2 How best to meet the shortfall?|
9. The most appropriate way of introducing this
section of the Report is by quoting from a recent "postnote"
from the Parliamentary Office of Science and Technology (POST):
"The UK's gas reserves are declining. Government
and industry analysts estimate that by around 2006 the UK will
no longer be self-sufficient in gas production and will revert
to being a net gas importer. Gas is the largest proportion of
the UK's primary energy
supply, and gas-fired power plants are the main method of power
generation. The UK will increasingly depend on gas imported from
Europe and further afield."
10. These are alarming words, but during its inquiry,
the Committee concluded that POST was not being alarmist but simply
11. The written submission from Scottish and Southern
Energy does, we believe, set out the scenario facing Scotland
the most succinctly:
..Scotland is faced with the prospect
of the following sequence of events unfolding:
closure of the nuclear power stations;
closure of the coal-fired power stations;
question marks against the viability of gas-fired
and large hydro stations;
question marks against longer-term deployment of
new renewable energy; and, in this scenario,
major investment in the England-Scotland interconnector
and in the transmission networks.
None of this is unavoidable."
12. It is, therefore, vital that decisions are taken
now, to obviate the possibility of, quite literally, the lights
going out in Scotland in the foreseeable future. There are a number
of possible forms of energy; nuclear, fossil (ie, coal, oil and
gas) and renewables (eg, biomass,
wind, wave and hydropower, geothermal and solar). Unfortunately,
no one form of energy production is perfect as all have their
An energy audit
13. The most crucial issue that was raised with the
Committee during its visit to Sacramento was that the UK should
undertake an audit of the energy resources that are currently
available, and then to use that as a basis to work the energy
requirements that will be needed in the future. The Committee's
attention was drawn to a report published in 2004, A Balanced
Energy Plan for the Interior West,
produced by Western Resource Advocates (WRA), which makes fascinating
reading. WRA uses law, economics and policy analysis to protect
land and water resources, protect essential habitats for flora
and fauna and ensure that energy demands are met in environmentally
sound and sustainable ways. WRA's Energy Programme develops policies
and markets to promote sustainable energy technologies to improve
environmental quality in the Interior West.
14. During his evidence, Professor Lovelock touched
on this matter, putting it in these terms:
.we do not have time at this juncture
for visionary schemes. We have to cut our cloth to the conditions
of the world and the world looks a very dangerous one. We had
better use the energy sources we need. Maybe they will give us
time to change over because any sort of energy source, like a
nuclear power station, does not last for ever. They need replacing
after a time, and then comes the time one should look at or be
prepared to use alternatives."
Committee agrees with the analysis put forward by its interlocutors
in both the UK and the USA. As a matter of urgency before any
final, irreversible, decisions on what sorts of power generation
are the most appropriate for Scotland are taken, we recommend
that the Government undertake an audit of the energy resources
that are currently available, and then to use that as a basis
to work out the energy requirements that will be needed in the
Renewable forms of energy
16. On the face of it, renewable forms of energy,
harnessing without exploiting the Earth's limitless natural resources
of wind, wave and sunlight would seem to be the perfect solution.
But there are issues even with renewables, and some people do
object to, for example, wind turbines as being unsightly and noisy.
17. Other forms of renewable energy may be available
and able to contribute to meeting future energy needs, for example
biomass, solar energy, wave and tidal power. In their submission
Scottish Renewables indicated a future energy mix from renewables
of one quarter for hydro, half for wind and a quarter for "emerging
technologies", which encompassed wave and tidal power.
18. In the case of biomass there are schemes already
existing in Scotland and there is a huge potential for the forestry
and agricultural industries to exploit this source. In their evidence
to the Committee both Scottish Coal and ScottishPower indicated
considerable interest in biomass. Scottish Coal indicated:
"Our particular company is interested in biomass
because we see biomass as being a major generator of electricity
at some time in the future, but there is virtually none being
burnt at the present time in Scotland. I think 60 per cent of
renewables in Europe come from biomass, but we are off to a fairly
slow start. The advantage of biomass with coal is that you get
an immediate reduction of emissions, this is the so called co
firing. If we start to blend in biomass with coal supplies
which we are doing at the moment - we are actually doing the first
commercial contract in the country of biomass blending with coal
- we have all the advantages of neutralising the existing coal
fired power stations and getting that immediate reduction in emissions."
