With permission, Mr. Deputy Speaker, I should like to make a statement on the energy White Paper and the consultation on the future of nuclear power, which I am publishing today. Copies of these, together with several accompanying papers, are in the Vote Office.
As I said last year, we face two big challenges: first, the need, with other countries, to tackle climate change by cutting greenhouse gas emissions; and secondly, the need to ensure that we have secure and affordable energy supplies. Both are vital for our future prosperity; both are global issues calling for action internationally as well as action here at home.
The evidence supporting the need for urgent action on climate change continues to mount. Sir Nicholas Stern’s report last autumn underlined the importance of acting now, and together with other countries. If not tackled, climate change poses catastrophic humanitarian consequences and economic costs.
Meanwhile, world energy demand continues to grow. It is expected to be 50 per cent. higher by 2030 than it is today, and it is likely to be met largely by fossil fuels for some time to come. That means rising greenhouse gas emissions and greater competition for energy resources, which has massive implications for both climate change and security of supply.
Here in the UK, our reserves of oil and gas are declining. Although significant amounts remain in the North sea, production has hit its peak and is now falling. As we made clear, we will make the most of our reserves, but as our economy grows we will become increasingly dependent on imports in a world where supplies are concentrated often in less stable regions. We need to take action to manage those risks.
In the next few years, energy companies will also need to replace ageing power stations and other infrastructure, so we need to create the right conditions for that investment to get timely and increasingly low-carbon energy supplies. The White Paper sets out a long-term framework for action to tackle those challenges at home and abroad.
The White Paper sets out our international strategy, which acknowledges that we need to tackle climate change and energy security together. Influenced by the UK, the European Council has agreed to a new strategy, including commitments to competitive markets, cuts in greenhouse gas emissions, more renewable energy and a central role for the European Union emissions trading scheme as a potential basis for a global carbon market. We also need to influence the wider international community, notably in getting a consensus on the post-2012 Kyoto framework for reducing greenhouse gas emissions. It also sets out the measures that we are taking here at home. We have already published a draft Climate Change Bill—which, for the first time, would impose a legally binding duty on Government to reduce the amount of carbon that is produced—as we work towards our target of achieving at least a 60 per cent. reduction in carbon emissions by 2050. We are the first country in the world to do that.
Faced with such challenges, more is needed. The first priority must be to save energy. The White Paper sets out a range of measures to help us to become more energy efficient and cut energy use. Consumers need better information about how they can save energy. Next year and the year after, any householder who asks for them can get free, visual real-time displays that show the amount of electricity that they use. In parallel, we will work with the industry to ensure that consumers have visual displays, together with smart meters, in 10 years. In addition, better and clearer energy bills will help.
It is estimated that leaving electric appliances on stand-by uses about 7 per cent. of all electricity in UK homes. That is equivalent to the electricity generated from two 600 MW gas-fired power stations or from more than 1,500 2 MW wind turbines. We will work with industry and others to improve the efficiency of domestic appliances to phase out inefficient goods and limit the amount of stand-by energy wasted.
If we are to make a genuine difference to reducing energy demand, we need a stronger obligation on energy companies to provide their residential customers with energy-saving measures. The White Paper therefore proposes that from next year they double their current effort, and from 2012 we aim to transform the way in which they see their relationship with their customers, shifting the focus to the provision of energy services, increasing energy efficiency and saving carbon in the home, rather than simply selling them gas and electricity.
We will also require big organisations such as supermarkets, banks or hotel chains and large public sector organisations to limit their emissions and set tougher standards for the homes that we build and the products that we buy. We need more low-carbon generation of electricity and heat. We want to encourage the enthusiasm of individuals and communities to generate their energy locally, for example in homes or schools, through solar panels and wind turbines. We are therefore introducing a range of measures to support that approach. As part of that, we will remove the barriers and simplify the licensing regime so that more communities can the follow the example of Woking, including by developing combined heat and power schemes.
However, we still need large-scale energy investment. In the next 20 to 30 years, we need new generating capacity equivalent to approximately one third of our existing capacity. Our aim must be to ensure that companies have a wide range of options available so that we can retain a diverse energy mix, which is good both for our security of supply and will help us to move to an increasingly low-carbon economy.
Renewables are crucial. We are strengthening support for renewable electricity. The reform of the renewables obligation is essential, and means that by 2015 we expect that around 15 per cent. of our electricity supplies will come from renewables—that is triple the current amount in only eight years. In transport, the road transport fuel obligation will save a million tonnes of carbon a year. We want to double it only if we can be satisfied that it is sustainable to do so.
New technologies will also help. We want British-based business to be at the forefront of new green technology. That is why we set up the Energy Technologies Institute, which brings public and private investment together, now with a minimum budget of £600 million. We will launch a competition for the demonstration of carbon capture and storage, which has the potential to reduce carbon dioxide emissions from fossil fuel power stations by as much as 90 per cent., which is important as we will rely on gas and coal power, including coal mined in the UK, for some time to come. Details are set out in the White Paper.
