear power stations in the UK unless they are offered guaranteed returns, engineers warned this week.

They said that the government's announcement last week that a new generation of nuclear power plants would be built by 2020 lacked credibility because the projects were "incredibly risky".

The government wants private operators to procure them without government subsidy.

"We haven't built a nuclear power station in this country since Sizewell B was started in the mid 1980s," said independent energy consultant professor John Large.

"To attract a consortium to do a PFI-style package to build, operate and decommission over 60 years, they would need a guaranteed price to make returns per unit of electricity and that is a big stumbling block for the government at the moment.

"I can't see anything that would induce a nuclear operator to build probably six stations and put something like £20bn to £30bn at risk without a direct subsidy or guaranteed prices."

Mott MacDonald energy director Simon Harrison added that the European Union's carbon trading scheme, under which energy operators would have to pay for exceeding their carbon quotas, would be key to making investment in "zero-carbon" nuclear power stations more attractive.

"Certainly investors will be looking for strong visibility of carbon pricing," he said.

Harrison claimed that the conventional turn-key fixed price contracts of previous nuclear schemes would be unfeasible after the Olkiluoto Nuclear power station in Finland, built under a fixed price contract by Arriva, had recently gone over-budget.

"A multi contracting arrangement where the client manages the integration and takes overall risk exposure is more likely," he said.

Energy Secretary John Hutton said in a statement last week that sites for new plants would be assessed by next year.

Attention is expected to focus on existing sites in the where demand is most acute including Sizewell, Bradwell and Dungeness.


GOVERNMENT UNDERWRITES DECOMMISSIONING

£10bn - Cost of underground waste repository

The government has taken risk away from those companies engaging in nuclear disposal and decommissioning for new nuclear power stations, the Nuclear Decommissioning Authority claimed this week.

In the small print of the Nuclear White Paper, published last week, the government has agreed to underwrite the costs of decommissioning new generation power stations.

"If the protections we are putting in place through the Energy Bill prove insufficient," says the document, "in extreme circumstances the government may be called upon to meet the costs of ensuring the protection of the public and the environment."

According to an NDA spokesman, this will be an incentive for those wanting the build nuclear power stations as, "this makes the government the decommissioner of last resort".

Building an underground repository to take medium and high level waste is estimated to cost in the region of Ł10bn. It would have to take around 470,000m3 medium and high-level waste from existing and any future nuclear power station.

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