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28 Apr 2009 : Column 189WH—continued
9.55 am
Mr. Mike Weir (Angus) (SNP): I am tempted to say, “Here we go again.” Looking round the room I see myself, the hon. Member for Orkney and Shetland (Mr. Carmichael), the hon. Member for Glasgow, North-West (John Robertson) and the Minister. We have all been round this course many times, in this Chamber, the House and the Scottish Affairs Committee. The hon. Member for Glasgow, North-West and I continue this debate in the Energy and Climate Change Committee.
When I saw the title of the debate, I hoped that we had moved on from the perennial argument over the construction of new nuclear power stations in Scotland. Alas, that has proved not to be the case. We have debated this subject on numerous occasions, and it will surprise nobody to hear that the Scottish National party and the Scottish Government do not accept the need for new nuclear power stations in Scotland. I have seen no evidence to make me change my mind on that, despite the best efforts of the hon. Member for Glasgow, North-West.
We oppose new nuclear power stations for various reasons, but there are other energy issues in Scotland. I will speak briefly on the nuclear issue before moving on to what I consider to be slightly more important matters. We do not need new nuclear power stations. Scotland has the potential to be the green powerhouse of Europe, and we should concentrate on creating a safer, greener Scotland by developing that full potential. Nuclear power is costly and has never lived up to the claims of its proponents. We all recall being told that it would be too cheap to meter—that has turned out to be a con. The budget of the Nuclear Decommissioning Agency is running away. At last count, it had reached at least
£70 billion, and may now be as high as £90 billion. Before the reorganisation of Government Departments, it took up nearly half the budget of the Department for Business, Enterprise and Regulatory Reform. That was before the costs of disposal of waste from new stations were considered.
In Scotland, the decommissioning costs of Chapelcross are estimated to be at least £1.37 billion. The site will not be available for resale until 2018. At Dounreay the cost is almost £3 billion. Total costs in Scotland have reached £5.3 billion at current prices, and that is before the costs of Torness and Hunterston B are known.
When the Labour and Liberal Executive were in power in Scotland, they were opposed to nuclear power stations because they did not believe that the problem of waste disposal had been solved. That is still a problem—it has not been solved. The UK Government have simply decided to treat it as solved without having a disposal site, funding or a clear plan for what to do with existing waste, never mind the new waste.
The economics of nuclear power do not stack up. No stations anywhere in the world have been built without public subsidy; the newest station in Finland is running behind schedule and over cost. We are told that nuclear power could provide jobs in the future, but renewables can provide jobs now. We need those jobs now for a new, green, energy future.
The hon. Member for Ochil and South Perthshire (Gordon Banks) talked about economic security. Where is the economic security when the main builder of new power stations will be a company, the majority of which is owned by the French Government? The main substance needed for nuclear power is uranium. Perhaps we can get that from Australia and Canada now, but there is a limited supply. Some estimates say that there is no more than 40 years’ worth. After that, where do we get it from? We will have to go to Kazakhstan and other such places, which are hardly the most stable parts of the world. If we were worried about gas from Russia, why are we so relaxed about uranium from Kazakhstan?
Mr. Carmichael: If Kazakhstan will not supply it, there is always Uzbekistan. Does the hon. Gentleman think that it is sensible to put our future energy consumption and generation capacity in the hands of someone like Islam Karimov?
Mr. Weir: Certainly not. We need to develop our own energy future. We currently have substantial amounts of North sea oil and gas, and a renewable future on which we should concentrate. Nuclear is a thing of the past and not the future. Moreover, we should consider its moral implications and its connection with weapons. We told Iran and North Korea that they could not have nuclear power because of what they might do with it.
Plainly, renewables, as a share of our energy generation, are increasing while nuclear is decreasing. I was much alarmed by the outrageous call of the hon. Member for Ochil and South Perthshire for the power of the Scottish Government to be removed. This is a matter for the Scottish Parliament, and it is part of the devolved solution and a matter for the Scottish people. A majority in the Scottish Parliament are opposed to nuclear power stations and they were elected by the Scottish people. It is up to the Scottish people to change the situation.
