Energy suppliers Eon and RWE Npower have announced that they are abandoning their plans to build two new nuclear power stations through their Horizon joint venture. If they are unable to find a buyer for Horizon, it is unlikely that new nuclear power stations will be built at Wylfa, on Anglesey, or Hinkley Point in Gloucestershire. Some commentators are suggesting that this could signal the end of the Government’s plans to revitalise the UK nuclear power sector.
This view is to some extent supported by Npower’s chief executive, who is quoted as saying that “the payback is too long compared with conventional and renewable sources of power”. However it may be too early to write off nuclear power completely, as both partners in Horizon have German parent companies, and are being forced to close nuclear power stations in their home market and to invest heavily in new conventional sources. Investors in the other six sites earmarked by the UK Government for new nuclear plants may be able to take a longer investment view, even though it is likely to be another 10 years before any new power stations come on stream.
Nuclear power is still an important part of the UK energy mix, providing around a quarter of all electricity. On the same day that Horizon announced its withdrawal from building new nuclear power stations, the Government announced that emissions of carbon dioxide, the main gas contributing to global climate change, had fallen to their lowest levels for 40 years in 2011. While there are several factors, including a milder winter and reduction in manufacturing, the largest single factor was that output of nuclear power rose 11% in the year.
So what does all this mean for customers buying electricity certified under the Green Energy Supply Certification Scheme? Firstly, it shows that that the cost of renewable electricity is already competitive with (or lower than) new nuclear power, so creating demand for more green energy will encourage companies to invest in it. But it also shows that the UK still has a long way to go if it wants to limit both carbon dioxide emissions and the use of nuclear power. Most Scheme members still include some nuclear-derived electricity in their overall fuel mix, even those the certified green supply must be matched by renewable energy purchases. And finally, it should remind us that reducing demand, usually by encouraging greater energy efficiency, is also important, especially if we are to rely on a greater proportion of renewable energy sources rather than building more giant nuclear power plants.
If you would like to encourage more renewable energy supplies, then why not join the Green Energy Supply Certification Scheme.
