M&C Energy Group, the UK's largest independent energy consultancy, has welcomed Charles Hendry's support for nuclear power and the introduction of a minimum price for carbon, however it expressed concern that much more is needed to encourage private companies to invest.

Energy analyst for M&C Energy Group, David Hunter, said:

"We are heartened by Charles Hendry's comments to the Nuclear Industry Forum on how he wants to make the UK one of the most attractive places in Europe to invest in new nuclear. Clearly, the purpose of these assurances is to give private companies the confidence to respond with finance.

"However we are concerned that the government, while saying the right things, is not yet backing it up with real action - particularly given the well documented difference of opinion on the need for nuclear at the heart of government.

"While introducing a carbon floor price is a step in the right direction, more must be done. Nuclear is still not operating on a level playing field when compared to renewable which receives huge subsidies from government. Considering exempting nuclear power from the Climate Change Levy, and transforming the Renewable Obligation scheme into a Low Carbon Obligation to include nuclear power, are steps that could be taken.

"Nuclear is being told that it must pay for its own ‘emissions' in the form of decommissioning costs, however dirty fossil fuels have to be priced fairly in the market to deliver a low carbon future that has 24/7 nuclear baseload power at its core.

"The UK has to build £200 billion of energy infrastructure over the next decade or so and foreign private investment will be needed on a grand scale.

"The government cannot afford to foot the bill, but that may not be the biggest obstacle to overcome. There are still potential planning delays, nuclear skills shortages in new build and regulation which, despite government assurances, could delay the process. Foreign investors will be aware of such pitfalls.

"It is all well and good saying that the government ‘will remove regulatory barriers and encourage nuclear power', but it is still reliant on private investors to ‘plug the energy gap'; there are real issues to overcome over and above funding. The biggest could be the obvious differences of opinion with the government when it comes to nuclear energy."

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