We believe that it would be wiser to invest the billions that would be required for new nuclear power stations in Scotland’s vast renewable potential. I appeal to hon. Members to get over their obsession with new nuclear and let us consider what we can agree on rather than raking over the embers of something that we are highly unlikely ever to agree on. On that basis, I should like to concentrate on some of the more positive aspects of electricity generation and consumption, and to highlight a few areas in which urgent action is needed.
As I indicated, Scotland has a huge potential for many forms of renewable energy. The Scottish Government are on target to exceed their aim of generating 31 per cent. of electricity demand from renewables by 2011, with capacity, which is either installed or consented to, exceeding 5 GW. They are determined to meet, and if possible exceed, the target of 50 per cent. by 2020 through a balanced mix of technologies. They also wish to continue working with European partners to look at better offshore grid connections, which are essential for the large-scale export of renewable energy.
The Scottish renewables obligation will give a much greater incentive to wind and wave technology, which has a huge potential for the future. In the spirit of co-operation that I am trying to engender, I also warmly welcome the recent announcement by the UK Government to extend the renewables obligation until 2037. That is very positive and gives us a potential to expand important energy sources. The Crown estate’s recent announcement of offshore wind licences also has the potential to increase our renewables. Some such licences may cover the firth of Tay in my own constituency. I await with interest the reaction to offshore wind given the problems that there have been with onshore wind. None the less, it is an area that we need to continue to develop.
The £13 million wave and tidal energy support scheme awarded grants to eight marine energy projects, and the Scottish Government have indicated that they intend to introduce, by June, the most generous support in the UK for commercially deployed and marine renewable energy projects on five renewables obligation certificates for wave and three for tidal. That is a real attempt to kick-start renewables and put in place all the renewable generation.
Moreover, we should not forget that we have North sea oil and gas. As the hon. Member for Glasgow, North-West well knows, the Energy and Climate Change Committee is currently considering the oil and gas industry. We have had some very interesting meetings on the subject which included a visit to Aberdeen. There is still an immense amount of oil and gas in the North sea, and potential development west of Shetland. The UK Government must consider that as part of a medium-term energy future. Changes in the Budget will help a little, but more needs to be done to ensure the development west of Shetland, which is a very difficult environment from which to extract oil and gas.
The future of the industry goes beyond that, however. The hon. Member for Ochil and South Perthshire talked about carbon capture and storage, but the North sea has huge potential. We have the undersea aquifers and the old oil and gas fields which have huge storage potential for carbon capture and storage. Moreover, in the North sea we have the skills, through the oil and gas industry, to develop CCS and offshore wind. The other
week, I visited Petrofac, which has a facility in my constituency, to look at its offshore safety work. It said that it was getting increasing interest from those who wish to get involved in offshore wind and other offshore renewable projects, thus highlighting that there is the potential to develop our existing North sea industry.
I should also like to talk about carbon capture and storage. Again, in the new spirit of co-operation, I welcome the statement on the subject made by the Secretary of State for Energy and Climate Change. I am tempted to say that it is better late than never, because had the Government not pulled the rug from under the Peterhead project, we could have been well ahead with carbon capture and storage. As it happens, that project is now proceeding in Abu Dhabi. We are now, at last, considering movement with CCS. Obviously, Scotland has huge potential with the possible development at Longannet. At the moment, Longannet is the second largest coal-fired power station in Europe. The project that is being developed there, in a consortium led by Scottish Power, includes Aker Clean Carbon’s technology and Marathon Oil Corporation’s drilling and transportation expertise. It is one of the three bids that is going forward in the bid process and, if it is successful, it could be the world’s largest fully operational system on site by 2014, and that would go a great distance to putting Scotland at the forefront of carbon capture and storage and developing industry for the future.
The hon. Member for Ochil and South Perthshire made an important point about the number of coal-fired power stations throughout the world and the continuing development of them in China and India. Longannet will be a retrofitted carbon capture and storage facility, which is vital because we have to retrofit the existing stations if we are to reduce their emissions. It is no good looking only at carbon capture and storage for new build, it must be developed to retrofit existing stations so that we can move forward and drastically reduce our carbon emissions.
