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Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next speaker, I remind the House that the winding-up speeches will probably begin in a little over an hour. A good many Members are still seeking to catch my eye. There is already an eight-minute limit on Back-Bench speeches, but if Members could take rather less than their allotted time it would be very helpful, not just to the Chair but to others who are waiting to speak.
4.38 pm
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab):
I shall begin where the Secretary of State began. He pointed out that electricity generation in this country is divided among a number of diverse sources, 40 per cent. being provided by gas, 33 per cent.
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by coal, 20 per cent. by nuclear power, perhaps 4 per cent. by renewables and a little by oil. That diversity provides some security, which I feel should be the nub of the argument. Nevertheless, enormous pressures are building up which will have an impact on the energy market. The International Energy Agency has said that over the next 30 years the demand for energy will increase by about 1.7 per cent. per annum. That increase will bring about new build of power stations. In Europe alone we will require 130 GW of energy replacement and new energy. Let me give the House an idea of how much that is. Drax power station, which is the largest power station in Europe, is 4 GW, so we will need to build a lot of Draxes to meet an energy demand of 130 GW over the next 30-odd years.
The point has been forcefully made that in moving over to gas, the threat is that we could become over-dependent on it. Gas is currently scarce, and we know that some 400 million cu m of gas is used daily. The Secretary of State said that we can meet likely demand this winter, and we know that gas supply is likely to increase when the Norwegian interconnector is through. In fact, as a result there is likely to be a 28 per cent. increase.
John Hemming: Does the hon. Gentleman accept that, as the production figures show, although it is feasible to import gas into storage, market pressures operate to prevent that from happening?
Mr. Clapham: Market pressures certainly do operate in that way. As my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) pointed out earlier, speculation in the market causes certain problems. Companies in her constituency have closed down and sold gas on, so there are difficulties associated with the market mechanism that need to be looked at.
When gas capacity increases by 28 per cent., there is likely to be another dash for gas, unless a mechanism is put in place to prevent it. Given the likely simultaneous decommissioning of coal-fired and nuclear power stations, unless we can restrict that dash for gas, 70 per cent. of our electricity generation needs may have to be met by imported gas. In the first instance, such gas will come from Norway, but within five years Norwegian gas is likely to become very scarce, so we will be dependent on gas coming down the pipeline from Russia. Russia has become an energy superpower that will provide energy for the whole of Europe. There are real dangers in that. The phenomenon of terrorism and the problems that may arise because of international disputes put us in a very vulnerable position. I therefore hope that during the review, the Minister will look seriously at the question of how we move forward. One driver will be climate change, which will be the big issue for the Minister to examine when he considers all the factors that impact on the review.
As was pointed out in strong terms by my hon. Friend the Member for Barnsley, Central (Mr. Illsley), coal is seen as a dirty fuel and we have got to get beyond that. The increase in the global energy market over the next 30 years is likely to occur in carbon fuels, and we have to be able to burn those fuels in a way that is compatible with our environmental aspirations. Clean coal technology provides that opportunity, and it is already here. Mitsui Babcock is producing supercritical boilers
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with a carbon capture facility; some are already being exported to China. We need to incentivise generators to invest in new clean coal technology. The first phase will be supercritical boilers with carbon capture, and the second is likely to be integrated gasification combined cycle units. I understand that four projects have already been given approval, so we are likely to see developments there too.
I believe that clean coal technology can help to provide the solution that the Minister is looking for. It would allow us to burn coal, capture the carbon and use that carbon either for sequestration in the North sea or in other projects—for example, infusing carbon dioxide into coal seams to enhance the gasification process. There is already a project running in Scotland; Strathclyde university is involved, and it may go commercial.There are a number of ways in which we can deal with carbon dioxide. Clean coal technology will help us to provide a sound energy base, but it also provides another opportunity. If we are to deal with the global carbon dioxide problem, we shall have to transfer technology into the countries that now use enormous amounts of coal, such as China, India, Brazil and the up and coming new economies. We need to invest in clean coal technology, and I hope that the Minister will see it as part of his solution.
The UK coal industry was privatised by the Conservatives in 1994. They privatised it into a failed market situation when it was below its critical mass, and they knew that it would wither away. Since then, the industry has been dependent on the Government, and had it not been for the present Government, it would already have passed on. There are now seven producing collieries, six in England and one in Wales, and there is a possibility of a new mine being sunk in Margam. That will be done in partnership with Corus, and it is for metallurgical coals.
The English coalfield needs investment. I hope that my hon. Friend the Minister is prepared to make that investment to ensure that it can continue to make a contribution to energy security.
4.47 pm
Mr. Quentin Davies (Grantham and Stamford) (Con): I shall not say anything this afternoon very different from what I have said on previous occasions on this subject, but I shall say it with greater urgency, because of present circumstances in the world, and with a greater hope that it will be taken seriously both by the Government and by my Front-Bench colleagues, who, as we heard this afternoon, are to conduct their own parallel energy review.
