The
Chairman: Would any of our other witnesses like to
comment? Robin
Webster: Yes, certainly. The question is an extremely
good one, because nuclear power is not an article of faith. Climate
change represents such an overwhelming challenge to us that we should
consider all options. It is something that should frighten us all, but
the evidence is that nuclear power will not provide the
answer. I certainly
back up everything that my colleague said. We can look at how Minister
Hutton presented the Bill, so much of which is about nuclear power, in
the House of Commons. He spoke for some 12 minutes about nuclear and
for about two or three minutes about renewables. Our fear is that
nuclear power provides a political distraction. Political energy,
political debate, and the minds of our civil servants and engineers go
down one route, and that does not give us a chance to think about the
root-and-branch change to our energy system that might be needed, and
how that will be achieved. That is our real
fear. Benet
Northcote: I think that that is exactly right. The
only thing that I would add in terms of the actual impacts that a
domestic new-build programme would have, is the figures from the
Sustainable Development Commission, the Government’s own
advisory body on climate change. It says that if Britain built 10 new
reactors, nuclear power could deliver only a 4 per cent. cut in
CO2 emissions some time after 2025. That is the most
optimistic build programme, which, as we all know, is very optimistic
indeed. Again, it is
essentially pragmatic to say that, in the short term, we have a real
problem. Nuclear power at present contributes just 3.6 per cent. of our
total
energy usage. We need a policy right now that looks at a heat strategy,
and how we will deliver on the EU renewable energy target, which takes
us to something like 40 per cent. of our electricity generation coming
from renewable sources. Frankly, nuclear just does not factor into the
equation at
all. The
Chairman: Mr. Marsh, did you have a
view? Russell
Marsh: I want only to say two quick things.
One is that I fully support everything that my
colleagues have said. The other is to highlight the focus on nuclear.
There is a focus on nuclear to the detriment of other technologies, but
if we are to get to where we need to be by 2015 or 2020, we need other
technologies. At the moment, our sense is that the focus is very much
on nuclear, which is not part of the solution. We need to focus on
other
solutions.
The
Chairman: Can I say at this point that everyone wants to
ask a question? If we are going to be fair, we must try to make the
questions and answers
brief.
Q
132Charles
Hendry: Thank you, Mr. Amess. I shall be guided
by our guests and move the discussion off nuclear, although I suspect
that it will come back. In your submissions, you talked about the
measures on heat wastage and inefficiency. What specific measures would
you like to see in the Bill, and what sort of amendments should be
pressed? Russell
Marsh: If I pick that up first, in terms of heat we
have a market with no support for renewable or low-carbon heat. There
is a renewable electricity obligation and a renewable transport fuel
obligation, but there is not the same support for renewable heat, let
alone low-carbon heat. We want the Energy Bill to have a power that
enables the introduction of a feed-in-type mechanism, particularly for
heat, although we also need a feed-in-type mechanism for smaller-scale
electricity. Benet
Northcote: I think that is right. The importance of
heat to climate change and to our energy security cannot be
underestimated. Something like 47 per cent. of our total emissions come
from heat. We talk about gas security. I do not know about you, but my
most immediate relationship with gas is in my boiler at home, which is
where the gas is being burned. The idea that you can somehow have a
coherent energy policy and not have a heat policy beggars belief. The
current energy White Paper has a mere four pages on heat; I cannot
remember how many pages there were, but I attempted to read them all.
That is a key part of the matter, and the Bill does very little or
nothing to address
it. To
reiterate on feed-in tariffs, they are also tremendously important. You
must look at the success of countries that have adopted feed-in
tariffs, notably Germany, where they are massively outstripping our
delivery of renewables in terms of solar power and wind. It is
acknowledged that the changes that the Bill makes to the ROCs and the
current framework will not get us to the necessary targets. The
Government admit that a new renewables Bill will be needed in about
2009 to meet the EU target. There is a lot that the Bill does not do
that it needs to
do.
Q
133Charles
Hendry: What about energy efficiency?
Benet
Northcote: It is easy to overstate energy efficiency,
and to make it out to be a simple, single bullet. We see it as a
culture of energy efficiency that runs all the way through the supply
chain. Traditional power stations throw away two thirds of the energy
before it gets to your house to be wasted at home in the form of wasted
heat. The culture should run through to appliances and ensure that we
have the most energy-efficient appliances. Waste avoidance needs to go
all the way through the system from generation to domestic light
bulbs.
