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My third critical consideration, which the Government unaccountably seem to ignore, or at least do not give the attention that it is due, is that there are good reasons for believing that renewables can readily fill the gap without the large downsides of nuclear. Let me give
what I hope will be powerful support to that view. Research has been carried out by AEA Technology, which is the former research arm of the Atomic Energy Authority, so one might expect it to have a pro-nuclear perspective. It announced three months ago that 40 wind farms sited off East Anglia’s coast could provide a quarter of the UK’s total electricity requirements. The report said that the offshore turbines could create the same amount of electricity as 30 conventional power stations. From my point of view, AEA Technology is an unbiased source, so I think that it makes a powerful statement.
If the Government are going to be serious about the role of renewables in their response to the Stern report, they should give a much higher priority to developing such proposals. Renewables provide only a pathetic4 per cent. of the electricity generated in the UK, whereas the average figure is in the order of 25 per cent. in nearly all other European countries. It is all very well for the Government to say that they have a target of20 per cent.—hoorah, that is wonderful; all power to their elbow—but as we have made such little progress in the past 10 years, it is difficult to credit that we will reach a target that is five times greater than the current position in the next 15 years. I hope and pray that the Government are right, but they will require much more muscular programmes of support than we have seen up to now.
Mr. Blizzard: I wonder whether the report to which my right hon. Friend referred was “Sea Wind East”. Nobody would be happier than I if such a capacity could be generated off the coast of East Anglia, not least because of the employment prospects for my constituents. We want as big a slice of that as possible, but I do not know many people who believe that we could do that much. We could do a lot and we need to do more, but I am not sure we could do that much.
Mr. Meacher: I do not think I was referring to “Sea Wind East”, but I will discuss the matter with my hon. Friend afterwards and show him my source. In arguing whether or not such a goal is possible, the key point is what Germany, Denmark and Spain have done. They are the leaders in wind power. Because of our offshore location, we have far greater wind power capacity in the UK than probably the whole of the rest of Europe put together. We are using only a minute amount of it.
Finally, microgeneration is probably the most promising new technology. The Energy Saving Trust estimates that by 2050 it could provide 30 to 40 per cent.—I am quoting the trust’s figures—of the UK’s electricity needs and help to reduce carbon emissions by some 15 per cent. a year. That will not happen without a major Government programme of incentives. A major and rapid expansion of renewables, including microgeneration, plus, as other hon. Members have said and I endorse, a major targeted programme of energy conservation to counter the prodigious waste of energy in both the industrial and the domestic sector, is the only assured long-term route to energy security on the scale required, and at the same time it can meet the UK’s commitment to a 60 per cent. reduction at least in greenhouse gas emissions by 2050, which is a bottom line requirement.
8.52 pm
Robert Key (Salisbury) (Con): My constituents in Salisbury and the towns and villages of south Wiltshire derive almost all their energy from the national grid. Virtually no electricity is generated in south Wiltshire. I say virtually because, like my hon. Friend the Member for Mid-Worcestershire (Peter Luff), we had micro-hydrogeneration 100 years ago in Salisbury in the town mill. That scheme was replicated in a number of locations up and down the Avon valley and the Woodford valley. Some enterprising people are considering it again, but it can never be of more than marginal significance as a means of energy production. Some people have tried wind energy—wind turbines—on their houses. Some farmers have looked into the possibility of wind turbines on the top of the downs. Fortunately for the sake of the landscape, the Ministry of Defence has intervened to point out that all the low-flying areas are not compatible with wind energy.
We must ensure that we balance the needs of the fourth largest economy in the world with the global and national objectives and national interests of the United Kingdom. I was delighted when the Secretary of State, opening the debate, spoke of the compatibility of being pro-growth and pro-green. I was delighted that in his speech from the Front Bench, my hon. Friend the Member for Wealden (Charles Hendry) spoke ofthe common ground and the fact that energy was top of the agenda. I was less impressed by the contribution from the Liberal Democrats, notwithstanding the fact that they have a distinguished fellow of my college in Cambridge as their energy spokesman. That is an enormous improvement, if I may say so, in spite of his ingenious intellectual contortions in his energy policy—better than previous Liberal Democrat spokesmen, who have always ended up by saying, “We’ll rely on wind and renewables and sustainable energy, and if it doesn’t work we’ll import nuclear electricity from France.” There has been some progress.
