Nuclear energy is the future of Britain's energy needs that no one dare mention - or at least not during a general election campaign. However, on the basis that Labour wins on Thursday, there will be a government review of the question whether to start building nuclear plant again.

Tony Blair sees nuclear power as the best way to meet the UK's commitments to reduce its carbon dioxide emissions. His view is widely shared in business, which is fed up with paying ever- increasing prices for electricity, and even by some environ- mentalists (including James Lovelock of the Gaia Foundation).

Setting aside tricky issues of how to convince a fearful public about the merits of atomic energy and storing radioactive waste, there is another big question: who is going to pay for new nuclear power stations?

According to Matsui Babcock, the energy consultancy and engineering company, it will cost pounds 12bn to build 10 new nuclear power plants in the UK. These would replace the 14 ageing plants - due to be decommissioned in the next two decades - that currently provide a quarter of the UK's electricity.

The construction expense would be higher unless a single, modular design is used for every station. Also, the cost per station decreases the more that are built.

One design that would fit the bill is the UK-owned Westinghouse AP1000 station. None has been built anywhere in the world as yet, but the design has been approved in the US.

Iain Miller, the chief financial officer at Matsui, says: ``The current nuclear power stations are basically a series of prototypes, built when Britain was the pioneer of nuclear energy.

``The next generation of stations will be modular and only use one design. You don't want to pander to various different technologies.''

Contrary to popular belief, the cost of nuclear generation is comparable with coal and gas-fired power stations over the long term.

According to a recent report by the Royal Academy of Engineering, the price of generating electricity from nuclear stations - even factor- ing in the costs of construction and the decommissioning of waste - is about 2p per kWh.

That is about the same cost as electricity from coal or gas- fired stations and a third of the cost of onshore wind farms. A recent report by the economic consultants Oxera found that the cost of the expected expansion in the generation of renewable energy over the next decade would dwarf the cost of building an equivalent nuclear generating capacity over the same period.

But one problem for those who support the construction of new nuclear plants lies in finding the capital - power stations are about three times as expensive to build as gas-fired plants.

The Treasury does not want to foot the bill for building new nuclear facilities. That leaves City institutions and utility companies to dig deep to find the cash.

Keith Parker, the chief executive of the Nuclear Industry Association, says: ``There have to be some en-abling measures to give the right signal to investors. For example, there is no way investors are going to be interested when it takes six years to get planning permission for a new plant, so reform of planning law would be a good start.'' Other helpful measures from the Government would include pre-licensing new plant designs and expediting the creation of a long-term policy on the disposal of nuclear waste.

In a recent speech in Paris, John Ritch, the director- general of the World Nuclear Association, said: ``As a step toward energy independence and as an urgent environmental imperative, it is essential that national governments take the steps necessary to incentivise immediate nuclear investments.

``This pump-priming can be achieved by a temporary production subsidy, by absorbing some first-of-a-kind engineering costs.''

He asked for a variety of subsidies, citing the help given by governments to ``politically correct renewables'' as a precedent.

Another way the government could encourage the construction of new nuclear plants would be to significantly reduce the amount of CO2 that power generating companies are allowed to produce without penalty.

Currently, if a power plant exceeds the amount of CO2 that it is allowed to pump into the atmosphere, it has to buy so-called ``renewable obligation credits'' and thus in effect pay a pollution penalty.

If emission limits were tightened, then emission-free nuclear plants would become more of a commercial proposition. However, such government restrictions would also accelerate the shift from coal to gas - an energy source on which, it is widely believed, the UK is already too dependent because stocks in the North Sea are diminishing.

According to Ritch's argument, the goal is not to sub-sidise long- term nuclear operations but ``simply to accelerate the nuclear renaissance for reasons of national interest and the global environment''.

Visit http://www.powermarketers.com/index.shtml for excellent coverage on your energy news front.