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Robert Key:
It would be unwise for the House to discuss security in any depth or detail, but looking globally at the situation, there are numerous examples of terrorism against pipelines, whether oil or gas. It is particularly on account of gas supplies and the vulnerability
of the 80 per cent. that needs to be imported that we should opt for a wider, broader base load including nuclear.
David Howarth: The hon. Gentleman makes a good point about the physical infrastructure, but my point is that it is only nuclear whose very technology requires a basic secrecy. Its historical connection with the military, which goes back to the origins of nuclear power, has meant that over the past 60 years it has been incredibly difficult to get any accurate information about the workings of the industry. It is not because the people involved are somehow ill intentioned; it is the nature of the industry itself, which means that it has to be kept secret. That leads on to a further reason against nuclear: it is the only form of energy production that is inherently a threat to civil liberties, requiring a repressive apparatus of the state to maintain it in place.
The next reason against nuclear is waste disposal. The CoRWM—Committee on Radioactive Waste Management—report does not resolve the problem of nuclear waste at all. Instead, it says that it is a very difficult problem over which it is difficult to gain consent. It argues that we should attempt to get the necessary consent, but whether we will ever reach it, of course, is a very different question.
Mr. Jamie Reed: The framework outlined by the Secretary of State for the Environment, Food and Rural Affairs last week provides a much-needed, long-term policy framework for the management of radioactive waste disposal. Contrary to what the hon. Gentleman has just said, the problems associated with that disposal are not scientific, but entirely political. I believe that a solution and resolution could be found quite speedily.
David Howarth: There are both scientific and human organisational problems. The scientific problems are connected with geology. In Finland, for example, the only site identified for nuclear waste is a wet granite site and it is not entirely clear whether the geology will work over the envisaged time scales. The organisational problems are connected with the extent to which any depository should be sealed because of the problem of future invasion of the site and removal of the materials. It deals with the very long term, so we have to raise the question whether, in many thousands of years’ time, people will be able to find the site and understand what is there. I would argue that those are human problems, not political ones.
Mr. Jamie Reed: On that very point, would not exactly the same apply to long-term carbon storage and capture?
David Howarth:
The hon. Gentleman makes a good point, but that technology is inherently a short-term fix to buy us time, though other hon. Members see it as a more permanent solution to the problem of producing energy in a carbon-free way. As the technology now exists—we are still in a state of uncertainty about the different forms of carbon capture and storage—it seems sensible to treat it only as a means towards getting a different energy system altogether in about a generation’s time. Fusion power was mentioned earlier;
the problem is that fusion has seemed to be a generation away ever since I was a boy. It is always a generation away. Some forms of technical innovation never seem to make much practical progress.
Peter Luff: The hon. Gentleman should visit Culham to see how much progress is being made on fusion. It is no longer a generation away; it is perhaps only half a generation away. There is real optimism that the technical challenge is being met. It may not happen, I agree, but it is looking more likely now than it ever has before. The hon. Gentleman should update himself on the technology.
David Howarth: I would be delighted to visit that site, but I have to say that optimism has been part of that particular technology for a long time. My view is that the nuclear industry in general—covering both fission and fusion—is fuelled more by optimism than by any other fuel.
I move on to the subject that our debate was originally to be about: the security of energy supply. The Government’s problem—it can be seen in the consultative documents—is how to measure security of supply. The Government invited views on how best to measure it in the first place; it is difficult to set a target if it is not clear precisely what is being measured. Security of supply, of course, is not one, but many different problems. In fact, there are at least four different problems, which I should like briefly to mention: resilience, control of resources, diversity and interdependence.
To deal with resilience first, an energy system is resilient to the extent that it can survive shocks and bounce back. We need to ask questions such as how long it takes to recover and at what cost. It is a question of minimising the permanent losses to the economy and production that can occur from a particular event, and assessing how much it will cost to get back to where we were in the first place. What makes for resilience are elements like decentralisation. A decentralised energy system is inherently more resilient—it can bounce back more quickly and is less injured in the first place than a big centralised system. In that case, when large power stations go out of action, it causes a huge problem, requiring a lot of effort and cost to recover.
It is also a question of storage, which has been mentioned in relation to gas. The Secretary of State referred to the improvements that followed the recovery of the Rough storage facility, the new pipelines and the liquefied natural gas port facilities. As he said, capacity is not the same as use, so we need some reassurance that the new facilities are being used to the full extent. It is right that, over the coming years, we will need more gas storage. Whatever one's view on nuclear, in the next 10 to 20 years, a lot of the replacement electricity-generating capacity that we are going to have to use will be gas. Whatever happens, it will be CCGT—combined cycle gas turbine—combined heat and power and microgeneration, so the question of increased gas storage capacity will be with us, regardless of our view on those bigger questions.
Mr. Mark Prisk (Hertford and Stortford) (Con): The hon. Gentleman talks about resilience, and rightly so, but does he recognise that the resilience of overseas assets, particularly gas pipelines, will be just as important as the resilience of those assets that he is talking about now?