On the question of energy supply, the Government have dithered over the past nine years. They have dithered on nuclear, by saying no, then maybe and now yes. To some extent, they have reneged on the dash for gas, which they now think is dodgy in terms of energy security. They have tripped up on planning. In the early years of this Labour Government, they introduced excellent planning legislation, but then they encountered difficulties with their proposals on infrastructure and power stations, which they abandoned. Now they are revisiting those proposals—what a waste of time—and they have failed to meet their targets. It is important, sensible and serious if the Government and the Opposition agree on these issues for the right reasons, but it is dangerous if they agree for the wrong reasons. I hope that the Opposition will not let the Government off the hook.
One trend running through today’s debate is the implication that the price of energy involves only the bill to consumers and industrialists. However, the price of energy is not only an economic cost, because security of supply has a strategic price and renewables have an environmental and distribution price in terms of countryside spoiled by wind turbines and transmission cables marching across the landscape.
Wind turbines are by no means carbon neutral when one considers how they are built and how the electricity they generate is distributed. In the economic jargon, we must internalise the externalities.
The overriding issue, which we must all take as a given regardless of which kind of generation we are considering, is safety. If one examines risk and safety in energy supply, whether one starts with wood, coal, oil, gas, wind, renewables or nuclear, one is left with the conclusion that there is always risk and danger. When advanced countries such as Finland have taken decisions, largely for strategic reasons, on renewing and extending nuclear generation, they have taken as a given the baseline of safety. Safety must be dealt with, acknowledged and ensured, because one can move forward on the basis of such a consensus, which is how we should proceed in this country.
The Government are, of course, responsible for providing security of supply, meeting our environmental objectives, balancing a range of energy sources and maintaining efficiency of transmission. The national grid is based on the 19th-century plans that resulted in a 20th-century distribution system, which is no longer fit for purpose in many cases. We must recognise that point, which is why microgeneration is particularly significant.
In 1970, the average household had seven electrical appliances; today, the average household has 47—in other words, we are very greedy for energy in this country. As we go out on our pre-Christmas binge for white goods and electronic goods, including plasma screens, which use four times as much electricity as anything else, we should bear in mind that we must examine our own navels. We should also remember that a UK citizen uses six times as much energy as an African citizen. We should examine our energy greed, because we can make a difference globally. We must put that argument to those who say, “It does not matter whether I do something good, because it will not make any difference in global terms.” It will make a difference.
Most hon. Members who have spoken believe that we need nuclear and renewables. I will not repeat those discussions, except to say that I happen to believe that we should invest much more in tidal flow generation, which is one of the great unknowns. If we run down our nuclear from current levels and replace it with gas, it will cancel out all the economies that we can achieve by being more sensible about our use of electricity, heat and transport as private citizens.
What is the difference between consumers in France, England and Finland when it comes to electricity generation? In France, people do not loathe nuclear electricity. Some 83 per cent. of French electricity is generated by nuclear power, and we know what happens in Finland. We must therefore differentiate base-led generation, embedded generation plans for CHP on a slighter larger industrial scale and the sort of microgeneration through which we can all make a major contribution.
It is really important that we grasp the nuclear issue. Having studied nuclear energy for many years, and having visited French, Finnish and British nuclear plants, I have come to the conclusion that we need another generation of fission capacity. Nuclear fusion is the future. Like my hon. Friend the Member for Mid-Worcestershire (Peter Luff), I have seen what is going
on at Culham and examined the international thermo-nuclear experimental reactor project, which could result in zero radioactive waste if we have a fusion revolution that allows us to develop a hydrogen-based fuel economy for our country and the industrialised world.
With regard to waste, it is imperative to distinguish the historical legacy of the defence nuclear industry and the first-time-round, experimental trialling of the early British civil nuclear programme from what might be produced in future. The two are as different as chalk and cheese. Over 50 years, a technological revolution has taken place. To use scare stories to imply that we must not move forward to a new generation of nuclear fission because of the problem that the Government are now tackling—for which I commend them—is to perpetrate a cruel deception on the people of this country. Of course we must decide on sites for deep geological burial and retrievability for at least 100 years. That technology is developing and improving, and is on trial in Finland now.