There are problems with CCS, however, which stem from the transmission grid. I have often talked about the need to strengthen the grid, particularly for the north of Scotland, to take the renewables into account. The regime is distance-based and that works against the development of renewable energy resources in Scotland as well as providing a disincentive to thermal-based generation. In effect, it is technology neutral, but any technology in the north of Scotland faces the same problems. It is high time that we moved from that to a charging model based on a flat rate—the so-called postal system. Each generator would pay the same for access into the grid. Such a system would go a long way towards helping the development of renewables and will enable us to meet the challenging targets that we are all signed up to—or that most of us are signed up to. National Grid is consulting the UK industry and generators for their views on the Scottish proposal, which I hope will move forward.
Mr. Carmichael: Will the hon. Gentleman explain his thinking? Why must we have only one transmission regime for every kind of generation? Does he accept that, if traditional fossil fuels are being used, locational charging, whereby there is a loss of energy in the transmission, makes sense, but that it does not make sense for renewable resources?
Mr. Weir: We are trying to get a balanced mix. We want to encourage as many types of renewable as possible. The hon. Gentleman talks about traditional sources, but CCS changes things. I will talk about that in a moment.
The current first-come-first-served access arrangements are indefensible, and I welcome the fact that the transmission access review group is looking at them. Hopefully, there will be changes to avoid the ridiculous situation in which people can be given connection dates many years in the future. We should consider a system that is based on the realistic possibility of access. If a project is tied up in the planning system for many years and is never likely to proceed, it is daft that it is able to have a connection consent when a project that has been through the system cannot. That needs to change.
Scottish Power has identified a problem with the CCS and the transmission system. At the moment, there are constraints on transmission under the British electricity trading and transmission arrangements. Generators in Scotland pay to be connected to, and to use, the Great Britain transmission system. Annually, such payments amount to 40 per cent. of the total transmission charges which, allowing for the fact that Scottish generation represents only 12 per cent. of total generation, means that Scottish generators contribute approximately £100 million per annum more than what would be a fair share. In return for the payments, generators are entitled to access and to use the transmission system to move their generated electricity to market. Consequently, when they cannot have full access to the system because of inadequate grid capacity, they should be entitled to compensation for the resulting loss—those payments are referred to as constraint payments.
Electricity generation in Scotland already exceeds the capacity of the network, and additional renewable generation in Scotland will exacerbate the situation. Neither National Grid nor Ofgem has taken sufficient steps to address the capacity shortfall, even though the problem has been known about since well before 2005. There is an ongoing programme of infrastructure reinforcement works to increase capacity, but it will be several years before the interconnector capacity between Scotland and England is sufficient to eliminate constraints. National Grid and Ofgem have nevertheless come forward with a new proposal that appears to target Scottish generators. They want to change the system of balancing costs so that constraint payments would effectively be charged back to the same generators, which is to say that generators would pay constraint charges for not being able to access the system, which seems bizarre in the extreme.
Setting artificial limits on the level of compensation that Scottish generators would receive, irrespective of the value that they provide to National Grid or of the losses incurred by generators, seems daft, but the problem is that the proposal seriously undermines confidence in investing in Scotland’s thermal and renewable energy sectors, including CCS, which is the point that I wished to make to the hon. Member for Orkney and Shetland. We are placing a great deal of faith in the future of CCS to meet our emission targets and we need to do everything possible to ensure that it happens. We cannot discriminate against existing and future Scottish generators—that calls into question the validity of the BETTA system. I appeal to the Minister to take the matter up with her
colleagues at the Department of Energy and Climate Change, as I have with the Energy and Climate Change Minister, the hon. and learned Member for North Warwickshire (Mr. O'Brien), who has promised to meet me to discuss the matter. It is important that we get this right. There are many other problems, but we need to get on with CCS, which is one thing that will ensure energy for the future without the need to go down the nuclear route.
I should like to make one final point in response to what the hon. Member for Ochil and South Perthshire said on energy prices. We all quite rightly get many complaints about energy prices, and all politicians will struggle with the problem in the coming years. However, we need to balance energy prices with the need for investment in the grid and in new generation, and we must be realistic about it. We must ensure that those who have difficulty paying bills—those on low incomes or benefits—are given the maximum help in paying them, but I agree with the hon. Gentleman that we must also take steps to ensure that our housing stock is as energy efficient as possible. We must ensure that new build incorporates the highest standards of energy efficiency—new renewable energy such as photovoltaics or solar panels could help.
