In a written statement to the House of Commons issued this morning, Energy Secretary Chris Huhn  has announced plans to expand the UK’s nuclear power generation capability and shelve plans for a tidal barrage across the river Severn.

He also announced plans for the Government to hold a further consultation in the autumn on the draft energy National Policy Statements (NPSs). The new consultation will run until 24 January 2011.

The Government intends to present the finalised Energy National Policy Statements to Parliament for ratification next spring. The Statements will be critical to delivering secure low-carbon energy supplies through the role they will play in the planning system. At least one-quarter of the UK’s electricity generating capacity needs to be replaced by 2020.

The Energy NPSs set out national policy on a number of key energy policy areas: Fossil Fuels; Renewables; Gas Supply and Gas and Oil Pipelines; Electricity Networks; and Nuclear. Each of these forms a separate NPS, sitting below an Overarching Energy NPS.

The statement said that the revised statements would give investors the certainty they need to bring forward proposals to maintain security of supply and ensure progress towards decarbonisation.

The announcement means that the Government has given the go-ahead to the building of new nuclear power stations using nuclear reactor designs known as the AP1000 and the EPR.

The Government said that that there is a clear need for the generation of electricity by the nuclear reactor designs because of the contribution they can make to increased security of energy supplies and reduced carbon emissions. Against this the radiological detriment to health from these nuclear reactor designs and their associated waste facilities would be low compared to overall levels of radiation, and “effectively controlled by the UK’s robust and effective regulators”.

No subsidy for new nuclear power

Alongside the other announcements being made today on steps the Government is taking to enable new nuclear power, Mr. Huhn reconfirmed the Government’s policy that there will be no public subsidy for new nuclear power, specifically:

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there will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation.
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New nuclear power will, for example, benefit from any general measures that are in place or may be introduced as part of wider reform of the electricity market to encourage investment in low-carbon generation.

Mr. Huhn also said that the Government was not ruling out action to take on financial risks or liabilities for which it is appropriately compensated or for which there are corresponding benefits. Within the framework of the Government’s policy under the Energy Act 2008, new nuclear operators must have arrangements in place to meet the full costs of decommissioning and their full share of waste management costs. The Government has not ruled out taking title to radioactive waste, including spent fuel, at a fixed price provided that price properly reflects any financial risks or liabilities assumed by the state.
Mr. Huhn said tha the Government would also continue to provide funding to the Nuclear Decommissioning Authority to ensure the efficient and effective clean-up of the UK’s civil, public sector legacy nuclear facilities.

Severn tidal power put on hold

The Government has also today published the conclusions of the two-year Severn Tidal Power Feasibility Study and the key documents which informed its conclusions.

Mr. Huhn said that although the Severn’s enormous tidal range could provide up to 5% of UK  current electricity generation from an indigenous renewable source, costs would be high, and a scheme would have to have a strategic need compared to other ways of meeting the UK’s need for renewable energy. The Statement said:

”The key conclusion of the Feasibility Study is that the Government does not see a strategic case at this time for public funding of a tidal scheme to generate energy in the Severn estuary. The costs and risks for the taxpayer and energy consumer would be excessive compared to other low-carbon energy options.

Furthermore, uncertainties over compliance with regulation would add to the cost and risk of construction. The Government believes that other options, such as the expansion of wind energy, carbon capture and storage and nuclear power, represent a better deal for taxpayers and consumers at this time.

However, the Government recognises that factors which will determine the feasibility of Severn tidal power could change over time. The Feasibility Study evidence therefore includes potential triggers for a future review, so that it can be considered by the Committee on Climate Change in the work they will be doing on the level of renewables ambition required to meet the 2050 greenhouse gas reduction target. The Committee is expected to report next year. The Government does not intend to review Severn tidal power before 2015.”