We want to save energy, and we want low-carbon sources of energy. That is why we will do everything that we can to encourage renewables such as wind, wave and tidal power. But that alone will not be enough if we are to minimise our costs and risks. Alongside the White Paper, we are publishing a consultation document on nuclear power, so that we can take a decision on whether companies should have that option when making their investment decisions. We have reached the preliminary view that it would be in the public interest to allow energy companies to invest in nuclear power. Before making our decision, however, we are consulting further. The White Paper makes clear the complexities of the challenges that we face in terms of climate change and energy security. There is no single answer to those challenges. As wide a choice of low-carbon options as possible is needed, so that we do not become over-reliant on any one form of electricity generation.
Nuclear is an important part of our current energy mix. We get about 18 per cent. of our electricity from nuclear power stations, which are a low-carbon form of generating electricity. That provides a regular and steady supply of electricity, whereas electricity generated from most renewables is, by its very nature, intermittent. Every year, a modern nuclear reactor saves about 2.5 million tonnes of carbon dioxide being pumped into the atmosphere, compared with an equivalent gas-fired station.
Most nuclear power stations are set to close over the next 10 to 20 years at a time when we know that demand for electricity is going up because of economic growth. Quite simply, in the public interest we need to make a decision this year on whether we continue to get some of our electricity from nuclear, because new stations take a long time to build. If nuclear is excluded, there is every chance that its place will be taken by gas or coal generation, which emits carbon. Yes, carbon capture and storage, if it can be developed, would help, but at this stage we cannot be certain—there is no commercial-scale operation of carbon capture and storage on power generation anywhere in the world.
Although we want more renewable energy as part of the mix, it, too, is controversial. There are more than 170 applications in the planning process at the moment. It will be for the private sector to initiate, fund, construct and operate new nuclear plants and cover the cost of decommissioning and its full share of long-term waste management costs. There are important issues to consider, including waste, and those will be examined in the consultation, which will run until October.
Our measures, including those in the White Paper, put us on track to make savings of carbon emissions of between 23 and 33 million tonnes by 2020. If we meet the upper end of that range, it would be the equivalent of removing all the emissions from every car, van and lorry on Britain’s roads today. By saving energy, encouraging new timely investment in gas import and storage infrastructure and maximising recovery of UK reserves of oil, gas and coal, our measures will also help security of supply.
We cannot become a low-carbon economy in a single step. Further measures will be needed if we are to achieve our long-term goals in the light of further international agreements in Europe and more widely. The White Paper sets out a framework for action to enable us to make real progress now towards tackling climate change and ensuring secure and affordable energy supplies. I commend this statement to the House.
I thank the Secretary of State for advance sight of the statement. At its heart, however, there is confusion. The Government say that certain things must be done, but their policy, at best, says that they might be done. The current Prime Minister says that the replacement of nuclear power stations is back on the agenda with a vengeance. The future Prime Minister says that a new generation of nuclear power stations will be built across the country. The most that the Secretary of State says, however, is that nuclear plant could be part of the future energy mix, and that it is for the private sector to take decisions over new nuclear power stations.
Whatever the rhetoric, nothing in the White Paper will guarantee that a single nuclear power station will ever be built. Where has the vengeance for nuclear power gone? Are the Government saying that nuclear new build will definitely happen, or not? How many new nuclear power stations will definitely be built as a result of the White Paper? How can the Secretary of State deliver a UK-wide energy policy if Scotland rejects nuclear power? If the Scottish National party has rejected both nuclear in principle and wind in practice, is the SNP’s policy anything other than utter lunacy?
Business will invest in nuclear power only if it knows its costs. It needs certainty about carbon, decommissioning and waste. There is no greater clarity on those issues today, so what will happen if no one comes forward to invest? Over a year ago the Prime Minister said of new nuclear build that
“if we don’t take these long-term decisions now, we will be committing a serious dereliction of duty”.
Today in The Times he says merely that we must consider it, so what decisions have been taken to address that dereliction?
Last July we set out our objectives. We called for a cap and trade scheme for CO2 based on auctioned rights, for site and type licensing, and for reform of the renewables obligation and the climate change levy. In addition, we said that there must be long-term certainty for investors. As we keep on saying, if this could lead to broad agreement between us and the Government, that would be good for Britain.
In today’s announcement, there are detailed proposals for banding the renewables obligation, but these will not overcome its central flaws. On what basis, therefore, has the Secretary of State assessed and then chosen to reject the considered alternative put forward by Ofgem?