19. There are experimental wave and tidal schemes
in Scotland but, although in theory they will provide a significant
proportion of energy there has not, as yet, been a large scale
prototype that would demonstrate that they can actually produce
sufficient energy. In their evidence, Wavegen stated that:
"It would probably take up to 10 years for all
the companies to get to the stage where they have enough critical
mass to go their own way and act and behave as stand alone businesses."
20. Similarly, there is insufficient information
on the part that solar or photovoltaic systems could provide.
In looking at the use of renewables, particularly wind and biomass,
we should not assume that we have to produce large scale projects.
Scottish and Southern Energy made the point that small scale wind
turbines could be useful in many homes.
The same might also be true of biomass.
21. Although objections to renewable energy sites
could be taken as simply NIMBY-ism, during its visit to California,
the Committee had the opportunity to see the hundreds of wind
turbines covering acres of the Altamount valley, and accepts that
in situating wind farms, for example, there should be proper attention
made to protecting areas of significant natural beauty from excessive
numbers of turbines. Clearly, however, it is true to say that
any form of energy production appears to have its detractors.
22. Given the
timescale and uncertainty of these "emerging technologies"
the Committee consider that it is unwise to assume that they can
meet a quarter of the renewable proportion of Scotland's energy
needs. We would urge that further research and development is
urgently required to ascertain their viability.
23. There is also the matter that renewable forms
of energy would need to be subsidised by the taxpayer if the individual
consumer were not to find the cost intolerable. We were quoted
a report from the Royal Academy of Engineering, which put the
cost of energy at 2.2p per kilowatt for coal, 2.3p for nuclear,
6.3p for wave and 6.7p for wind.
It was not entirely clear, however, what factors were taken into
account in coming to these figures.
Coal and gas
24. As stated in paragraph 9 above, by around 2006
the UK will no longer be self-sufficient in gas production and
will increasingly depend on gas imported from Europe and further
afield. Whilst some of this gas will be imported from stable democracies
such as Norway, some of it will have to come from less politically
stable countries and regions. We do not consider that the UK should
set itself up as being a hostage to fortune in such a way.
25. In order for coal to have a viable future, coal
fired power stations will have to take on board the 2003 Energy
White Paper's 2050 target of a 60 percent reduction in carbon
dioxide emissions to about 240 million tonnes, and more immediately
the EU's Large Combustion Plant Directive, coming into force in
26. This latter Directive will mean that coal fired
stations will have to operate at very low sulphur emissions. As
Scottish and English coal is high in sulphur, costly flue gas
sulphurisation will have to be fitted to the plants, or low sulphur
coal will have to be imported from, eg, South Africa.
27. Given the
vast reserves of coal within the United Kingdom, it must have
a part to play in meeting our future energy needs; therefore,
coal-burning power stations in the UK must be fitted with the
equipment necessary to capture carbon dioxide and sulphur. The
Committee recommends that the Government shows its commitment
to the future of the UK coal industry by agreeing to underwrite
the cost of providing and installing such equipment at coal-burning
28. Perhaps, however, the solution might be the most
controversial decision that the Government could take: the rehabilitation
of nuclear power. Nuclear power does have a proven track record,
and a new build power station could take less than 5 years to
complete, but people
do have fears about nuclear power. The solution could be a new
generation type of nuclear power station; from our discussions
in Chicago, we understand that Exelon are already analysing possible
29. The Committee heard from UKAEA about the possibility
of nuclear fusion (ie, joining together atoms), rather than nuclear
fission (ie, splitting atoms), being used to produce electricity
in the future. Nuclear fusion technology, if "marketed"
properly would appear to be nowhere near as controversial as nuclear
fission, as the Director of UKAEA Dounreay confirmed that fusion
technology would be safer, cleaner with no waste produces and
with no possibility of the technology having a military application.
