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The best option of all is renewables. We have the powerful example of German support for renewables by guaranteeing a price for energy generated from them—the so-called feed-in tariffs. In his opening
remarks, the Secretary of State said that whatever the merits of feed-in tariffs, we needed to consider what would work best in the UK. I waited with anticipation for an explanation of why wind and heat in the UK were somehow different from wind and heat in Germany, but instead we simply heard praise for the clarity and consistency of the German Government. I agree, but no substantial arguments were produced against feed-in tariffs. I look forward to hearing some from the Minister for Energy when he winds up.
The truth is that the reason why Germany reached the target of generating 10 per cent. of electricity from renewable energy before we reached 5 per cent., although Germany has fewer natural resources, is that the Germans adopted feed-in tariffs while we stuck doggedly to a renewables obligation regime that has not really come up with the goods, especially in bringing forward new renewable technologies. The percentage of the renewables obligation met by buy-outs has gradually increased, suggesting that the obligation has increased faster than renewable capacity, and has not really worked. Meanwhile, we have a catastrophic hotch-potch of grants programmes.
We are probably all aware of the low-carbon buildings programme, which was cut back for households to the point where it ran out within hours every month. It has now been suspended, and has not been replaced. Hon. Members may be less aware of the community energy programme, which provided a few tens of millions of pounds, supposedly to support small innovative projects with local government. That was a worthy initiative, but unfortunately it was wound up in March last year with no prospective replacement.
Support for renewable energy at local and community level has been a real mixed bag. The Bill makes some important provisions for future energy supply and energy security. It also represents a missed opportunity, increased nuclear liabilities and botched plans for carbon capture and storage, and it has failed to promote renewable energy adequately at national, household or community level.
8.13 pm
Mr. Geoffrey Robinson (Coventry, North-West) (Lab): As other hon. Members have said, the debate has been well attended—on this side, at least. The important national topic before us today has been well debated, too. I want to congratulate my right hon. Friend the Secretary of State on seizing the issue and making the decision on nuclear power that we must shortly decide on together. It cannot be simply left to wither on the vine, and a decision has to be reached. It was encouraging to hear the almost acceptance of the need for nuclear power, with some caveat that I could not quite follow, that came from the Tory Front-Bench spokesman earlier.
I see that that spokesman, the hon. Member for Rutland and Melton (Alan Duncan), is in his place now. I could not quite grasp the point that he was trying to make about the storage of nuclear waste. Was his point about the cost, or do we need to make a decision on where it will be located—and start to drill the holes to put it in—before he will commit his party to support the Government’s decision? The Government have decided, at least in principle, to embark—if the private sector can respond to the market—on a new generation of
nuclear power stations. That is the bottom line, and the most important explicit decision in the Bill.
I hope that the official Opposition will vote with the Government tonight and we will have a bipartisan approach. We shall see when the Division is called.
Alan Duncan: I am happy to assure the hon. Gentleman that we do not intend to vote against the Bill. We are being responsible by saying that there remains an open-ended part of the calculation about investment in new nuclear power that needs to be clear. Clarity and honesty are essential if a proper decision is to be made. What decision does the hon. Gentleman think that the Government will take? The Government’s view is that new nuclear development is an option that potential investors can take rather than a decision for the Government.
Mr. Robinson: The Government are not going to set out and build the reactors, as Governments did in the past with Magnox. All they can do—as they have rightly sought to do—is to create an environment in which they will positively back proposals for nuclear power if they can be carried out within the tight constraints of financial self-stability, or, to put it simply, without subsidy.
I think that the hon. Member for Rutland and Melton is trying to say that sooner rather than later we will need a decision on where such developments will be located and what the costs will be. Indeed, someone asked earlier what proportion of the total costs of any given site will be ascribed to the first company that builds a nuclear power plant. I am pleased to hear that the hon. Gentleman will not vote against the Government on those grounds this evening. I do not think that it is reasonable to ask the Government to answer those questions right now. They have answered the big question by saying that they will co-operate with and make possible the building of a new series of nuclear plants if that can be accomplished within the tight financial constraints that have been set out. That seems to be the right decision, on balance.
