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WORKERS, DECEMBER 2003 ISSUE

APPARENTLY UNBELIEVABLE comments from US power companies operating in Britain that Britain would face power cuts by 2004 have been reinforced. The US companies forecast power cuts because the rate of return on their profit was being restricted by government regulation. Now British Energy is teetering on bankruptcy - administration is coming near again as debts reach £1.3 billion...and still rising at the last count.

British Energy accounts for 20% of Britain's electricity generation. The European Union is investigating the government's bale-out of British Energy as being illegal under European directives. In addition the European Union's Large Combustion Plant Directive, which targets sulphur emissions, will effectively close all of Britain's coal-fired power stations.

Unless the generating companies are willing to build the hugely expensive gas flue de-sulphurisation capability that the coal-fired stations need, then the stations will be closed. As the generators have refused such action since the 1980s, the future of coal-fired generation looks bleak. Correcting problems caused by an unstable power supply and a lack of back-up options could take 10 years or more if new power stations have to be constructed.

Government strategy is based upon four principles: no further construction of new nuclear plant; no dependency on Britain's vast coal reserves; experimental development of Heath Robinson wind and wave schemes; and almost total dependency on imported gas from Norway, Russia and the Middle East. The only logic for the dependency on imports is if the government has totally subscribed to and accepted that it has no energy policy other than that which is driven solely by the European Union.

· A report published by the Adam Smith Institute - an anti-working class, anti-trade union, Thatcherite organisation - on alternative energy poses some awkward questions.

The report, written by an alternative energy expert, suggests that dependency on imported energy and renewable sources such as wind and wave power, combined with the closure of home coal and nuclear power generation, will lead to unreliable and unpredictable energy supplies. This policy, now being considered by government, could result in a tripling of energy prices and routine black-outs, according to the institute.

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