The question of who pays is crucial. Future nuclear industry should not have a tax subsidy. There is no reason why it should. More than 400 nuclear plants are in operation around the world, and others are being built all the time, not just in China and India but elsewhere. The United States has a well proven system of financing for the treatment of nuclear waste for every kilowatt generated. That system is being adopted in Finland. The decommissioning costs must be met from the generation of funds invested for the future, whether privately or by the state.
All of that is predicated on the continuing availability of the nuclear science, technology and engineering skills base in the United Kingdom. Science education is fundamental, and it is a major lack. I blame the Government for not giving sufficient attention to it over the past nine years. Only this weekend, I saw their television advertisements for science teachers, which are super. What a pity they did not run them nine years ago. What a pity that physics and chemistry departments have closed in our universities. How tragic it will be if we do not even have the skilled engineering manpower to dismantle existing nuclear power stations, let alone build a new generation.
Education, not just in our schools and universities, but public education about energy supply—whether nuclear, renewable or both—will cost money. Spending by the taxpayer or private energy companies must be transparent and accountable. Money will be spent, and in large quantities. I maintain, however, that if that spending is transparent and accountable, it is not bribery. It is often alleged that if British Nuclear Fuels or anyone else spends money on visitors’ centres, school packs or CD-ROMs, it is bribery. We must get away from that silly idea.
In energy supply debates, I look for consensus between the political parties. The people of this country deserve that. There is a difference, however, between saying that nuclear energy is back on the agenda with a vengeance, and saying that it is a last resort. I hope that I can persuade those on my Front Bench to be a little more positive than they have been able to be. It is interesting that, whereas the
Conservative party has said unequivocally that it supports, and will almost certainly replace, our nuclear deterrent, it cannot be as positive about nuclear energy for civilian use. I think that we shall have to move from that position as the argument develops. I hope that we do it with good grace, saying “Yes, we have listened to the arguments.”
The constituents to whom I have talked, especially the younger ones, now take it for granted that we will need a new generation of nuclear facilities. Only two weeks ago, when I addressed nearly 400 sixth-form students in Salisbury, I was asked directly for my view on such a “next generation”. I gave my view, and I can only say that it received pretty universal acclaim and agreement.
We have a generational problem here as well. I think that our electors, particularly young electors, see the virtues of trusting in the science, technology and engineering skills that can secure the future energy supply of the United Kingdom.
9.5 pm
Mr. John Grogan (Selby) (Lab): It is a great pleasure to follow the lively, ebullient and typically informative contribution of the hon. Member for Salisbury (Robert Key). I have an increasing sense of quality rather than quantity as the evening proceeds, so I shall confine my speech to two basic questions. The excellent speech of the hon. Member for Mid-Worcestershire (Peter Luff), who chairs the Select Committee on Trade and Industry, left hanging in the air the question of coal, which he said he would have liked to deal with more comprehensively. I shall say a few words about that, and a few words about gas supply.
It is somewhat ironic that at a time when our major indigenous coal supplier, UK Coal, is down to just five pits in England—two in Yorkshire, Kellingley in my constituency and Maltby, and three in Nottinghamshire, Daw Mill, Thoresby and Welbeck—we should see in the energy review the most positive statement about the future of indigenous coal that any Government have produced for 20 or 25 years. Perhaps it is not surprising, though, because indigenous coal has its attractions for two reasons. One, which has been mentioned a great deal today, is security of supply. According to the Department of Trade and Industry, 75 per cent. of our energy will be imported by 2015. It may not be irrelevant that coal, both deep-mined and open-cast, could provide 8 per cent. of our needs then. If we adopt a wider perspective and look at energy supply across the European Union, we see that a larger proportion of coal than of oil and gas is produced in Organisation for Economic Co-operation and Development countries.
Price, as well as the attractions of indigenouscoal, was mentioned in the energy review. Last year100 million tonnes of extra coal was demanded, largely in the far east and mostly in China. Russian coal, which we currently import, may be diverted to the far east in the coming years. There is an advantage to British industry, and to Britain as a whole, in indigenous coal supplies.
I accept entirely that it must be clean coal. We have heard a good deal about that today, notably from my hon. Friend the Member for Waveney (Mr. Blizzard). He was right to be excited about the potential for carbon capture, but there are other potential technologies.
