Nuclear sector calls for government attention

Unveiling a set of wide-ranging energy policy statements on Monday, energy minister Ed Miliband said the government would fund up to four large-scale carbon capture and storage (CCS) plants and released a list of 10 sites approved for nuclear new build. However, although CCS projects will receive money through a £17-a-year levy on each household’s electricity bill, ministers insist there will be no specific subsidy for nuclear.

Paul Stapleton, head of energy at EC Harris, criticised the government for having “too many plates in the air” and said nuclear, not coal, should benefit from public funds.

He said: “They really have to stop trying to be all things to all men. Let’s step back from CCS and let the market take care of it. Put subsidies into nuclear and offshore wind.”

The government has always said the £50bn likely to be spent on nuclear plants would be funded entirely by the private sector. But concerns around the financing of the programme are growing.

A report by Citigroup out this week said there was “little if any prospect” of plants being built without government funding.

Simon Harrison, energy director at Mott MacDonald, said: “Finance is short everywhere.

For capital-intensive stuff like nuclear it’s going to be challenging. The government will be increasingly pressurised.”

He said concerns included uncertainty over carbon pricing and the cost of construction.

Nigel Adcock, managing director of Gleeds Energy, said it would be “disappointing” if the government failed to support the programme through incentives such as tax breaks and said the Treasury could also help with extra work such as reinforcing the grid in Cumbria, where three sites have been approved.

What next for the sites?

Of the 11 sites nominated for nuclear development by the power companies in March, Dungeness in Kent has been dropped, owing to environmental pressures.

EDF’s plants at Hinkley Point in Somerset (attached graphics) and Sizewell in Suffolk are likely to be progressed first. The company says it can have the former up and running by 2018, although industry figures privately say this is impossible.

Next up is likely to be RWE/E.ON (now rebranded as Horizon Nuclear Power), which has plots at Wylfa in Anglesey and Oldbury in Gloucestershire The first of these is expected to be finished in 2020.

A consortium of GDF Suez, Iberdrola and Scottish and Southern Energy, which secured the purchase of land at Sellafield last month, hopes to start construction within six years.

Who’s bidding for the work

Balfour Beatty with Vinci
Bouygues with Laing O’Rourke
Kier with BAM Nuttall
Carillion with Eiffage
Costain with Sir Robert McAlpine (for EDF stations)
Costain with Hochtief (for RWE/E.ON work)