PIU Report Reactions

The Performance and Innovation Unit’s Energy Review (see Renew 136) predictably attracted hostile comments from the Times (‘An ill wind’ 15 Feb.) and the Telegraph (‘Blair will Blow Billions on wind’ 17 Feb.), but also critical comments from the Sustainable Development Commission and the Environmental Audit Select Committee, complaining that the PIU had ducked the issue presented by the Royal Commission - the need for a 60% cut in emissions by 2050. And the BWEA claimed that wind alone could supply 20% of UK power by 2020.

The nuclear industry meanwhile started optimistic talk about replacing the Advanced Gas-Cooled Reactors with AP100 when the AGRs were shut down from 2010 onwards (see ‘9 new plants’ later). And the governments Chief Scientist, Prof. David King, seemed to break ranks with the official line and back a nuclear expansion. "Dependence on fossil fuels would be unchanged unless there is new nuclear build at least to replace existing nuclear power stations," he said in an interview on BBC Radio 4’s Today programme, although he did add that might only be necesary ‘until renewables come on stream substantially’.

The debate continues (see our report later) with a DTI consultation paper emerging in the run up to the proposed White Paper on Energy, expected in October.

PIU Debate

The Performance and Innovation Units energy review was the subject of a joint meeting of the Parliamentary Sustainable and Renewable Energy Group and the Parliamentary Office of Science and Technology in March, at which a large audience packed into a House of Commons meeting room, heard very positive comments from Brian Wilson, Energy Minister, Robert Keys opposition energy spokesman and Lord Ezra Lib Dem Energy spokesman. They seemed to be trying to outdo each other in heaping praise on the PIU energy team for an ‘excellent bit of work’.

What seemed to make the PIU report attractive to politicians was that it managed to contain the thorny issue of nuclear power in a loose framework which might avoid head on collisions. Thus on one hand it says that new nuclear plants are not needed now, and shouldn’t get state support, but on the other, that the nuclear option should be retained as an insurance, in case renewables, energy efficiency and CHP don’t deliver enough power. So it should be allowed to benefit from the emerging carbon credit system.

However, the consensus was not entirely solid. For example, Keys harped back to the nuclear industry’s call to ‘replace nuclear with nuclear’, which the PIU had explicitly rejected, at least for the moment. Lord Ezra also muddied the waters a little, pointing to the local environmental impacts of on-land wind. Wilson went on the attack on this issue, saying that too many of the projects given NFFO contracts had not happened because of local planning problems. Everyone agreed that we needed renewables, he said, but some of the people who said they supported renewables in principle were actually opposing them in practice. He seemed determined to press ahead- and indeed almost evangelical about the prospects for the renewables industry.

However, the rhetoric took a bit of a dent from people from the industry. Jeremy Leggett from Solar Century complained that investment capital was hard to find in the UK- unlike in Germany where PV solar was romping ahead.

Catherine Mitchell, representing the PIU, focused on the economic issues. Renewables and CHP looked likely to be the best economic low carbon supply options, so we should simply allow them to show what they could do. Pushing this line perhaps a little too far, she added ‘economic regulation needs to be technologically neutral’. That’s fine up to a point- a level playing field would be a good thing. But it will take time for the field to be levelled- and we may need a period of positive discrimination in favour of renewables. The governments new green rhetoric is obviously welcome, as are the capital grants for renewable projects. But the main reason, arguably, why renewables have been stalled so long in the UK is because all the support and subsidies went to nuclear. And it’s still the case that nuclear gets more than renewables- by a factor of more than two in terms of R&D spending, leaving aside the billions in liabilities that the government is to take over. Even assuming we accept the view put by Wilson that nuclear and renewables should have a joint role as non fossil options (a very big assumption) what sort of parity is that?

Wilson seemed bemused by the fact that Denmark had done so well with wind, compared to the UK, but seemed unaware of, arguably, the main reason why- the Danish decision in 1985 to avoid nuclear. However that sort of decision seems to now be out of reach within the new PIU consensus framework. Instead, we are to focus on timetables for the various options, renewables CHP and efficiency now, nuclear again maybe later. Obviously that’s not all bad, but lets hope the imminent DTI consultation paper on the issues raised by the PIU report provides an opportunity to raise the problems of nuclear power, rather than just allowing us to register our degree of approval for the framework set out by the PIU. See Reviews in Renew 137 for more

Opposition from both sides

While environmental groups like Greenpeace, Friends of the Earth and SERA have indicated their opposition to the PIU’s compromise on nuclear, it was, in effect, also challenged, but from the other side, by the Chief Scientific advisor, Prof. King, who is based in the DTI’s the Office of Science and Technology. As noted above, he rather broke ranks by suggesting that "dependence on fossil fuels would be unchanged unless there is new nuclear build at least to replace existing nuclear power stations," (interview on BBC Radio 4’s Today programme).

Greenpeace was horrified. "The chief scientist is playing politics - he has strayed outside his scientific remit to try and soften up the public on behalf of the Government which wants to build a dangerous new generation of nuclear power stations".

Instead, Greenpeace recommended that the Government support a target of getting 50% of UK power from renewables by 2020. ‘This would allow us to phase out nuclear power and massively reduce our emissions of greenhouse gases’.

Perhaps predictably, Kings comments were echoed by Jack Cunningham, the Labour former minister. ‘We are simply not going to be able to provide the electricity for an advanced industrial economy without a contribution from nuclear power.’ However, Margaret Beckett, the environment secretary, played down Prof King’s comments, saying it was too early to come to conclusions.

* Subsequently, the PIU report was debated in the House of Commons on March 13. This turned into an exchange of pro and anti nuclear views. We will be covering the debate in Renew138.

Overall the PIU review does seem rather complacent. For example, not only does it conclude that there should be no major problems with allowing imported gas to be the dominant fuel for the UK, it also suggests that energy demand will stabilise, with only transport being a problem and most of that coming from growth in the use of aviation fuel. In general it felt that market mechanisms and especially EU energy market liberalisation could be relied on to maintain security of supply. So there was no need for much in the way of government intervention, just a bit more regulation. All very New Labour.

The special meeting with a panel including key PIU energy team members, organised by the Warwick Business School at the Institute of Mechanical Engineers on 11th March, tried to tackle some of these points- with for example the issue of global oil and gas reserves being raised. But the mood seemed to be that, if the world energy system can survive the Enron collapse, then it could cope with most things. A Friends of the Earth speaker tried to get the problems of nuclear power discussed, but the view seemed to be that, in reality, the city was unlikely to fund any new nuclear plants, so the issue could be left aside.

In general the PIU seem convinced that renewables, CHP and energy efficiency should and will be the technologies of choice, as reflected in the ambitious estimates for potential take up. All that was needed was proper market regulation. The problem is that it is not clear whether this is what OFGEM, the energy regulator, can deliver - with NETA being the current issue.