30. UKAEA's Head of Corporate Communication continued:
"This is one of the key advantages that everybody
sees for fusion as opposed to fission. Having said that, we do
have to recognise that it is not a developed technology in the
way that nuclear power, fission power is. The reason that it might
be worth developing is because it has got these inherent advantages
of safety; it genuinely fails safe
is of hydrogen isotopes so the actual product of it is not radioactive
isotopes. Where there is waste produced in the fusion reaction
it is just radiation of the material around the reactor but none
of that is these long lived isotopes that give us such a problem
with what is the eventual waste route. My understanding is that
they are all isotopes that would decay within a period of 50 or
100 years, so there is not a huge waste disposal issue as we are
currently struggling with on fission."
31. The Committee considers nuclear fusion plants
to be an option which may be worth pursuing. As Professor Lovelock
commented when following up his oral evidence:
"The reactor at Culham is an experimental device
that has now succeeded in proving the feasibility of obtaining
energy by the nuclear combustion of hydrogen, almost the same
process that goes on in the sun. It is a prototype for a larger
reactor from which the first fusion power plant will be designed.
The Culham reactor successfully fused the isotopes of hydrogen,
deuterium and tritium in 1997 with a yield of 16 Megawatts of
energy lasting for two seconds.
The chance of building and running a successful
fusion power plant looks good. Its advantages are impressive;
the main fuel deuterium is everywhere as a part of water and easily
separated from it, the second fuel, tritium, is produced by the
reactor as it runs. There is no risk of an explosion, and no long
lived nuclear waste. Think of it as somewhat like a gas fired
boiler. The deuterium, tritium fuel mix is fed in and burnt continuously;
there is no vast radioactive energy store inside the reactor as
there is with fission power. If only it were available now! "
major problem with nuclear fusion, which appears to be a particularly
benign and efficient way of producing electricity, is that it
will not be available until nearly the mid-21st century. As the
UKAEA witnesses stated, it is 30 years, at least, before a commercial
fusion reactor would be available.
Nevertheless, nuclear fusion could be a major source of power
in the not too far distant future, although more research may
A mix of sources
33. From our informal discussions and oral evidence
sessions it was clear that no-one any longer advocates a sole
form of energy to provide Scotland's electricity; everyone accepts
that a mix of some description is needed.
34. For example, the Scottish Executive has set a
target of 18 per cent of electricity generated in Scotland to
be from renewable sources by 2010 and an aspirational target of
40 per cent by 2020. Current generation from renewable sources
stands at around 12 per cent. In his evidence, Professor
Lovelock suggested that an appropriate mix might be 30 to 40 per
cent from nuclear, possibly a similar balance from "clean"
coal with renewables filling the shortfall.
In their submission, the Scottish Renewables Forum states that:
"The key issue facing Scotland is how to consider
the replacement of current conventional generation that will complement
the planned 40% renewable target. i.e. the issue is how to achieve
the 60%. The debate is not, therefore, about renewables vs. conventional
as both will be needed."
35. However, it is not immediately clear what the
Scottish Executive means by 40 per cent. Scottish and Southern
Energy expressed their confusion:
"40 per cent of what, is one of the questions?
I think we are going back, to answer that question. Is it on electricity
production in Scotland, because 40 per cent of nothing is not
a great deal? Or is it 40 per cent of energy supplied in Scotland?
Or is it 40 per cent of renewables in the UK?..... I have been
actively encouraging the Scottish Executive to give greater definition
to what that policy meant or potentially to redefine the policy
in different terms."
"The 40 per cent will be achieved very, very
easily just by shutting Longannet and Cockenzie, and that is my
point. If you define it as a relative point it is easy to achieve
by reducing the amount you generate. I think that is the wrong
definition of policy. I think it should be of energy supplied,
in other words what Scottish consumers use rather than what Scottish
36. The Committee shares Scottish and Southern Energy's
confusion and concern. The
Scottish Executive must, therefore, clarify its position and state
whether the "40 per cent renewables" refers to generation
37. The Committee
agrees with the statement by the Scottish Renewables Forum that
the debate is not about renewables vs. conventional as both will
be needed. The energy audit, recommended by the Committee in paragraph
15 above, must, therefore, be on the basis that all current forms
of energy, whether renewable, fossil fuel or nuclear, will be
38. Another important matter brought to the Committee's
attention was the impact of the British Electricity Trading and
Transmission Arrangements (BETTA).