Some of my hon. Friends who have spoken have a loathing for nuclear energy—I would not say that they all had a pathological hatred of it, which was the phrase used by my hon. Friend the Member for Copeland (Mr. Reed)—that can be shared by others. However, those of us who, on balance, favour nuclear energy—it is a balanced decision—say to them that it is not about charge and counter-charge, or suspicion about lies or misrepresentation.
The simple fact is that the hazards and uncertainties that surround renewable sources, such as tidal power, and carbon capture and storage, in this country—they are almost unique to this country—are at least as great in their uncertainty as nuclear power. Let us take the example of tidal power from the Severn estuary: no one knows yet what the cost or time scale for that might be. However, it is clear in all areas where we have embarked on positive Government action—in particular with wind farms, offshore and onshore energy—British industry, consumers and generators have not responded. Barely 2 per cent. of our energy needs are supplied by renewables, compared with the better progress in Germany.
Colin Challen: Will my hon. Friend give way?
Mr. Robinson: In a moment. I am mystified as to why we have had so little take-up and so little success—as my hon. Friend the Member for Morley and Rothwell (Colin Challen) must be, too—when the Government have had such good will towards renewable methods. Renewable energy has received a huge subsidy, which has made it far more expensive than gas-fired or coal-fired energy.
Colin Challen: I must say that I do not loathe nuclear energy. I have visited nuclear power plants and seen them for myself. Germany has come up so many times because, as the Secretary of State said, the Germans took a single-minded approach to renewables at the same time as they decided against nuclear power. Does my hon. Friend think that any country could afford to do both at the same time?
Mr. Robinson: The two most important requirements are security of supply, and for energy to be low in carbon emissions. Security of supply can be guaranteed only by diversity, which has two aspects—diversity of the type of energy source used, and of its point of supply. We must meet those criteria, which means that nuclear must inevitably have an important role in meeting our energy needs.
Martin Horwood: If security of supply is so overwhelmingly important, how can the hon. Gentleman prefer nuclear? It relies on imported fuel, whereas renewables are diverse and use power that comes literally out of the sky.
Mr. Robinson: We have had success with onshore wind farms, but problems still exist with offshore facilities. All hon. Members have a direct interest in the jobs that the energy sector provides in our constituencies, but if it fell to me to secure energy supply over the next 10, 15 or 20 years, I do not think that I could say, with my hand on my heart, that our energy needs could be met by a diverse range of renewables. History shows that that is not possible, even with the streamlined planning powers that we now have. The biggest delays to the development of renewables have been caused by problems with the planning process, and the culture of our island—our traditions and pattern of resistance to investments of that sort—means that we will not be able to resolve those problems.
That is why I believe that it is inevitable and necessary that we embark on the proposed nuclear programme, and that we should continue to develop renewables at the same time. I urge those of my hon. Friends who oppose nuclear so strongly—I know that they believe that they have good reason—to accept that those of us who see nuclear as an inevitable and necessary component of our future power supply support the development of renewables just as strongly as they do.
We want the Government to do more in that regard, and that is why we welcome the full-scale pilot project for carbon capture and storage—although I am not sure that that project is not evidence that we are indulging in the sort of recidivist tendency for picking winners to which there seemed to be a pathological aversion when I was in the Treasury. I hope that we get
it right, and that others will come forward to challenge the orthodoxy—or whatever we choose to call it—that the Government embark on when the results of the competition are announced.
However, the plant in question will not come on stream until 2014, so we are left with the questions posed by my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham): will there be an energy gap between 2010 and 2018—or 2020, or even 2015, come to that—and how big will that gap be? If a gap does open up, from where will our needs be met?
Coal-fired plants were supposed to be phased out back in 1997 and 1998, when I was at the Treasury. The energy policy at the time was that such plants should be got rid of, but last year they produced more energy than any other source of supply. The lifetime of coal-fired plants, and of existing nuclear plants, could no doubt be extended. Is that the Government’s intention, or are we embarking on what amounts to another dash for gas? Is the purpose of the powers that the Government are taking greatly to increase our gas storage capability and the number of connections to the gas grid? It would be helpful if the Minister who responds to the debate could clarify that.
