Energy Bill

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Q 150Albert Owen: Sorry, can we concentrate on electricity, which is important for industry?
Tom Burke: Yes, but as I explained earlier, the generation gap, as it were—I am a bit reluctant to use that phrase—that we have because of the phasing out of existing provision must be filled long before new nuclear can come in, even under the most optimistic assumptions. If we have a carbon-neutral coal option—
Q 151Albert Owen: I have heard this, Mr. Burke, with respect, and I have read your evidence, but I am talking about countries that are looking at extending the current fleet. Does that not help to bridge the gap?
Tom Burke: This country is talking about—
Albert Owen: So does Canada.
Tom Burke: If you let me finish, there is a lot a of talk about a nuclear renaissance. Looking around the world at what people are actually doing gives you a slightly different picture. There are not a lot of real commitments. I noticed as I was listening to the previous panel that not many people are actually putting in orders to Japan Steel Works, which is the only place at the moment that can produce the forgings for new reactor vessels. Not many people are actually paying up the 30 per cent. that Japan Steel Works is asking for to get into the queue. That is what I am looking at—what Governments are doing. Mr. Bush offered the nuclear industry in the United States essentially to pay for the first six reactors that —
Q 152Albert Owen: With respect, my specific question was about the fact that others are going down the nuclear road and also looking at extension. You may be against nuclear build on principle, but what about extending current power stations?
Tom Burke: I am in favour of extending the life of existing nuclear reactors for as long as we can. I do not want to stop that. I think that—
Albert Owen: Thank you. If others could answer it as well, please.
Benet Northcote: In one of your exchanges you said “Let’s stick to electricity, please, if we can, as opposed to energy, because that is important for industry”. I agree that it is. Clearly it is essential, but you cannot decouple electricity from energy, which all the debate is framed on. That is the misreading that is going on. You cannot say, “Oh, I just want to focus on the electricity gap” and then talk about energy security, gas prices and oil prices. Those things are integrally linked. How do we have a sustainable economy that moves forward and continues to employ people and provide what we need for our quality of life without trashing the planet? We need to do that by solving all those things together. That is why we talk about a solution in a positive way—an achievable solution built on decentralised energy, renewable energy and energy efficiency. Those three things come together.
Q 153Albert Owen: I appreciate that. What about extension of existing nuclear power stations?
Benet Northcote: Extending the life of existing power stations?
Albert Owen: Yes.
Benet Northcote: We are talking, what, five years max? Five or ten years. It is not something that will solve our energy problems as an issue going forward.
Robin Webster: I was just frowning to myself, because I was trying to work out how many questions you have asked me. On one of them, Benet has just said it: the Government have rather presented nuclear as winning an argument, saying “We are presenting a package that is just one of many solutions.” The idea of a package is important, and Benet has just said it; they teach us to say it on our line manager’s knee or whatever, and to think about what solutions are out there: decentralisation, energy efficiency, renewables. Those are the three solutions that we have to be thinking about in the energy system. Decentralisation is thinking about fossil fuel and more efficient use of the fossil fuel resource that we are currently using in a completely profligate way.
On the Severn barrage, I slightly misunderstood what you said. Did you say that communities are seeing the Severn barrage as a structure of wind farms?
Q 154Albert Owen: In my community of north Wales, they see windmills as a distraction. They want to go with other options, because whatever option people come up with, they seem oppose it. Many people in the Cardiff bay area oppose the barrage. I was wondering whether Friends of the Earth still opposed the barrage in principle.
Robin Webster: We are opposed to it not in principle but for pragmatism. Again, it is on the same sort of principle as nuclear: what is going to work best? We have considered tidal lagoons and think that they would have a far less negative environmental impact.
Q 155Albert Owen: Sorry to push you on this. So is the barrage, in your opinion, a distraction?
Robin Webster: Yes.
Russell Marsh: On the nuclear question, there is a lot of evidence to show that the electricity generation gap that we have is not actually as big as we may think it will be. We were looking at some numbers recently and if you include our renewable electricity target, which could be about 40 per cent. of our electricity by 2020, and everything currently coming through, we will not have an electricity gap, so nuclear does not come into that equation. We need to look at the numbers and get a good sense of what is out there and what we mean by an electricity gap, which I think was the only question that you directed to me about the crowding out.
Albert Owen: I have had my response.
The Chairman: We are now going to have four doctors in a row.
Q 156Dr. Ladyman: I shall start by commenting on the idea that—I am paraphrasing Mr. Northcote—the fight against climate change is one of trajectory and that the effort put in to develop technologies, such as CCS, up to 2020 will allow us to make that trajectory up to 2050. However, that is exactly the argument that you used to reject nuclear power, which cannot make a contribution up to 2020 and, therefore, can be ignored between 2020 and 2050. My first question is: can you explain that contradiction?
Secondly, if you are going to convince me of your arguments, you will have to use figures. The assertions that I have heard from the four of you today, and in material that your organisations—Friends of the Earth and Greenpeace—have put out, contain no hard estimates of what the alternatives to nuclear power and the energy mixes of today can produce. You have not given me figures such as, “20 per cent. of this by 2020, or 20 per cent. of that by 2020.” Will you do that now? Will you tell me what those are? Greenpeace just sent us a DVD, which I have watched. It suggests a string of alternatives to nuclear power as reasons that we do not need the latter. What proportions of those alternatives do you envisage in our energy mix by whatever date? When we were thinking about a 60 per cent. carbon reduction by 2050, Friends of the Earth had a set of proposals for our energy mix. However, I have not seen you revise those since you started your campaign for an 80 per cent. reduction. How are you bridging that 20 per cent. gap without having produced a new energy plan?
