nuclear power

Jim Pickard

How badly do ministers want a new era of nuclear power in the UK? At the moment it is not clear – but they will soon have to show their hand.

Negotiations have been going on for months with French power giant EDF Energy to agree a fixed “strike price” for its electricity. This complex “CFD” (contract for difference) is being set in the current energy bill and will be open to all generators of low-carbon energy.

But EDF is now in talks with the Treasury to receive further support, as we revealed on the front of today’s FT. The talks are still at a very early stage but are very much live.

The company is asking the government to underwrite some of the project’s financing, which could make it more attractive to third-party investors such as pension funds or Chinese state-owned nuclear companies. (EDF has been in talks with two such groups since Read more >>

Jim Pickard

The BBC is reporting today that Lord (Chris) Smith, chair of the Environment Agency, has come out in favour of fracking – the controversial method for extracting gas from shale. In reality his words are not a clearcut endorsement for the practice.

The Beeb points out that Smith said on the Today programme that he only backed fracking if it was accompanied by successful carbon capture & storage, which so far only exists in pilot form.

In fact his concerns are wider. In his speech tonight at the RSA he will say that fracking “potentially ticks the box on energy security, on availability and on cost“.

But he adds: “Does it tick the box on environment? The answer is complex, and is something like ‘up to a point’.” If Britain locks itself into a new generation of gas, “with all the carbon consequences“, it would be unable to reduce the carbon impact of its power generation to zero, he will say.

Lord Smith will also add that fracking needs careful use of drilling technology and rigorous monitoring and inspection. No doubt he is aware of the controversy surrounding the chemicals which are used in the process of extraction – skilfully described in this excellent feature by our environment correspondent, Pilita Clark.

The peer will use his speech to make a broader warning that green issues are sliding down the political agenda despite being among the most important challenges facing the UK.

In a rare intervention by the former Labour culture secretary, the peer will use his first big speech for three years to call for the government to “acknowledge and respect” that environmental policy is essential and not an optional extra.

The comments come as the coalition is shedding several green commitments in order to focus on economic growth. “We can’t abandon either green or growth,” he will say in tonight’s speech.

Lord Smith told me he backed the coalition’s attempts to streamline regulation to make it less bureaucratic. The government has carried out a “red tape challenge” to strip away unnecessary burdens on companies.

But he challenged the focus on cutting legislation, saying there was a reason why many regulations existed. “Because things like putting toxins into our water or Read more >>

Jim Pickard

It’s a striking headline on the front of today’s Daily Telegraph: “Greener energy will cost £4,600 each a year.” And no doubt it will fuel any incipient hositility to renewables among the broadsheet’s large readership. But is it accurate?

Technically, yes. Professor David MacKay, a government adviser on climate change, has done the calculations on how much it will cost on sustaining and replacing the nation’s entire energy system. The resulting figure – which is not synonymous with energy bills – is the total investment in energy needed (£2.4 trillion) over the next four decades. That is then divided by population to come up with the figure.

But as the article makes clear a few paragraphs further down, it could cost even more to rely on traditional sources of power such as fossil fuels and nuclear. (It also suggests we are already spending £3,700 a year already).

MacKay, who is a professor of physics at Cambridge – and has written a highly regarded book on the future of energy – has (with DECC officials) produced a “cost of energy calculator” setting out what Britain will need to spend in the coming years.

Key to this is his assumption that energy already costs us an average of £3,700 a year per person in Britain.

There are several future options including:

* “Do nothing” to develop low-carbon energy systems: this would cost £4,682 a year, Read more >>

Jim Pickard

If all low-carbon energy is given a public subsidy then has nuclear power been subsidised? You might have thought so.

But Chris Huhne insisted yesterday that this was not the case. Read more >>