Energy Production

– in Westminster Hall at 1:00 pm on 13th October 2009.

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Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater 1:00 pm, 13th October 2009

I am delighted to be serving under you yet again, Sir Nicholas. It seems slightly strange to go from farm building allowances to nuclear building. I am sure there is a synergy somewhere, but I cannot think what it is-perhaps we should have corporate breaks.

I am fortunate to have obtained this debate. The future of nuclear power is vital both to my constituency and to the whole of the United Kingdom. As a nation, it is no secret or surprise that we are running out of capacity to generate electricity. Our power plants are growing old and have to be replaced within the next seven years or the lights will start to go out-in other words, an urgent situation is looming.

My premise today is to try to urge the Government to hear that ticking clock and to recognise that we cannot afford any more delays and we must take action. In Bridgwater, nuclear power has been providing reliable electricity to the grid since 1970 through four reactors, two of which have been decommissioned at A station. B station, which has had a five-year extension, is now owned by EDF Energy. We know how well nuclear power works and, more important, how safe it is. We have a whole generation of local experts who are closely involved in the building and management of it and, as I said, the decommissioning of our first power station has taken place at Hinkley A.

Where I come from, there is an acute understanding of the technicalities. Bridgwater college is pioneering specialist training for the important task of decommissioning our ageing nuclear power stations. I would like to thank the Minister because, two days ago, we got the go-ahead to build the first nuclear academy in the United Kingdom at Bridgwater. I am grateful to Geoff Russell at the Learning and Skills Council, to the regional development agency and Harry Studholme, and, of course, to the principal of Bridgwater college, Fiona McMillan, and her team. That is fantastic news and I am sure that the Minister would agree that it is good for the country.

I shall ask the Minister for some advice and it would be delightful if we could get some straight answers. Some people say that one deals only with yokels in Somerset, but I would like to think that that is not true. The people of Bridgwater are listening and watching. They have a true attention to detail and a real knowledge of their subject. I am afraid the Minister cannot pull the wool over my constituents' eyes. They have been interested in this matter for too long, and in Somerset, fudge and waffle do not come on to our agenda.

Hinkley Point is far from invisible. I do not know if the Minister has had a chance to come and see it, but it sits like a concrete castle overlooking the Bristol channel and dominates the skyline in one of the loveliest parts of this country. Hinkley Point has always provided valuable employment, but it has also attracted and bred considerable expertise. Some of the people who planned the very first reactor and went on site in 1959 still live nearby. They have seen Hinkley B, which is still operational, do its job equally well, and they may live to see the dawn of the latest generation of reactors at Hinkley C and D. However, that will happen only if the Government push for that and support it.

The plan is to construct a pair of new power stations-pressurised water reactors, which are tried, tested and, more important, used all over the world-that are capable of pumping out enough electricity to satisfy 4 million customers in the United Kingdom. I make no bones about it-this is a big-scale operation. The biggest civil building programme in the south-west to date is Hinkley A and B. The biggest civil programme of building in the south-west in the future will be Hinkley C and D, which will provide 700 permanent jobs per station. Many thousands of other jobs will be created to build it. The overall impact on our local economy has, of course, been totally positive. I am absolutely delighted to say that it has been good for us and will continue to be good for us.

The programme demands painstaking research, costly studies and a huge amount of essential consultation, so that everyone involved knows exactly what is involved and how to get it right. I suspect that if Her Majesty's Government-I do not mean just this Government, but any Government-were solely responsible for doing it, the idea would never have got off the drawing board. However, as the Minister knows full well, the nuclear industry in this country goes about its task with enormous efficiency and, of course, attention to detail. Important geological surveys are going on right now, EDF is on site, there are holes everywhere and it is pushing for the information it needs to be able to submit an application.

The latest phase of consultation-the second round-involves public meetings in village halls and begins today. The company seeking to build Hinkley C is EDF Energy, which is France's No. 1 power firm. It has already secured the land it needs and has spent months-actually, it seems more like years-discussing the small print with everyone. EDF has sent an absolutely fascinating detailed breakdown of what it wants to do at Hinkley. I will give it to the Minister at the end of the debate, because I cannot deal with it all in only a quarter of an hour.

