Nuclear bosses admit gas is better

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THE NUCLEAR industry plans to join the "dash for gas" after being privatised, heralding the beginning of the end of atomic power in Britain.

Senior managers accept that no more nuclear power plants will be built in the foreseeable future, and say that the next electricity generating stations they construct are likely to be gas-fuelled.

The plans follow a wholesale demolition of the case for building new reactors in the Government's nuclear review, which went largely unnoticed in the furore over privatisation when it was published 12 days ago.

Meanwhile, British Nuclear Fuels has quietly completed commissioning a gas-fired plant to supply power for its controversial Sellafield nuclear complex. It deliberately chose gas over nuclear power, scrapping earlier proposals to build reactors to do the job.

Although BNFL is not part of the current privatisation package, its decision will be seen as a harbinger of things to come for the nuclear industry.

The new holding company to be set up to run the privatised industry is expected to establish a separate subsidiary to build gas-fired power stations. This will have the same status in the group as the existing Nuclear Electric and Scottish Nuclear.

The Government's nuclear review, which has paved the way for the change, was set up in 1989. Last year Tim Eggar, the Energy minister, asked the industry to "make the case for new nuclear power stations", and invited more than 100 organisations to comment. The resulting report - presented to Parliament by the President of the Board of Trade, Michael Heseltine - dismisses the case out of hand.

It shows that electricity from new nuclear power stations would be more expensive than from gas-fired ones, and that "private finance is unlikely to be forthcoming"; and rejects a plea by Nuclear Electric for public money to help finance them as "a significant intervention in the electricty market" unwarranted by "current and foreseeable circumstances".

It says there is "no case" for subsidies to ensure diversity in Britain's energy supplies, "no evidence" that nuclear power stations are necessary to combat the greenhouse effect, and that they "could not be justified" on grounds of increasing employment or stimulating the economy.

Publicly the nuclear industry says that it aims to build another reactor at Sizewell, Suffolk, or Hinkley Point on the Severn Estuary. Privately senior managers admit that, after being sold off, the industry would invest in projects that brought the most benefit to shareholders.

For the foreseeable future, this would mean building gas-fired stations which are relatively quick and cheap to construct and less polluting than other fossil fuel plants. One manager said: "We could diversify into all sorts of things. The station we have been wanting to build at Sizewell could well turn out to be run on gas."

Out with a fizzle, page 27