| After the White Paper | | Print | |
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Since the publication of the Energy White Paper in February, events in Britain and around the world have begun to change perceptions about the role of energy in our lives.
Since the publication of the Energy White Paper in February, events in Britain and around the world have begun to change perceptions about the role of energy in our lives.
Recent power blackouts in London and Birmingham, USA, Canada, Scandinavia and Italy have made it clear just how dependent we are on a secure supply of electricity. Security of energy supply has become a key issue in North America and the EU. Even though these blackouts appear to have been caused largely by transmission system failures, concerns are now raging about security of supply from generation, and, following the lessons of Italy, on the risks of relying on imports. As the EU electricity industry faces the challenge of completing the liberalisation process by 2007, the "mature" English electricity market keeps revealing its flaws. Fluctuating wholesale electricity prices, struggling generating companies, plant mothballing and a shrinking available capacity margin, are all signs of an unhealthy investment climate. Although National Grid Transco forecast that there will be enough gas and electricity to meet winter demand this year, they would like to see a bigger electricity "safety cushion" to manage exceptional circumstances. But will the industry be able to respond quickly enough to market signals to provide the capacity needed, not just this year, but in the coming years? European electricity industry officials are emphasising the need to pay attention to market signals to provide further investment and development in power generation capacity and transmission infrastructure. However, it may be doubtful whether electricity companies will have sufficient incentive to respond. According to Eurelectric some 300GW of new capacity, at a cost of about €250bn, will be required by 2020 to compensate for closed plant and to meet growing demand for power in Europe. It is stressed that an investment friendly regulatory framework is needed to maintain environmentally clean generating options, and a continuing role for nuclear power. Where does all this leave nuclear energy in the UK, which was more or less dismissed in the White Paper as a contender in the near future? Sooner or later - probably sooner - it will become abundantly clear that the reliance the White Paper places on renewables and energy efficiency to provide secure electricity and substantial cuts in carbon emissions cannot be delivered by those measures alone. Then policy makers will re-evaluate the importance of maintaining a viable nuclear power industry. In the meantime, the industry must continue both to demonstrate its technical competence, and to seek those measures - a stable electricity market that rewards reliable low carbon energy sources, the early establishment of the NDA, and more urgent attention to a long-term acceptable waste management solution - that are needed to maintain the nuclear option. |
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