Wednesday, September 13, 2006

Citigroup: Future Carbon Constraints to Favor Nuclear Power

From Reuters:

The increasingly urgent need to combat climate change will probably spawn U.S. policies to impose fossil fuel charges and so dramatically favour nuclear power, Citigroup said in a research note on Wednesday.

Burning fossil fuels such as coal and oil is one of the biggest sources of the greenhouse gas emissions that scientists fear are leading to dangerous climate change.

In response, a carbon market in Europe already charges heavy industry to emit carbon dioxide (CO2) above a certain limit -- requiring companies to buy tradeable carbon credits -- and some U.S. states are set to adopt similar schemes.

This will sort winners from losers in power markets, with nuclear especially seen benefiting from increases in power prices driven by carbon charging, as zero-carbon emitters facing none of the costs of having to buy carbon credits.

"Under such (U.S.) legislation nuclear generators would win," Citigroup said.
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