The U.K. government Tuesday published its long-awaited draft energy bill, which contains mechanisms and incentives designed to encourage around GBP110 billion investment in low-carbon energy such as offshore wind farms and new nuclear power stations.
That sounds good. The Nasdaq story shows that the government really wants to sell it:
"If we don't secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiraling energy prices and dangerous climate change," said U.K. Energy and Climate Change Secretary Edward Davey.
The story doesn’t really make a case for nuclear – except that it is absolutely necessary if the country wants to achieve its emission reduction goals:
The government needs to ramp up low-carbon power from offshore wind farms, nuclear power stations and gas and coal plants fitted with carbon capture technology to meet legally binding targets to cut greenhouse gas emissions by 34% by 2020 from 1990 levels.
A recent report by our Energy Information Administration indicated that coal with ccs likely won’t be ready to contribute to carbon emission reduction by 2035 much less 2020, so this seems extremely optimistic. But we’ve seen with Japan that shutting down nuclear plants can make a dramatic difference rather quickly, so if Britain gets some plants built and windmills set up in the next eight years, it could at least make good progress toward its goal. Here’s how the report itself puts it:
The three families of low carbon electricity generation - Renewables, Fossil Fuels abated by Carbon Capture and Storage (CCS) and new Nuclear - could all play a role in our future energy mix, even though they each present their own challenges and have their own uncertainties. Yet our existing electricity market makes it more difficult for such low carbon technologies to develop and deploy, because they all have much higher upfront capital costs than unabated fossil fuel competitors like gas.
One has to grant that nuclear and coal plants are big projects, but wind mostly needs a land buy (or lease).
Around a fifth of existing capacity is expected to close over the next decade and more intermittent (wind) and less flexible (nuclear) generation will be built to replace it.
The draft doesn’t explain that odd description of nuclear – I think it is referring to the fact that nuclear reactors generally don’t ramp down once ramped up, making it a poor source to spell wind’s frequent failure to blow. In other words, there’s no benefit in pairing the two. “Less flexible” doesn’t seem to capture that, but there it is.
Much of the report’s nuclear content regards spinning off the Office for Nuclear Regulation (ONR) as an independent regulator similar to our Nuclear Regulatory Commission (Japan is considering something similar.).
As a statutory body, the ONR will retain the best of current practice whilst creating a modern independent regulator based on the better regulation principles of transparency, accountability, proportionality and consistency. The ONR will build on its current strengths as a world-class regulator and will be better placed to respond quickly and flexibly to current and future regulatory challenges, while retaining its focus on the protection of people and society from the hazards of nuclear generation.
And there is some discussion of an incentives program that sounds a lot like cap-and-trade.
The bottom line is: the U.K. sees nuclear and renewable energy sources as the way forward (and all right, coal with ccs too). Davey notes that electricity rates will go up in the coming years regardless, but that this mix will keep that increase lower than it would otherwise be. That’s some comfort against the specter of “consumers hit by spiraling energy prices and dangerous climate change.” We’ll see how this legislation does.
Edward Davey. Hopefully, he’s not referring to carbon emission levels or the cost of electricity in this picture. Maybe he’s answer how much nuclear power will be put in use over the next few years.