• 2 hours Kinder Morgan Warns About Trans Mountain Delays
  • 8 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 13 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 17 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 23 hours Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
Alt Text

Rising Costs Slow The Growth Of Nuclear Power

High costs and public fears…

Alt Text

New Tech Is Transforming Japan’s Energy Sector

The tech that built bitcoin…

Alt Text

This OPEC Strategy Could Boost Uranium Prices Next Year

Kazakhstan, the world’s largest uranium…

Global Risk Insights

Global Risk Insights

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

More Info

UK Reviving European Nuclear Energy at High Costs

The British government recently made a deal with French-owned EDF, Arriva and Chinese investors to continue with the development of the Hinkley Point C nuclear plant in Somerset. This represents a major step in David Cameron’s energy strategy, as energy increasingly becomes a focal point of the next general elections campaign.

On 21 October the UK chancellor George Osborne announced a major deal that will revive plans to give nuclear energy a more relevant role in the UK energy mix. The new power station should become operational by 2023, with a cost of £16 billion and a guaranteed unit price of £92.50 per megawatt-hour of produced energy – twice the current energy price. This is the latest attempt by the UK government to establish a credible long-term energy policy, and thus create a favourable investment climate in the energy sector.

It seems that the decision to unfreeze the long-standing Hinkley project is the effect of the realisation that nuclear power might be the optimal way to secure energy in the mid to long-term and cut the carbon footprint by 80 percent by 2050. On the other hand, the decision might have come as the Coalition’s response to Ed Milliband’s strong attack on the government’s inability to control the energy market in the UK.

Related article: Energy Starved Jordan to go Nuclear

The deal with French company EDF, Arriva and their Chinese partners is a direct response to the Labour intention to interfere with free market laws. Another message that the Coalition is trying to transmit to the public is that the era of cheap energy is long gone, and that the current priority should be to secure sustainable and clean sources of energy at the most affordable market price. Indeed, nuclear energy is not cheap, but it has its advantages over other energy sources: It is carbon free, relatively safe, and although nuclear is comparable with renewables in terms of subsidies, high capital costs and price per MWh of produced energy, it is much more reliable in terms of energy production and distribution.

According to the UK government, building new nuclear power stations might actually cut energy bills by 2030. Nuclear energy is also more acceptable to the public, in comparison to the extremely unpopular attempts to promote shale gas developments in the UK. However, the deal is criticized as unfavourable for both the government and consumers. The key argument behind this criticism is the fact that the government could have taken advantage of cheap shale gas that will soon become available from the U.S., or increase efforts to reduce consumption, instead of making a 35 year deal on the assumption that the energy prices will inevitably go up.

Related article: Japanese Political Elite Divided over Country’s Nuclear Future

The recent deal is also in stark contrast with the developments in other European countries. Following the Fukushima disaster, many European countries, such as Germany, Italy and Switzerland, have decided to abandon nuclear energy completely , or – like France – reduce their dependence on it. The UK example, should it work, might give the battered nuclear sector a new chance in Europe. At the same time, the move is a huge gamble for the UK’s ruling coalition that exposes it to the attacks from both the opposition and voters, who are already irritated by the ever-rising cost of energy.

By Ante Batovic




Back to homepage


Comments currently closed.

  • SA Kiteman on November 16 2013 said:
    The costs are still much lower than the unreliable power from wind and solar, and it is reliable too.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News