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Last Updated: Tuesday, 11 July 2006, 02:43 GMT 03:43 UK
Q&A: UK energy review
Electricity pylons (image: PA)
Could an 'energy gap' leave the UK struggling to keep the lights on?
The government has published the findings of its energy review.

Much of the attention centred on whether new nuclear power plants will be given the go-ahead.

However, there are a number of issues that the review will cover.

What is the energy review?

The review was announced by Tony Blair in November 2005, and has been overseen by Trade and Industry Minister Malcolm Wicks.

It has been focusing on progress in a number of key policy areas, including:

  • Cut the UK's CO2 emissions by 60% by 2050, with real progress by 2020
  • Secure energy supplies
  • Making sure that every home is adequately and affordably heated

Why do we need this review when the government published an Energy White Paper in 2003?

Government officials have said the review was necessary to assess the developments made in the areas above, which were originally outlined in the White Paper.

But they also list a number of factors that have occurred since 2003 that they said made a review necessary. They include a surge in oil prices, reserves of North Sea gas being depleted, and concern over a looming "energy gap".

What is the "energy gap"?

In short, the projected demand for electricity over the coming decade is greater than the projected generation capacity. This has lead to worries about the nation's ability to keep the lights on.

ELECTRICITY GENERATION
BBC graphic

The reasons behind the so-called "energy gap" are that a number of large coal-fired power plants will have to close because of a European directive that limits emission levels.

Also, all but three of the nuclear power plants in the UK are scheduled to reach the end of their operating life by 2020. Currently, nuclear reactors generate 20% of the UK's electricity.

These closures combined with a growing demand for electricity in homes and businesses has led to the emergence of the energy gap.

Why is nuclear power back on the agenda?

This can be boiled down to two reasons: economics and emissions.

Gas-fired power stations provide about 40% of the UK electricity, but the rising cost of natural gas has seen a rise in people's energy bills.

This rise in electricity generation prices have helped make nuclear power plants become more economically competitive.

Concerns about being dependent on unreliable overseas supplies have also led to a number of key people, including Tony Blair, giving serious thought to the nuclear option.

As for emissions, nuclear power plants produce virtually no CO2 when generating electricity.

This makes it an attractive option for the government, which is set to miss its self-imposed target of cutting CO2 emissions by 20% on 1990 levels by 2020.

However, uncertainty still surrounds the thorny issue of radioactive waste. A panel of experts recently said that burying the waste deep underground was feasible, but the price tag of a clean-up programme for the UK's nuclear waste could exceed 70bn.

Are people going to see their energy bills continue to rise?

In the past few years, households have seen a rise in gas and electricity bills after a number of years of stable prices.

SMART METERS
Smart meter (Image: More Associates)

There appears to be little chance of cheaper bills in the short-term while global energy markets remain volatile.

Rising bills particularly affect families on lower incomes. The government describes "fuel poverty" as a household that spends 10% or more of its disposable income on gas and electricity.

Ministers recently announced plans for energy suppliers to help people become more energy efficient and reduce their demand.

This could involve insulating homes, buying energy efficient equipment or even installing so-called "smart meters".



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