The UK electricity market will experience a radical shake-up, after the Government released new reforms which aim to put billions of pounds into new nuclear power plants, in a move which will admittedly boost costs for consumers.
The average power bill is dominated by transmission, distribution, wholesale and retail costs. The world’s power generators and electricity network operators are are also closely watching the rapid decline in the cost of renewable energy technologies and an anticipated surge in installation with an increasing level of concern. The potential of renewable energy to deliver cost-effective options for home and commercial consumers has been apparent to many in the industry for some time.
Deutsche Bank solar analyst Vishal Shah noted in a report last month that EPEX data was showing renewable energies like solar were cutting peak electricity prices by up to 40 per cent, a situation that utilities in Germany and elsewhere in Europe were finding intolerable. “With Germany adopting a drastic cut, we expect major utilities in other European countries to push for similar cuts as well,” Shah noted.
But in the UK, power prices may rise as high as 166 pounds a megawatt-hour, over than three times the current level, to justify the expense of building a new nuclear plant, Citigroup Inc. said in a May 8 note, assuming an estimated cost of 7 billion pounds a reactor.
Energy secretary Ed Davey said £110billion ($173.5bn) of investment is needed in nuclear power plants and wind farms to replace ageing fossil fuel plants.
The legislation will go into effect in 2013 if passed, but some British MPs have suggested the system will work for nuclear but not for other low-carbon power such as offshore wind, and warned the plans amount to a subsidy for new reactors, something the Government had pledged not to provide.
UK forced to extend lifespan of reactors in interim
The UK’s Office for Nuclear Regulation has told the Guardian it is working with the country’s dominant nuclear operator, the French-owned company EDF, to extend the life of its eight nuclear power stations in the UK, and that it is “content for the plants to continue to operate”, as long as they pass regular safety tests.
The French company has said it wants to extend the life of seven of its plants for an average of seven years, a figure it has already raised from five years and which could increase again if EDF decided it was commercially viable to keep them open longer. Its other plant, Sizewell B in Suffolk, is expected to remain open until 2035.
EDF said: “Extending the lives of our nuclear power stations makes absolute sense in terms of filling a short-term energy need while the country rightly continues towards aggressive decarbonisation targets.” The company added that it was still fully committed to building new reactors, dismissing suggestions that the life extensions would undermine the need for new capacity.
“Life extension helps with the very short-term risk but doesn’t change the need or urgency of the new nuclear programme in the longer term,” said an EDF company spokesman.
Source: The Metro
Source: Business Green
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