May 22 (Bloomberg) -- Italy will start building a nuclear power plant by 2013, overturning two decades of opposition after rising energy consumption left utilities unable to meet demand with existing energy sources.

Building a new reactor would reverse Italian energy policy after the country abandoned nuclear energy for safety reasons in the 1980s. European countries like the U.K., Finland and France are exploring technologies to produce cleaner and safer power.

``Only nuclear plants allow the production of clean energy, safely, at low cost, on a large scale, without damaging the environment,'' Industry Minister Claudio Scajola said during the annual assembly of industry group Confindustria in Rome. ``By the end of this legislature we will take the first step in construction of a new generation of nuclear plants.''

Utilities and governments from the U.S. to Taiwan are building or planning atomic plants. Power producers may construct as many as 107 reactors by 2020, according to the World Nuclear Association. During the same period, 42 may be shut.

Prime Minister Silvio Berlusconi's government will have a hard time turning political will into reality because of potential opposition from towns where a plant may be located, said Davide Nardi, who helps manage 180 million euros ($283 million) of investments at Antonveneta ABN Amro Bank SpA.

Enel SpA, Italy's biggest utility, is expanding access to nuclear power outside its home country. It owns generators in Slovakia and will build new plants with Electricite de France SA. Enel also wants to take part in any new nuclear projects at home, Chief Executive Officer Fulvio Conti said today.

``If the government is pushing for it, anything is possible,'' Conti said when asked whether the country would accept the return to atomic power.

British Nuclear Plans

An Italian move back to nuclear would be similar to steps the U.K. government is taking to allow more generation from the fuel. British Energy Group Plc, the U.K.'s biggest power producer, is in takeover talks after meeting with more than 10 companies to discuss partnerships for developing new plants.

Power companies want to buy British Energy to build new reactors adjacent to its eight existing stations, after Prime Minister Gordon Brown backed atomic plants to replace older units and meet future energy needs. Enel has said it's not involved in talks with British Energy.

Italy mothballed its nuclear generators in 1987 after the Chernobyl nuclear accident in the Ukraine and is still searching for a permanent storage site for waste from those facilities. Since then the country has switched to rely primarily on oil and natural-gas fired power plants, boosting prices there.

`Way Too Much'

Oil prices rose to a record above $135 a barrel today, more than double the average price for crude in New York in the second quarter last year.

``Nuclear energy is fundamental because companies and citizens pay way too much for power in Italy,'' Luca Cordero di Montezemolo, chairman of Fiat SpA, Italy's largest manufacturer, said today. ``Nuclear energy is the only road possible.''

The new government, which took office last week, will promote renewable energy, ``clean'' coal and nuclear power to diversify fuel sources and encourage geographic diversification, Scajola said. Italy will also introduce ``targeted'' tax cuts on fuels used to transport the country's ``principle goods and services,'' he said.

Companies seeking to build energy infrastructure in Italy like power plants or liquefied natural gas import terminals often face local opposition and lengthy authorization procedures. Berlusconi's government yesterday held its first cabinet meeting in Naples where it is fighting a trash crisis caused in part by local opposition to incinerators and dumps.

``From disposing of the trash in Naples to building a high- speed train in the north, creating new Italian infrastructure isn't easy,'' Antonveneta ABN Amro's Nardi said. ``It will be a problem convincing people to allow construction of a nuclear power plant near their homes.''

Italy aims to streamline the process for approving the construction of energy infrastructure, including natural-gas import plants, which have been blocked by opposition from local governments and environmental groups, Scajola said.

To contact the reporters on this story: Anthony DiPaola in Rome at adipaola@bloomberg.net; Adam L. Freeman in Rome at afreeman5@bloomberg.net

Last Updated: May 22, 2008 12:50 EDT