We should consider retrofitting our older housing stock, but there is a limit to what we can do. My house is a Victorian semi, and I have done all the easy things to insulate the house, but it has solid walls, so I cannot inject anything into them. I have a very well lagged loft and I have changed all the light bulbs, but there is a limit to what I can do.
As hon. Members who have served on the Business and Enterprise Committee and others will know, the interconnection of the European and UK markets is a serious issue, and it impacts on the price of our energy. It is not balanced. The European Commission is apparently trying to liberalise the market, although there has been little success to date. That needs to happen, because the operation of the Europe-UK interconnector impacts on Scotland.
Many things can be done in Scotland so that we have a clean, green energy future. I suspect that we will never agree on nuclear. I appeal to everyone to concentrate on the things on which we can agree, to push forward generation for the future and to ensure that we have that clean, green energy future for Scotland.
Mrs. Joan Humble (in the Chair): Order. I wish to call the Front Bench spokesmen at 10.30 am, so we have only 13 minutes of debating time left for the two hon. Members who still wish to speak. I therefore urge them to limit their contributions.
10.17 am
John Robertson (Glasgow, North-West) (Lab): It is a pleasure to serve under your chairmanship, Mrs. Humble. I congratulate my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) on his excellent speech. He hit all the right buttons and talked about everything, and his contribution was balanced. It was more balanced than that of the hon. Member for Angus (Mr. Weir). He told me earlier that this is like déjà vu all over again. He started off well, saying that we did not want to go into the usual nuclear argument, but then he went into it—for the next seven minutes or so.
The most important thing is how the needs and aspirations of the Scottish people are met. As Scottish politicians, we should do our best to meet those aspirations. I enjoyed the hon. Gentleman’s last comment. He said that we should talk only about things on which we agree but, unfortunately, that is not how life works. We want to talk about everything, which includes nuclear. Nuclear will bring a great deal to the party, and it will do a lot to meet the energy needs of the Scottish people at a time when it is needed.
The usual smoke screens have been produced as a way of arguing against nuclear—we heard that nuclear generators are bad people who produce horrible waste that we do not know what to do with. The Government will say what is happening on waste in the late autumn. I hope that the Scottish National party north of the border will accept what comes forth, and that we have a single repository for waste in this country. I hope that the party does not do anything silly and try to have a separate waste dump for nuclear waste in Scotland. How silly would that be? Then again, sillier things have come from that party in recent times.
It is no surprise that I will speak on nuclear energy. It would be remiss of me not to, as chair of the all-party group on nuclear energy. In May, Doosan Babcock, a business just across the river from me, will show off one of the first carbon capture trials in the country. Science is important. I believe that we have always excelled at it in this country, and that science is the most important thing in considering how we are to survive our future, whether in terms of climate change or of our existence in general.
Scientists tell me that no carbon capture facility anywhere in the world is up and running and supplying energy, and it is unlikely that one will be before 2025 at the very earliest, or more probably 2030. There will be trial sites, and we will try this and that to get a power station fitted, up and running and doing what we hope it will do—we hope that this country will make a lot of money selling energy to countries such as China, as my hon. Friend the Member for Ochil and South Perthshire mentioned—but it will not be part of our energy mix in the short term.
When I say “short term”, I am thinking particularly of the 2015 to 2020 bracket, when we will have a problem with our energy needs. At this moment in time, whether we like it or not, or whether we agree or disagree, we will have to consider gas to fulfil a lot of our needs, and we will have to import it from areas from which we do not particularly want to import it. That is my opinion. Although the Secretary of State for Energy and Climate Change said to me that he did not believe that we would have to go down that road, I believe that we will. The information coming to me from energy companies is that there will be a problem when we reach 2015. If we close our coal-fired and nuclear power stations, we will have a shortfall that cannot be met by renewables.
Core supply is the most important thing. Without it, the country does not run. Core supply is the base of electricity or energy needed to ensure that the country works. During the cold spell last winter, renewables in Scotland produced 0.01 per cent. of energy. That is not good enough. We cannot rely on renewables for our future energy needs. When it gets cold and the wind is not blowing, we will not have enough energy to supply our needs. That is a problem.
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