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Michael Connarty: That is my experience when talking to my hon. Friend the Member for East Lothian (Anne Moffat), who has Torness power station in her area, as with the hon. Members around the Hunterston B power station in Scotland. People there are very supportive of the nuclear industry. We went to Canada and found very much the samepeople there would gladly have taken another station. In fact, I understand that different parts of Canada have been bidding for the waste facility, since the very substantial report put together by a former United Nations environmental commissioner for the Parliament of Canada.
The last question about capacity is about the capacity to manufacture. From my information from talking to people in the field, I worry that the large castings industrythe steel industry required to cast the pressure vesselsis very under-supplied at the moment. The Americans have no capacity at all, because they pulled out of nuclear. I was recently in the Framatome processing site in France, which four years ago the Government were planning to shut down. The new chief executive of Areva convinced them not to. Areva took over Framatome, which it is now investing in and expanding. They were creating pressure vessels for Three Mile Island and for Floridain fact, they had just finished a 200-tonne pressure vessel for Florida, which was about to go out of the door when we were there. But there is no capacity in the US. There is capacity in Japan and talk of new build for manufacture in Korea and other places, but at the moment people are booking slots for pressure vessels without any customers. They are booking them four years ahead, so that when they do get a customer, they have the pressure vessel to supply the nuclear power station. That is how bad things are. I think we need to get together on an EU basisin fact, worldwideto talk about that.
I have a suggestion for the Minister. Having done a number of seminars with people in the industry and having talked to people on the financial, legal and manufacturing sides, they are in absolutely no doubt that the Government have to come up with something to secure the carbon price. We could say that the emissions trading scheme will do that, but looking at it recentlyat one point, it was trading at €60, then it went down to minusthe market is far too volatile. Tinkering with the emissions trading scheme may help, but I do not think that it will do what we require it to do.
My suggestion is that the Minister and the Government should think about how to get together a PILOT for the nuclear industry. Talking to people on the legal or financial side, they all have their little commercial niches and secrets, which for me recalls the days when the North sea was running down. People were hanging on to plots that they would not explore because it did not fit their commercial model, and they would not tell people what they had found. However, the Minister got involved and all that was freed up. They started to exchange information, put packages together and give up their little piece of a plot so that someone else could explore that licence area. We came up with the Buzzard field and made big finds in different areas. I think that there has just been a new one in the past month.
People need to put together their knowledge and help make the market, but the Government must make that move. I do not know whether it will eventually mean, as the hon. Member for Grantham and Stamford suggested, that the Government will go further and underpin the market, but we must get everyone working together to make the market before we can move forward. Part of that will involve the carbon price, and the other part depends on the will of the Government, once they have made up their mind, to sit down and put together a team to work with a purpose.
Having said that, I was dismayed to find when I had my last meeting with a group that one of the companies said, The problem is that the next time we go across to some European organisation, the DTI team will be completely different, because the civil servants that we have worked with for the past three years will have moved on. Theyll be in agriculture or somewhere else. The Government are shifting the very people who have built up that knowledge during the past three years to other duties because of the civil service rotation problem. It is a real problem for an industry and a company in which people commit their lives and investment capital. They put themselves on the line for their entire business life, only to find that the people in Government with whom they are working shift every three years. If we have a PILOT, let us make sure that the pilot has a crew who will be there until we end the journey.
David Howarth (Cambridge) (LD): I start by congratulating the Chair of the Trade and Industry Committee on securing this debate, but I share his regret that, for various reasons, many hon. Members have been unable to attend today, including many who hold the same view as I do.
As I see it, the main argument in favour of nuclear power is that, although it is not a magic bulletas the Minister often saysit is needed as part of the mix, for three reasons. First, as many hon. Members have mentioned, there will be a generating gap. How will the lights be kept on? Secondly, it is needed for carbon reduction purposes. Thirdly, it is needed for security of supply.
I do not think that any of those reasons hold up to analysis. Not even the Government believe the generating gap theory. The question is whether the market will cope and introduce new supply to fill the 25 GW reduction that might occur as nuclear plants close and some coal plants must close or choose to refit. In response to the Environmental Audit Committees report, Keeping the Lights On, the Government said that their own modelling
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.
