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NUCLEAR ENERGY TOO COSTLY TO TACKLE CLIMATE CHANGE, COUNCILS TELL ROYAL COMMISSION

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Evidence submitted to the Royal Commission on Environmental Pollution (RCEP), by Nuclear Free Local Authorities (NF...
Evidence submitted to the Royal Commission on Environmental Pollution (RCEP), by Nuclear Free Local Authorities (NFLAs) and the Consortium of Opposing Local Authorities (COLA), dashes the hopes of the nuclear industry by showing that the realistic level of any future income from the sale of 'carbon permits' will not make new nuclear stations commercially viable.

The UK Nuclear Industry is pinning its hopes on the introduction of a tradeable 'carbon permits' scheme to improve its economic position vis-a-vis other electricity generators. However, a detailed study prepared for the Royal Commission by the NFLAs and COLA shows the claim by British Energy, that the introduction of tradeable carbon permits would rapidly make new nuclear build economic, is mistaken. The basis for this conclusion is that:

- the lifetime cost of new nuclear stations currently trail other major generating capacity by at least 2 pence per kilowatt/hour (2p/kWh).

- the timetable for the introduction and financial impact of economic instruments, such as tradeable carbon permits, are highly uncertain.

- a very rough estimate is that permits might cost up to about 0.2p/kWh, only one tenth of the sum nuclear generation needs to become competitive.

- the prospects for substantially reducing the capital costs and financial risks associated with new nuclear construction in the early decades of the next century are poor. It is highly unlikely that the requirements for doing so - a major international construction programme, the international harmonisation of licensing procedures, and overcoming public hostility - can be achieved in the foreseeable future.

- there is increasing recognition of the need to make sure the nuclear industry covers all its 'external' costs - particularly the costs of major accidents and of liabilities management which can stretch over 100 years.

This should be done by extending segregated fund arrangements to ensure adequate coverage of all post operational liabilities, and by significantly raising the current low level of nuclear operator accident insurance cover.

New nuclear build should not be advantaged by tradeable carbon permits or carbon taxes without first substantially strengthening these measures.

NFLAs and COLA have told the RCEP that taken together, these factors mean that there is no realistic prospect for new nuclear build becoming economic in the foreseeable future. The RCEP have been advised that it would be highly imprudent to assume that new nuclear build could make a contribution to achieving carbon dioxide reduction targets beyond 2010. The UK climate change programme must be constructed accordingly.

Notes

The Prospects for New Nuclear Build: Joint submission to the Royal Commission on Environmental Pollution study of Energy and the Environment by the national steering committee of Nuclear Free Local Authorities and the Consortium of Opposing Local Authorities, 13pp, December 1998 - (available from the NFLA office free of charge tel: 0161 831 9108.)

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