The Government’s controversial carbon price floor is responsible for the issues facing the nuclear industry. This is according to energy analyst Tony Lodge, who predicted back in January the carbon tax would not incentivise new nuclear build.
The Centre for Policy Studies Research Fellow warned the carbon price floor should be re-examined as it only provides benefits to existing nuclear generators and risks another ‘dash for gas.’
Tony Lodge said: “The Government’s proposed carbon price floor hugely benefits EDF but heavily penalises RWE and EON assets inthe UK which always risked making their future nuclear investments uncertain.”
Mr Lodge also predicted that the carbon tax would result in tonnes of UK coal reserves becoming ‘stranded’ as the market for indigenous coal production collapses before new clean coal plants are ready.
He added: “It will make generating electricity from coal, oil and gas more expensive; the cost increases inevitably being passed on to the consumer and energy intensive industry. It could undermine successful and growing British coal mining operations which are planning for new ‘clean coal’ markets and opportunities.”
Many in the sector agree companies like EDF are suited to a high carbon price floor in light of its existing fleet of nuclear plants. Others like RWE and E.ON would be discouraged to part with their cash due to their reliance on coal and gas assets.