Introduction
1. Our use of energy underpins every aspect of society.
It is reflected every day in the need for petrol for road transport,
natural gas for domestic heating, and electricity for lighting
and appliances. Less visibly, it is embedded within the very fabric
of the material world which surrounds us—the buildings we
dwell in and the goods we purchase and use. No society can therefore
claim to be sustainable unless it is based on environmentally
benign and sustainable forms of energy provision. But, given
the extent of our current reliance on fossil fuels, the challenge
is daunting.
2. In February 2003, the Government published the
Energy White Paper.[1]
This represented the outcome of three years of intense debate,
initiated in June 2000 by a seminal report from the Royal Commission
on Environmental Pollution.[2]
It was informed, in particular, by a major inquiry carried out
by the Performance and Innovation Unit (now the Strategy Unit),
which involved an extensive and detailed consultation on many
specific aspects of energy policy.[3]
Numerous other bodies, including the Environmental Audit Committee
(EAC), published their own contributions to the debate. The
White Paper itself endorsed the emerging view that renewables
and energy efficiency could play a central role in future energy
policy, and to that extent it received widespread support. It
also set in motion a number of other processes—including
the development of a detailed action plan on energy efficiency
(subsequently published in early 2004), and the creation of a
cross-departmental network—the Sustainable Energy Policy
Network (SEPN) —to coordinate implementation of the White
Paper and to monitor progress against it. Two annual monitoring
reports have since been published, the latest in June 2005.[4]
3. However, by the summer of 2005, energy strategy
had once again risen to the top of the agenda for a variety of
reasons—including the sharp increases in UK carbon emissions
since 2002, concerns about future reliance on imported gas, and
greater awareness of the scale of investment required in new electricity
generating plant. In particular, the potential contribution of
nuclear new build was once again being hotly debated, with proponents
arguing that it offered the only credible way of both reducing
carbon emissions from the electricity generating sector and ensuring
security of supply.
4. It was in this context that we decided to launch
an inquiry on energy policy. We focused on the electricity generating
sector, and the scale and nature of the investment required to
fill the potential shortfall caused by the decommissioning of
existing nuclear and older coal plant. Given the need to achieve
radical cuts in carbon emissions across the UK economy, a key
aspect of our inquiry was the extent to which the existing regulatory
and policy framework adequately incentivised investment in lower-carbon
forms of generation. An underlying aim was to assess whether
the vision set out in the White Paper remained true—namely,
that renewables and energy efficiency would be sufficient to address
future demand, without recourse to nuclear new build which was
in any case then considered uneconomic. Given the debate over
nuclear power, we were particularly interested in a number of
related issues—including costs and investment risks, the
impact of nuclear new build on investment in other areas, the
carbon emissions associated with nuclear generation, and a long-term
solution to the problems posed by nuclear waste.
5. Following the publication of our press release
on 26 July 2005, we received over 100 memoranda and papers. From
mid-October to the end of November, we held eight oral evidence
sessions in which 21 organisations or individuals were represented.
These included Alan Johnson MP, the Secretary of State for Trade
and Industry, and Sir David King, the Government's Chief Scientific
Adviser. In December, we visited Denmark and Finland to explore
further some of the issues arising from our inquiry, the latter
being of particular interest insofar as it is the only country
with relatively liberalised markets to have commissioned a new
nuclear power plant in the last 20 years. Also in December, the
BBC Radio 4 programme You and Yours focussed on our inquiry
and invited views from members of the public—an analysis
of which was subsequently forwarded to us in January 2006. The
programme also prompted some members of the public to write to
us directly setting out their views. We would like to express
our thanks to all who have contributed to this inquiry.
6. After the launch of our inquiry, the Prime Minister
announced at the Labour Party Conference in September 2005 the
Government's intention to conduct an Energy Review. Wide ranging
and very general terms of reference were published by the DTI
on 29 November, followed by a more detailed public consultation
on 23 January 2006.[5]
As this report makes clear, we have concerns over both the rationale
for, and the nature of, this consultation. We hope, nonetheless,
that the Government will find our work helpful in taking forward
its own review.
1 DTI, Our energy future - creating a low carbon
economy, Cm 5761, February 2003 Back
2
RCEP, Energy - the Changing Climate, June 2000 Back
3
PIU, The Energy Review, February 2002 Back
4
The annual monitoring reports and Energy Efficiency Implementation
Plan are available on the SEPN website Back
5
DTI , Our Energy Challenge, 23 January 2006 Back
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