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Lord Tombs: My Lords, I congratulate the noble Lord, Lord Jenkin, on giving us the opportunity to discuss nuclear power as the pivotal contributor to our future energy strategy. I should also like to congratulate our two new colleagues, the noble Lord, Lord Cunningham, with whom I have spent many hours on energy strategy in the past, and the noble Lord, Lord Turnbull. They will come to see that discussion of energy matters is a recurring feast, if that is the appropriate word, in this House. I hope we shall hear from them again on this subject.

The latest government consultation document, modestly titled Our Energy Problem, makes no pretension to be a strategic one. Indeed, it follows its predecessors in its somewhat rambling, dissertational style and offers neither analysis nor guidance to its unfortunate consultees. I do not understand its purpose, if, indeed, there is a purpose, but I fear that it is likely to disappoint the Government in their apparent hopes that wisdom will be achieved by an absence of leadership.

The claim that this document is necessary because of unforeseen changes rings hollow. There were many voices in this House and elsewhere warning the Government of the limitations of their heavy reliance on wind power to meet the CO2 reductions envisaged, as there were about the perils, in security and financial terms, of their blind reliance on gas as the main fuel of the future.

Overlying all of this was the naive belief that the internal forces of a manipulated market mechanism would provide a long-term strategy for the energy market. As though that was not enough, there was an astonishing belief that international gas markets would operate freely. Toytown economics indeed, made worse by political procrastination and, I am sorry to say, prejudice. But there are some signs that
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the threat of climate change is becoming more widely recognised and there seems to be a growing recognition worldwide that nuclear power will be a part of the solution. We should therefore seek ways of reinforcing these nascent indicators by suggesting ways of facilitating the resumption of nuclear power station building.

The first requirement is for government to abandon the anti-nuclear measures which have, for a variety of reasons, become embedded in government thinking and actions. These are well known, but I will repeat them in order to refresh ministerial memories. They are: the imposition of a CO2 tax on a non-CO2 producing industry, a point made by the noble Lord, Lord Jenkin; the imposition of selectively punitive local rates on nuclear generation; the exclusion of nuclear generation from the national fossil fuel obligation; and, more recently, the oppressive financial terms imposed on British Energy by a government "rescue" of the company from a crisis purely of the Government's making.

We need a government approach shorn of the hostility and procrastination of recent years and concerned with the solution of problems rather than their creation. Three problems have often been mentioned as difficulties in the way of resuming a nuclear power programme. I should like to deal with these in turn, in a constructive attempt to help the Government escape the artificial situation into which they have talked themselves.

The first is that of affordability. The economics of nuclear power have been greatly improved by the new generation of reactors, which are substantially smaller than their predecessors, as well as being more inherently safe. Ample information of high quality is available around the world, but the Government seem to prefer in-house assessments by such groups as the PIU, which bring little to the examination beyond their obvious discomfort with the political climate in which their analysis is conducted.

The charge has been made that investors show no great willingness to promote new nuclear power. That is hardly surprising, given the lavish subsidies for wind power: £30 billion—I will echo the noble Lord, Lord Cunningham, and say £30,000 million—to the year 2020, according to the most recent government estimates. There is also the short building time and fool's gold of cheap gas, which have dominated industry policy for the past 10 years. The recent acknowledgement by the noble Lord, Lord Sainsbury, that nuclear power can now be regarded as a renewable source invites a logical response in the form of inclusion of nuclear power in the NFFO.

The second reason for delay has been the safe disposal of nuclear waste, about which we have heard quite a lot today. I had the honour of chairing a Select Committee of your Lordships' House which reported in March 1999 in favour of deep geological disposal. That solution has been widely adopted internationally but has been studiously avoided by the Government for the past seven years—largely, I fear, as a means of that procrastination, to which I and many other noble Lords have frequently referred.
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Finally, there is an apparent belief that nuclear power is opposed by the public. Recent surveys have shown a steady improvement in public acceptance, aided by growing concern about the likely effects of climate change. I shall dwell on the topic of public acceptability by recounting two experiences from my period with the South of Scotland Electricity Board, a doughty enthusiast for nuclear power, in the mid-1970s.

