The Observer

by Heather Stewart

22 October 2006 

The Government's Energy Review was a messy political compromise which leaves Britain trapped in a 'poker game' with nuclear giants, according to a report by one of Britain's leading experts on energy policy.

Dismissed by some campaigners as a smokescreen for introducing nuclear power, the Energy Review was launched in July with the personal backing of Tony Blair.

But in a report published tomorrow by think-tank the Social Market Foundation, Dieter Helm, a specialist in energy economics at Oxford University, accuses the government of fudging the question of whether it supports nuclear power. 'The review provides little by way of concrete policy proposals and it is unclear as to whether it is pro-nuclear,' Helm said.

While admitting that it is unlikely to meet its emissions targets unless new nuclear stations are built, the review failed to offer a definitive price for carbon - the main market mechanism it hopes will encourage the private sector to produce more nuclear generators.

Helm says this lack of definitive targets exposes the government to brinkmanship by potential builders, who can wait for the government to get closer to missing emission targets, and demand more financial concessions.

He also accuses ministers of being 'naive' in expecting energy markets to ensure security of supply, in the new world of expensive oil, declining UK reserves, and powerful gas companies, such as Russia's Gazprom.