David Howarth: It is true that the resilience of those assets is important. I will come on to another question about overseas assets, which is who controls them. That has been a concern on many sides—who controls the assets and in what circumstances can they be withdrawn from use by the authorities of other countries?
I want to answer the question about what will happen as the nuclear power stations come out of use, a problem that has been raised on several occasions so far. Those nuclear power stations make up just under 12,000 MW. Already planned are 12,000 MW of gas and 13,000 MW of renewables, mainly wind, to which we can add a small amount of planned CHP plants, again mainly using gas. Those facilities will result, I think, in there being no particular problem of electricity supply in the next period. In fact, the Government say as much in their reply to the Environmental Audit Committee report on energy entitled “Keeping the lights on”:
“the modelling also indicates that in most scenarios, the risk of having unserved electricity demand is unlikely to become substantively higher than today until around 2015. Even then, the amounts of ‘shortfall’ between demand and supply are likely to be small and could therefore potentially be resolved by some companies voluntarily shifting their electricity consumption from peak to off-peak times in response to price signals.”
Therefore, I do not think that that is particularly a problem.
However, there are a couple of problems in respect of resilience and gas storage. One is the planning system. A number of hon. Members have raised that. I understand that the Government will make announcements in January on how the planning system can be speeded up in favour of gas storage sites. I find it interesting that the Government are prepared to tear up the planning system in favour of nuclear. As has been mentioned, the consultation on how that will work will close tomorrow. It is interesting to compare what the Government are prepared to do for nuclear with what they were prepared to do for gas.
I am not particularly sympathetic myself to tearing up the system for either system of energy production, but I think that improvements are possible. The problem is that attempts to impose top-down command-and-control orders on local planning authorities simply lead to resentment. People who feel ignored or bypassed by the system are likely to want to take up any point. My experience as a local council leader is that one day spent in consultation early is worth a week of recriminations later.
What one sees—there are examples of this going on now—is councils taking up points in rejecting planning applications which are basically cop-out points. The councils themselves are unlikely to believe that the problem really exists. What they are saying is that it is a planning issue; that local residents perceive that there is a problem. That is not a point that it should be possible to use in the law itself, but local authorities are not taking responsibility. They are effectively saying, “Someone has to decide in favour of this but let it not be us. Let someone else take the rap.”
It would be better to change the planning system, so that local communities and people got some benefit from accepting strategic projects. It is noticeable that the CoRWM report talked about exactly that. It was saying to local communities, “If you accept radioactive waste, there will be other benefits for you, so we ask for volunteers to take this deal.” The question I put to the Government is: why not have the same system for gas storage or indeed for renewables?
Another issue that arises in respect of gas storage is the strategic reserve. The energy review rejected the notion of a strategic reserve. The argument against it was that classic Treasury argument that I used earlier in this speech: it would crowd out private sector investment by dulling incentives to cover contracts. That is a fascinating point. One would have thought that, given all the fuss that the Government have made about the security of gas supply and all the points that were made by the hon. Member for Wealden (Charles Hendry), who speaks for the Conservatives, about the threats from Gazprom, and the uncertainties about where gas will come from, there would have been an entirely different answer from the Government on the question of a strategic reserve—that the Government are much better at spotting political risk than the private sector. But what has happened? Entirely the opposite has happened. The Government have concluded that no strategic reserve is necessary. My conclusion is that one can tell from what the Government decide on the strategic reserve what they really believe about the political risk—that is, the political risk is controllable and the private sector can handle that problem in the normal market way. We have here an example of the Government revealing their preferences by what they do, rather than by what they say.
The second aspect of the problem of security of supply is control—the ability to command resources outside the market and to have ownership of them. This is the concern about imports. There is a fear of imports—a form of mercantilism is going on here. There is a feeling that we are in a new situation of importing energy and we should all be afraid of the feeling of loss of control. In many ways, it is an unfamiliar and unwelcome feeling, but it is not an argument for nuclear, as 100 per cent. of uranium is imported.
The best forms of maintaining control are energy efficiency and renewables. The fuel sources for renewables are again entirely under our own control. Wind, wave and tide cannot be taken away by other people. That is why, from a security point of view, renewables are so important. I suppose that one of these days someone will invent rain power and then we will be completely fine.
Mr. Jamie Reed: The hon. Gentleman will be aware that, if we reprocess spent nuclear fuel, we need never import another gramme of uranium into this country.
David Howarth: The hon. Gentleman is suggesting reprocessing nuclear fuel in a way that no one now proposes to do. If we have learnt one thing about nuclear in the past generation, it is that the reprocessing method is not viable economically. I do not think anyone is suggesting going back to it.
I suppose that it is true to say that other methods of control may be recommended, although I would not recommend them. US policy seems to be obsessed with the control issue. Dick Cheney said in 2001 that the US should
“make energy security a priority in our ... foreign policy.”