It is important that we provide the right incentives for the development of clean coal. The hon. Member for Cambridge (David Howarth) mentioned the various plants that would come on-stream over the next five or 10 years. Not many new coal-fired plants are planned. It is important that as we design the next generation of emissions trading schemes, carbon trading and carbon credits, the right incentives are given. In Germany, where there are fuel-specific and technology-specific credits extending over the next 15 years with some certainty, there is increasing investment in clean coal.
If we overcome that hurdle and reach a stage at which we have some clean-coal capacity, the question will be whether there is any potential for British coal. Like others, I think it will be largely a matter of negotiations between the generators and UK Coal, but I also think that the Government have a role to play, for reasons that I shall give shortly.
Representatives of coalfield communities are no longer urging the Government to subsidise the coal industry more. About £160 million was put into operating aid and about £65 million was put into investment aid. Over the past 10 years, that was crucial in keeping up the supply of coal and keeping the lights on. Now, however, the coalfield communities are asking the Government to revert to the role of banging heads together. There is a role for Government in doing that. It was interesting to hear from my hon. Friend the Member for Coventry, North-West (Mr. Robinson), who played that role at the Treasury in an earlier phase.
The generators, of which three—E.ON, EDF Energy and Drax Power—count for the purposes of this debate, are all making considerable profits. Drax, in my constituency, makes a return of 40 per cent. on its revenue, largely through the increase in energy prices in recent years. The fact that those three generators are coming to the Government asking for certainty on issues such as emissions trading and carbon credits means that there are levers that the Government can pull. The generators negotiated coal contracts some years ago when the price of imported coal was below that of domestic coal. UK Coal had little choice but to accept those contracts because otherwise domestic coal would have disappeared. Today, the price of coal is much higher internationally. If the generators are serious in their protestations about wanting to maintain some British coal—and it is surely in their interests that domestic coal survives, because otherwise they will be over a barrel in relation to imported supplies of coal and will have much less bargaining power—they must renegotiate those contracts. The Government must recognise, rather more forcefully than the Secretary of State did in his opening remarks, that the energy market is not a perfect market and that they have a role in banging some heads together.
I want to say a few words about imported gas. We are coming up to the first anniversary of the great price hike in November last year, when gas prices reached about £1.70 per therm. I think of Rigid Paper Ltd. in my constituency, which nearly went under last year because of those price rises. I hope the developments that we have heard about, with new capacity coming on-stream through the interconnector and increased storage capacities, will make a difference. In time, the
more robust approach by the European Commission in sending dawn raids into some of the integrated energy companies in France and Germany, which has not happened before, should have a result.
Nevertheless, the Government could do one or two things to increase capacity further. The planning system has been mentioned an awful lot, and we await further announcements next year. Several gas storage facilities of considerable capacity—Preesall in Cheshire is one of the biggest—are facing public inquiries. There is a case for the Secretary of State to press his ministerial colleagues in the Department for Communities and Local Government to recover those applications and determine them centrally without going through the public inquiry procedure.
It is interesting to look at the Government’s consultation on gas security of supply, which was published in October. It is a radical document that reveals to the gas supply industry the measures that the Government could be prepared to contemplate if the interconnector and the gas storage facilities that are becoming available are not fully used. It contains some radical suggestions—not Government proposals but matters that they are prepared to consult on, such as the regulation of the use of gas storage for security of supply. It states:
“The proposal would be to regulate to ensure that levels of gas in storage were kept at their highest possible levels going into, and during the early part of, winter; and that gas from storage was not used to supply the market in preference to other sources of supply.”
There is also the potential for capacity mechanisms in the gas market whereby a body such as the National Grid or Ofgem could be given the job of specifyingthe level of capacity required and put in place arrangements to provide it, tendering for additional storage capacity. Those measures, although probably not directly contemplated by the Government for the time being, are in the background if matters do not improve this winter.
One step that the Government could take is to insist on increased transparency so that the owners of thegas infrastructure, whether storage capacity or the interconnector, should have a responsibility to advertise well in advance—perhaps by some weeks or months—where there is unused capacity. That could create a secondary market and make the “use it or lose it” phrase used by the Chancellor in the pre-Budget report last year a reality. If the owners of the storage and the interconnector do not fully use them, others should have the opportunity to do so.
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