Market News

 June 16, 2010
Government details subsidy-free support for nuclear

 Energy minister Charles Hendry will today underline the government's commitment to building a new fleet of nuclear power plants in the UK, outlining how it plans to remove "unnecessary" barriers to the construction of new reactors.

Hendry will tell the Nucelar Industry Forum that the government will support new nuclear plants that can demonstrate that they can be built, operated and decommissioned without recourse to public subsidy.

He will also confirm that initial conversations between ministers and the energy companies planning to build a new fleet of reactors suggest that they are confident that unsubsidised nuclear plants can be built.

"The coalition agreement clearly sees a role for new nuclear, provided that there is no public subsidy," Hendry will tell the meeting of nuclear industry executives. "We are clear. It is for private sector energy companies to construct, operate and decommission new nuclear plants. It will be for us to ensure the appropriate levels of safety, security and environmental regulation. "

Last week, energy giant EDF, one of the companies planning to build new nuclear reactors within the UK, welcomed the government's plans and expressed confidence that it could build new nuclear plants without subsidy.

Hendry is expected to welcome EDF's position and will also promise to deliver greater regulatory clarity in order to encourage nuclear investment.

The government is expected to bring forward a national planning statement detailing the framework under which new nuclear power plants will be built. Under the terms of the coalition government, Lib Dem MPs who oppose nuclear power will be able to voice opposition to the proposals, but will only be permitted to abstain in any parliamentary vote on the issue.

Details are also expected soon on government proposals for a floor price on carbon emissions, which is expected to bolster the investment case for low ca rbon energy sources such as nuclear and renewables