A mix of energy generation types with a low level of nuclear power could massively increase the cost of electricity generation. A report by advisory experts KPMG, highlights the effects of various sources of electricity generated in the UK.
A low level of nuclear could send the price of electricity generation up from around £75/MW today, up to as much as £120/MW in 2050.
David Simpson, Head of Nuclear Advisory services at KPMG, said: Research into the levelised cost of electricity shows that nuclear costs range from £55 to £100/ MWh, compared to the other large scale low carbon alternative offshore wind being £130- £200/MWh.
KPMG and PB Power carried out an independent study of electricity costs based on the Department for Energy and Climate Change scenarios for 2050.
Some of the key findings were:
-in a scenario where the market is not directed to generate low carbon, the cost of electricity would be approximately £70/MWh.
-a high nuclear scenario (70%) would increase this cost to £75/MWh.
-in a scenario where Carbon Capture and Storage is considered a viable alternative and offshore wind holds 40% of the market, the electricity cost rises to £120/MWh.
Mr Simpson said: “The chosen mix of low carbon energy generation has the potential to hit consumers’ wallets hard. Our study shows that a strong case for including nuclear into the mix to provide secure base load and to curb overall cost increases and high prices to consumers. Governments need to take a dispassionate and critical view. If they do decide to back new nuclear, decisions need to be made urgently on how they are going to facilitate the financing of new nuclear capacity through the structuring of regulatory systems and financial support.”