Benet Northcote: On trajectory, we are calling for a fundamental change in our energy system. Be in no doubt about the ambition that we are calling for. The analogy that I use is with electricity privatisation—the second time we have talked about Margaret Thatcher in the Committee. If you had walked into the CEGB in 1983 and said, “I have this great idea. We should privatise the electricity system and hand it over to a small bunch of oligarchic companies in a market operating a little like an oligopoly of largely foreign-owned companies,” people would have told you that you were completely barmy. But that is what happened, and I think that we are looking at a similar transition in our energy system. When I talk about trajectory—
Q 157Dr. Ladyman: Are you arguing that we should do something barmy?
Benet Northcote: No, I am saying that people would have said in 1983 that the prospect of a privatised electricity system was barmy, but it did not turn out that way and is now being defended vehemently by DBERR. My point is that we need to go through another transformation, starting now, to take us up to 2020 and beyond, as opposed to sticking with the system that we have got and looking for technical fixes.
You asked about figures and hardcore numbers. I shall point you towards two documents: the work coming out of DBERR right now on heat, which I have referred to already, and the Office of Climate Change report on the potential of heat and a heat strategy. We could go through the numbers, but I am not sure that that is the best use of the Committee’s time. However, I am happy to cheerfully circulate the latest figures to you.
For ease of reference, I point you to the White Paper on the future of nuclear power, which is a useful document to look at every now and then. I could talk to you about some of the alternative scenarios proposed by DBERR if we did not have nuclear. Paragraph A20, on the market allocation model—I have been waiting to use this quote—states that
“when new nuclear power stations are excluded, electricity generated from renewable sources would have to play a significant role in electricity generation, constituting over 40 per cent. of the generation mix by 2050.”
Stop me if I am wrong, but we are committed to about that generation mix from renewables under the EU target by 2020. The very models that the Government are using in their market allocations show that we can do this.
Q 158Dr. Ladyman: Those models were rejected because the Government do not believe that they are achievable. I am asking you to give me a picture of what our energy mix will look like by 2020 and by 2050, which I can test with people who might invest in it to see whether it is achievable.
Benet Northcote: Well, I think that I have answered that. As I see it, we will meet our EU 2020 target of roughly 40 per cent. of electricity generation coming from renewable sources. It is such a shame that we cannot ask the Minister his opinion on whether the EU targets are achievable. There is no doubt that the Prime Minister thinks that they are because he is on the record as saying so. He said very clearly that he thinks the targets are achievable. In saying that you do not think that they are achievable, you have to challenge the word of the Prime Minister.
Q 159Dr. Whitehead: I had a go recently at doing precisely what we are talking about in a pamphlet that I produced, but I will not advertise it to anybody.
What becomes evident immediately is that we have two planning cycles up to 2020, roughly speaking. On the electricity generation gap, we have to replace 20 or 25-odd GW of our installed generator capacity by that time. We know that none of that generation will be nuclear, whatever one thinks of nuclear energy ultimately. Therefore, we are talking very big numbers. Presumably we will go down a predominantly renewable path with a number of transitional technologies, such as combined heat and power, which might include coal and gas. There will be various mitigating factors, such as CCS.
In terms of your general view of how energy progresses, what compromises do you think will be necessary to get us to those big numbers by 2020, on the basis of the sort of scenario that I have set out? I think that that vision is probably fairly widely shared. We may have to use renewable fuels, the Severn barrage or gas with combined heat and power. Do you regard those as compromises or as part of the big energy picture? I know that we have not talked about the Bill too much. However, is it your view that some of the devices in the Bill might at least give a positive lead towards those numbers being achieved?
Tom Burke: Let me add more to your problem before answering it. If we want to arrive at a carbon-neutral global energy system by 2050, which is what the scientists are telling us we will need to do if we are to avoid not just the 2, but the 3 and more that are predicted, we will have to move to electricity for all of our heat, cooling, power, communication and mobility needs. Essentially, that is what a carbon-neutral energy system will mean.
Whatever forecasts there currently are for electricity demand, they will go up if we are to move in a direction that will really solve the climate change problem. We might not go in that direction. Just to be clear about this point: there will need to be a lot more electricity in the system. A scenario that does not take you in that direction is not taking you towards a stable-climate world.
Let me illustrate that point. If you want to have a carbon-neutral energy system, you cannot use gas for all domestic boilers. You cannot have hundreds of millions of domestic gas boilers. One thing that the Bill could do that would be very helpful would be to make regulations so that you do not put gas supplies into the 10 new eco-towns and the 3 million new houses. You will then not have to pay all over again to take them out. That would be a way of getting ahead of the curve on that issue.
I will move on to how best to meet the electricity demand that will be created if you increasingly move to electrify your system. I have been trying to offer you an answer about renewable sources. As Benet said, the renewables target of about 40 per cent. will be difficult and expensive to achieve. There will have to be a fair amount of public money in the infrastructure—not necessarily in the deployable technology—to get access to that potential. The rest of it will come from centralised and essentially largish gas and coal-fired power stations with carbon sequestration and storage. That is it—about 40-odd per cent. from renewables and a bit more over time as we go towards the 2050 thing, but the bulk coming from carbon-neutral gas and coal. We need to get on with that very fast because it is 42 years away and, as we all know, the life cycle of energy investments is very long. The danger with things like Kingsnorth, as we lock ourselves into a way of using coal for electricity, is that we will have to go back later and pay a lot to make it carbon neutral. It is better that we realise now the kind of world we will be living in in the next 40 years, and start now with what we have to do.
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