By Roger Harrabin, Environment Correspondent
The final version of the Prime Minister's energy review could spell the end of the nuclear industry in Britain if its recommendations are followed. Today has learned that the final report from the Performance and Innovation Unit recommends that decisions whether to invest in new nuclear stations should be left to the private sector.
One controversial suggestion is that investors in nuclear stations should pay all the hidden costs of nuclear power - including disposing of waste, however high the future costs. A spokesman for British Energy says no nuclear industry in the world survives under these conditions. City analysts say that with the current electricity price it will be impossible for the industry to attract investors who would take the enormous risks needed to build new nuclear stations.
The key section of the report which covers economics says, "The nuclear industry should benefit from exemptions from any future carbon-based taxes," but it should have to "internalise all its external costs ... including risks such as waste cost escalation." The former government-run British nuclear system had its liabilities funded by taxpayers. And ministers recently committed £60 billion to an agency to help the privatised nuclear industry meet its decommissioning costs for the current generation of stations.
Does this review mean nuclear power is dead? The Energy Minister Brian Wilson, who steered the PIU team, has Hunterston nuclear station in his constituency. He is trying to save 300 jobs in the area by having a new station built on the site of earlier stations that are now closing. He told Today that the nuclear option must be kept open in case there is any problem with future gas supplies from volatile regions of central Asia. He said the PIU report was merely an advisory document to government - not government policy.
The PIU team are not greatly concerned about security of supply. Their report says, "There are no pressing problems connected with increased dependence on gas. Most of our major competitors already have substantial reliance on imported energy." One member of the team privately told Today: "Energy security is something that the media and politicians get excited about ... we don't think it's much of a problem"
Also addressed in the report is the need to cut carbon emissions by 60% in response to climate change. The PIU team claim that by doubling the renewables target and increasing energy conservation, the UK should be able to reduce emissions without the need for nuclear stations.
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