Areva will seek reactor licence after go-ahead for UK nuclear

Areva and other nuclear companies have long demanded to be able to licence reactor designs before their customers decide to build a new station at a particular location known as pre-licensing.

A source close to the company told The Business: Should the Energy Review open the pathway to nuclear power, pre-licensing will be the next step. We and other vendors would definitely look at pre-licencing.

The Energy Review backs the construction of new nuclear power stations. But energy policy experts said the Treasury had blocked attempts to provide additional subsidies to encourage the building of new nuclear power plants.

A leading energy policy adviser told The Business: At one stage they were talking about a low-carbon obligation or giving nuclear power a guaranteed market share. What Ive heard from quite senior people is that the Treasury wont have it.

Instead, the review will smooth the way for private financing, overhauling planning laws and possibly additional commitments on the carbon trading scheme.

The source said: It stops the situation which is what happened at Sizewell B and at Hinkley Point where throughout the whole process opponents were able to go back to beginning, and say "what is the justification for new nuclear power stations?"

Bernard Ingham, Margaret Thatchers former press secretary and a vociferous supporter of nuclear power, argued in a report for the Economic Research Council: The British government does not have the luxury of choice to overlook nuclear power if it really wants greater security of unsubsidised cleaner electricity.

He argued that planning has been the greatest obstacle. In the report he said: Nothing has been done to enter into contingency arrangements whether by way of licensing next-generation reactors, identifying sites for them or clarifying the terms of long-term access to the electricity market. If there has been any policy for dealing with long-term nuclear waste, it has been procrastination.

The nuclear safety watchdog, the Nuclear Installations Inspectorate (NII), said in its report to the Energy Review at the end of June that it supported granting licences in two phases, first to particular reactor designs and then for a particular site.

Areva and its rival Westinghouse, which owns the AP1000 design, are the companies whose reactors are most likely to provide the UKs next generation nuclear plants, although General Electric and the Canadian utilities behind the Candu reactor may also seek licences.

The Areva source said government chief scientist Sir David Kings assertion in May, that pre-licensing could start this summer, was optimistic.

Although the Energy Review will back new nuclear power, supporters of energy efficiency and renewable forms of generation are optimistic that it will be a partial victory.

The government had hired consultants at Deloitte to examine expanding the subsidy for renewables called the renewables obligation to cover new nuclear power. This was apparently vetoed by the Treasury, which has also pushed for targets on energy efficiency to be replaced by targets for energy demand reduction, a much tougher goal. The 2003 Energy White Papers push for energy efficiency is widely seen as having failed.