There have been two dramatic developments in the world over the past few months that we cannot ignore. One is that although the evidence of climate change has been apparent to us anecdotally for some years, because of such things as the changes in the seasons in this country, there is now empirical evidence, based on the latest measurements, that the amount of cold water sinking in the North Atlantic, which is the mechanism for the gulf stream, is falling. That is terrifying, because if the gulf stream failed, or was reversed, in a few generations' time this country would have a climate comparable with that of Labrador today.
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That is a major threat, and we have to take it seriously. We know that we are not likely to reach the 60 per cent. reduction in carbon emissions by 2020 to which we have committed ourselves—at least, not without some major new action.
The second new development is the substantial rise in the price of natural gas, which has doubled over the past couple of years, coupled with the fact that we have become a net importer of natural gas. Anyone who knows anything about the energy business knows that all gas and oil fields follow a bell curve pattern: once exploitation begins, production increases quite rapidly, then there is a plateau for quite a long time, but when the field begins to run into diminishing returns, production falls sharply away. I am afraid to say that the news can only get worse on natural gas against a background of rising international prices and energy demand. Being dependent on the Netherlands and Norway is, as has been said, relatively reassuring, but once we come to find a substantial proportion of our natural gas deriving from Algeria or Russia and other such countries, we will need to be very worried.
Frank Dobson: Will the hon. Gentleman give way?
Mr. Davies: I cannot as I am trying not to go into extra time.
Against that background, I do not think that energy saving is enough. Of course, we all want to go in for energy saving, but we have to recognise that demand for energy will be increasing at the very time when some of our power stations, particularly the nuclear ones, have to be decommissioned. We must replace those sources of energy with new ones. We must also provide for new energy in future. Simply to talk about energy saving, as the Liberal party does, is a complete abdication. It is a cop-out, not a responsible policy line.
Nor do I believe that renewables can be the answer. After all, all we have had so far from renewables has been wind. There has been no progress on ambitious ideas about mobilising tidal energy. Wind is very expensive. Subsidies disguise the additional economic cost, and wind is available on average for only 30 per cent. of the time. It is not a baseload source of energy, and although it is fine if it provides 4 per cent. or even 10 per cent. of energy—a few percentage points would be very desirable—it eventually becomes impractical, because we would need so much back-up capacity that the fixed costs of the back-up for when there is no wind, which is on average roughly 70 per cent. of the time, become excessive. That is not a solution.
The only solution is that supported by colleagues and me. I very much endorse what my right hon. Friend the Member for Fylde (Mr. Jack) said, and what he has also said on many occasions. We need to go, ambitiously and bravely, for a major programme of building new nuclear generators. In other words, we need to do, 20 years later than they did, what the French have so successfully done. I should like us to commit ourselves in the next few years to building, say, 10 new EPR stations, or perhaps dual reactor stations. Ten of those with 3 GW to 4 GW each would produce in 25 or 30 years time about half our current energy needs.
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If we are to move down that road, Parliament will have to take some decisions. We shall have to make a decision on a licensing regime. The nuclear inspectorate of the Health and Safety Executive has gone to sleep over the past few years so far as licensing new models is concerned, even though new stations have been built in France, Finland and elsewhere. The inspectorate has done no work on that, and there will be enormous delay in getting it into gear. We should go for an EU regulation and licensing regime, which would enable us to leverage on the experience of the French and the Finns.
We have to do something about the planning regime. We cannot possibly have the absolute fiasco of the Sizewell B inquiry, which I think lasted six years. From my experience in Northern Ireland, I can see what happens when we put a lot of lawyers in a room and pay them large amounts of money daily, as in the Saville inquiry. It all goes on for years and years and years.
If we are going to do what I suggest, it will have to be done by private Bill procedure. Of course, private Bills can be prayed against, and Parliament can hear the evidence. We would never have built a railway system in the 19th century if it had not been for private Bills. I think we have to get back to that. I remember in my first Parliament supporting the private Bill on Felixstowe dock and harbour. We would never have had the Felixstowe dock without adopting that procedure, and what a success that has been.
Then there is the climate change levy. We should not give a bonus to existing stations, which are making a reasonable amount of money and are rapidly depreciating. But for new nuclear build, we should exonerate energy produced by those stations from the levy. There is no real logic about applying the climate change levy to nuclear energy, which produces no carbon at all and does not affect the environment. We should remove that anomaly.
Finally, we need to do something about limiting regulatory risk. The state—be it in London, Brussels or Vienna—is in a broad sense responsible for regulation, and if we are to get private sector capital investment in building new nuclear power stations, investors must be sure of the rules of the game on, for example, fuel treatment, recycling and decommissioning. They must be sure that the rules will not suddenly be arbitrarily changed. If the rules are changed, it is reasonable to require the state that changes them to meet the associated economic costs.
Investors in the energy industry and others are looking at an average oil price of $50 a barrel, and that offers a viable reason for revisiting the nuclear programme. As I said, two of our EU partners, Finland and France, have made that analysis already. France is gaining immense benefits—some of the figures were quoted earlier in the debate—from the very brave decisions that it took in the 1970s. That is the way forward for us too, and I hope that the Government, and my colleagues on the Opposition Front Bench, have the courage to say as much over the coming months. We need to make a decision without delay.
4.55 pm
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