Nuclear Must More Than Double In UK Energy Mix

The U.K. needs to more than double the amount of electricity generated by nuclear power in addition to boosting renewables, energy efficiency and gas storage to guarantee energy security, an independent report commissioned by Prime Minister Gordon Brown said Wednesday.

Nuclear power should provide between 35% to 40% of the U.K.’s electricity after 2030 from around 15% now to prevent the U.K. from becoming overly dependent on imported natural gas as its North Sea gas production declines, said Malcolm Wicks, the Prime Minister’s special representative on international energy, who authored the report. The U.K. is currently aiming to get around 30% of its electricity from renewable energy by 2020.
“The new generation of nuclear reactors will more or less replace where we are now. Is that enough? My own judgement is that when you add the national security dimension to where we are scientifically about climate change the answer is that we should be more ambitious about nuclear in the future,” Wicks told a news conference.

However, companies say the government will need to find a mechanism to support the construction of new nuclear plants if the carbon price continues to remain too low to encourage investment on its own.

“The U.K. will need more nuclear generating capacity, however we will need to see the carbon price improve very sharply in order to make this economic,” said a spokesman for U.K. utility Centrica PLC (CNA.LN), which recently acquired a 20% stake in Electricite de France SA’s (EDF.FR) U.K. nuclear unit British Energy.

European utilities EDF, E.ON AG and RWE AG are planning to build around 12 gigawatts of new nuclear capacity in the U.K. with the first reactor scheduled to start operation by the end of 2017.

But this won’t add much additional generating capacity as all but one of the U.K.’s current nuclear fleet will be closed by 2023 along with a significant chunk of the country’s coal-fired power stations by 2016 to comply with E.U. environmental directives.

And with declining gas production in the U.K. sector of the North Sea, the country is becoming more dependent on imports from countries such as Russia, Algeria and Nigeria. By 2020, it’s forecast the U.K. could be importing up to 80% of its gas needs.

And although wholesale gas prices are weaker now due to the economic downturn, demand for fossil fuels and prices are expected to rise as the recession eases. That could pose a problem as most of the new electricity generating capacity being built in the U.K. is gas-fired.

Wall Street Journal, through Google News