Hidden in the statement is bad news about carbon capture. Will the Secretary of State confirm that his failure already to agree a pilot project for it means that any prospect of it happening has been seriously delayed? Is it not the truth that far from being on the edge of happening, carbon capture is about to be deferred and endangered? How on earth will carbon capture ever happen if it is still clobbered by the climate change levy? When will the Government remove the perversity of keeping a dirty tax on a clean process?
On strategic infrastructure projects, we welcome site and type licensing and the streamlining of the planning process. However, we have grave concerns about entrusting that to an accountable quango.
Our policy statement last July called for the greater use of carbon trading. A broad and rational regime for carbon trading is crucial to incentivise low carbon technologies. We therefore welcome the Government’s announcement that they will broaden the scope of carbon trading to cover a greater number of businesses. We think permits should be auctioned. Will the Secretary of State tell us how and when they will be?
Climate change is the greatest threat that we face. That is why we supported the Government in signing up to tough EU targets on emissions and renewables in March, but at present we get just 2 per cent. of our total energy from renewables. Raising that to 20 per cent. was always going to be challenging, to put it mildly, but is it not true that today’s plans will, at best, get us only about halfway to that target? Is it not the case that despite the clear wish expressed in the White Paper to encourage local and decentralised energy, there is almost nothing that amounts to a robust policy that will make it happen? Again and again, the White Paper wills the ends, but does not provide the means.
In households, smart metering could greatly increase energy efficiency and help customers to export electricity back into the grid, but the Government are supporting the limited clip-on visual electricity displays. Does this intervention not pull the rug from under the real smart meter market? Why are the Government going for the most basic option, when real smart meters would help to stimulate the microgeneration industry?
Today’s announcement has already been twice delayed. It is Labour’s third White Paper, following dozens of consultations, and it is the product of their third energy review under their ninth Energy Minister. It offers nothing definite on nuclear or anything else. It heralds the potential collapse of carbon capture. It continues an irrational regime for carbon penalties and incentives. It provides little or no prospect of hitting renewables targets. It does not offer the security that we need. Ten months after the energy review, it is still content-free, not carbon-free.
Although the hon. Gentleman undoubtedly received my statement, I am sorry that, yet again, he did not have an opportunity to read it before he responded to me. Let me start with nuclear. As I understand his position now—I may have got it wrong, because it seems rather different from his position 12 months ago—he is berating the Government for not having said today, “Look, we’re definitely going ahead with nuclear.” That comes from the hon. Gentleman, who at the beginning of last year said:
“From about the age of 12, I have had an instinctive hostility to nuclear power.”—[Official Report, 17 January 2006; Vol. 441, c. 779.]
This is the man now urging us not to consult or do anything other than press on with it. His policy, as I understand it, is that nuclear should be deployed only as a last resort. In other words, only when it became clear that we cannot meet our obligations through renewable or other means would the hon. Gentleman say, “Okay, let’s consider nuclear.” That seems to me to be absolute nonsense.
The hon. Gentleman asked me about the renewables obligation. I know that it is Tory policy to get rid of the renewables obligation, yet it has meant that we have doubled the amount of wind farm energy over the past two and a half years and that we are on track to reach the target of 15 per cent. by 2015—triple the current amount, as clearly set out in the White Paper. The Tory policy is to get rid of it. On top of that, Tory councils up and down the country are objecting to wind farms. [Interruption.] Let us take the London Array—one of the largest offshore wind farms in Europe to which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I consented. Who is objecting to it? Tory—[Interruption.]
The point is that in respect of both nuclear and renewables, the position of the shadow Secretary of State is muddled, confused and full of contradictions.
The hon. Gentleman asked about the European emissions trading scheme. We wholeheartedly support it and believe that it should be tougher. It has an auctionary element to it. I am sorry, of course, that from the hon. Gentleman’s point of view, it is in Europe, but there we are. That is just one of the things we have to deal with.
In relation to carbon capture and storage, we have taken a step forward that no other Government have taken. We are in discussion with about half a dozen large institutions that are interested in seeing it developed. Yes, it does take time. Nowhere in the world is a commercially operating CCS system in place, but we are determined to ensure that Britain is in the forefront of this technology, which is why I have been able to announce further details in the White Paper.
I am glad that the hon. Gentleman supports our proposals on planning—although that was not immediately obvious on Monday afternoon when the hon. Member for Meriden (Mrs. Spelman), who speaks for the Tories, rather gave the opposite impression. As to decentralised energy, which is important, measures are proposed to remove some of the barriers that stand in the way of decentralised energy. We want to encourage that—for individuals and for schools, for example.
The hon. Gentleman criticised us for not having a commitment to the installation of smart meters. I therefore invite him again to read my statement and the White Paper, which both make it abundantly clear that we want smart meters introduced for business and companies. Yes, it takes time, because it does not make economic sense to go into everybody’s house tomorrow morning, rip out existing meters and install others just like that. On top of that, as I said earlier, from 2008-09 any householder wanting a free visual display to see how much electricity is used will be able to get it. The hon. Gentleman, rather like me, has been in his post for about a year. We are now two years into this Parliament and it is quite clear to me that the Conservatives still do not have an energy policy.
