Nuclear Power in the UK Electricity Market: From a Limited Future to Eternal Life and Back Again?

Abstract

In 1990, the privatisation of the British electricity supply industry revealed how uneconomic Britain's nuclear power plants were. The nuclear sector was withdrawn from privatisation and it seemed likely that by 2000, most of Britain's nuclear power plants would be closed. However, operating costs were dramatically reduced and in 1996, most of the nuclear plants were privatised in British Energy. Nuclear output made an important contribution to the reduction of greenhouse gas emissions and the future looked secure for the existing plants. However, the early success of British Energy was based on an inflated wholesale electricity price and by 2000, British Energy was struggling to cover its costs. The British government is now conducting a review of energy policy. The economic case for new nuclear power plants is poor but the need to meet greenhouse gas emission targets and the influence British Energy and BNFL may ensure the long-term future of the existing plants.