UK proposes energy market overhaul to boost nuclear

Britain unveiled a draft energy law on Tuesday aiming to plug a looming energy gap with £110 billion of investment in nuclear and renewable energy over a decade. Britain is due to lose about a fifth of its energy capacity over the next 10 years while demand will double by 2050, ministers said, admitting some of the cost of new capacity would come from increases in household bills. "What we want is a market structure that makes sure we keep the lights on," Energy Secretary Ed Davey told BBC radio. He said a planned mechanism to stabilise revenue for firms investing in low-carbon generation did not amount to a pro-nuclear subsidy but aimed to smooth out "high up-front costs". "Unless nuclear can be price competitive -- as the industry says it can be -- these nuclear projects won't proceed," he said. The British arm of environmental campaigners WWF said the process was "rigged for nuclear". The draft bill, which must now be scrutinised by MPs, is also set to include an emissions standard aiming to stop the construction of "dirty" coal power stations. Nuclear plans in Britain suffered a setback in March when German energy giants E.ON and RWE said they had decided to pull out of their British nuclear power joint venture, which had planned to build two new plants. Germany itself has decided to phase out nuclear power because of safety fears after Japan's 2011 atomic disaster, in which a tsunami swamped cooling systems at a power plant, sending reactors into meltdown and leaking radiation into its surroundings. The accident forced tens of thousands of residents to evacuate their homes and sparked fresh global debate over the possibility of nuclear accidents even as supporters back atomic energy to cut emissions and fight climate change. Fossil fuels accounted for 90 percent of the British energy supply, according to government statistics released in 2011, while some 28 percent of its energy came from imported sources. Nuclear accounted for 6.4 percent. Davey said Britain's proposed bill would help reduce reliance on imported gas and oil, insulate the country from world energy price fluctuations, and "meet our climate change goals by largely decarbonising the power sector during the 2030s".