At that time, we were applying for permission to build a nuclear power station at Torness, on the east coast. Local concerns were met by introducing local inhabitants to those from Hunterston, on the west coast, where we already had two nuclear stations. Indeed, at the time, there was a proposal to build a gas terminal on the Hunterston peninsula, which prompted local residents to send me a petition asking for a new nuclear power station instead. Since then, Torness has been built and nationally we have had a further 30 years of successful operation of UK nuclear power stations. The evidence shows a ready acceptance of existing local communities, who have discovered that nuclear power can be a very good neighbour.

At about that time, in partnership with Sir John Hill, then the chairman of the UKAEA, I approached the late Lord Porter, who was then director of the Royal Institution, to hold a debate at the institution on the merits and problems of nuclear power. The debate lasted for three days and was open to the public, It dealt with uranium mining, uranium enrichment, safety, waste disposal and weapons proliferation. Speakers for the industry were matched with opponents from environmental organisations. Understandably, the event attracted substantial media interest and two live television debates followed.

The result was a triumph for nuclear power. The issues of concern were dealt with fully and in public, and the necessarily technically complex issues were explored patiently and thoroughly in a way which had never been attempted before and was a resounding success at the debate itself, on television and in the press.

I would encourage the industry today to repeat the experience and so demonstrate that there are satisfactory answers to the public's apprehensions, rather than adopting a defensive stance in responding to alarmist media statements which make their impact before a defence can be mounted.

Finally, my Lords, let us recognise the reality that nuclear power, as a baseload contributor to our energy demand, can allow us to build a less polluting society and at the same time preserve our strategic and economic independence in the energy field. It also offers, through hydrogen production, the best hope available of tackling that mammoth polluter, transport.

3.40 pm

Lord Redesdale: My Lords, I start by thanking the noble Lord, Lord Jenkin, for his rather inspired speech, although I think I will leave the love analogies
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to others. I also thank the two maiden speakers for their contributions. The speech of the noble Lord, Lord Cunningham, was excellent. I knew that I would have to mention him, so I looked at his entry in Dod On Line. Perhaps I should mention that the noble Lord has a great deal of humility. Under the heading "career" he states that he was a research academic at Durham University, and that is it. He has left out of Dod completely his political career, which is an inspired move. I look forward to hearing more speeches from the noble Lord, Lord Turnbull, after his illuminating contribution. He understands the arcane workings of decision making from the inside of government.

Like the noble Lord, Lord Tombs, I read the consultative document Our Energy Challenge in preparation for this debate, a fine document featuring a picture of the planet on the cover. That is always a worrying aspect. But given that it is a consultation document, I did not bother to read most of it. Initially I went to page 7, which lists the key questions for review. Those key questions guide consultees on what they are supposed to be answering. It is clear, as the noble Lord, Lord Jenkin, pointed out, that the whole purpose of the consultation paper is set out in the third question:

I believe this document makes the point that the Government are looking at new build. As many noble Lords and many in my party know, I am sceptical about the case for nuclear. I must say that the nuclear industry has done an incredible job over the past 10 years, taking itself out of a position where it looked like nuclear power stations were to be phased out without reprieve to one where it is now seen almost as an environmental champion, coming forward to save the planet. Moreover, I accept that nuclear will have to be reconsidered in the light of global warming.

However, a few questions should be asked, ones that the nuclear industry will have to answer. First, I want to ask a question of the Government. The whole debate assumes that the consultation will be taken into account and weighed up, but a number of people have said that for new nuclear build to move forward, primary legislation might well be needed and therefore Parliament will make the decision. But I am not certain that that is the case. If it is not and the consultation reveals a majority in favour of new nuclear build, does it mean that this document will set the parameters for a White Paper leading to the Government declaring that they will move towards nuclear new build? Will Parliament be given the opportunity to debate the option of any nuclear new build, or will the decision be taken? The Prime Minister has already stated that he is keen on the argument, but that might not remain the case because costs will come into it and the decision probably will not be taken before we have another Prime Minister. For that Prime Minister, this will certainly have cost implications.
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It has been stated that nuclear is needed to keep the lights on. This has been said in three debates in your Lordships' House, but I challenge it. Although nuclear makes an important contribution to the energy basket as it is made up, it does not provide the baseload. That is supplied by coal and gas, and in the future gas will embrace a larger percentage. Some 19 per cent of our energy is supplied by nuclear generation. Therefore it could be said that to take out the nuclear option would not be to remove the major component.