I thank my right hon. Friend for putting forward such a thorough and courageous White Paper, which really provides what we need. I am particularly pleased that he has exposed the gesture politics that passes for energy policy on the Opposition Benches. Will he tell us how soon it will be before the methodology for the siting process for the new nuclear stations is brought forward?
First, we have to consult on the principle of ensuring that nuclear remains an option that can be considered by generators in the future. We want to consult on that. In parallel, we are also publishing documents relating to licensing and siting. My hon. Friend is quite right to say that nuclear is a controversial and difficult issue, but I am quite clear in my mind that it is important to have a mix of energy supply so that we do not become over-dependent on one particular source. It really is important that we do not become over-dependent on imported gas, which is bad for the environment and very worrying for the security of energy supplies in the future.
On our analysis, by 2050 we can reduce emissions from the power-generating sector by 94 per cent. entirely without nuclear power. Bringing in nuclear has the effect only of displacing renewables rather than gas, so nuclear brings no advantages on climate change and no advantages in security of supply in the long term. All it does is leave us farther away from a completely renewable system.
Does the Secretary of State agree that carbon capture and storage will provide a better interim technology than nuclear to keep emissions low and plug any gaps in the supply system while wind, wave and tide technologies are brought on-stream? Has he not read—on the basis of his statement, I do wonder—the words of Scottish and Southern Energy on carbon capture last week to the effect that all the technology is proven at the desired scale, so we are demonstrating the ability to integrate technologies? Did not the Government sign up to a binding EU commitment on CCS by 2020? Will the Secretary of State acknowledge that CCS is more compatible with a rapid increase in renewable forms of energy and with microgeneration, because it can accommodate variations in load—the intermittent energy that the Secretary of State mentioned—while nuclear does not do so efficiently?
Will the Secretary of State confirm that the Government have accepted a binding commitment for 20 per cent. of all energy, not just electricity, to come from renewable sources by 2020? In his White Paper, he targets 15 per cent. of electricity by 2015, so could he please somehow integrate those two statements? Does his document on the future of nuclear power continue to assert below-market price financing for nuclear power, as he did in earlier documents and appears to continue to do today? Given his strong statements in favour of nuclear in the media today, does he think that his consultation will be seen as genuine?
Will the Secretary of State also confirm that by 2050, the effect of nuclear would be to reduce the percentage of electricity generated using gas from something like 19 per cent. to something like 15 per cent., and that that negates completely any argument that nuclear would significantly increase security of supply?
Finally, I welcome the right hon. Gentleman’s adoption of our proposals for a cap and trade scheme on energy efficiency and for smart metering, but why has he missed the chance offered by the White Paper to take firm action on social tariffs for vulnerable consumers? There are so many areas where the Government have made or could make U-turns, so why have they chosen to make a U-turn on the one policy that they got right the first time round?
I agree with the hon. Lady in what she says about renewable energy. I want to see far more of it, particularly wind or wave power, as and when the technology allows it, but I am sure she would agree that, although there are some interesting developments on wave power, it is still very much in its infancy. On wind power, she will not be surprised to hear me say that her words would carry a great deal more credence if Liberal Democrat councillors up and down the country were not objecting to just about every wind farm that ever comes up for consideration. They also object to any power line that would carry the energy from the wind farms to where it is needed. It is a problem that all politicians must face: we can be in favour of something in principle and in favour of a good idea like renewables, but we then have to back the means to make it possible. As I said in my statement, more than 170 applications for wind farms are now blocked in the planning system—many of them by Liberal Democrat councillors, so the hon. Lady should have a word with them about that.
Let me deal with some of the hon. Lady’s further points. The 20 per cent. commitment on renewables and energy was entered into by the Heads of Government at the European Council. It is a European target. We discuss it in the White Paper and refer to the fact that we need to take account of it. We support what Europe is trying to do, and the allocation of the 20 per cent. target among the 27 member states will, I suspect, be a matter of some debate—not necessarily in this country, but certainly in some others—particularly in respect of what exactly constitutes a renewable and how it will be allocated. It is important for Europe to act in a number of ways. It is also committed to liberalising the energy market in Europe, which is very important.
On the cap and trade proposals for business, I am glad that the hon. Lady welcomes them. It is important for supermarkets, banks and large-scale public sector organisations to be brought into the scheme. They are not in it now, so it is important to help us meet our objectives.
In relation to the whole question of nuclear, yes I have changed my mind. I used to be sceptical about nuclear power, but two facts have changed my mind. First, it is now clear that the rate of damage being done to the climate by carbon emissions is such that we need to do something about it, and nuclear is a low-carbon source of energy. Secondly, I am increasingly concerned by that fact that, as we obtain less and less oil and gas from the North sea, having to import more gas from areas of the world that are sometimes not politically stable could put our security of supply at risk. The Liberal Democrats might be willing to do that, but I am not.
