CBI: Nuclear should lead the mix

13 July 2009

The Confederation of British Industry (CBI) has put forward proposals for a path towards meeting UK climate and energy goals. It includes scaling down renewables targets and scaling up on nuclear to achieve a cost-effective mix.


The report says that subsidies for wind generation are too generous and this is distorting investment in other low-carbon forms like nuclear power and carbon capture and sequestration for the future.


At the same time, new nuclear build must be maintained on schedule in order to avoid a new round of new gas plants, which could lock in a greater amount of the fossil fuel for many years.


A tough act to follow
The CBI showed cost figures based on the best features of a typical nuclear reactor: being able to generate 8.6 billion kWh of low-carbon electricity per year and provide 1000 MWe to the grid at peak.
A nuclear power plant with this capability would cost £2.5 billion, plus £500 million for eventual decommissioning ($4 billion plus $800 million), whereas a series of wind generators with the same attributes would cost £6.5 billion ($10.4 billion).
Apart from costing over twice the amount to build, due mainly to the need for 70% redundancy to make up for low capacity factors, the difference in figures is down to £1.3 billion ($2.0 billion) in transmission lines as well as £256 million ($413 million) in back-up gas-fired generation for days when it is not windy.

According to the CBI, current policies would lead to a power market based on 36% gas, 24% wind and 20% nuclear in 2030 with a total of 64% coming from low-carbon sources. The CBI would prefer a "more balanced mix" in 2030 with nuclear on 34%, wind on 20% and gas on 16%. This mix, where 83% of electricity would come from low-carbon sources, would be more stable and feature lower prices.


Among the data backing up the group's claims was that the cost of offshore wind is 2.6 times more than the cost of the same amount of new nuclear.


The UK government is aiming to have 32% of power come from renewables - mainly wind - by 2030, but this should be reduced to 25% to allow companies to "pick a cost-effective mix of low-carbon technology." The CBI said it supports the Renewables Obligation (RO) scheme but that it is expensive and goes beyond what is required to meet carbon reduction commitments.


The RO system of certificates, which is under review, has been estimated to soon exceed £1 billion ($1.6 billion) per year in subsidy to wind generators. By contrast, the UK government is at pains to stress there will be no such support for nuclear power and has set no target for capacity. Nuclear proponents in the UK, such as Vincent de Rivaz of EDF Energy, have called for the government to stop picking technology winners, impose a price for carbon emissions and let the market decide.