There have been two other phases of public consultation. British Energy used to run both Hinkley A and B. Subsequently, it ran only Hinkley B, which has been taken over by EDF Energy, as the Minister is fully aware. It spent months asking for opinions about the matter and when EDF bought British Energy out, it began consultations of its own, which is absolutely right and proper-there are no problems with that. Schemes of such importance should never be pushed through on the quiet. No one would put up with that-I would not do so as an MP and neither do I expect my constituents to.

The consultation is far from over. Some 37 miles of cabling are required to get the electricity out of the new power station and on to the grid, so we need new pylons. The consultation is ongoing in relation to where those pylons should go. Unfortunately, the existing system, on which the National Grid has opened the consultation, must have new heavy-duty power lines that will go up to Avonmouth through a new switch system just outside Bridgwater. The patient work of seeking views is being undertaken by the National Grid and is ongoing. I am delighted to say that the local authorities most affected by the prospect of the new station are being kept fully informed by both the Government and EDF. In fact, so much information is out there, even a hermit crab could not get away with not hearing about what is going on.

So, what is the next step? This is where the debate might become awkward. Everybody accepts that it would be unfair to leave big planning decisions such as this to a local council. Somerset is the smallest district council in the United Kingdom and it knows that it could not cope-we accept that. We have a tripartite system between Sedgemoor district council, Somerset district and Somerset county council to ensure not only that we keep the Government informed, but that they keep us informed. We do have talented planners in our town halls, but the issues surrounding the building of a nuclear power station go much wider. Of course, Hinkley C raises local issues-for example, we need our councils to ensure that new roads are planned carefully. We desperately need a new road to bypass Bridgwater and that is one of the subjects on which EDF is in discussion.

Hinkley C is, of course, a national issue. The old planning system allowing major projects such as motorways and airport expansion to be considered by public inquiries has gone. On the face of it, that system seemed the fairest way to deal with such schemes as it gave everyone a say in front of a learned judge or appointee, who would then compile a report and leave the final yes or no to the Minister. The big downside to that way of doing things was time. Public inquiries too often became rambling and rowdy debates. The precise details could not be dealt with because so many activists wanted to argue the moral theories first. That is why years were wasted on the rights and wrongs of aviation, rather than the exact plans to expand Heathrow-and that is just one example. Such a situation is like a hijack-people think such inquiries will settle a planning question, but they end up being involved with a woolly argument that drags on for years and solves nothing. Of course, the only real winners in such a situation are the lawyers.

From bitter experience, I know a lot about the subject of planning. For my sins, I sat on the Parliamentary Committee set up to examine Crossrail, and I still bear the scars. It was an immensely controversial subject involving vast numbers of witnesses-or stakeholders as they are now called-and we were obliged to call them all. Some of the stakeholders wanted to waste time by bleating on about literally anything, including one lady who was worried about helicopter noises in tunnels. We listened and we heard, but we were still not sure of the arguments. That went on for two and a half years. It was very worrying that most of those people-and I do mean most-lived nowhere near the tunnels and would not have been affected by the proposed development at all, but felt that they had to have a say. My Committee colleagues were sorely tempted to drive stakes through the hearts of some of those people. However, that process did show that we had the ability to do the work by having a narrow remit, and we were not expected to come up with anything other than a yea or nay. It was not a big deal, but it was a lot more efficient than subjecting the whole thing to a public inquiry.

I understand why the Government want to alter the existing planning rules-I make no bones about that-but what they are introducing is not right. The idea is that huge projects such as Hinkley C will be placed before a brand new quango called the IPC, but this is too important to get wrong, and the Minister knows that. Eyes are beginning to glaze over, but let me assure people that the IPC is not to be confused with the IPCC -the Independent Police Complaints Commission-and neither is it to do with the International Publishing Corporation, the International Paralympic Committee, the international primary curriculum or international patent classifications. Those all have the same initials, and I am afraid that we have them here too. I suppose that Her Majesty's Government is overusing those initials to create a quango that can be hidden among others.

In this case, the brand new IPC, which has been operational only since the start of October, stands for-it is quite a mouthful, and quite a job-the Infrastructure Planning Commission. The new system is meant to work in this way: a planning application for a new nuclear power station would have to be submitted to the IPC-I hope that the Minister will correct me if I am wrong-and applicants would be expected to demonstrate that they had consulted the community properly in advance. The IPC would then consult local authorities and other organisations before making a decision, which would take into account the Government's national policy statement on nuclear power.

