The U.K. committed to the world’s costliest power station when it agreed with Electricite de France SA to build the first new nuclear reactors in the country since 1995, according to Liberum Capital Ltd.
Adopting a minimum price for carbon dioxide will do little to encourage investment in the U.K. power sector and risks souring relations with continental Europe, according to Citigroup Inc. and Virgin Green Fund analysts.
The U.K. government’s decision to guarantee as much as 10 billion pounds ($15 billion) in debt for the first nuclear power station in two decades helps ensure Electricite de France SA will support construction of the plant.
The U.K.’s 376 billion-pound ($582 billion) program to switch from fossil fuel to renewable and nuclear power is headed for crisis because of looming energy shortages and spiraling costs, Liberum Capital Ltd. said.
The U.K. government will publish draft strike prices tomorrow outlining how much renewable project developers will earn for each megawatt-hour of power they produce, a Liberum Capital Ltd. analyst said.