I agree with my right hon. Friend that renewable energy sources have a vital role to play. He will be aware, however, that there are apprehensions that the production of certain imported biofuels is environmentally damaging and can even have a negative effect on net emissions of greenhouse gases; in other words, it can increase them. What steps are being taken to address that issue?
My right hon. Friend makes a perfectly good point. Most of us would like to see more biofuels, and I referred in my statement to our commitment to go to 5 per cent. in relation to petrol and diesel. He is also right, however, to say that their production must be sustainable and that we must not damage the environment elsewhere by growing those products. We are having discussions with my right hon. Friend the Secretary of State for Transport about how that will work, and how we can be satisfied that the production of biofuels does not result in the destruction of forests, for example. My right hon. Friend has made a very good point, and we are alive to the issue.
Although I am not sure that it was wise of the Secretary of State to pre-empt his statement to the House on the “Today” programme this morning, may I congratulate him on the calm way in which he stood up to the simple rudeness of John Humphrys during the interview? I did not disagree with anything that the right hon. Gentleman said in that interview, subject to my studying the detail of his proposals. Does he understand my concern, however, that the policy framework that he has set out in the White Paper—when I come to read it—will be insufficiently robust to guarantee his own commitment on renewables, never mind the European commitment, or to provide the incentives for private sector investors to invest in the new generation of nuclear power stations that I believe is necessary?
I am grateful to the hon. Gentleman for his kind words, and I look forward to hearing his next interview with Mr. Humphrys in the light of what he has just said. He must let me know when he is on.
I am convinced that the renewables obligation has made a real difference. The changes that we are announcing today, which will band the obligation to provide greater incentives towards new technologies such as wave power, will also help. We have had a lot of discussions with the industry about this, and I believe that this proposal will provide them with the certainty that they need to carry on increasing the amount of renewable energy.
The House is well aware of the history of our debates on nuclear power. Earlier this year, the High Court held that we needed to carry out a far more thorough consultation, and I have no problem with doing that. Indeed, when hon. Members have had a chance to read the consultation, they will see that it is very thorough and that it goes into all the matters that I hope the public will want to know about. We need to reach a view at the end of this year. I am encouraged by the fact that a lot of the large generators now acknowledge the economics of change; they know that there is going to be a carbon price. We would like that to be tougher than it is at present, but I think that they can see the general direction of travel, which is important. I hope that the proposals that I have set out today will provide us with a framework that will help us to meet our energy needs over the next 30 to 40 years, while at the same time putting us on a path towards reducing the amount of energy that we consume. To my mind, that is absolutely critical.
My right hon. Friend’s predecessor stood at the Dispatch Box about 18 months ago and said practically the same things as my right hon. Friend has said today. We seem to have had review after review over the past two or three years before arriving at this situation. May I urge him to get on with making some decisions about our future energy needs? Regardless of the decisions on nuclear power, one of our future energy sources will be coal. We will have to burn coal for some years to come. Will he give further encouragement to advanced clean coal technology, and particularly to the fluidised bed system, a waste-to-energy production method using obliteration on a fluidised bed?
I understand perfectly what my hon. Friend is saying. I think that I am right in saying that a good deal of work has been done in his local council area on biomass. A lot has been done in the past 18 months. Apart from anything else, we have almost doubled the amount of energy that we get from wind farms in just over that period, which is important. There have also been developments in the European Union emissions trading scheme. My hon. Friend is quite right to say that we will depend on coal; we do so very substantially at the moment. Two things are necessary to get cleaner coal—although that is a comparative term in relation to carbon emissions—and to move to carbon capture and storage. I should have dealt with this point earlier, because it was raised by the hon. Member for Richmond Park (Susan Kramer). It is true to say that the technology to capture, transport and store the carbon exists, but it has not actually been joined up on a commercial basis yet. That is why I am so reluctant to say, “Let’s abandon nuclear now.” These things might never become available. I have said on many occasions that we should not put all our eggs in one basket. It makes sense to have a sensible mix, and it would make no sense at all to put off these decisions in the hope that they will not come back to bite us one day.
The Secretary of State talked tantalisingly in his statement about local power generation and decentralised power, but—apart from just now in response to a question—he made no reference to biomass or biogas, both of which are renewables that we can produce from our own resources. One of the obstacles to their production is the fact that the renewables obligation is difficult to access for small-scale generators. Is there anything in the White Paper that will make it easier for those generators to access the renewables obligation, so that our biomass and biogas industries can really get going?