There is also a question mark over how many nuclear power stations will have to be built significantly to increase the proportion of energy supplied by nuclear. The present figures refer to four new nuclear power stations, but they certainly will not replace the 25 per cent of energy that was provided by nuclear.

If we are going to build a large number of power stations, it raises the question of who will build them. As the noble Lord, Lord Jenkin, pointed out, Westinghouse, of course, has now been sold to Toshiba. One of the reasons given for that was the risk implications of building nuclear power stations abroad and the fact that the Treasury would not want to underwrite them. But if the Treasury is unwilling to underwrite the risk factors of building nuclear power reactors abroad, who will underwrite the new nuclear build in this country? If the new nuclear build is to take place, will the Treasury underwrite it or will it be underwritten by whoever builds the new reactors?

I believe that nuclear reactors could be built a great deal quicker than many people set out. Of course, if the new nuclear reactors are built on sites where there are nuclear power stations at present, that will get rid of many of the question marks over planning. The four new nuclear power stations that have been built in China have come in under budget and under time.

But, as was pointed out by the right reverend Prelate, nuclear power still has two hurdles to face, the first being waste. It has been pointed out by my noble friend Lord Taverne that waste is now an issue of lesser magnitude. Of course, much of our nuclear waste in the past was built up through military activities, but it is still an issue. It is not any less difficult to deal with; we do not have a solution. A deep-level storage facility is not a solution but a management factor. Do the Government have any estimate of the costs of such deep-level storage facilities?

The other hurdle is cost. We have referred to many of the aspects of cost, but I am quite concerned about the cost of electricity. If we build these major nuclear power stations, which will last for 50 years—and some of them could last for 50 years—we will need to discuss how we are to set the price for the electricity produced by them. That will have an interesting effect on the cost of electricity from other suppliers. It seems strange that while we are discussing the liberalisation of the gas market in Europe—and I press the Government to do as much as they can to move forward on that issue; it seems ridiculous that we are paying vastly inflated
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prices for gas when compared with other European customers—we would not expect a set price for energy from the gas suppliers but we might from nuclear.

The noble Lord, Lord Turnbull, said that one of the issues that have to be addressed is that the present power stations produce carbon waste. That factor has to be taken into account and I would press the Government to look at the work of Professor Peter Hall of Strathclyde University, who is looking into methods of carbon storage and capture. The aspect of clean coal should be looked at. Professor Hall deals with prototype work carried out in Scotland by industry and the University of Strathclyde to sequester carbon dioxide in unmineable coal seams 3,000 feet down under the central belt. They are about to undertake a two-year programme which would see flue gas similar to that produced by the Longannet coal-fired power station injected deep down. As a by-product, the methane gas which would then be pumped to the surface could be burnt, the sales revenue from which could cover the drilling costs. Billions of tonnes of carbon could be placed underground safely. It would bond with the coal and therefore would not come to the surface. A question for the Government is: why are they not investing more in clean coal-fired technologies? If we are to make coal and gas—which produce so much of our energy—carbon neutral and prevent global warming, we have to start investing seriously in this technology.

Will the Government look again at co-fired biomass which is under threat due to the capping of the renewable obligations? This issue has to be addressed; it is one way of making clean coal sustainable if biomass is to be grown and burnt alongside coal. However, the big changes to the renewable obligations, where a cap on this is being considered, are not supplying the amount of security for farmers to grow the stuff in the first place. We are looking at another collapse in the biomass market.

I was going to talk about wind and the possibility of a new 10 megawatt turbine that is under development, but I have run out of time. However, I will finish on this one point. I understand that the energy review is looking at a basket-case of energy.

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