Examination of Witnesses (Questions 220-222)
PROFESSOR KEITH
PALMER
6 JUNE 2006
Q220 Mr Weir: I want to ask about
the Emissions Trading Scheme. I just wonder whether under your
scheme any weight would be given to the environmental impact of
various technologies. Nuclear produces waste. Although in a sense
it may produce less carbon than other technologies it creates
another environmental problem.
Professor Palmer: I think that
all of these schemes should properly take account of the environmental
costs because the producer should have imposed upon him whatever
particular environmental disbenefits he is causing. In the case
of nuclear it may be nuclear waste; in the case of windmills it
might take the form of amenity concerns, but to the extent that
those costs can be borne by the people who cause the problem,
my carbon premium would apply equally so those who incurred greater
environmental costs would find their economics less advantageous
and they might not proceed.
Q221 Mr Clapham: In answer to a question
put by Lindsay Hoyle about security of supply you said you thought
that diversity was the answer. Within that context what amount
of nuclear energy should be included in the energy economy mix?
Professor Palmer: There is not
a single or simple answer to any of these questions, but for me
the overwhelming reality is that at the moment the question is
whether the existing nuclear is replaced with an equal amount
of new nuclear. Obviously, that would not change the portfolio
mix of generation; it would simply replace old with new.
Q222 Mr Clapham: Therefore, you would
say it should be 20%?
Professor Palmer: That would be
the starting position. There is then the question: what is the
right share? First, one has to get there. To get to 20% is a mighty
task, but beyond that the right share will depend upon what value
one puts on it being non-carbon-emitting. The more one puts a
value on that, the more one wants it to displace gas-fired stations.
It will depend upon what the cost turns out to be. If by then
20% of the capacity is nuclear and it is getting really cheap
because the industry has learned all the tricks of the trade it
may be that one wants a bit more than that simply because it is
cheaper. In general, I believe that the Government and the country
should have a very broad view about the sort of mix that should
concern us as a society but within some fairly broad parameters.
The actual mix should be left to producers and the markets to
figure out. If one has the right carbon premium and effective
competition in the electricity marketplace one should then have
a portfolio that not only provides security of supply but is the
cheapest energy one can get.
Chairman: I think we must leave it there
because we have gone well over time. We have found this a very
illuminating and interesting session. We are very grateful to
you for the thoughtful way in which you have answered our questions.
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