1. The Energy Review 

‘If the review was open, transparent and fair, looking at the options on economic grounds across a whole life cost assessment of nuclear stations, the solution may well point to renewables,’ said Elliot Morley ex-environment minister.  When the  governments Energy Review finally emerged it took a different view- backing nuclear along with renewables, clean coal & efficiency. See Box. A classic ‘more of everything’ policy- an approach also backed by Gordon Brown who in June said we needed ‘a balanced policy which takes account of guaranteed supply, including nuclear’.  Just before the publication of the Review, Tony Blair said: ‘I think the sensible precaution is to have a balanced energy policy. You put it all in the mix. To take out of that nuclear power...  is a very, very big step for us to take and I would need a lot of convincing that renewables are going to fill the gap.’ He added ‘There are people who say you can make it all up through renewables, but if they are wrong, in 15 or 20 years, we are going to have a serious problem in this country, and we will be completely dependent on imports of oil and gas from abroad. My view is that’s a dangerous gamble to take.’  Reuters: 28/6/6 

Interviewed on Newsnight (30/6/6), Peter Hain the N. Ireland and Welsh Secretary, was less sure: ‘if there has to be a new nuclear power station or three or four or whatever it might be, that is up to private developers. They have to finance it, they have to sort out the decommissioning costs they have to deal with the waste disposal costs and make sure it’s safe and then if in order to keeps the lights on people decide there has to be nuclear, I’m sceptical about it. But if there has to be, it can only and must only be in a way that doesn’t crowd out any renewable development.’ 

Review in a nutshell  

 ‘Based on a range of plausable scenarios, the economics of nuclear now look more positive than at the time of the 2003 Energy White paper. Government considers that nuclear should have a role to play in the future of the UK generating mix, alongside other low carbon generating options.’ 

So says the review, which also outlines a streamlined planning process in which generic nuclear reactor types can be pre-licenced with local planning inquiries then being just on site details. But any nuclear plants must be financed by the private sector- there will be no direct subsidy. Instead the government is looking to enhance the EU Emission Trading System to push up carbon prices so that nuclear is more attractive to investors: ‘A clear and stable long-term carbon policy framework is important for creating the confidence and certainty that is needed to underline changes in industry behaviour’. 

That will also help renewables.  In addition the government says it will upgrade the Renewables Obligation to 20% by ensuring that ‘the level of the Obligation always stays above the level of renewables actually installed, up to a 20% obligation’ (but with the RO buy out price frozen from 2015); and by creating  ‘technology bands’ within the RO, with a higher price for projects that need extra support, such as offshore wind, wave and tidal- but not until 2009/10. There will also be ‘aggressive implementation of the Microgeneration Strategy’, and support for efficiency, distributed generation and CCS. 

Planning -energy review proposals   

Trade Secretary Alistair Darling said the government would act to accelerate the building of plants and cut upfront investment costs for the energy industry by simplifying the planning and licensing regime. ‘We need to streamline the planning laws for big infrastructure projects.. we need to move to the stage where, basically, the government needs to publish a statement of need, saying this is a project that’s of national importance.’ 

The new regime would cover nuclear, gas and coal-fired plants as well as large wind farms and electricity transmission lines- but would not cover Scotland, which has devolved planning responsibilities. There would be a pre-licensing system for approving a design for new nuclear plants.  Planning inquiries could change the appearance and precise siting of plants, but would be unable to block them on the grounds that they were not needed, a factor that, it was claimed, slowed construction of Sizewell B, the last nuclear plant to be built in the UK. He was in favour of imposing time limits on inquiries. ‘You would have thought that most issues can actually be covered in a matter of weeks or maybe months’. Darling was adamant about the need for change: ‘Given the fact that we may need to replace a third of our electricity generation, there is a serious risk that one day we’ll switch on the lights and there won’t be gas or electricity unless we deal with this planning problem’. 

Barrage back?  

The Governments Energy Review  mentions  tidal barrages and lagoons and says that along with the Welsh Assembly, it will ‘work with the Sustainable Development Commission, the South West Regional  Development Agency and other key interested parties to explore the issues arising on the tidal resource in the UK, including the Severn Estuary, including potential costs and benefits of developments using the range of tidal technologies and their public acceptability’. 