Finally, several Labour Members have mentioned fuel poverty and asked why the Government have not used the Bill to tackle it. I have some experience of imposing windfall taxes on the utilities, and I do not recommend that as a solution to the problems that we are experiencing just now. However, massive increases in profits for the energy supply companies are matched by massive increases in the cost of energy for our constituents, who are its consumers. The average price increase must be well into double figures in percentage terms, so if every percentage point rise leads to 40,000 more people suffering from fuel poverty, the effect of the latest rises means that another 600,000 people will be forced into that category.
In the debate, various figures from Friends of the Earth, Energywatch and other bodies have been quoted. Those organisations have done a good job, and my right hon. Friend the Secretary of State said that he was in discussions with the energy supply and utility companies in a bid to resolve the problem. I hope that he will remember that—faute de mieux, and if all else fails—the possibility of imposing a windfall tax does exist. If he bears that in mind in his negotiations, it might be a very useful tool for him.
8.25pm
John Robertson (Glasgow, North-West) (Lab): It is a pleasure to follow my hon. Friend the Member for Coventry, North-West (Mr. Robinson). It would appear that the arrogance of Mr. Hyde, who was mentioned earlier, is not reserved for those who are pro-nuclear. No one has a monopoly on correctness: we should listen to all the arguments, and all contributions should be heard with a degree of humility.
As my hon. Friend the Member for Copeland (Mr. Reed) said, I am the chairman of the all-party nuclear energy group. As such, I accept that I might be said to be pro-nuclear, but I also support renewables and clean coal technology. I am willing to try anything that will ensure that this country and the people who live in it have a sustainable energy supply. I am willing
to listen to all the arguments, and to support options other than nuclear—as I have done on many occasions in the past. It is important to remember that the debate is not about nuclear versus renewables.
I was once asked why I had become so involved in nuclear energy, given that I come from Glasgow and that there is no nuclear power station on my doorstep. All that is true, and not even one constituent of mine is an employee of the nuclear industry, so how did I get involved? The fact is that my friend Bill Tynan, who used to be the MP for Hamilton, South, was short of numbers for his all-party group and asked me to go along to a meeting. That is what happens with most hon. Members who join all-party groups—we are doing someone a favour.
I went along to the meeting and, although I cannot now recall what was discussed, I had an open mind about nuclear. I have never been a unilateralist, and I was willing to listen to the arguments, even though I had reservations about nuclear energy. What I heard was not quite what I was expecting, so I went to other meetings and gathered more information. Eventually, I knew a bit about the nuclear industry and had some understanding of how it could be used for good.
At the time, my party was not exactly in favour of nuclear power. Indeed, I am quite taken by how many pro-nuclear contributions have been made from these Benches. That would not have happened when I came into the House seven years ago, and I am pleased that people are listening to the argument. Some of the contributions in support of the Government’s proposals have been made by people who were anti-nuclear in the past. I hope that they have taken on board what has been said and that they have changed their minds for all the right reasons, and not just because many of their constituents are employed in the nuclear sector. I worry about the people employed by such power stations and the communities that those power stations help to provide for, and it is important that we do so.
I want to talk about security of supply. The hon. Member for Preseli Pembrokeshire (Mr. Crabb)—unfortunately, he and all the other Conservative Members are no longer in the Chamber—said that there was an unjustifiable fear about the supply of gas to this country. He asked why we had to go down the road of nuclear when we could get gas in fairly cheaply. I remind the hon. Gentleman of what has happened in relation to oil and gas. Twenty years ago, would we have forecast the oil problems with Iran and Iraq? Would we have forecast the ongoing cuts to oil production in Nigeria? Would we have realised that the Russians would be suppliers of gas and that they would cut off the gas to their neighbour to make the point that they wanted money? Would we have realised that the pipeline coming from Russia through the Caucasus would be attacked by people who were rioting? We did not know those things, but we know them now. That was why the Government took on board the need to look at a balanced and sustainable energy policy for this country. One problem with renewables is that we cannot guarantee supply. I hope that that will be possible in the future, and I believe that we will meet our targets if we work hard at it. However, we must have a core supply, and I believe that nuclear must form part of that.
