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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (10174)	3/28/2010 12:46:01 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 24225

Power crunch looms for Britain The taxpayer must pay for new plants, warns new Npower boss Volker Beckers Danny Fortson BRITAIN faces the worst energy crisis in Europe, according to the boss of one of the biggest power companies. “The country has to build two large plants or more every single year,” said Volker Beckers in his first interview since becoming chief executive of RWE Npower two months ago. “This has never happened in Britain’s history, so there’s no time to lose.” Homeowners will end up footing much of the estimated £200 billion bill for the new plants through higher energy prices. “The government faces the biggest challenge in Europe,” said Beckers, whose company supplies power to 6.4m British homes. “In a world where capital is scarce and the economic case is unclear, it’s not an easy sell to my board. Right now, I can’t do it.” Within the next decade. a quarter of Britain’s fossil-fuel plants will be retired, to be replaced by more costly low-carbon alternatives. Offshore wind and nuclear are the government’s favoured options. The £200 billion bill for pipes, plants and turbines predicted by Ofgem, the regulator, translates to a cost of £8,000 for each of Britain’s 25m households. Both Labour and the Conservatives have said the state needs to take a more active role in guiding the makeover. They expect the industry to bear virtually all the upfront costs. However, the uncertainty over future energy prices and how much of the additional cost, such as for waste clean-up, will have to be shouldered makes it hard to proceed with big investments such as nuclear reactors, said Beckers. “At the moment nobody really knows the rules of the game. If the uncertainty prevails, investors will simply do what they understand best in this market and that is gas generation. “That is exactly what we as a company have done in the past few years, but as a country it’s not what gets the UK to the [carbon reduction] targets we have for 2020.” He expressed particular concern about the development of nuclear power, a central plank of the government’s low-carbon plans. As of now it gets no additional support while offshore wind, for example, receives renewable obligation certificates (ROCs), which in effect triple generators’ income from the projects. “Why discriminate against nuclear in favour of renewables?” said Beckers. “Why give offshore wind ROCs and make nuclear stand on its own feet?” Ministers have clung to the conviction that nuclear will be subsidy-free. It is clear why: Ofgem predicts that household bills, now an average of £1,100 a year, could rocket to £2,000 by 2017. Additional support for nuclear could push that even higher. The industry counters that insulation and other measures to cut consumption will soften price increases. Subsidy is only one aspect of the nuclear story that still needs to be worked out. Companies remain unclear how much they will have to pay into a nuclear waste clean-up fund, and when — if ever— a facility for deep geological disposal will be built. Npower’s German parent company could ultimately choose to put its money elsewhere. For example, 53 new nuclear plants are under construction round the world, with another 469 planned or proposed. In Britain, eight are on the drawing board. Half are planned by Horizon, the joint venture formed by Npower and its rival Eon last year. EDF Energy, the French giant, and its partner Centrica want to build the rest. The government last week floated the idea of a low-carbon obligation, which would require energy groups to buy expensive clean power. The Tories proposed introducing a floor to the carbon price, which would kick in if the price of European pollution permits fell below a set level. Npower plans to invest £1 billion a year through to 2018. Beyond that depends on more aid, whether it’s called a subsidy or not. Beckers said: “It’s a big demand, especially while there are similar needs on the Continent. So the UK needs to make sure it has the highest level of attraction for investors.” business.timesonline.co.uk