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  • 14 July 2006

Energy firms will reject nuclear, say Sussex experts


Experts at the University of Sussex Energy Group have criticised government plans, announced on 11 July, for a new generation of nuclear power stations. They argue that energy firms will not invest in new nuclear plants without further government intervention.

Dr Jim Watson, Senior Fellow in the Sussex Energy Group, said: "Liberalisation of the UK's electricity market over the past 15 years has encouraged firms to go for the cheapest forms of power generation. This has meant large-scale investment in gas but also increasingly in wind power. Although gas prices have risen recently, these technologies are well known and energy companies are familiar with their risks.

"By contrast, nuclear investment is subject to greater financial risks because the reactor designs now being offered are new. There are signs from experience elsewhere that this is already causing problems. A reactor being built in Finland is already a year behind schedule."

In delivering the government's energy review, The Energy Challenge, Trade and Industry Secretary Alistair Darling said it would be for the private sector to initiate, fund, construct and operate nuclear plants and cover the cost of decommissioning and dealing with nuclear waste.

The Sussex experts point out that the huge up-front capital investment for nuclear power stations is unlikely to be forthcoming unless investors are given price guarantees for the energy they produce. In addition, there are still unresolved problems with decommissioning power stations at the end of their life and dealing with the waste.

Dr Alister Scott said: "We are in danger of repeating history. At the end of the 1980s, Margaret Thatcher - widely thought to be a 'strong' Prime Minister - ordered a new generation of ten new nuclear power stations. In the end she got just one - Sizewell B. We expect that this may be about to happen again. This will divert vital political and financial resources away from measures that can be taken more quickly, such as energy saving and renewable energy."

These perspectives have been confirmed by city experts since the launch of the energy review. One senior investment banker said that he would be "amazed" if any bank would be prepared to finance a new nuclear power station. At the same time, the companies that the government assumes will be willing to build the new nuclear stations are remaining cagey.

Notes for editors

  • The Sussex Energy Group is one of the world's largest independent research groups on energy policy, with around 20 researchers. It has core funding from the government-funded Economic and Social Research Council (ESRC)
  • Sussex Energy Group contacts: Dr Jim Watson, tel: 07866 724777, Dr Alister Scott (press co-ordinator), tel: 01273 877555
  • University of Sussex press contacts: Jacqui Bealing or Alison Field, tel: 01273 678888, email: press@sussex.ac.uk

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