Minister pledges backing for nuclear build despite setbacks

 

A leading minister has said the government is committed to building a new wave of nuclear power stations despite recent blows to the programme.

Lord Sassoon, Commercial Secretary to the Treasury, who spent the bulk of his career with the accountant KPMG and the investment bank SG Warburg, told The Independent the private sector "wants reassurances of the direction of travel from the Government" on nuclear.

He said the Government would create a "settled energy market" that would encourage investment on nuclear power station development. Critics have questioned whether the plans, which would cost tens of billions of pounds, are economically viable after German utilities Eon and RWE said earlier this year that they were pulling out of UK nuclear new build.

The three consortiums that have put forward proposals for the developments are waiting for the Electricity Market Reform Bill, expected by the end of the year. This will set what is known as a "strike price", a guaranteed minimum amount for generators of low-carbon nuclear electricity that would cover the vast investments they are proposing.

This is considered the biggest overhaul of the electricity market since privatisation in the early 1990s, but has been criticised for being vague on detail so far.

Many of the parties involved in the consortiums, most notably British Gas owner Centrica, are concerned that the minimum price might not be enough to make the investment worthwhile.

Lord Sassoon said: "We are working hard so that all the energy market reform and all that's related to it in the timetable is set so investors know there's a settled energy market. We have a lot of work to do, particularly this autumn."

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