Of course, that led to a policy of autarchy and of trying to maintain obsessive control over the range of energy sources. It may not have been the only reason for the war in Iraq, but I am sure that it was not entirely irrelevant. In fact, one aspect of the nuclear debate that worries me—hon. Members appear to find it so interesting—is that it seems that Britain is going nuclear as soon as the US changes its policy and goes nuclear. I might come to the conclusion that the decision to go nuclear is simply another aspect of the vassal-state attitude of some members of the British Government.
It also has to be said that the US interest in nuclear also extends to ensuring that its companies receive nuclear contracts from the third world. The interests of Bechtel are involved, I fear—
The Minister for Energy (Malcolm Wicks): I really do not wish to delay the hon. Gentleman any longer—[Hon. Members: “Hear, hear.”] He seems enthusiastic about two things—I am enthusiastic about them, too—one of which is fuel efficiency. However, to be fuel efficient one needs some fuel to be efficient with. The only fuel he seems to advocate is renewables. We want a five-fold increase in renewables, but where will the rest come from? The hon. Gentleman is telling us what he does not like, but what diversity of energy mix are the Liberal Democrats promoting?
David Howarth: As I said, whatever one’s attitude to nuclear, in the next 15 to 20 years, electricity production will come mainly from gas. I know that some people want a different solution in the short term, but there is not one. That is why gas security is so important, regardless of one’s view on nuclear. The proportion of gas used to produce electricity will increase, whether nuclear energy is chosen as a long-term option or not.
Dr. Nick Palmer (Broxtowe) (Lab): What’s your long-term option?
David Howarth: Well, I have explained the mix that will be necessary, and the hon. Gentleman can read for himself the ILEX report produced for the World Wide Fund for Nature on the subject. If one combines an aggressive energy-saving programme with a wider choice of renewables than we are considering at present, together with combined heat and power, a more efficient way of using gas and a change in the way in which the electricity market is regulated—so that it encourages low-carbon, not high carbon between coal and gas—one can achieve a carbon saving equivalent to what the Government have set out, but without using nuclear.
The third aspect of security of supply is diversity, and here I come to an important problem with nuclear power. The Government intend that new nuclear power stations will be procured in a group—or a fleet, as it is called—of 10 or more of exactly the same design. They
will be ready much more quickly, because it will be necessary to approve only one design, and they will be built by a combined consortium of the major energy suppliers. The problem is that that reduces the amount of diversity in the system.
Security of supply is achieved by diversifying risk and ensuring that risks are not associated with each other. If the Government have a programme of 10 identical nuclear power stations, they will increase the correlated risk. If anything went wrong with one of those nuclear power stations, they would all be affected. If something were wrong with the design of the plants, they would have to be turned off at once. Nuclear power stations are similar in design, but not identical. Making all the new nuclear power stations identical will lead to the problem the aircraft industry faces—if something goes wrong with a type of aircraft, the whole fleet has to be grounded. That is a fundamental objection to the notion that nuclear power will add to the diversity of supply: in fact, it will detract from diversity.
Finally, the most important aspect of security of supply—and the one that really works—is interdependence. We need security of supply for those who import power, but there also needs to be security of demand for those who sell it. Russia’s problem is not that it intends to use energy supply as a political lever. Its real problem is that Europe is its only serious customer. It needs to diversify its customers. At the same time, we are attempting to diversify the sources of our gas. In Britain, the amount of gas imported from Russia last year was exactly zero—we do not use Russian gas, but the rest of Europe does. By diversifying and turning to the rest of the world for gas supplies, other European countries are worrying the Russians.
I am concerned that we are developing a sort of Russia phobia in describing the relationship between us, which should be one of interdependence within international trade. However, there are barriers. The obvious barrier to developing an interdependent and free relationship is that Russia and, indeed, Ukraine, are not even members of the World Trade Organisation. Russia also needs internal liberalisation—Gazprom is a state majority-owned company. However, people who live in glass houses should not throw stones and we can hardly lecture the Russians on liberalisation if Europe’s market is not liberalised.
The problem in the European market is not simply a question of the French and the Belgians refusing to liberalise; it is a problem about the relationship between control and interdependence. Regulators and Governments in those other countries are so concerned about the question of control over gas supplies that they think that it is more important than liberalising the market. Last winter, we saw very high prices for gas. British companies were willing to pay those prices, but they could not obtain gas at any price. The reason for that is that the gas was controlled by state-controlled companies in which officials make their careers not by making money for the company, but by ensuring that gas is under the control of their company and Government. We need to negotiate the liberalisation of the European gas market, and the Government are doing so to some extent. However, they need to recognise that the obsession with control—from which we also suffer—is a fundamental problem.
The first essential step is transparency. If we do not know how much gas is held in other countries, there is little else we can do. Therefore, I urge the Government to get on with that aspect of negotiation.
The issue of security of supply is not simple, and I have held the House up for a long time largely in an attempt to demonstrate that it is not simple. The Government have adopted several measures that should be praised. Their attempts to encourage better gas storage and the liberalisation of European gas markets are indeed the right way to go. However, we must understand our own position. If it is fundamentally one of worrying about control, we will undermine our efforts to reach the situation of international free trade and interdependence, which will be safest in the long term.
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