Previously, there were three separate transmission charging areas,
England and Wales, Central Scotland and the North of Scotland.
Different amounts were charged for generation, whereas under BETTA
there is a national set of transmission charges, put in place
by the National Grid Company.
39. The effect of this was that it costs between
£23 and £26 million more to operate a gas-fired power
station in Aberdeenshire than one in South West England. How such
an anomaly could happen was explained by Scottish and Southern
.our Peterhead power station will pay
£18 a kilowatt for every kilowatt it has connected. A power
station in the central belt of Scotland will pay around £12
a kilowatt. A power station in the north of England will pay around
£5. A power station in the Somerset area will receive
£5, so you have a very pronounced tilt."
40. As previously stated in paragraph 11 above, Scottish
and Southern Energy suggested that none of the scenario set out
in its written submission was unavoidable.
The transmission charging regime could be fundamentally reviewed;
a reformed regime would, SSE claim, remove from Scotland the stigma
(all other things being equal) of being the last place in which
it is economically rational to maintain or build a power station,
including new renewable energy, and that a review could help Scotland
meet its future energy needs.
41. The Committee is persuaded by this argument and
therefore recommends that
a fundamental, and immediate, review of the transmission charging
regime takes place.
our inquiry it has been put to us on several occasions that the
best way of ensuring that Scotland's energy supply is maintained
is by conserving energy. We agree, and therefore commend the Government's
current Energy Efficiency campaign, particularly the television
advertisements which seek to convince the British people that
one person can indeed make a difference by simply switching off,
eg, an unused light or lamp.
43. We commend
also those companies who, under the Energy Efficiency Commitment,
are helping priority households to lower their energy costs by
providing them with free loft and cavity wall insulation,
and those builders who are incorporating, solar panels, for example,
as standard in or on their new build homes and office blocks.
44. We call
upon the Government to continue to improve through national regulations,
the standard of building construction, both commercial and residential
to ensure that maximum energy efficiency is realised. The Committee
was impressed in its visit to the San Francisco Public Utility
Company at their efforts to ensure that minimising energy use
was integral to the city's planning processes for development.
We accordingly recommend that the government provide tax incentives
such as reductions in VAT, to encourage a rigorous energy audit
before any substantial development so that the developer works
towards a zero or minimal net energy demand. This should be extended
to existing homes.
1 "Primary energy" refers to resources that
produce energy, eg, oil, gas, coal, nuclear or renewables. Electricity
is "secondary energy" because it is generated from primary
The future of UK gas supplies,
POST postnote 230, October 2004. Back
See written submission from Maf Smith, Chief Executive, Scottish
Renewables, HC 259 Vol II Back
Organic material provided by crops, trees, agricultural and forestry
residues and animal waste. Back
The report is available electronically at http://www.westernresourceadvocates.org. Back
Q 144. Back
See written submission from Maf Smith, Chief Executive, Scottish
Renewables HC 259 Vol II Back
Q 58 Back
Q 87 Back
See written evidence from Scottish and Southern Energy
Q 94. Back
Q 126. Back
Q 44. Back
E-mail to the Committee secretary, 2 March 2005 (not otherwise
Q 46. Back
Q 146. Back
See written submission from Maf Smith, Scottish Renewables, HC
259 Vol II Back
Q 175 Back
Q 176 Back
The Trade and Industry reported on BETTA in 2003. See the Fifth
Report from the Trade and Industry Committee, Session 2002-03,
The British Electricity Trading and Transmission Arrangements:
Pre-legislative scrutiny of the draft Electricity (Trading and
Transmission) Bill, HC (2002-03) 468-I, and the Tenth Report
from the Trade and Industry Committee, Session 2002-03, BETTA:
Comments on the Government Reply to the Committee's Fifth Report
of Session 2002-03, HC (2002-03) 937. Back
Q 159. Back
See written submission from Scottish and Southern Energy, HC 259
For example, see written submission from Scottish and Southern
Energy, HC 259 Vol II Back