EU Energy Policy Blog

The UK options for delivering zero-Carbon electricity appear limited with the exception of nuclear power: hydro-electricity is limited, wave/tidal energy is too costly, biomass for electricity generation is an inefficient use compared with heat raising and requires a huge land-take, CCS is expensive as are photovoltaics, leaving onshore wind which is almost competitive at present prices but faces challenges in visual acceptability and transmission connection. Offshore wind is costly, and so the concentrated power in North Africa appears a long way off.
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Nuclear power has high capital costs and low variable costs, so that its commercial viability depends critically on the cost of capital – the rate of return it must pay investors – and the price of electricity. Pessimists have claimed that liberalised markets are too risky for new nuclear investment without special support. But is it necessarily correct that nuclear power is a risky and therefore financially costly choice? Continue reading »