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Nuclear Industry

I am most grateful to my hon. Friend for his intervention. Although not the subject of the debate, a different report on the work of the Nuclear Decommissioning Authority and the United Kingdom Atomic Energy Authority deals with nuclear fusion. The Committee is enthusiastic about the prospects for nuclear fusion, but like so many things, it remains about 15 years away. The evidence is that we are getting closer to plausible, commercially realisable nuclear fusion, and we are encouraging the Government to continue to support our international efforts, which are moving from Culham to the ITER––international thermonuclear experimental reactor––facility in the South of France. I agree with my hon. Friend that there are other technologies, such as locally distributed energy generation, which may in 30 or 40 years’ time produce alternative sources of power. As new technologies come along, we may find that this is the last time that we need to renew the old fashioned large-scale power plants. I entirely agree with what he said. On security, the Office for Civil Nuclear Security expressed some concern about its ability to provide clearances for the likely influx of workers from other jurisdictions arising from a new build programme. We also heard about the traditional concerns—the transport by train of nuclear fuels and waste around the country. However, we were reassured on those points. Overall, the Committee felt that the security issue came down to the extent to which future nuclear power stations presented an additional risk over and above that which already exists in current nuclear installations. We did not believe that the risk would be significant. Turning to the positive things, there are four key principles for nuclear policy. In our inquiry, we received evidence from many different groups. Four issues above all stood out. There was consensus on the primacy of those issues across the waterfront, from electricity generators, regulators, academics and non-governmental organisations. I will go through them one by one. The first, if we are to renew the nuclear power stations, is the need for a broad national consensus on the role of nuclear power that has both cross-party political support and wider public backing. The energy review’s conclusion in favour of nuclear power was widely foreseen following the Prime Minister’s speech to the CBI in May 2006 in which he said that increasing dependence on gas imports"““put the replacement of nuclear power stations, a big push on renewables and a step-change on energy efficiency, engaging both business and consumers, back on the agenda with a vengeance.? " That helped foster a high degree of cynicism about the energy review itself. Sir Jonathon Porritt told the Committee that"““the way in which the Government is handling the process around the Energy Review is not clever. It is allowing an awful lot of people to assume…this is, indeed, an exercise in rubber-stamping?." The Committee also concluded that the decision-making process was taking place too rapidly, before adequate consideration of the available evidence. That view was upheld in court earlier this year, following a case brought by Greenpeace, in which the judge concluded that the consultation process had been ““misleading?, ““seriously flawed? and ““procedurally unfair?. In response, the Prime Minister said that it would not affect the policy at all. However, the Government have rightly committed themselves to holding another consultation on nuclear energy, which has delayed the energy White Paper to May. Overall, evidence to date suggests that there has been little opportunity for politicians to move towards a consensus on new nuclear build. I hope that that is something that today’s debate will go a little way towards rectifying. It has also undermined the Government’s ability to get the public to buy in to nuclear policy. I understand that a new nuclear consultation document will be published at the same time as the energy White Paper in May, and that timing may be enforced. However, that seems strange in view of the judge’s criticism. The risk is that the White Paper could be seen to be pre-empted—or not to be pre-empted—by the consultation document. If the White Paper has green edges—in the consultative rather than the environmental sense—that means that important decisions on the future of energy policy risk being further delayed. That concerns me and I think that it would concern members of the Committee. A carbon-pricing framework that provides long-term incentives for investment in all low-carbon technologies is very important. We took a lot of evidence on the different costs of nuclear power and how that related to other sources of electricity. We concluded that the Government should make it clear that all the costs of building, operating and decommissioning new nuclear power stations should fall to the private sector investors who build those stations. In other words, the costs are a concern for investors, not the Government or the taxpayer. A policy framework that provided a level playing field, rewarding all low-carbon technologies, was seen as the only way in which the Government could cost-effectively tackle carbon emissions from the electricity sector. However, because of the long lead times for nuclear, and the period over which investors would seek returns, that framework would need to provide 15 to 20 years of certainty over a reasonably stable and foreseeable price for carbon if the private sector were to invest. Current carbon pricing arrangements such as the climate change levy and particularly the EU emissions trading scheme do not provide a sufficiently long-term stable carbon price. The energy review rightly commits the Government to continuing with the EU ETS as the main means of pricing carbon, but in my view that is not an adequate approach. Phase 2 will take us to 2012 and there will be no clear progress on phase 3 of the scheme until perhaps 2010. However, significant progress must be made urgently if the Government’s objective of advancing nuclear power is to be achieved and the energy gap we all fear in the next decade closed. When we visited the European Commission in February, we were impressed by its commitment to making the EU ETS a success, but interested to learn of the scale of opposition among many member states to the very tentative steps in phase 1. It seems that the Commission has no option but to proceed in fairly short time frames until all member states are convinced of the need for a robust and enduring emissions trading scheme. Is the Minister convinced that the Commission is being strict enough in its review of allocations? Is it generally approaching the scheme in the right way? Are the other member states willing to abide by its decisions or is there a risk that, in practice, they will try to undermine them? What does he make of potential nuclear investors’ concerns that we cannot wait for a third phase of the EU scheme? Investment decisions are needed now, and that means a UK initiative now, over and above the EU ETS arrangements. The third point is the need for a long-term storage solution for the UK’s existing radioactive waste legacy, never mind that created by a new generation of reactors. The Government rightly expect the private sector to meet the costs of decommissioning and waste management for any new build. However, nothing is yet in place to dispose of the existing nuclear waste legacy, and the record of successive Governments in that respect has been abysmal. Without a solution, or at least the prospect of one, everyone will be in a difficult position. The Government could find, if they seek to introduce new build too quickly and underestimate the cost of nuclear waste disposal, that they might have to cover some of the cost of future disposal themselves if it proves higher than the industry expects as a result of Government indications. That is not what the industry wants, but the lack of progress is making it all difficult. The Committee on Radioactive Waste Management, or CoRWM, concluded last year that deep geological repository was the best means of providing a long-term solution to the UK’s waste legacy. That was no surprise. We all knew that that was what CoRWM was going to conclude. It is not rocket science—an appropriate phrase, as one of the options was to fire nuclear waste into space. CoRWM concluded that site selection would need to involve a high level of local engagement. Again, I think that it is right. That is the experience in Scandinavia too. Nirex’s estimate is that it could cost about £10 billion. The Government published a response to CoRWM accepting its broad thrust, but we have not heard a great deal about what has happened since then. That is worrying. The principle of local community ““volunteerism? is likely to mean that it will take longer to arrive at specific solutions than would have been the case with simple Government direction.