That all sounds clear and simple-I hope that everyone agrees-but one crucial aspect is missing. Imagine building a nuclear power station and forgetting to order the uranium, Sir Nicholas. You see, there is not yet a national policy statement on nuclear power. It does not exist; it has not been made. It cannot be nailed to a perch, or push up daisies, let alone go "Pretty Polly". It is far less use than a dead parrot. It might be a good idea to have a national policy statement on nuclear power and a national policy statement on wind or wave power-and perhaps one on solar power too; I do not know-but the Government have not got around to making any national policy statements on these issues or anything else. As things stand, if EDF Energy submitted an application to the new IPC, the IPC would be quite unable to reach an effective decision.

I would not insult the Minister by trying to teach him to suck eggs, but I hope that he will not mind me reminding him just how expensive it is to build a nuclear power station. It will not come as any surprise to hear that it costs billions. EDF wants to build four such power stations in the UK, and it has already spent millions on planning and consultation, but it does not have a bottomless pit of money; nobody does. A few days ago, EDF said that it was considering selling its UK electricity distribution network to reduce £36 billion of debt. It is also looking for investors to take a 20 per cent. stake in its UK nuclear business. Two German companies are also in line to build a pair of nuclear power stations in the UK, but the word is that they are becoming impatient with the indecision of the Government and this country.

The Minister will know, as will you, Sir Nicholas, that delay costs money, and we are painfully aware of the rising price of energy. Indeed, Ofgem-another quango-estimates that the price of power could almost double in order to pay for the investment in nuclear and renewables. That is a bitter price to pay for not making up our minds in time. It takes seven years to build a power station. Hinkley B is due to end its productive life in 2016 unless it gets another five-year extension. Even if the Government were to give Hinkley C the go-ahead now, it would not be ready in time to replace the reactors that are going. I am afraid that the process of producing a national policy statement on nuclear power has "delay" written all over it.

The Government are bending over backwards to allow everybody a say-that is agreed-but the nation cannot afford a system that moves like a snail. The national policy statement has to be simpler. It is a device to stop people arguing about the merits of nuclear power. It needs to state: "We think nuclear power is clean, safe and obviously the way forward," but we are still waiting. Only in the planning, and when the Government have nailed their colours to the mast, can we really start to tackle the applications. In the meantime Sir Michael Pitt, the chairman of the IPC, is picking up £234,000 a year-more than double what the Prime Minister gets.

I am not convinced that, even when the national policy statement eventually comes along, the IPC will be able to sanction new power stations without a series of battles and still more delay. It could easily get bogged down in legal challenges from judicial reviews in the High Court to a challenge-I should like the Minister to clarify this-in the European Court of Justice. That is partly because the IPC is an untried quango and because its decisions do not have to be ratified by this place or by Members. I believe-dare I say it, given that I do not want delays?-that that is wholly wrong.

I endorse the determination of my party to try to sort out the IPC, and I urge the Government to consider the issue as well. We are not going to hang on to national policy statements, but we are committed to putting the decision-making power back where it belongs. Public inquiries are good, but they are not the whole answer. Accountable decisions must be made quickly and fairly. My message today on the national policy statement is very straightforward: let us get going and let us sort this out. Let us make sure that we get the statement and that the building of Hinkley C and D can be undertaken as soon as possible.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I call the Minister to reply to the debate. I think that I speak on behalf of all colleagues present in congratulating him on his much-merited promotion.

Photo of David Kidney David Kidney Parliamentary Under-Secretary, Department for Energy and Climate Change, Parliamentary Under-Secretary, Department of Energy and Climate Change 1:16 pm, 13th October 2009

Thank you, Sir Nicholas, for those kind words. It is a pleasure to see you in the Chair for this important debate. I congratulate Mr. Liddell-Grainger on securing the debate. His clear enthusiasm for, and expertise and knowledge of, his subject is apparent; he is clearly keen to see progress on nuclear power. I take his lectures on how we must hurry up and speed along. It was not so long ago that his party's policy on nuclear power was to put off any decision and to make it a last resort, so I suggest that the right party is in power to take the decisions with which he would agree.

I hope that the hon. Gentleman will not mind my saying that the Government's policy is a little broader than simply focusing on nuclear, but of course I shall deal in some detail with his remarks on nuclear. We recognise the importance of having secure, reliable and affordable energy supplies for the UK. Alongside that challenge, we also face the challenge of tackling what could be cataclysmic climate change. It is important to us to have secure energy supplies and a just transition to a low-carbon future in which all our citizens have access to affordable energy sources.

