Larry Elliott and Mark Milner 

Ministers act to stop lights going out in 2015

· Threat of energy crisis sees nuclear go-ahead · Coal-fired stations coming to the end of their lives
  
  


Fears that Britain could be plunged into an energy crisis by 2015 will result in the green light being given by Christmas for a new generation of nuclear power stations, senior Whitehall sources are indicating.

With more than a fifth of the UK's electricity generating capacity due to be closed down in the next eight years, ministers are planning to fast-track Labour's energy strategy with the publication of two white papers this month.

Sources said that the government would mount a full public consultation process over the coming months, after which a final decision will be taken. But ministers have been persuaded of the need to act quickly. "We are concerned that unless we act soon, the lights could go out in 2015 in the event of a really hot or really cold spell", said one Whitehall insider.

One of the white papers will argue that Britain needs a balanced energy portfolio, including nuclear, to meet its needs over the coming decade. The other is designed to speed up the planning system, allowing new power stations to be given the go-ahead within two to three years.

The government's energy blueprint will include plans for an expansion of renewable forms of electricity generation, but ministers believe there will still be a potential shortfall by the middle of the next decade. They are concerned that victory for the Scottish Nationalists in tomorrow's elections could sound the death knell for more windfarms in Scotland.

Consultation on energy policy, ordered by the courts after a judicial review earlier this year, will be relaunched at the same time as the white paper is published and the government hopes to be in a position to unveil its plans before the end of the year.

Britain is facing the risk of an "energy gap" over the coming years as ageing nuclear plant is closed down and a number of coal-fired power stations are due to stop generating by the end of 2015 at the latest because they do not meet the European commission's emission regulations. Two nuclear stations were closed at the end of last year and another six nuclear plants are currently scheduled to close between now and 2015.

At present Britain's generating capacity is around 20% higher than peak demand, which enables the system to maintain full supplies even if a number of power stations unexpectedly drop off the grid. Industry estimates suggest more than 20 gigawatts of generating capacity will be retired over the next 15 years and it will cost about £20bn to replace. Generating companies have tabled plans for around 20 megawatts of new capacity but while some have passed the planning stage others are barely beyond the drawing board.

According to the source the government is worried the comfort zone - the excess of supply over peak demand - will be eroded between now and 2015 and that, despite efforts to conserve energy, there is a real risk of power shortages.

Generating companies accept the need for new capacity, but are facing a number of uncertainties over what kind of capacity should be built. A number of clean coal projects are on the stocks but the big questions are the extent of the political commitment to nuclear power and what will happen to the price of carbon under carbon dioxide emission trading schemes.

Companies will be reluctant to commit to nuclear if they believe a policy of new build would be overturned by a subsequent government, while the price of carbon will be a key influence on the economics of the industry. A high price will encourage renewables and nuclear but a lower price would suggest gas and coal would remain top of the agenda.

The government has set a target that 20% of Britain's electricity will come from renewables by 2020 but the source said that was challenging and would become even more difficult if Labour were defeated in the Scottish elections.

The government is also concerned about the decline in output from the North Sea which is occurring more rapidly than earlier forecasts had predicted.

 

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