In other words, the risk of the lights going off, to which some hon. Members have referred, is grossly exaggerated. There is no real risk of iteven the Government recognise thatand no need to panic. The market will plug the gap without any change in policy. Moreover, the risk itself, although small, decreases the more existing nuclear stations lives are extended and the more existing coal stations undertake the regulatory requirements to which they are subject.
There is also the question of timing. Even with reforms of licensing and planning, it is unlikely that nuclear new build can make a contribution to carbon emission reduction for at least 10 yearsit would make only a small contribution even after that period. The Governments response to the Environmental Audit Committees report states:
Government agrees that even with facilitating measures, new nuclear build is likely to make only a small contribution to carbon emission reductions and security of supply by 2020.
That then raises the question, why go for nuclear at all? Reducing carbon emissions over the next 10 or 15 years is crucial, and the Government say that nuclear new build will play absolutely no part in it. After 2020, we will see new technologies coming on line, not only renewables such as tidal, wave and solar power technologies, but those such as carbon capture and storage, to which the Chairman of the Committee referred. It is significant that the date given in the EU proposals on energy policy for all new coal power stations to be employing carbon capture and storage is 2020. In reality, that is about the time when any new nuclear will be going on line. The question is why we need new nuclear power at all if other carbon-saving technologies will be available at the time that that nuclear power is due to start.
Michael Connarty: I have to inform the hon. Gentleman that I questioned the person responsible for the first and most advanced proposal for carbon capture, who was a junior at BP when I first met him. In front of a large audience at Stavanger last year, he clearly said that carbon capture is technologically feasible, but that the go-ahead is not yet guaranteed because it is not yet financially viable.
David Howarth: It was significant that the Chairman of the Committee said that the finances are rapidly changing with the technology. I agree with him that, left to the market, it is possible that carbon capture and storage will be able to outbid nuclear quite soon. The nuclear industry is always optimistic, but I think that it is being over-optimistic.
I have never been able to grasp the point made by nuclear advocates on the security of supply because there is no domestic uranium and European supplies of uranium are insufficient to keep nuclear power plants going for long, especially if there is new nuclear build that uses up existing and known supplies. All usable uranium has to be imported, not only from Canada and Australia, but other countries such as Uzbekistan and Kazakhstan. On the other hand, wind, tide, sun and coal are local and there are plenty of suppliers within our political grasp, as it were.
Instead of comparing itself with those sources of energy, the nuclear industry usually compares itself with the gas industry. True, gas will probably play a bigger part in the generation of electricity in the next few years regardless of the policy on nuclear new build, because gas is probably the source from which new electricity generating capacity will come as other sources decline, depending on the relative price of gas and coal. That is not in any way an argument for nuclear. By the argument that I have been using, nuclear will not be able to plug the gap in the time scale. The policy problemthe problem of a secure gas supplyapplies regardless of nuclear policy.
Mr. Reed: The largest dose that the European population receives per head from radioactivity comes from the extraction of oil and gas from the North sea and elsewhere. Those are the findings of a long-established analysis undertaken by the European Union. I should be happy to furnish the hon. Gentleman with a copy of the report if he would like one.
The nuclear industry has an appalling record of cost overruns. As many people have said, the nuclear industry runs as much on optimism as it does on uranium. The famous and heavily state-supported Finnish reactor to which reference has been made is already €600 million over budget and 18 months beyond its schedule. No British nuclear project has ever come in both on budget and on time. In addition, the industry has a record of secrecy.
Peter Luff: I do not have a mandate to defend the industry, although it is true that broadly I am sympathetic to it, but I do not understand the relevance of the cost issue. If the market is delivering, the private sector investors bear the problem. As it happens, every one of the Canadian reactors has come in on budget and on schedule. Matters are for the private sector to determine.
My response to the hon. Gentlemans argument is that the industry also has a sorry record of receiving hidden subsidies. The market is rigged in favour of the nuclear industry. Billions of pounds of public money have gone into research and development for nuclear energy, compared with tiny amounts that have gone into research for other forms of energy. If we include fusion research, even now nuclear research takes up more than half of publicly funded energy research. That is one hidden subsidy.
Peter Luff: Throughout the whole of Europe, overwhelming research goes into coal. That is where the public support goes, not into the nuclear industry. It is distressing to hear factual arguments being dismissed. The hon. Gentleman has some important points to make. I have a lot of sympathy with what he is saying, but the facts are against him.