On the hon. Gentleman’s general point, the banding of the renewables obligation will help biomass production. We are also publishing further proposals today that I hope will help in that regard. I take his point about small-scale applications, and I hope that we can do something to encourage that industry. I urge him to look at the White Paper and at the separate paper that we have published on biomass. I hope that that will be of help to him, but I would be happy to discuss the matter further.
I thank my right hon. Friend for his statement. Will he share with the House his thinking on social tariffs for vulnerable consumers? I am sure that he is aware that during the recent debates in the House and in Committee on the Consumers, Estate Agents and Redress Bill, which will introduce the national consumer council, a great deal of concern was expressed about the fact that suppliers are simply not passing on reductions in wholesale energy prices timeously to some of the poorest consumers. It was also felt that Ofgem either does not have teeth or chooses not to act in the face of that disgraceful behaviour, which is clearly undermining the Government’s positive policies on fuel poverty and inflation.
I very much agree with my right hon. Friend. We have made a commitment to reduce fuel poverty, and the increase in wholesale gas prices, which was reflected in the price that consumers paid over the past 18 months, has set back progress quite substantially. The fact that wholesale prices are now coming down as a result of action that has been taken over that period is encouraging, but there are further things that we need to do. There is a discussion in the White Paper about social tariffs. As my right hon. Friend will know, different power companies have taken different approaches to this issue, but we want them all to take action because they have a real obligation to do so. I want to make it clear that if that does not happen, we might well have to consider legislation to ensure that further action is taken. We are also introducing other measures that will take about 200,000 households out of fuel poverty over the next few years. I urge my right hon. Friend to look at the White Paper, because we are determined to tackle this very real problem.
Given the time that it takes to plan and build a new nuclear power station, and the urgency of this issue, how can the Secretary of State justify 10 years of prevarication through serial reviews and consultations? Will he tell us what was so inadequate about the previous consultations that we now require yet another one? How long will it be before the first electricity from a new nuclear power station flows into the grid?
I have some sympathy with what the right hon. Gentleman says, but if he is right about that, leaving nuclear generation as a last resort— which is his party’s policy—must be even worse. As for why we are consulting again, I urge him to read the report of the February court judgment, which explains at some length why that was necessary. I readily accepted the need for further consultation, and we are now going into a degree of detail that did not feature in the earlier consultation.
The right hon. Gentleman is right: the process takes time. That is why I think a decision must be made one way or another this year, and why I want to consult. I accept that the issue is controversial and that hearts and minds have still to be won, but I am persuaded by the evidence that nuclear generation needs to be part of the mix. I believe that it needs to be an option. However, as the right hon. Gentleman well knows, that view is not universal, especially in his own party, and it is not shared by his party’s Front Bench.
I have reservations about nuclear power. What does my right hon. Friend think about the construction of a Severn barrage, which would have major environmental hurdles to overcome but would make a huge contribution to a reduction in carbon dioxide emissions?
That proposal, too, is mentioned in the White Paper, and my hon. Friend will know that the Sustainable Development Commission was asked to examine the implications.
The Government would like to encourage tidal power. There are environmental issues, and one that has not yet been properly addressed is the balance to be struck between the impact on, say, the River Severn and the environmental gain that would result from not putting more and more carbon into the atmosphere. Part of our problem is that the European directive does not attach enough weight to the alternative to encouraging more tidal power.
I have a great deal of sympathy with what my hon. Friend has said. She has raised an issue of which Ministers are well aware, and I urge her to read the White Paper.
The statement will not end investors’ uncertainty. The delay over carbon capture and storage, yet more announcements of a competition that seems to have been announced many times before, and the very fact that the Government seem still to be attracted to nuclear generation cause uncertainty among those who wish to invest in non-nuclear carbon-free generation, because they do not know where the Government’s strategy is going. The Government should give non-nuclear carbon-free generation and carbon capture and storage a real chance to develop before diverting investment from that new industry.
I do not accept what the hon. Gentleman says. Not a single generator has come to me and said “I am not going to build a wind farm until I know your position on nuclear generation”. I think that most generators would say that it is sensible to have a mix, and to ensure that we have renewable energy and more of it. As the hon. Gentleman is close to some Liberal Democrats who are objecting to various Scottish developments, let me add that if they are serious about wind farms, perhaps they should think again about objecting to every application that comes along.
I believe that we should consider nuclear, gas and coal generation. As I said earlier, putting all our eggs in one basket does not make sense. I understand that the Liberal Democrats oppose nuclear generation—although I think the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) takes a rather different position, which is why he is no longer a spokesman on these matters—but I suggest to the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) that if he took a sensible view not just on climate change but on security of supply, he would recognise that it makes sense for us not to become over-dependent on imports from difficult parts of the world.
I think that you would stop me if I attempted to answer for the nationalists, Mr. Deputy Speaker, but I will say this. At present, more than a third of Scotland’s electricity comes from nuclear generation, and there are at least 10 to 20 years of life left in one of its two nuclear power stations. One way or another, a substantial amount of Scotland’s electricity will be generated by nuclear power, and as far as I know the First Minister will not be switching off his light for a third of the time to try to get himself out of that.
