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[cdn-nucl-l] Dump coal-fired stations to save nuclear power, says think-tank
Posted in the UK Independent on October 13, 2002 and at:
A policy the world should adopt to save millions of lives every year.
See what David Suzuki has to say at:
Dump coal-fired stations to save nuclear power, says think-tank
By Andy McSmith and Heather Tomlinson
13 October 2002
Britain's ailing nuclear industry could be rescued if the Government
closed down some of the coal-fired stations, a left wing think-tank has
The call, from the influential Blairite Institute of Public Policy
Research, comes in the wake of the Government bail-out of British Energy
and the mothballing of two power stations by Powergen and is being made
as one of the largest coal stations in the UK heads towards a fresh
Alex Evans, Energy Research Fellow at the IPPR, has warned ministers
that if they bail out nuclear power company British Energy, which is in
danger of going into administration, they would "make a mockery" of
their own competition policy.
The IPPR also hit out at financial support given to British Energy. "By
supporting British Energy, the Government is unfairly penalising other
energy companies – and there is a real risk of political fallout if they
fight back. Instead of focussing on short-term pain relief, the
Government must address the real problem of overcapacity in generation,"
Mr Evans said.
"This can be achieved in the short-term through incentive payments for
the oldest and dirtiest coal stations to close early. This will help
British Energy by easing overcapacity while at the same time reducing
carbon dioxide emissions."
Other energy companies have been hit by falling energy prices in the
wake of the reform of the electricity market earlier this year. Drax,
the coal-fired power station in Yorkshire, has been hit by high debt
levels and rising insurance costs. Now it may have to renegotiate a
lifesaving contract with TXU, the energy giant whose shares were briefly
suspended in New York last week, as investors panicked over liquidity
TXU reassured the market about its overall liquidity, but ratings
agencies are still alarmed by prospects of a cash crunch at its European
subsidiary. Fitch rating agency downgraded its debt last week to below
investment grade level while Standard & Poor's downgraded due to
"immediate liquidity concerns".
"If TXU sinks, then there's a distinct probability that that would cause
severe distress at Drax," said Michael Sonenshine, a high yield debt
analyst at Credit Suisse First Boston.
He has downgraded around £225m of Drax's bonds and claimed, in recent
research, that they have no asset value.
TXU has said it is renegotiating contracts with power stations that call
for it to buy power at prices well above the current market rate. The
contract at Drax is worth between £200m and £250m, and is responsible
for more than half of the station's output.
Garry Levesley, a vice president of AES, the US company that owns Drax,
has said that the power station is the cleanest and most efficient
coal-fired station in the UK.
"The older, dirty stuff needs to be taken out of the system," he said.
"The Government would be better off to buy the old, uncompetitive
generators and shut them down." Drax has debts of £1bn and bankers fear
it could default on the loans.
The IPPR's call for the closure of coal- fired stations will come as a
surprise to anyone who remembers the left wing slogans of the 1980s
"Coal not dole" and "Nuclear power – no thanks".
Old priorities such as saving the jobs of miners have been replaced by
more pragmatic concerns about climate change and the state of the energy