Government's draft Energy Bill: Will it answer all the nuclear questions in the West Country?

Picture of protest against plans at Hinkley Point C Credit: ITV West

The government's draft Energy Bill, being published today, aims to answer several important questions of vital importance to the West Country: how are we going to keep the lights on, and at what cost?

Underlying this is the future role of nuclear - the proposed Hinkley C - and of renewable alternatives, wind farms and the Severn Barrage.

The decision by Horizon to pull out of another nuclear station at Oldbury in South Gloucestershire, means that option is now seriously in doubt, while EDF's plan to build two more reactors at Hinkley is in jeopardy due to rising costs and difficulties in its home energy market in France.

Reports today that the life of Hinkley B could be extended will at least give the company - and the government - more time to assess the financial implications. It now seems clear that the private sector - which is attracted to the Severn barrage - is put off by the enormous decommissioning costs of nuclear and uncertainties about the rate of return.

The only way to overcome this would be contracts supported by the government to guarantee a fixed price for electricity from nuclear - some reports suggest this could add £200 a year to household energy bills.

Enthusiasm for nuclear has waxed and waned within government - while it seems to fairly strong at the moment, this is mainly because the looming energy gap will have to be plugged in the medium term, and imported gas is too risky. The Severn barrage may yet be a more realistic option after all.