IEA report on UK energy policy backs nuclear

02 March 2007

"Nuclear has to be part of the mix" in the UK, according to Claude Mandil, executive director of the International Energy Agency (IEA). However, the UK needs to catch up with Finland and France in developing a credible, satisfactory answer to radioactive waste, which is critical for gaining public confidence.

 

Mandil was speaking at the launch of the IEA's in-depth report on the UK: Energy Policies of the United Kingdom 2006.

"The UK's energy industry is working in a well-established framework of market regulation, in which it has sufficient incentives to provide new investment when needed," said Mandil. The review encourages the government to maintain its trust in the market mechanism for the delivery of required investment and security of supply.
 

The review argues that the development of a positive investment framework in planning and licensing - without direct intervention in investment decisions favouring nuclear - would allow investors to judge the viability of new plants, and that government should be more active in this aspect.

 

Almost all existing coal-fired and nuclear power capacity in the UK will be retired within the next 15 years. As new investment in energy supply is focusing on gas-fired power the country's dependence on gas is increasing. "The UK government needs to monitor this situation and should keep all options open for potential developers of power stations to use other fuels," Mandil said. "Furthermore, the planning system under which large infrastructure projects are licensed, permitted and built is a significant barrier to energy infrastructure developments and can become a risk to security of supply."

 

The IEA agrees with the UK government that no technology should be ruled out on principle, but that "it should be up to market participants to decide on the fuels of their new power stations," said Mandil.

 

On the demand side, the IEA considers the government's Energy Efficiency Commitment (EEC) an impressive success. The EEC was introduced in 2002 and is an energy-saving program under which suppliers must achieve efficiency targets in households. Challenges, such as the requirement that 50% of savings come from low-income households, remain. The review invites the government to investigate ways in which fuel poverty could be reduced without distorting the EEC.

 

The IEA presented its review at the UK government's Department of Trade and Industry briefing. Energy minister Lord Truscott noted that many of the IEA's conclusions are similar to the ones the UK government had arrived at during its energy review: that there would be no subsidy, levy, nuclear obligation or market intervention to help launch a new nuclear program.

 

"Our position is unchanged. New nuclear will have to stand on its own feet. It will be for private business to make its own decisions on investing and for industry to decide whether it is viable. It will operate within the market as it stands," Lord Truscott said.

 

Further information

 

International Energy Agency 

 

WNN: Nuclear Power in the United Kingdom