Our strategy on ensuring a low-carbon Britain for the future is to encourage greater effort on energy efficiency. After all, what better way to reduce emissions than to reduce our consumption of energy? Reducing our need for energy would clearly support our desire for security of supply, and for those who have difficulty paying their bills, the more they can reduce those bills, the better. Alongside energy efficiency, there will be the trinity of more renewable energy, low-carbon nuclear and clean fossil fuels such as gas and coal.

If the hon. Gentleman does not mind, I should like to say a little about renewable energy and clean fossil fuels, although I will concentrate most of my remarks on nuclear power, as he has asked me to. Alongside the low-carbon transition plan that we published in July, we published strategies for low-carbon industry and transport and launched the UK's renewable energy strategy. We are aiming for an ambitious sevenfold increase in the amount of energy in this country that is provided by renewable sources by 2020, compared with 2008. That will be the largest proportional increase in Europe and is therefore very ambitious, but we are fully committed to meeting that target.

Such an increase could provide about £100 billion-worth of investment opportunities and up to 500,000 jobs in the renewable energy sector. This year's Budget announced £405 million to support the development of world-leading low-carbon energy and advanced green manufacturing in the UK, and we are starting to see progress already. The data from September 2009 show that on top of the 7 GW-worth of renewable electricity generation that is already in operation-to put that into context, all the onshore and offshore wind energy that was produced in this country last year provided power for 2 million UK homes-a further 2 GW-worth is under construction, another 9 GW-worth has planning permission and is awaiting construction, and more than 10 GW-worth more is going through the planning process. Those will all be connected to either the transmission or the distributed networks. The strategy relates not only to big electricity projects: over the summer we have been consulting on plans to introduce more support for small-scale electricity generation, which will provide financial rewards for people setting up renewable energy sources for their houses, businesses or community projects.

The hon. Gentleman passed by renewables, so I will leave out some comments that I would have liked to make about our support for research on the whole range of renewable energy sources, but I would not like him to think that our minds are closed to technologies for harnessing wave and tidal energy, hydrogen fuel cells or bioenergy. For the purpose of this debate, I will pass by those, but I remind him that, for the feed-in tariff for electricity support next year, we will be consulting towards the end of this year on a renewable heat incentive. That will be a big drive in the promotion of heat from renewable sources and for bioenergy and combined heat and power, and we hope to introduce that in April 2011.

I turn now to nuclear energy. Renewables alone will not meet our energy needs. Nuclear power is certainly a low-carbon, secure and reliable source of electricity generation, and our recent low-carbon transition plan outlines how nuclear power, alongside renewables and clean fossil fuels, has a crucial role to play in the UK's future energy supply. The Government remain absolutely committed to our policy on nuclear new build and want to achieve a nuclear market that is considered one of the best in the world for nuclear investment and for companies working in our nuclear supply chain. In our recent transition plan we stated how nuclear energy, alongside a tenfold increase in renewables and clean coal, has a crucial role to play in achieving a low-carbon future to secure our energy supplies, and we are doing everything we can to facilitate new build of the type the hon. Gentleman is calling for.

The increasing politicisation of energy supplies is creating global economic uncertainly, so ensuring that we have a diverse energy mix is important to both price stability and energy security. As we set out in the nuclear White Paper, the Office for Nuclear Development is taking the necessary steps to establish the right policy framework and create the right conditions in the UK for investment in new nuclear power stations. The office will act to enable investment in the UK from the earliest possible date, with no cap on the amount of new build.

To follow through on those commitments, we are about to publish the national policy statement that the hon. Gentleman is so impatient to see-I have seen the drafts of the document and can assure him that it will be with us shortly. That is a key plank in the new planning system and will be available for consultation shortly and, crucially, for parliamentary approval later. We have legislated to ensure that developers put money aside from day one for the eventual clean-up of new build and we are working to implement Dr. Tim Stone's recommendations on the nuclear regulatory environment.

All those steps are working. Energy companies have recently invested almost £13 billion, and EDF, as the hon. Gentleman mentioned, has invested by buying British Energy and the Nuclear Decommissioning Authority's sites for £387 million. All that investment shows the market's confidence in what is about to happen in this country. Taken together, the nuclear industry has so far announced plans for more than 12 GW of nuclear energy in the UK, which is more than currently exists. Our operators continue to estimate that electricity could be generated from new build by the end of 2017 or the beginning of 2018. Crucially, that time scale depends on every element being in place, not least the investment, but also the appropriate planning framework.

