Energy plan set to support nuclear option

LONDON (Reuters) - The government will underline its support for nuclear power on Wednesday as it sets out plans for a major policy shake-up to secure energy supplies and fight global warming.

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Britain’s oil and gas from the North Sea are dwindling and it well remembers how Russia, which supplies 40 percent of Europe’s gas, disrupted supplies last year. It also wants to meet its carbon emission cut targets.

“We are now faced with countries such as Russia who are prepared to use their energy resources as an instrument of policy,” Prime Minister Tony Blair wrote in The Times.

“We need a policy that conforms to the rising concern about climate change and gives Britain the secure, safe and politically acceptable supplies of energy that our livelihood demands,” he added.

The government wants more energy from renewable sources and to encourage businesses and individuals to cut electricity use.

The European Union aims to get 20 percent of its energy from renewable sources by 2020, and a draft law going through parliament calls for the country to cut emissions of climate warming carbon dioxide by 60 percent by 2050.

But Blair and many of his ministers insist Britain must have a new generation of nuclear power plants to replace the 20 percent of electric power its ageing network provides.

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“If we knock out nuclear and say no more under any circumstances, that means we will have to import more gas and we run the risk of putting more and more carbon into the atmosphere,” Industry Minister Alistair Darling told BBC radio.

The Energy White Paper that Darling will present to parliament on Wednesday will cover all the energy options and make it clear that the government wants nuclear power -- to the outrage of many environmentalists.

But because it was rapped over the knuckles earlier this year for failing to consult the public adequately on the nuclear issue, the government will also on Wednesday be forced to launch a full consultation process lasting several months.

All but one of the existing nuclear power plants is due to close by 2023 and even the most optimistic pro-nuclear lobbyists reckon it will take a minimum of 10 years to build a new plant from scratch.

The government says no public money will go into new nuclear plants. But there is no clear evidence that private sector finance will be on offer for an industry that sucks up capital at the outset and has no guaranteed return.

Major utility EDF Energy, whose parent company runs the fleet of reactors supplying some 80 percent of France’s electric power, has proposed a “carbon hedge” in which the government basically underwrites the price of carbon.

While new nuclear plants are likely to be by far the most controversial topic on Wednesday they will not be the only one.

The Energy White Paper will promote the search for carbon capture and storage -- a potential huge money spinner in exports to countries such as China and India with large coal supplies and booming energy demand.

It will also promote energy saving by businesses, call for more investment in renewable technologies such as wind and waves, back an extension of trading in carbon emission permits, urge greater energy efficiency and support micro-generation such as rooftop solar panels and wind turbines.