*Clean Coal too  The governments energy review backed ‘clean coal’ i.e. advance coal combustion (e.g. supercritical steam plants, gasification and carbon sequestration). A report from the Clean Coal Task Group, set up to contribute to the review, said: ‘Indigenous coal has an essential role in securing peak electricity supplies. It is secure, affordable and long-term’.  The Review said a  Coal Forum would be set up.

NAP target 

 Just before the publication of the Energy Review, the government announced  that under the proposed new National Allocation Plan, for  submission to the EU,  key UK energy users will be asked to cut emissions by 8m tonnes, for the next round of the EU Emission Trading System- the maximum agreed by the DTI & DEFRA 

What next? 

A White Paper will be produced ‘around the turn of the year’ on the nuclear policy & planning issues raised in the Review and there will be yet more consultations e.g. on the RO bands. Meanwhile, we are likely to hear more protestations that renewables will not be down graded.  At the All Energy conference in Aberdeen in May, Energy Minister Wicks, perhaps trying to undo some the damage done earlier in that month by Tony Blair’s apparent backing of nuclear power, commented ‘The Prime Minister’s recent speech to the CBI put renewable energy firmly on the agenda and that is a message I want to re-iterate’. And in May he told the Welsh Affairs Select Committee ‘What is important for government to do is find ways to incentivise clean forms of energy. I don’t think it is for us to favour nuclear as opposed to renewables, but if we can produce that framework based on a price for carbon, I think that is conceptually the way ahead.’   

Certainly if, despite the resistance of the CBI and major energy users (and the rest of the EU!), the government sets a high price for carbon based electricity via the EU-ETS, nuclear could perhaps go ahead without direct state subsidies, and renewables would also be stimulated, so it might seem fairer. But nuclear might also get hidden subsidies, e.g. for waste management and decommissioning as well as insurance liability, and in any case, if it was allowed to benefit from increased carbon prices, it would be getting support it didn’t have before.  However, even that might not be enough. Investors will want to be sure prices will stay high. But as Wicks said at the Welsh Affairs Committee ‘It is not for us to say that nuclear should have at least this price for 20 years. That would be absurd.’  Quite, But will investors come forward?  EoN said ‘if the sums don’t add up we won’t do it’. 

Your say- 36% renewables please  

In the run up to the publication of  the  Energy Review, the BBC put up a calculator programme on its web site that enables members of the public to choose different options (nuclear, fossil, renewables, efficiency) to determine the energy mix and carbon reductions in 2020. It’s quite interesting.  It’s at: http://news.bbc.co.uk/1/shared/spl/hi/uk/06/electricity_calc/html/1.stm 

Subsequently the BBC reported back on which energy mixes had proved popular and noted that renewables were favoured. Over 100,000 people have used the calculator and registered their chosen mixes- and the aggregate results were a system to meet electricity demand in 2020, projected to be 381 Terrawatt hours, with:  

*        fossil fuels - 85TWh: 21%

*        nuclear - 113TWh: 28%

*        renewables -143TWh: 36%

*        imports - 17 TWh: 4%

*        cut demand - 39TWh:10% 

The 36% from renewables is way ahead of the current 20% by 2010 ‘aspiration’. But note  that nuclear was seen as playing an expanded role (from  19% now), while efficiency savings are relatively modest, and this all ignores heat & transport. 

John Loughhead,  director of the UK Energy Research Centre, commented that it was ‘interesting to see there is a broad desire to see renewables play a bigger part, although there are some engineering reasons which might make it difficult to reach this level by 2020’.   Malcolm Wicks said ‘It’s encouraging to see the public engaging with the debate and developing a more sophisticated relationship with energy’.   

No doubt the results, although not necessarily representative (it was a self-selecting group) will encourage the government in its ‘more of everything’ approach- including nuclear. The BBC Calculator is still available for use.  

* A new NOP opinion poll for the DTI provided even stronger evidence for support for renewables, with 85% of the  2000 respondents backing them to some degree and 81% being in favour of wind power, over a half strongly so.  Moreover over three fifths would be happy to live within 5km of a wind project- 32% strongly so. But 31% said that renewables are too costly and that this outweighs their environmental benefits.

The Energy Review is at: www.dti.gov.uk/energy/review/index.html