United Kingdom

United Kingdom

The case for nuclear not revealed

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Nuclear will plug the gap in UK emissions reductions three times more cheaply than wind energy. The startling statement is made by a British consultant company, Oxford Economic Research Associates (Oxera). But by calculating the cost for nuclear on the basis of government shouldering a large proportion of the risks, the article effectively concedes that nuclear cannot be financed in the private sector. The firm declines to reveal who ordered the research.

The wind industry points out that by comparing the theoretical cost of nuclear financed in the public sector with wind in the private sector in Britain today, Oxera's "analysis" does not compare like with like. It also says that Oxera fails to reveal the basis for its findings.

Oxera makes its claim in an article in Agenda, its own publication. Making the case for nuclear, Oxera says the government's existing Climate Change Program, which relies heavily on renewables-mostly wind-and energy efficiency, will fall short of meeting the UK's greenhouse gas reduction target of a 60% cut in emissions by 2050. Even a program of 20% renewables by 2020 is not enough. A greater degree of fuel switching away from coal will be needed, the article states. "From the point of view of the taxpayer, nuclear energy may be a strong contender given its costs relative to wind farms," writes the author, Robin Smale.

He claims the current renewables program will cost around £12 billion more in present value terms than conventional generation. The equivalent amount of nuclear generation would, says Oxera, cost just £4.4 billion. This would comprise £1.1 billion government capital grants and £3.3 billion publicly backed loan guarantees. But public liability insurance-which has not been estimated-should be included, he adds.

Reports in the British press of Oxera's unfavourable comparison of the cost of renewables with nuclear accept Oxera's figures at face value. Yet Smale's article gives little indication of how he arrived at the figures. Oxera maintains that the work underpinning the article was a "multi-client" commissioned study. It adds that all articles appearing in Agenda are reviewed by an editorial board.

The British Wind Energy Association (BWEA) says it is "disappointed" that the article failed to substantiate its figures with supporting data. The BWEA's Marcus Rand says: "The costs for renewables and nuclear do not appear to be directly comparable and in any case the extra cost of wind plant is critically dependent on wholesale prices in the electricity market. With nuclear, it appears that much of the risk would be borne by the taxpayer, which is not case for wind.

"This piece of work seems to be at odds with a report by the government's Sustainable Development Commission that concludes wind is cheaper than nuclear," says Rand. "Advocates of nuclear power stations must address the economic, safety and social and environmental case surrounding their technology if they are to join wind and other renewables in addressing climate change and energy security."

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