British Energy poised as government prepares go-ahead on nuclear power

Published on Sunday 27 March 2005 02:39

BRITISH Energy is in talks with City institutions to raise funds for a new generation of nuclear power stations in anticipation of ministers swinging their support behind a massive construction programme after the election.

The Livingston-based group, which last week ousted its chief executive Mike Alexander, has been sounding out potential private sector financial partners. The discussions are supported by the Treasury, which is understood to be working on potential tax breaks for private companies willing to support the building of nuclear power plants.

The latest development follows a report published last week by the House of Commons Scottish Affairs Committee, which suggested nuclear power may be the best way to solve the UK’s looming energy crisis.

Following British Energy’s previous financial troubles, the government is said to be unwilling to use public money to finance new nuclear stations.

But British Energy - the only firm likely to be tasked with running new nuclear power plants - would be unable to finance projects on its own.

A restructuring of the wholesale power market may be necessary to give private backers the stability they need to invest in nuclear power.

The CBI has also called on the government to embrace new technologies and face up to difficult decisions, such as the nuclear option, as it attempts to meet tough targets on cutting greenhouse gases.

The employers’ group has offered its support to meeting the 2050 Kyoto target on reducing emissions, but wants individuals and other countries to match that commitment.

Michael Roberts, the CBI’s director of business environment, said business was also looking for government to combine leadership on the issue with pragmatism.

His comments coincide with the publication today of the Commons environmental audit committee report into the challenge of climate change. Roberts said: "We support the government’s goal for the world’s developed economies to cut greenhouse gases by 60% by 2050, and for the UK to commit to such a path.

"But while there is action UK-based businesses can take now and in the future, we must combine leadership with pragmatism if we are to safeguard our competitiveness."

The CBI claims that while business emissions fell by nearly 17% in the past 15 years and are set to fall further, household emissions fell by less than 4%.

Roberts said: "Improved policies could help secure further gains in business energy efficiency, but the challenge of also cutting emissions from households and transport cannot be ducked. At best, action on all these fronts will probably only achieve half of what we need to by 2050.

"So government must also show renewed enthusiasm for promoting new technologies and serious political will when it comes to addressing difficult questions like the future role for nuclear power."