The hon. Gentleman has been critical in his remarks on the new Infrastructure Planning Commission, but I think that he is misguided to be so critical of a key plank in the system that will give investors the confidence to plan to build new plant in this country by the end of 2017. It is crucial that we get the planning environment right for those decisions. Our job is to work hard to create the right conditions for that investment, so we are well under way in taking steps to make new nuclear power stations a reality. We will publish the draft nuclear national policy statement for consultation. We have legislated to ensure developers put money aside from day one and are working to implement the recommendations Dr. Tim Stone made in his nuclear regulatory review. With my noble Friend and ministerial colleague, Lord Hunt of King's Heath, we are looking at the proposed legislative restructuring of the regulatory framework. Those efforts are what will encourage investors to make those important decisions.

There are, after all, massive economic opportunities to be seized in this nuclear renaissance. The supply chain and skills base required to support a new build programme offers considerable opportunities for UK businesses and workers. The Government are working closely with the industry to raise awareness of those opportunities and to encourage investment. An expansion of nuclear energy in the UK will require thousands of people working in the sector. The challenge for the Government and the industry is to ensure that we have enough people with the right skills to build and operate new nuclear power stations.

As the hon. Gentleman was kind enough to give us credit for, we are working closely with Cogent, the sector skills council, with the National Skills Academy for Nuclear and with the industry to ensure that we have a clear and jointly shared understanding of the key skills priorities for the nuclear sector and how skills demand can be met. I have been following the progress of the proposal for an energy college in the hon. Gentleman's constituency, which I am delighted to hear him report has now come to fruition. I wish that project well, because it is vital for the future skills training of the enterprise. Bridgwater college in his constituency is playing its part as one of the most successful further education colleges in the country. It is an associate member of the National Skills Academy for Nuclear and, in association with the university of Central Lancashire, offers a very positive foundation degree course in nuclear decommissioning, which is a good step forward for the future of the sector.

On a similar point-I wondered whether the hon. Gentleman would mention this, as he has certainly been a great advocate of the relationship between local authorities and EDF in getting planning right at local level-I am advised that EDF and the local authorities have now signed a planning performance agreement in relation to EDF's potential planning application for a nominated site at Hinkley Point. That will help to ensure that both sides are clear on the advice and support required from a local authority and on when it will be delivered. That agreement does not pre-empt the decision by the IPC or the Government's consultation on the nuclear policy statement. I hope that that reassures him on the points he raised.

I want to mention the role of coal. Neither wind nor nuclear, or even the two together, can provide the flexibility required to handle fluctuating energy demand, so coal will continue to play an important part in the energy mix. Keeping coal-fired generation helps the Government to deliver secure, reliable and affordable energy to homes and industry. Coal, like gas, is more flexible than nuclear energy and so can react quickly to changing demand, such as when other generating sources fail. Coal-fired power stations supply a third of our electricity over an average year, and that is in addition to coal's role in providing energy for the manufacture of steel, chemicals, cement and for other industries. Nearly a third of the coal used for generation in the UK is locally produced, and UK coal producers believe that they can maintain production at that level for the foreseeable future. It is therefore very important that we are able to retain that flexibility for the future, and that means a clear role for coal, with carbon capture and storage in our future electricity mix.

Our strategy for moving towards the deployment of carbon capture and storage needs to bring together energy security and our climate change objectives, so we consulted on a framework for clean coal, which closed on 9 September. Under consideration are proposals to support up to four CCS demonstration projects in the UK and a requirement that any new coal-fired power station must demonstrate CCS on a substantial proportion of its capacity and retrofit 100 per cent. of capacity when the technology is proven. Taken together, the Government's proposals for coal amount to the most environmentally ambitious of any country in the world.

The Government are committed to a market framework, regulated by Ofgem, that ensures that there is a good deal for consumers through a competitive market and that the significant investment needed across our whole energy infrastructure over the coming years is delivered.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I am grateful to the Minister for bringing his reply to an end.

We move on to the last Westminster Hall debate today, which is initiated by Mr. McCartney. When I came into this House, I was honoured to serve alongside his father, who was a respected Member of this House.