Britain’s manufacturers gave a strong welcome to the Prime Minister’s announcement today of a full scale energy review, and in particular his decision to grasp the nettle of a public debate on the future of nuclear power.
EEF, the manufacturers organisation recently published it’s own long term energy strategy which called for a balanced use of all available options in order to provide an affordable and secure supply.
Without such a strategy, EEF believes that industry’s competitiveness could be threatened by a more expensive and less secure supply of energy prices and that there will be little chance of meeting the government’s aspiration to reduce carbon emissions by 60% by 2050.
Commenting on the announcement, EEF Director General, Martin Temple said:
“Energy has suffered from a policy vacuum for too long. However, the Prime Minister should be applauded for grasping the nettle of nuclear power and opening a public debate on our future energy supply. Government must now provide a clear lead in putting in place a long term strategy that will provide a competitive, reliable and secure supply of energy which includes investment in a mix of technologies.”
EEF’s proposals contained in its report ‘Sustainable Energy – a long term strategy for the UK’ contained detailed modelling analysis of the various cost of energy sources which showed that:
in a world of low gas and carbon prices, conventional gas is substantially more competitive than any other energy source:
in a high gas and carbon scenario, nuclear power could be the most competitive form of energy supply;
the competitiveness of nuclear power is very sensitive to the rate of return required by those potentially financing the construction of new plants and that the government can have a significant influence on this;
the EU Emissions Trading Scheme is currently too immature to send a strong signal to investors about future carbon prices.
very significant reductions in capital costs would be needed to make wind competitive with other energy sources;
EEF therefore recommends a number of steps for government:
addressing planning, licensing and liabilities issues that will make a substantial difference to the rate of return required by investors in nuclear power;
making a decision on the disposal of radioactive waste
exempting nuclear power from the climate change levy, given that it emits no carbon, which would sent out a powerful signal to potential investors;
replacing the current Renewables Obligation with a zero carbon obligation in 2015 (the earliest feasible date in which a new nuclear plant could be operational with a zero carbon obligation.
Martin Temple added:
“Energy is now right at the top of the agenda and there is no time to lose in putting in place a long-term strategy that will provide a competitive, reliable and secure supply and generate significant reduction in emissions. Failure to do so will mean relying on renewables and energy efficiency which alone are unlikely to deliver on any of these fronts in the medium term.”