No nuclear power plants are likely to be built in Britain before 2020, if they are built at all, which will be too late to fill the country's looming power generation gap, according to a report published today.
The government wants the private sector to build new nuclear power plants to replace the country's ageing reactors and plug a generation shortfall left by the closure of coal-fired power plants under European environment laws.
But the report by Poyry Energy Consulting says the commercial case for building new nuclear plants is shaky and that none will be built without a higher long-term carbon price than that set by the current European Union Emissions Trading Scheme (ETS).
The ETS is supposed to encourage investment in cleaner power technologies by making generators pay for 'rights' to emit carbon dioxide from burning fuels like coal, oil and gas, based on the volume of emissions they create.
Because many member states have given away too many rights for free, the cost of spewing the main gas responsible for climate change in to the air has mostly been below €20 a tonne over the last year. This is too low to make low-carbon but costly nuclear power worthwhile, the report concludes.
Partly because of high capital investment costs and rising prices for uranium, companies will not spend the huge sums required on nuclear power without a long-term reliable carbon price above €20 a tonne, the report says.