company position: nuclear generation
Last updated: 03/01/2012
We believe that nuclear power has an important role as part of a diverse energy mix in a low carbon UK economy. However, it is important that it pays its own way and is not a burden on the tax payer.
In light of the Fukushima accident, we also support the decision to perform ‘stress tests’ at European nuclear stations.
cost considerations
Connecting large nuclear units will create greater costs for the system operator where additional generation needs to be held to ensure frequency remains within the acceptable range. Greater reserve is also required.
National Grid Electricity Transmission (NGET) has estimated that the associated additional costs would be around £160m per annum.
We believe there has been insufficient consideration as to whether the costs should be passed on to customers or the generators. Generating plants could possibly be charged via a ‘Large Scale Generation Reserve Funding Mechanism’ which would ensure that each MW of nuclear generated electricity makes a contribution to the additional capacity.
In the longer term we believe there will be issues with having a decarbonised fuel mix which is dominated by nuclear and wind. For example, there will be points in summer months during off-peak periods when demand is exceeded by the combination of nuclear and wind.
Arrangements for constraints (or the ability to bid negatively into the balancing mechanism) will need to be revisited to prevent the price of off-peak electricity rising. Current constraints are due to system problems but in the future energy constraints may emerge.
For additional information, please contact us.
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