Q
134Paddy
Tipping: There is a lot in the Bill about carbon capture
and storage. The first issue is that in
Greenpeace’s evidence you point out that the
technology is not yet proven. The second is, as a matter of principle,
do you as a group feel that there is a place for coal that is burned
cleanly? Are the measures in the Bill, and the Government’s
other measures, sufficient to bring forward new, clean-coal power
stations? Benet
Northcote: We drew attention to the comments of the
former Secretary of State, now Chancellor Darling, and his views on the
role of coal. He said when giving evidence to, I think, the Business,
Enterprise and Regulatory Reform Committee, that
“it is commercially untried and
untested. It is not being developed anywhere else in the
world.”—[Official Report, 6 June 2007; Vol. 461,
c. 338.] Whether that is
BERR’s view of the potential for CCSs is a valid
question. The way in
which we will tackle climate changes is about trajectories, so it is
not about saying that we can bet the house on a technology that
may deliver commercially in 20 or 30 years. We need to explore the
potentials, and if CCS has the potential to deliver, we should push it
as hard as we can at every opportunity, notably the application that is
sitting on the Secretary of State’s desk for a new coal-fired
power station at Kingsnorth in Kent, which may be built without any
carbon capture technology whatever specified. We believe firmly that if
it is to be built, it should be built with carbon capture installed and
working from the
outset. The issue is
about trajectories, and what we can do between now and 2020. I do not
think anyone credibly thinks that CCS will be there between now and
2020. We must get ourselves into an energy system that can deliver what
we need by 2020, and see us on to
2050. Tom
Burke: I do not agree. Whether we have CCS by 2020 is
entirely a function of how much effort we want to put into it. If we
put enough effort in, we can have it much sooner than that. We are not
currently putting enough effort in, and the Bill does not do very much
to increase it. To
set that in context, CCS is an imperative, not an option, if you want
to avoid even more dangerous climate change. The reason for that is
that, although you can come up with all kinds of
theoretical trajectories that are both economically and technologically
available to arrive at a carbon-neutral energy system by the middle of
the century that does not involve coal, I have not seen anybody come up
with a politically deliverable system. You have to face up to that
reality. The coal is there, and for perfectly legitimate energy
security reasons it will be burned, so we have to deal with CCS as an
existential problem, not as an optional problem. If we do not solve that
problem, we will be in considerable trouble on the
climate. I do not know
what the Bill really does to make a difference to nuclear power,
because anybody who wanted to could have applied for a facility anyway.
A really tough decision—this is the one Benet
did mention—would have been to spend the money needed to make
Kingsnorth carbon neutral whatever that cost us, as a way of
demonstrating to the world two things. First, that it can be done,
which we know technically but not operationally, and secondly that we
are serious when we say that is the way the western world has to go,
because if they do not believe we are serious, why should they do it,
and if they do not do it, we cannot deliver for 60 million Britons a
stable
climate. Robin
Webster: I have just one thing to add. The Bill
provides certainty through the Government’s
competition on CCS, which is a good thing, but the competition on CCS
will be testing only the least efficient way of doing
CCS—post-combustion. It is not testing pre-combustion. We are
seeing permission being given to build coal stations—we are
seeing Kingsnorth. We are seeing them go ahead under the moniker of
capture ready; they are going to be clean coal. We do not yet know what
clean coal is and we are testing the least efficient form of clean
coal. We do not know when that testing will finish or when CCS will be
in place. That needs to happen pretty
fast.
Q
135Paddy
Tipping: Would you give us a view on a high price for
carbon as a driver of technological
change? Tom
Burke: I do not think that there will be a high
enough price for carbon to deliver the technology changes that we need.
It is extremely important to have a price for carbon—it has a
role to play—but are you talking about the kind of technology
shift that we must make to arrive at what is essentially a
carbon-neutral energy system globally by 2050? That is what a 60 or 80
per cent. cut means. Because of the nature of the climate system, a cut
in total emissions of 60 to 80 per cent. is in effect
a carbon-neutral energy system because of emissions from deforestation,
agriculture and so on. If you want to arrive at that, you will
certainly have to use the carbon price, but in terms of both magnitude
and time, we are going to have to think much more about both the
regulatory and the fiscal
measures. In
particular, the idea that the infrastructure for CCS—the
pipelines, the storage facilities and so on—any more than the
infrastructure for offshore wind that we need to bring onshore, will be
built by the market responding to some signal that is pretty imprecise
with the volatile price of carbon is, frankly, a fantasy. Building that
infrastructure is the equivalent, for a competitive low-carbon economy
in the 21st century, of building the motorways in the 20th century.
Nobody would have suggested that we leave the building of the motorways
to the wisdom of the
market.
Q
136Steve
Webb: I have two questions: one for Miss Webster and one
for Professor Burke. This picks up on your crowding-out point, and I
shall give you both the questions just to flag it up. Can you expand
more substantively on crowding out? Your argument was
that if we have new nuclear, the greatest brains of Government will have
to think about it and that crowds out renewables. All right, we have
this Bill and then they will get on with it; it is mainly the private
sector doing it. How real is the crowding out of renewables by new
nuclear? With nuclear, people will get on with it because it is a
private business and they will just do it, so is it really crowding out
renewables? My
question for Professor Burke is on waste. The argument is that we are
not starting from a position of no nuclear waste; we have dirty great
piles of the stuff and all we are doing is dealing with a bit more.
