We cannot afford not to have nuclear in our low-carbon energy mix
Tuesday, February 19, 2013 at 10:10PM
Uranium Stocks

Ever so slowly the UK government appears to be getting the message that they cannot do without nuclear energy.

The euphoric phase on low-carbon energy is over. There is no solution that is clean and cheap and always on.Yet we must make major investments in energy. Old coal and nuclear plants will have to close. And climate change has to be tackled or it will result in costly economic damage.

So let's consider the options for investment in low-carbon electricity. Over the coming 20 years there are only three options that are relevant – wind,carbon capture and storage (CCS) and nuclear. Each has significant imperfections yet each works. And there is no muddle through option.

Each technology has deeply entrenched opponents. But if all the opponents have their way, we are left with no solution. Or at a minimum there will be a long period of argument, muddle and delay, followed by a rushed, expensive and late period of investment. Isn't that how it is already feeling?

Let's consider the three energy technology options in turn. Each is a different kind of curate's egg.

The great thing about wind is that it is free. The bad thing about wind is we cannot control its availability Deeply cold anticyclones in winter are widespread, windless and can last for days. So if we build lots of wind-based power, we have to build lots of gas-fired backup which will bring some extra cost. This is starkly evident in the recently published gas strategy from the Department for Energy and Climate Change (Decc). The right balance must be struck. Energy storage and demand management will help but will not be panaceas.

The further offshore we go, the bigger the windfarms can be. That is good news, but it means more costly foundations and cables. The Carbon Trust is working with industry on innovations to bring these costs down.

It would be a big help if there was more acceptance of onshore wind. It is fundamentally cheaper than offshore wind.

CCS has few friends and no natural owner. CCS is a nuisance on a gas-fired power station. It creates complexity and reduces flexibility. It adds about 50% to the all-in unit cost of gas-based electricity. CCS perpetuates fossil fuel use and leaves us open to gas price fluctuations in the long run.

Critics say CCS is not commercial. But, despite the complications, if CCS, once demonstrated at scale, were to receive the current subsidy for offshore wind, Decc, I would wager, would have a queue of CCS investors at its door.

Globally, because coal and gas are relatively cheap and will be used, if we don't have CCS, we can't stop damage to the climate.

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