Planning and section 36 consents are a devolved matter and we do not propose to change that. But let me repeat that the Scottish nationalists, who tell us that they want more renewables, object to wind farm applications—perhaps more than anyone else—every time they come along. One Minister in the Scottish Executive Administration opposes installation of the power line that would carry the electricity from the wind farms down to where it is consumed. The nationalists cannot go on saying no to nuclear generation and no to renewables: that is the way to switch off the lights.
Can we assume from the answer that the Secretary of State gave the hon. Member for East Lothian (Anne Moffat) that if any new nuclear power stations are recommissioned in the United Kingdom, they will definitely be in England rather than Scotland as a result of the devolutionary process?
No. All nuclear power stations will be decommissioned at some stage. Scotland has two nuclear power stations, due to be decommissioned in 2011 and, I believe, 2023. Torness was the second last nuclear power station to be built in this country, Sizewell being the last. My point was that the nationalists’ position seemed rather contradictory, and I think that the Conservatives north of the border agree.
Does the White Paper give any illustrative figures for the true cost of nuclear generation, including the costs of future decommissioning and radioactive waste management? Is it not a complete fantasy that the private sector will build new power stations without assurances that the Government will step in if things go wrong?
I can see that my hon. Friend has yet to be persuaded of my argument. The answer is yes: the White Paper goes into the costs at some length, and makes it absolutely clear that the industry will have to take account of the costs of decommissioning and long-term storage.
I have said several times that it is for the generators to come forward and make proposals relating to whatever form of generation they consider appropriate. People ask what has changed. Two or three years ago nuclear generation did not seem attractive, but more and more generators now think that it must be an option because of the economics, the carbon price, climate change and the knowledge that Governments will have to deal with it, and security of supply. As I have said, if we do not do anything we will be in grave danger of becoming over-dependent on gas from areas that can pose great difficulties, because we are subject to the sometimes unpredictable whims of foreign Governments.
Earlier today the Prime Minister made it plain that the Government favoured a large nuclear generating capacity, and I agree with that. The Secretary of State’s statement, however, told us only that the Government would seek to encourage private-sector investment. That is not the same thing. Will the Secretary of State tell us what proportion of generating capacity he thinks should be nuclear-based, and what steps he will take to encourage the private sector to make that investment?
I am sure that the Prime Minister and I are in complete agreement on that, although I was not present at Prime Minister’s Question Time.
We have made it clear that if new nuclear plant is built, it will be built in the private sector. Proposals will be presented and planning permission will be sought in the usual way. The consultation document discusses all the issues relating to waste, the economics and so on. But, as I said to my hon. Friend the Member for Pendle (Mr. Prentice), whereas in the past there was not much interest in nuclear generation, there is now a growing interest among generators who want to be sure of a proper mix and diverse energy supplies.
A couple of years ago I had the privilege of opening a methane extraction plant in my constituency, on the site of the former Hickleton colliery. It is run by a company called Octagon Energy, and it produces enough electricity in my constituency to power 5,000 homes for the next 20 years. Can my right hon. Friend reassure me that plants such as that will be able to qualify for the same tax incentives and assistance as those producing other forms of renewable energy?
We want to encourage development of that kind. There are many examples of methane being captured to provide energy for towns or for local businesses.
I urge my hon. Friend to look at the results of the consultation, and at the banding. We want to encourage various forms of energy generation to ensure that there is diversity, and that we can recycle as much as possible. I hope that my hon. Friend will find that helpful.
Is the Secretary of State aware that there are now 500 offshore wind turbines either under construction on, or planned for, sites in the Wash or off the Norfolk coast? They are less intermittent than onshore turbines, and they have critical mass and carry huge public support, in stark contrast to the various applications for sporadic onshore sites, which are far less efficient, do huge environmental damage and are universally unpopular. What can we do to get these onshore turbines offshore?
The first thing that the hon. Gentleman could do is tell the Conservative members of Swale borough council to withdraw their objection to the cable that links the offshore wind farm on the Thames to the land where the electricity will be used. He could help me in that, as he probably has more influence with them than I do. However, he makes a serious point. Offshore wind farms have a great deal of potential because there might be fewer objections. Of course, the Royal Society for the Protection of Birds and others might have concerns, but we were able to address them in respect of London Array and other offshore wind farms. We have to face up to the fact that offshore wind farms can be as controversial as onshore ones. However, I would like there to be more renewable energy. Our country is not as far advanced as it should be on that; we are seventh in the world, but we should be higher. As every little helps, if the hon. Gentleman could have a word with the good people of Swale, I would be most grateful.