Given that we will need a big hole in the ground somewhere, why is it
so bad to put a bit more into that big hole in the ground? There is no
issue of principle here and it is quite cheap to put a bit more in a
big hole; it is just a bigger hole. So why is it so substantively
problematic? Perhaps we can deal with the issues in that
sequence. Robin
Webster: I think that the question of political
tension is not as ephemeral as it may seem, having seen with my own
eyes the leaked Government document that said we are not sure whether
we want to hit the renewables target at EU level because it might not
give us enough space to develop nuclear. You could see there was some
political thinking behind that. On the question about the political
thinking that is going on inside our Ministries, I think that quite a
lot of us recognise that within DBERR there is an attitude of
“grown-ups build power stations”. We see the Government
coming out with quite a lot of iconic announcements, saying, “We
going to have nuclear power. We're going to do the Severn barrage. It's
all going to be fine. Please stop presenting us with this
problem.” Actually, what they are not doing is looking at the
energy system. We are
looking at whether we can make a more decentralised energy system, what
kind of mechanisms can exist to develop renewable power and what
barriers there are to renewable power within the UK. These are the
kinds of questions that need to be answered. The question of political
attention is a key
one. I think that
Benet is probably better qualified than me to speak on the finances and
the financial fears that there might be around nuclear, but that could
be another very large part of that
equation. Tom
Burke: We have to solve the problem exactly because
it is there. It does not make very much difference adding an extra cost
and I do not think that that is a core issue. There is obviously an
issue about the balance of risk that falls to the private and public
sectors that needs to be properly debated and worked out. However, I'm
much more worried about the fact that, this year, we will spend
£2.8 billion on cleaning up the problem with radioactive waste
from the past, but nothing, effectively, on carbon capture and storage,
which is really important to the future prosperity and security of 60
million Britons. I
cannot see how it makes any sense to argue that we
should create more of a problem—we are already
having to spend too much money on solving the problems of the
past—when we are not spending enough on the problem we have
really got to address, which is guaranteeing the well-being of our
citizens. That is a hard argument to make.
Personally, I do not think that
waste is the core issue. I think that the core issue is what is going
to contribute to energy security and climate
security. Benet
Northcote: I am not sure that I agree with anything
that Tom says on the waste issue. There is a substantive difference
between legacy and new-build waste. We do not need to create new-build
waste. We have to deal with the legacy waste. There is an essential
ethical difference between the two bits of waste, which has
been clearly identified by CoRWM—the Committee on Radioactive
Waste Management. The new chairman of CoRWM has been very clear that
all of its recommendations and proposals are for legacy waste and
absolutely cannot be applied to new-build waste, and that a new process
would need to be undertaken for new-build
waste. There are many
issues associated with a repository for new build and the associated
costs for that. For example, there are issues as simple as how the cost
for the repository for new build is apportioned or whether all the
transport links and the infrastructure links will be properly
apportioned into new build? How do you do that when you do not know how
many power stations there are going to be, if the market is coming into
things? Will it be four or 10? How do you apportion costs to one? Will
the first one take all the costs, as opposed to all 10 of them? There
are an awful lot of issues
here. Our primary
concern, just to talk about the detail for a second, is that we see the
Bill in terms of back-end costs. I agree with everything that Tom says
about up-front costs and all the up-front subsidies. British Energy was
not prepared to say that it was prepared to invest immediately; it
wants to wait for yet more years, because the subsidies right now are
not there. In terms of back-end costs, the Bill essentially cedes power
for protecting the taxpayer from Parliament and gives it to the
Secretary of State. So the Secretary of State has complete power to set
up all the funding mechanisms and all the requirements on the new-build
companies, leaving absolutely no way for Parliament to come in and
check that. That is our reading of the Bill. There is massively undue
haste in respect of new power stations when there is massive
uncertainty about what these costs might be. So why not wait until the
base-case consultation is finished and, at least, wait until there is
clarity on where the repository will be, what are the geological
criteria and what are the costs associated with making it work, and
then look at how you might put together the financing
programme? Russell
Marsh: I just want to pick up on the crowding-out
point and to highlight the fact that the evidence is already there to
show that, at the moment, we are seeing a lot of attention and almost
all the focus on nuclear and much less attention is being paid to some
of the other single reactors, particularly CCS, to which Tom referred.
We will have one demonstration project in the UK that may or may not
have CCS fitted at some point in future and at the moment we
may get nothing else. There is a lot of focus on
nuclear to deliver 20 per cent. of our electricity. However,
although we have to get 40 per cent. from renewables, there is a lot
less attention paid to that. We can already see that the nuclear debate
is crowding out the time for a debate and a policy discussion about how
we bring on all the other technologies at the same
time.
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