Shell backed out of its commitment to provide the financing for one third of the world’s largest offshore wind farm off the Kent coast. The London Array, expected to cost about £2bn, now needs to find a new investor. What about tapping the public? The project has reasonable economics, and private individuals could benefit from 40% tax relief by putting shareholdings into pension plans. Perhaps as importantly, such a move would raise understanding of renewable energy generation among the wider community.

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In the past three months, John Hutton, the UK government minister in charge of industry, has publicly backed an expansion of both nuclear and of offshore wind. Is this good for the UK’s climate targets? Possibly not.

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Nuclear power may or may not be an unfortunate necessity. But a look at Finland should temper any optimism about construction costs.

The government’s decision in early January 2007 to support (or, more precisely, not oppose) the construction of nuclear power plants in the UK prompted strongly felt responses from all sides. To the electricity generating industry, nuclear power represents an attractive way of reducing emissions. To most – but by no means all – environmentalists, the push for more nuclear power is both a mistake and a missed opportunity: a mistake because no country has yet shown that nuclear waste can be stored effectively, and a missed opportunity because nuclear baseload generation reduces the incentive to develop wind and tidal power.

This article looks at what we can learn from the building of the nuclear power station at Olkiluoto (OLK3) on the western coast of Finland. The ground works started here in early 2004 and the plant is now due to open in 2011. Does this project give us confidence that nuclear power stations can be constructed at a reasonable cost and to a reliable timescale?

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E.ON’s plan to install supercritical coal-burning technology on its Kingsnorth site in Kent was (unsurprisingly) supported by the planning authority. A more interesting question is why E.ON persisted with the application in the first place. Even carbon efficient power stations emit far more carbon than gas plants. A high price of carbon would make the Kingsnorth coal plant uneconomic. The answer to the question must be that E.ON is confident that supercritical coal plants can be economically retrofitted with carbon capture technology (CCS). So even if the carbon price increases dramatically, coal will still be competitive.

E.ON’s US operation is closely aligned with the co-operative FutureGen venture, which plans to build a coal gasification plant in the US within five years. This power station will then capture CO2 and store it in sandstone. FutureGen gasification carbon capture technology is ‘pre-combustion’, unlike the ‘post-combustion’ focus in Europe. US electric utilities are now assuming that coal plants without CCS will not be allowed. But in both the US and Europe there seems to be a prevailing assumption that a $30 per tonne CO2 price is sufficient to cover the cost of CCS technology, meaning coal will eventually be back in the power station mix.

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The UK government has announced an intention to allow offshore wind farm development around most of the UK. John Hutton suggested that about 33 GW capacity could be added by 2020. This would provide about 25% of current UK electricity demand (which is itself rising by 1 to 2% per year).

Simple calculations suggest that this change may add about 15-25% to UK electricity bills. Offshore wind is more expensive to construct and operate than onshore wind farms. The announcement may suggest that the government believes that offshore wind can be pushed through but that onshore farms are likely to be successfully opposed. The big push for offshore wind seems to mean that the government is losing faith in nuclear.

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