The failure of the United Nations summit in Copenhagen to produce a firm agreement on climate change has jeopardised plans to build a new generation of nuclear power stations in Britain.
Leading energy industry figures said that the meeting’s failure to help to establish a strong international price for carbon dioxide emissions had undermined the economic rationale for developing the new plants, which emit little carbon but are very expensive to build.
Vincent de Rivaz, chief executive of EDF Energy, the French-owned company that has proposed building four new reactors in Britain, said that there was an “urgent” need for the Government to intervene in support of nuclear investment. It wants a floor price to be set on the carbon credits that companies need to buy to burn fossil fuels.
Mr de Rivaz said: “EDF Energy believes that a UK-specific minimum carbon price would help to deliver the low-carbon investment needed in electricity generation. This is all the more urgent, as it may take time for an international carbon market to develop fully. UK politicians must continue to lead by ensuring that everything possible is done to encourage the transition to a low-carbon economy.”
After the talks broke up with only the bare bones of an agreement, the price of the credits, which European companies need to buy to emit one tonne of carbon dioxide, fell by almost 9 per cent to below €13 (£11.60).
Last month, the International Energy Agency said that the price would have to reach €33 a tonne in 2020 and €73 by 2030 to make lowcarbon technologies, such as nuclear, economically viable.
A spokesman for Centrica, the owner of British Gas and EDF’s partner in the project, agreed that government support would be needed to ensure that the plants were built. “We need some certainty now over future carbon prices ... it may be necessary to underpin them in this country until EU prices catch up with our objectives,” the spokesman said.
EDF and Centrica have proposed building two new nuclear reactors at Hinkley Point in Somerset and Sizewell in Suffolk at an estimated cost of up to €5 billion each — but only if investment conditions are right. The plants are considered crucial to Britain’s energy security as well as its aim of reducing carbon emissions by 80 per cent by 2050.
Richard Lambert, the CBI Director-General, also described the meeting as a missed opportunity. “Business needs a clearer sense of direction if it is to make the enormous investments needed to shift towards a low-carbon economy,” he said.
Steve Holliday, chief executive of National Grid, Britain’s largest utility, said that he was “seriously disappointed ... It is a real shame that the Copenhagen accord did not lead to legally binding agreement or targets.”
The estimated cost of building a new, 1,000MW nuclear power station — enough to supply 750,000 homes — is about £2.7 billion. That is more than four times as expensive as the £600 million required to build a gas-fired power plant of the same size.
The energy industry has said that it can justify investment in new nuclear plants only if the price that operators of conventional fossil-fuel power stations pay to emit CO2 is high enough to make nuclear power competitive. Yet for David Porter, chief executive of the Association of Electricity Producers, the Copenhagen meeting was “no more than half a step forward”. He believed that there was an urgent need for stronger investment signals if the industry is to spend the billions of pounds required to build low-carbon sources of electricity.
Mr Porter said it was inevitable that there would be a “wobble” in investment plans for new UK nuclear plants. “The clarity that our industry needs to make billions of pounds of new investment depended on clear principles emerging from Copenhagen, but the meeting did little to strengthen that.”
The weak deal has left the Government facing a choice of either acting unilaterally to underpin investment in new reactors or running the risk that companies will opt to channel funds into the cheaper, but polluting, gas-fired power stations.
Vincent de Rivaz, chief executive of EDF Energy, the French-owned company that has proposed building four new reactors in Britain, said that there was an “urgent” need for the Government to intervene in support of nuclear investment. It wants a floor price to be set on the carbon credits that companies need to buy to burn fossil fuels.
Mr de Rivaz said: “EDF Energy believes that a UK-specific minimum carbon price would help to deliver the low-carbon investment needed in electricity generation. This is all the more urgent, as it may take time for an international carbon market to develop fully. UK politicians must continue to lead by ensuring that everything possible is done to encourage the transition to a low-carbon economy.”
After the talks broke up with only the bare bones of an agreement, the price of the credits, which European companies need to buy to emit one tonne of carbon dioxide, fell by almost 9 per cent to below €13 (£11.60).
Last month, the International Energy Agency said that the price would have to reach €33 a tonne in 2020 and €73 by 2030 to make lowcarbon technologies, such as nuclear, economically viable.
A spokesman for Centrica, the owner of British Gas and EDF’s partner in the project, agreed that government support would be needed to ensure that the plants were built. “We need some certainty now over future carbon prices ... it may be necessary to underpin them in this country until EU prices catch up with our objectives,” the spokesman said.
EDF and Centrica have proposed building two new nuclear reactors at Hinkley Point in Somerset and Sizewell in Suffolk at an estimated cost of up to €5 billion each — but only if investment conditions are right. The plants are considered crucial to Britain’s energy security as well as its aim of reducing carbon emissions by 80 per cent by 2050.
Richard Lambert, the CBI Director-General, also described the meeting as a missed opportunity. “Business needs a clearer sense of direction if it is to make the enormous investments needed to shift towards a low-carbon economy,” he said.
Steve Holliday, chief executive of National Grid, Britain’s largest utility, said that he was “seriously disappointed ... It is a real shame that the Copenhagen accord did not lead to legally binding agreement or targets.”
The estimated cost of building a new, 1,000MW nuclear power station — enough to supply 750,000 homes — is about £2.7 billion. That is more than four times as expensive as the £600 million required to build a gas-fired power plant of the same size.
The energy industry has said that it can justify investment in new nuclear plants only if the price that operators of conventional fossil-fuel power stations pay to emit CO2 is high enough to make nuclear power competitive. Yet for David Porter, chief executive of the Association of Electricity Producers, the Copenhagen meeting was “no more than half a step forward”. He believed that there was an urgent need for stronger investment signals if the industry is to spend the billions of pounds required to build low-carbon sources of electricity.
Mr Porter said it was inevitable that there would be a “wobble” in investment plans for new UK nuclear plants. “The clarity that our industry needs to make billions of pounds of new investment depended on clear principles emerging from Copenhagen, but the meeting did little to strengthen that.”
The weak deal has left the Government facing a choice of either acting unilaterally to underpin investment in new reactors or running the risk that companies will opt to channel funds into the cheaper, but polluting, gas-fired power stations.
Source: The Times
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