UK nuclear needs market reform

WITH a commitment to cut carbon emissions by 34% by 2020, and with little of its own money to spend, the UK government must encourage private-sector investment in low-carbon electricity generation

Nuclear power must play a key role in this, but there are regulatory obstacles to the kind of long-term investment needed. A carbon floor price and an obligation for traders to buy low-carbon power under long-term contracts are the two sticking points. At the moment, non-nuclear low-carbon forms of generation benefit from Renewables Obligation Certificates (ROC), which guarantee the power they produce can be sold under assured long-term contracts, providing the cash flows that give long-term investors comfort. Nuclear projects do not qualify for ROCs and must sell electricity on the spot market, because ROCs were created as an incentive for new generating technology, and nuclear is considere