David Howarth: I heard the Chairman of the Committee change the unit of analysis. He was talking about Europe; I was talking about Britain. I am pretty sure that, if we include fusion, public support for energy research in Britain is still overwhelmingly for nuclear.
The other massive subsidy for the nuclear industry is in the form of the Nuclear Installations Act 1965. It limits the liability of nuclear installations for nuclear accidents to about £150 million and promises Government money of up to £350 million per accident over and above the amount of £150 million. It leaves any excess damage on the heads of the victims. The nuclear industry should, like other industries, pay its way. It clearly does not when it comes to nuclear accidents.
Let us consider the estimates for the cost of Chernobyl. They vary from around £4 billion to more than £100 billion and are way higher than the liability limitations that the Act grants to the industry. The industry says that, without that cap and hidden subsidy, the risk would be uninsurable, but to echo what the Chairman of the Committee said, that is the industrys problem. If a risk is uninsurable, it might be because no one should be taking it.
Mr. Reed: That is an anti-nuclear fantasy of long standing. This spectre of the industry is invoked every time the issue is discussed. There is no such thing as the industry. The UK civil nuclear industry has absolutely nothing in common with the former decrepit, dilapidated Soviet nuclear industry.
I was not suggesting that the risks from nuclear power stations in this country and western Europe are in the same league as those from former Soviet bloc power stations. I was making a point about the cap on liability. A cap on liability is a massive subsidy to the whole nuclear industry. If the industry had to bear that liability itself, it would make the industry uneconomic. That fact cannot be denied. Nuclear plants are not as reliable as the hon. Gentleman has implied. There are various estimates for load factors in excess of 90 per cent. Last year, four Swedish plants had to be turned off at the same time because of an accident in one of them. That is a warning to those who propose that the Government should help the industry by ensuring that a single design for the new nuclear fleet is brought forward. The problem with that is if, as happened in Sweden, one discovers a very dangerous flaw in one plant, all the plants of the same design would have to be turned off
at once. That is one of the biggest threats that one could imagine to security and continuity of supply.
Similarly last year, a Spanish plant, which was responsible for 20 per cent. of the countrys electricity supply, had to be turned off because it overheated in the hot weather. Even the French had to turn off the Dampierre plant this month. Members might remember an incident last year when the whole of northern France lost power for days on end. That happened because the connection between France and Germany was damaged. The French electricity system is predominantly nuclear-powered. It is massively inflexible and cannot cope with having its connection with another country broken. The French grid exports and imports vast amounts of electricity. Therefore, the claim made by the hon. Member for Stroud (Mr. Drew) that the French independent grid system is the best in the world is quite false. The French depend on import and export because nuclear power is so inflexible.
Mr. Drew: I was talking about the interconnector. We are a major importer of the French nuclear industry, and without the interconnector operating, there have been times when we would have seen the lights go out in this country.
David Howarth: The hon. Gentleman is making an error that many people make when discussing electricity. They think that importing electricity is worse than exporting it. In fact, they are both the same. The grid has to be balanced. If electricity cannot be exported because the interconnectors are broken, the whole of the grid could go up like a big fuse. The inflexibility of nuclear power is risky because of that fact and not just because of imports. The French also import vast amounts of electricity.
Michael Connarty: Is not the hon. Gentleman arguing about the problem of grid systems rather than the source of the energy? We have the same problem. That is why the proposal is for a very much higher rated grid from the north of Scotland to the conurbations of Scotland, which of course is opposed by his own party.
David Howarth: No, it is not about the grid system; it is about any grid system with a high percentage of nuclear power. The 60 per cent. that the hon. Gentleman proposes would be as dangerous as the 80 per cent. used by the French. The problem is that nuclear power stations cannot easily be turned on or off. Therefore, they are very inflexible. All this talk about base loadthe concept of base load is an artificial construct because it is only the minimum amount of electricity being used on the grid over a long periodreveals a misunderstanding of one of the basic problems of controlling a grid, which is that it has to be held in balance at every point. Nuclear power cannot do that.
Michael Connarty: I am sorry to take the hon. Gentleman up on this. If a huge array of wind power was generating electricity in the north of Scotland on a very windy day and there was a problem with the grid connection at some point down the line, the same problem would occur: energy that had nowhere to go would be coming down the grid, so all the wind farms would have to be switched off.
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