Sir, Investment in power generation in this country is now undertaken solely by private capital and it is unlikely that private companies would invest in capital-intensive nuclear plants (Business, May 10 and 11) with long construction periods in a competitive market where prices are highly volatile.

Private capital tends to chase the lowest-cost solution and over the past decade this approach has led to building primarily gas-fired plants. While this has been sufficient for the UK’s energy needs, it has considerably exposed the economy to gas price increases and weakened energy supply diversity. Hence the renewed interest in nuclear power.

However, it is difficult to see how the Government can create the economic conditions necessary to build new nuclear plants without seriously distorting the power market and creating considerable uncertainty about regulation of the industry.

If the Government truly believes in competitive energy markets, then it should stop at opening the door to a nuclear renaissance and let the private generation companies decide if they want to enter. To go further would bring into question the Government’s confidence that truly competitive markets can be trusted to deliver secure, reliable power at reasonable costs.

Yours faithfully,
GRAHAM WEALE,
(Director, European Energy Services),
Global Insight (economic consultancy),
Wimbledon Bridge House,
1 Hartfield Road, SW19 3RU.
May 11.

From Mr Matthew Rhodes

Sir, The arguments for microgeneration go to the heart of debate about the future shape of our country. Do we want a nation dominated by big energy companies supported by big government and big taxes, or do we want energy and government as servants of the people?

Centrally generated and supplied electricity — big energy — costs customers 7p per kWh, whether it comes from nuclear, big wind farms or gas turbines. The bulk of this cost goes on distribution and transmission charges, supply costs (for example, people in call centres), losses in transmission and corporate margins.

In contrast, microgenerated electricity from, for example, microturbines and energy-efficiency measures, such as loft insulation, cut out the corporate overheads.

The reason homeowners don’t see these benefits is that energy supply is controlled by a small number of large companies whose size limits the flexibility they can offer customers. This inflexbility is built into the regulation and structure of the energy market.

Instead of spending billions of taxpayers’ money for foreign firms to build nuclear stations or wind farms, the Government should put in place market mechanisms that properly value microgeneration and energy efficiency.

Yours faithfully,
MATTHEW RHODES,
(Managing Director),
Encraft (energy advisers),
46 Northumberland Road,
Leamington Spa,
Warwickshire CV32 6HB.
May 11.

From Dr Alison Doig

Sir, Africa’s energy crisis keeps people in utter poverty. Eighty per cent of sub-Saharan Africans have no access to electricity, and over 90 per cent cook all their meals on open fires. This is the real energy crisis. According to the World Health Organisation, cooking with wood, dung and crop waste in poorly ventilated homes is one of the greatest threats to health in developing countries.

Tony Blair’s Commission for Africa supports a centralised, large-scale approach to solving Africa’s energy crisis. However, this approach will bypass the majority of African people. Investments in oil and gas pipelines will export Africa’s resources to richer nations. Electricity transmission lines will pass over rural villages to feed wealthy urban centres and industry.

Mozambique is a net exporter of power from its large hydro plants, predominantly feeding the South African grid. Only 6 per cent of people in Mozambique have electricity.

Local solutions bringing decentralised power and fuels to millions of people living in poverty are essential to achieve Tony Blair’s vision of lifting Africa out of poverty.

Small is beautiful.

Yours faithfully,
ALISON DOIG,
(Energy specialist),
Intermediate Technology Development Group,
Schumacher Centre for Technology Development,
Bourton Hall, Bourton On Dunsmore,
Warwickshire CV23 9QZ.
alisond@itdg.org.uk
May 15.

Explore Letters

• Feedback