The revival of nuclear power
The planned closure of all but one of Britain's 10 operating nuclear power stations by 2023, means that decisions on nuclear build need to be taken now. Britain faces an energy crunch from 2015 when there may not be enough power stations operating to meet national electricity demand.
Electricity brownouts during peak winter demand and managed blackouts for industrial users are a real possibility in the UK. But undoubtedly the major trigger for the nuclear renaissance taking place world-wide has been mounting international concern over global climate change.
Nuclear power stations offer a ready-made technology-based solution because they generate large amounts of electrical power with very low carbon emissions. Energy security has also become an important factor since the control of energy supplies has become a political objective of foreign governments. The Middle East and Russia lever significant political influence controlling the supply of oil and gas to Western Countries.
The economies of Britain, Europe and the United States are vulnerable to price shocks from the Middle East oil markets and Russian gas supplies. Threats from terrorism, political unrest and war in the Middle East can affect world oil and gas prices. Britain needs to secure a diverse mix of low carbon energy supplies so that it does not rely too much on any single generating technology or fuel supplier.
Today the price of wholesale electricity (£ per MWh) in Britain tracks the price of natural gas (pence per therm). Gas has become the dominant price-setting fuel in the electricity market. Britain's dash-for-gas during the 1990s means that the cost of Britain's electricity supplies are now vulnerable to sudden price hikes from volatility in the wholesale gas market. The threat of higher gas prices in the European market has been a major driver for utilities to look seriously at investment in nuclear power.
Furthermore many utilities believe that some form of tougher carbon taxation or much higher carbon trading prices will almost certainly be implemented across Europe and the United States. Nuclear power stations are financially attractive from this perspective because they produce no carbon emissions and so are not required to buy any carbon permits, whose future price is highly uncertain.