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As high costs force Centrica to pull out of new projects, can nuclear power ever be profitable? (City AM)

    CPS Research Fellow Tony Lodge writes in City AM.

    To view the full article, please visit the City AM website

    "Nuclear power stations can be built and operated without the need for government subsidies. The actual build of nuclear power stations is entirely financed by energy companies – not the government. However, the only way that you can get these companies to invest billions of pounds is by providing them with a level of certainty. Forecasting energy prices for the next 25 years is difficult. But the government is in negotiations to guarantee a fair price to energy companies – not necessarily a subsidy. A look at the numbers shows the business viability: two 1,600-megawatt reactors, operating at 90 per cent efficiency over 50 years, could generate £88bn in revenues at an average market price of £70 per megawatt hour (the government’s median projection price for nuclear power in 2011). This shows that building nuclear energy plants can be a financially viable business without subsidies from the government."

    To view the full article, please visit the City AM website

     

    Date added: Tuesday 5th February 2013