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Renewables Indus Seen Untouched By Govt's Nuclear Pwr Push

Renewables Indus Seen Untouched By Govts Nuclear Pwr Push
Παρ, 11 Ιανουαρίου 2008 - 02:44
The U.K. government's widely anticipated decision Thursday to back a new generation of nuclear power plants is unlikely to derail investment in the country's burgeoning renewables sector as atomic projects will still have to compete on cost and return, industry officials said this week.
The U.K. government's widely anticipated decision Thursday to back a new generation of nuclear power plants is unlikely to derail investment in the country's burgeoning renewables sector as atomic projects will still have to compete on cost and return, industry officials said this week.

The energy gap in the next 10 years, fears over security of supply and government subsidies in renewables will also keep the sector robust.

The U.K., already one of the world leaders in wind power, is pushing an ambitious plan to get 20% of its electricity from wind power by 2020 from around 1.5% now. It is also home to world class research projects in tidal and wave power.

Environmentalists and opposition politicians have expressed concerns that some of these projects could fall by the wayside as money pours into the nuclear sector, leaving little left for alternative forms of energy.

However, Rob Cormie, head of energy and natural resources at KPMG Corporate Finance, said companies would still want to maintain a diverse portfolio even with nuclear power now firmly on the table.

"Whilst there will be an element of competition, I don't think it's going to crowd out renewables," Cormie said. "Investors will still put their money into renewables because they make money out of it," he added.

Cormie cited last week's purchase by U.K. utility Scottish & Southern PLC (SSE.LN) of Dublin-based wind power company Airtricity Holdings Ltd. for $1.59 billion as an indication that investors were still keen on the sector despite the prospect of government-backed nuclear power.

Earlier Thursday, the U.K.'s Business, Enterprise and Regulatory Reform Minister John Hutton told parliament that nuclear power has a role to play in Britain's future energy mix as a low carbon and affordable source of power.

"The government believes...it should take active steps to open up the way to the construction of new nuclear power stations...I therefore invite energy companies to bring forward plans to build and operate new nuclear power stations," Hutton said.

Although there's been nothing stopping companies from building new nuclear power stations for the past few decades, cheap gas, and weak electricity prices in the 1990s deterred companies from building any new nuclear plants.

However, power prices in the U.K. are higher now and are expected to stay strong as North Sea oil and gas runs out and $100 oil pushes up the price of imported gas. The U.K. is also worried about relying too heavily on gas imported from suppliers such as Russia and wants to diversify its source of energy supplies.

The U.K. government hopes to smooth the path for new investment in the nuclear sector by also introducing a planning bill that will help fast track big infrastructure projects such as nuclear builds. The government aims to have many of these new nuclear power stations coming online from 2017.

However, until the new power plants come online, the U.K. will have a big energy gap starting in the next 10 years as most of the country's current fleet of nuclear stations and many coal-fired power stations are due to be retired.

"Nuclear may well have a part to play in the U.K.'s long-term energy supply mix, but we're facing a significant energy gap in the next 10 years when 20 gigawatts of production will be retired," said Charles Anglin of the British Wind Energy Association.

This is when renewables, especially wind power, will step in, Anglin said.

"So long as there's a level playing field we're quite confident that renewables can compete with other energy sources," he added.

Companies such as RWE and EDF Energy that invest in both nuclear and renewables don't see a problem with both attracting finance.

"It's as much about diversity of supply and we're convinced of the need for diverse energy resources," said EDF Energy's Jonathan Levy. EDF Energy plans to build four nuclear power plants in Britain and also invests heavily in U.K. wind power.

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