Is my right hon. Friend aware that an application has recently been made to build a clean-coal power station in my constituency? It will be a £2 billion project that will burn in excess of 6 million tonnes of coal per year. Sadly, all that coal will be imported even though the site of that power station sits on top of the great northern coalfield where in excess of 500 million tonnes of coal await exploitation. Does my right hon. Friend not think that we should be burning that coal?
I would like our reserves in this country to be recovered and burned. However, the Government cannot tell generators that they must burn UK coal and that they cannot burn imported coal; the generators must reach decisions on that. There is a lot of coal in this country that is still available to be mined. That is a resource and we should consider exploiting it, especially as we are sometimes increasingly concerned about the difficulty in importing coal and gas. I would like British coal to be mined where that is environmentally acceptable and economically viable.
When the price of carbon and electricity falls to such a level that private nuclear generators can no longer cover their costs, can the private investors expect to be rescued as was the case in respect of British Energy four years ago, or will they become insolvent?
In a welcome move, the Secretary of State set up the coal forum to inform future policy on the contribution that UK coal could make to a balanced energy policy, but he does not appear to have taken up its suggestion on a statement of need in relation to the role of UK-produced coal in the future. If that is the case, why has he not done so? As he knows, the coal industry is important in my constituency. What comfort can it take that its needs have been recognised in the White Paper?
Let me add to what I said in reply to my hon. Friend the Member for Wansbeck (Mr. Murphy). We want to encourage the extraction of UK coal where that is economic and environmentally acceptable. We looked at the question of a statement of need; as my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) knows, we have been discussing that in the coal forum for some time. There are tensions in various parts of the country, especially in relation to open-cast mining between people who want to recover more coal and those who have well established objections to open cast. We have tried to strike a balance on that. As I have said, I hope that we can continue to extract UK coal because that adds to the general mix and balance. We looked at the statement of need and we thought that it would not help in this regard, but I hope that what is in the White Paper does help.
Speaking on behalf of the Scottish National party and Plaid Cymru, I can say that there is much in the energy White Paper that we can support, particularly on renewables and energy efficiency. Indeed, we believe that energy efficiency should be given the highest priority. However, there is a large white elephant in the room in the form of nuclear power. It will come as no surprise to the Secretary of State that the majority of people in Scotland oppose nuclear power, and the Scottish Government will not allow the building of any new nuclear power stations in our country. The Secretary of State has also rightly said that for the foreseeable future we will have to continue to burn a lot of fossil fuels. I note what he said about carbon capture, but by my reckoning this is the sixth time that that has been announced, so why cannot he just press ahead with the Peterhead project, which is up and ready to go? Could he also tell us—
On the Peterhead plant, I know that the leader of the Scottish National party has a particular interest because it is in his constituency, but the Government cannot simply plump for one project without giving other people who are equally interested, and who also have plans, a chance to put forward their proposals. The nationalists’ position on nuclear power is muddled. I noticed yesterday that their energy spokesman could not even say whether the existing nuclear ought to continue. I would have thought that that should be absolutely clear. In relation to the future, I have already said that the Scottish Executive have devolved powers, and we are not proposing to change that. I agree with the hon. Gentleman’s point on renewable energy, but he cannot have it both ways. His party has been talking about local referendums for wind farms. It also objects to almost as many applications as are made, and it objects to power lines. It cannot have it both ways. It says no to nuclear, but it also says no to renewables. It must adapt from being in opposition; it is now the Administration in Edinburgh and it should show that it knows how to stand up and take decisions.
Britain is the windiest country in Europe. My right hon. Friend’s Department has identified many sites around our coasts for offshore wind farms, which can make a major contribution towards achieving the 20 per cent. target in respect of renewable energy, but too many such developments are bogged down in the long and tedious consent process and some are facing real obstacles. What is there in the White Paper that will help those developments to proceed, through streamlining the consent process and removing some of the obstacles?
The best place to refer my hon. Friend is the planning White Paper that was published on Monday. Attention has been focused on big infrastructure projects such as airports and nuclear power stations. It takes far too long to get consent for wind farms; far too many different sorts of consents need to be obtained. That is why I hope that all the Members of all parties who say that they want there to be more renewable energy—more wind farms, both onshore and offshore—will back the proposals in the planning White Paper that would make that possible.
In terms of today’s White Paper, I am sure that the Secretary of State will want to confirm the importance that he attaches to inputs from the devolved Administrations and regions of the kingdom. Does he have any particular plans to improve the dialogue and liaison between his Department and the devolved Governments and other areas as we move matters forward in the coming months?
First, let me congratulate the hon. Gentleman on his new role. I want there to be close relationships between the devolved Administrations and ourselves. As was the case last week in advance of the announcement on post offices, this week in advance of the announcement on energy I or my ministerial colleagues spoke to Ministers of the devolved Administrations—or offered them the opportunity to speak in one case. It is important on matters such as energy, in which we all have an interest, that we all work together.