UK plans energy white paper for new nuclear at turn of year

UK plans energy white paper for new nuclear at turn of year

London (Platts)--11Jul2006

The UK government unveiled its energy review on Tuesday including a
widely-anticipated move to facilitate the building of new nuclear power
stations in the country.

The government said it planned to carry out a consultation process into
measures to make it easier to build new nuclear plants.

Measures could include streamlining the licensing process and clarifying
the strategy on decommissioning and nuclear waste, the government said as it
released the conclusions of its energy review after six months.

The consultation will lead to an energy white paper around the turn of
the year.

Trade and industry minister Alistair Darling said it would be for the
private sector "to initiate, fund, construct and operate new nuclear plants."

The private sector would have to "cover the cost of decommissioning and
their full share of long-term waste management costs," he said.

If the UK does nothing to replace ageing nuclear plants, nuclear power's
share of current energy output will drop from "just under 20%" now to 6% in 15
years' time, Darling said.

Darling said that although it was "more likely than not" that some of the
drop in nuclear's share of the energy mix will be replaced by gas, new nuclear
plants "could make a significant contribution" to future energy supply.

Nuclear developers might gain some certainty for their investment from
the government's commitment Tuesday to a "continuing carbon price signal." The
mechanism for this would be a strengthened European Union Emissions Trading
System, which currently runs only until 2012.

Having a price for carbon imposes a cost on fossil fuel power generation
but helps nuclear and renewables.

Renewables will also be boosted by an increase in the renewables
obligation, which compels supplies to source a minimum percentage of power
from renewable sources. The renewables obligation is currently at 6.7%, due to
rise to 15.4% in 2015/2016. Under current policy the obligation would remain
at that level until 2027. The government now plans to increase the minimum
level to 20%, which it said could be "achievable" by 2020.

A coal forum will be set up between generators, coal producers, trade
unions and others to secure a long-term future for coal-fired generation and
coal production in the UK.

The government will also seek to increase North Sea oil and gas output,
and plans to launch a task force with the industry on developing
infrastructure in the West of Shetland region.

Gas looked in short supply last winter in the UK, and the government will
review the effectiveness of security of supply arrangements, and will also
consult this autumn on the planning process for gas infrastructure.

Beyond generation, the government's energy review also called for greater
energy efficiency, and said it would press for the European Commission to
bring road transport into the EU Emissions Trading System.

For more news, request a free trial to Platts UK Gas Report at
http://ukgasreport.platts.com or subscribe now at
http://www.platts.com/infostore/product_info.php?cPath=3_39&products_id=45

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.