There must also be investment in clean coal technology. That could be a winner for this country, and we could make a lot of money by supplying such technology to other countries. We must be at the sharp end of that technology’s research and development, and I hope that that will bring money back to this country.
Security of supply and service is the most important thing that the Government must address. No one would forgive any Government who allowed the lights to go out, whether that happened in 10 or 20 years’ time. If we do not make the commitment now, we will not be able to get rid of our dependency on gas. Opposition Members were right to say that we will need to import more gas in the years to come. We have been building lots of storage tanks because, during the cold spell two years ago, we talked about the fact that there might be a shortage of energy due to a lack of gas supplies. Let us hope that the liquid gas storage points that we have been building will help us to overcome any problems that might be caused if we were to be held hostage to a foreign country.
There are a few questions that my hon. Friend the Minister for Energy should answer in his winding-up speech. Many hon. Members have mentioned smart meters. Why are we not doing something about them, and can we raise that important matter in Committee? Fuel poverty and social tariffs are important and have been mentioned by several hon. Members. However, I will not talk about them in any detail because I will just be raising the same old questions.
More than 100 tonnes of plutonium are stored at Sellafield, and I mentioned in a few interventions the MOX reprocessing system that could be built. I have seen what the MOX station in France can do, and I believe that we could go down the same road. That would certainly reduce the waste that we produce because we would be able to reuse fuel rods from nuclear power stations. My hon. Friend the Minister should be looking at the proposal much more carefully, and he should talk to my hon. Friend the Member for Copeland to find out what could be done in his constituency to get the reprocessing unit up and running. That could also give back money to the country in general.
Hon. Members have raised aspects of the Government’s support and asked where the money will come from. They have asked whether companies want to invest in our nuclear industry. As chair of the all-party group on nuclear energy, I can tell the House that plenty of companies are lining up. They come to see me every other week and try to use me to get to Ministers so that they can attempt to get their power stations on line.
It is true that the Finnish power station is overrunning, but it is a new station and one of its kind. It has nothing to do with the repository, which is separate—it just happens to be on the same site. Anyone who has seen the medium-level waste repository in Finland will have been more than a little impressed. If Finland is going down such a road, as Canada will—the Americans have already decided to do so, but need to get over legal problems—we in this country should do the same thing.
8.33 pm
Dr. Alan Whitehead (Southampton, Test) (Lab): I am a little surprised that we have spent so much time talking about nuclear power when we are considering a Bill that will, I hope—one way or another—put us firmly on the road towards dealing with the challenges that are immediately ahead of us. Whether one thinks nuclear power is great or terrible, if we consider the energy debate facing us up to 2020, it is completely irrelevant in this country. That is because by 2020 we will have had to replace between 20 and 25 GW of our installed capacity for electricity generated power. We will have to replace 8 GW of capacity currently generated by coal-fired power stations, and 3GW generated by oil-fired power stations by 2016 under the EU large plant directive. By 2020, some 7 GW will be lost when nuclear power stations are decommissioned; it is unlikely that their lives will be extended, because of cracking in their cores. We will probably have to consider building 5 GW of additional installed capacity to cope with additional demand. Between 2020 and 2030, a further 7 GW of power will go out of commission and will need to be replaced. To put that in context, the UK’s overall installed capacity is something like 76 GW.
Within that installed capacity, we have to keep a running reserve, so that the lights stay on if everybody switches on their kettles at half-time in the cup final. That running reserve only comes on stream occasionally, when there are peaks in demand, but there will be bids to provide it if the system makes it possible for those bids to work when demand for electricity is high enough. Consequently some of the reserve will be provided by uneconomic power stations that are online for perhaps only a few hours a year but that none the less serve to keep the lights on.
Because we have a bidding system, we know who has to bid the least: nuclear power. It cannot make top-end bids because it is a form of power that cannot be switched on and off; it has to be at the bottom of the ladder. We are in a market-based energy supply system. One reason why energy suppliers are being invited to build new nuclear power stations without subsidy is that if there were a lot of subsidy, it would wreck that energy market, and it would not be possible to continue with the bidding process. Therefore by enabling one form of power to keep the lights on, we would probably be switching the lights off in a number of other areas over time. That is the position as regards the energy gap and the way in which the market is used to keep the lights on.
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