Should the UK government be investing further into new nuclear programs?
The time is nearing for the UK government to make a clear decision on the future shape of the energy policy and its place in the UK economy. This decision will include factoring in whether investment should be placed towards revitalizing the power plant at Anglesey, Wales.
Hitachi, who intend to construct the plant has already suggested that the project is unlikely to succeed without financial support from the Government and this means the inclusion of public sector investment.
Its widely known that nuclear projects require large investment initially. The Hinkley Point project lead by EDF Energy required in excess of £5 billion to allow developers to continue with the development plans.
Off the back of this investment, the UK Government secured an agreement that any new nuclear plant would only develop if all costs incurred during construction would be the responsibility of the companies involved in the development phase.
The question now is whether the UK government will alter this agreement and invest public capital into this project and if they do will this mean public capital will also be offered to other, new nuclear projects. To ensure an equal and balanced process, funding would legally have to be available to all contractors which ultimately result in an excessive amount of public capital being invested into new nuclear projects. This decision could result in further investment demands into the EDF nuclear project at Hinkley.
Without the necessary funds, the Anglesey power project will not go ahead. Critics suggest that the UK does not require additional nuclear sites and public capital should not be placed into new nuclear programs or diverted away from renewable energy projects. The UK Government argue that nuclear development is essential for the country to achieve its carbon emission targets and the associated costs with renewable energy development are not effective enough to meet these demands. However, renewable energy technology has improved dramatically and associated costs have continued to reduce, whilst nuclear technology seems to not be following the same path.
Critics emphasize that whilst costs with renewables are continued to decrease, the costs associated with nuclear technology continue to remain high. Supporters of nuclear power need to be capable of highlighting how the industry can and more importantly remain competitive for future years. If renewable technology continues to decrease it is unlikely the nuclear sector can be a competitive and viable option for future energy generation.
The decision to invest in new nuclear projects will have massive implications. If the Anglesey power project is set to receive public funding, the government will be creating a new approach to investment into industrial activity and likely spur further demands from other potential nuclear developers.
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