Leading article: No alternative to nuclear power

When it comes to keeping Britain's lights on, the Government is between a rock and several rather hard places. A quarter of our ageing power plants will shut by the end of the decade. But demand is set to double as people turn to electricity for heating and to run their cars. And under EU treaty commitments, 30 per cent of our power must be green by 2020. Meanwhile, household fuel bills have trebled since 2004 and 8.5 million people are set to slide into fuel poverty over the next four years.

The proposed solution is for private investors to bankroll £110bn-worth of offshore wind farms and new nuclear power stations. To give them confidence that such investments are safe, the draft Energy Bill published yesterday includes measures to set up complex "contracts for difference" to smooth out some of the uncertainties of the fluctuating electricity price.

The proposal has much to recommend it. Indeed, without it, expensive non-fossil-fuel facilities will struggle to attract the funding they need to get off the drawing board. That the scheme could push up fuel bills even further, possibly by as much as £200 per household a year, is regrettable. But there is no other way to modernise Britain's energy infrastructure and, with so many power stations closing, it is no longer an option to do nothing at all.

New nuclear facilities, in particular, are essential to meeting Britain's future energy needs, because they provide carbon-free, always-on electricity generation to complement the natural intermittency of wind power. And although there are to be new coal plants, they will be subject to emissions limits requiring expensive (and, so far, untested) carbon capture technology.

The Energy Bill will not, in the medium-term, do much to reduce the UK's unhappy reliance on imported gas and the volatile international gas markets. Neither does it signal any new initiative to tackle the draughts and leaks of too many British homes. Improving woeful energy efficiency levels would be the fastest and cheapest way to bring down both bills and carbon emissions. But there is no alternative to rapidly moving ahead with plans for new nuclear power stations.