Yesterdays statement in the Commons concerning nuclear power was a strange event. The Conservative benches were full, with many shouting agreement to the governments measures. The Labour benches were not so full, with obvious signs of distress punctuated by disagreement shouted from sedentary positions. The Lib Dem benches got behind their snarling spokesman, expressing disgust at anything with the word nuclear in it.
We have waited a long time for this statement. We were promised a great debate on whether we wanted a new generation of nuclear power stations or not, another one of Tonys grand gestures that never materialised. We have had two consultations, the second necessitated following a successful legal challenge to the first. We now know what we have long suspected from reading the informed briefings in the newspapers ?? the government does think more nuclear power stations should be built.
This government has dithered and dithered for more than ten years without a proper energy policy. They have long known that 19% of the UKs electricity is currently generated from nuclear stations, many of which need to be retired quite soon. The government just stood and watched, hoping the problem would go away.
Now they have said the market can build replacements if they wish ?? but of course they could have done so at any point in the last ten years, subject to planning and licenses. The government would not have been entitled to prohibit a new station, although it could have been difficult about building it in any particular place, or could have required a different design of reactor. In each case it would have needed well based reasons for refusal to withstand judicial review of the decision.
So we have to ask why has the industry been unwilling so far to seek permission for nuclear stations? Why have they preferred gas driven power stations? Has anything fundamentally changed as a result of this government statement?
Over the past couple of decades the industry has shied away from nuclear because it poses greater planning and safety approval issues, because there is a vocal group of people who disagree fundamentally with nuclear power, and above all because it has been more expensive. Today we read that a French company wants to bid to build six stations. That represents quite a change, but of course we need to read the small print and see what their conditions are and how easy it will be to raise the money to do so.
Yesterday clearly has made some difference. It implies that planning permission is likely to be granted, and to be speeded up compared to the experience of most larger projects in the UK in recent years. It suggests the government will licence a type of reactor that it regards as safe and suitable, reducing delays and risks from licensing. The surge in the oil price, which will drive gas prices higher, also makes a difference.
The missing ingredient which the Minister yesterday was keen to avoid is subsidy. We do seem to have elicited from the government that there will be assumption of risk by the state if there were ever to be a major incident ?? something which could prove crucial to securing realistically priced insurance for these devices. We also have been told that creating a sensible regime for carbon pricing is important. Indeed, the nuclear industry when I saw them to discuss their plans made it crystal clear, that whilst they did not need a subsidy, they needed a higher carbon price than the current market one and needed that to be sustained over the life of the project.
It was because the industry expected a deal on the carbon price that I suggested putting the judgement about carbon free and low carbon technologies out to a market competition. I felt we needed to know how the costs of power generated by various renewable methods, by carbon capture and storage schemes allied to other plant, and by nuclear compared. Only if we know these relative costs, could we then make a judgement about the right mix and the balance of risks between the different technologies.
The government claims to know better. It has made a decision about nuclear and told us all in no uncertain terms it wants more nuclear. It will now have to do more work on all the details if it wishes its dreams to come true. The carbon trading system in the EU is a disgrace, creating too many permits on the continent to keep the price down, whilst forcing the UK to pay good money for permits we have to import from abroad! It has proved to be a bonanza for many carbon generating industries over there, and nightmare for some industries over here. It has not established the level of carbon price the nuclear industry told me they wanted. The government needs to go to Brussels and stay there until it has knocked some sense into the partners, and stopped the dreadful unfairness to Britain of the current system. It now needs to do so as well if its beloved nuclear is ever to be anything more than ground hog day in the Commons with the renewable nuclear statements.