U.K. Energy Secretary Ed Davey denied that consumers face increases in their power bills to help pay for new nuclear reactors.
“There is no public subsidy for new nuclear,” he told BBC television’s “Sunday Politics” show. “I am determined to make sure we negotiate hard. Because I am really worried about consumer bills, I’m not going to allow the negotiations on nuclear to add to bills.”
The U.K. is aiming to revive the nuclear industry after Germany’s largest utilities scrapped a British project in March, saying the investment would take too long to pay off. Earlier this month, the government announced long-term contracts that give power producers guarantees to help them attract as much as 60 billion pounds ($95 billion) in finance for nuclear plants.
Electricite de France SA, the company furthest along in its plans to build a new nuclear plant in Britain, is unlikely to complete a reactor before 2020, according to Alistair Buchanan, chief executive officer of the U.K. energy markets regulator. EDF has said it will make a final investment decision on its project at Hinkley Point in southwestern England by the end of this year.
“I believe if we can get a deal that involves no public subsidy we could see that project proceeding,” Davey said. “EDF says if we can reach agreement, we’re talking about electricity from that power plant by the end of the decade.”
About half of Britain’s coal-fired plants are scheduled to close by 2016 and all the nation’s nuclear stations are due to shut by 2035. Britain gets about 20 percent of its power from 10 nuclear stations. All except one reactor are owned by EDF and Centrica Plc.
The cost of a new generation of reactors may reach 60 billion pounds if all the proposed plants get built, according to the U.K.’s Nuclear Advanced Manufacturing Research Center.
According to today’s Independent on Sunday newspaper, the government has been told by energy companies that shale-gas technology may do little to solve the energy crisis as reserves are smaller than first thought and could be uneconomical to extract.
“Shale gas is an opportunity but I wouldn’t agree we should go hell-for-leather for it,” Davey said. Without a “strong regulatory framework” there is a risk of “significant environmental damage,” he said.