2. Reactions to Energy Review 

The Energy Review generated a lot of debate, which still rumbles on.

The Conservatives criticised it for being too timid and too vague. Shadow Industry Secretary, Alan Duncan said: ‘We have been told for months that urgent decisions must be made now. Yet the Review puts off making any of the big decisions and instead proposes new consultations and areas to consider. The responsible thing to do is to give green energy a chance, to unleash the potential of renewables and keep nuclear as a last resort’. The Lib Dems were similarly aghast.

Nevertheless, although they were seen as only marginal, the proposals on renewables were generally well received. However, Maf Smith, Chief Executive of Scottish Renewables said ‘we would have liked to see more from Government on how it will make sure Ofgem- its regulator- works to support energy policy, rather than fight against it. We’re also concerned about how Government might change the Renewables Obligation which underpins all that we do. Careful steps are needed here to maintain industry and investor confidence.’  

Although it  was perhaps not fair to use acceptance of a 20% target, with no specific date, to claim as the government did that it was increasing renewables by a factor of five, it was seen as a step forward. The adoption of a banded RO with different levels of support for each developing technology was also generally welcomed, even if a little grudingly by the BWEA and the Renewable Energy Association. The BWEA were worried about the potential disruption, while the REA said it had ‘previously advocated leaving the RO alone and working on parallel measures to develop technologies such as wave and tidal, which need a period of additional support.  An alternative would have been to switch to feed-in tariffs, a sensible and comprehensible approach, used to great effect by the majority of our European neighbours.  The Energy Review has taken a third approach- that of altering the Obligation to deliver a similar end-point to feed in tariffs.  Whilst this avoids the upheaval of a complete u-turn, it is never-the-less a significant departure from the current view.’  

It added ‘The proposals set out in the Energy Review were first suggested in a paper circulated by Gaynor Hartnell to REA members some months ago.  We now want to focus on working with Government to make sure they are effective, whilst striving to maintain the essential momentum for continued progress.’  

However the overall approach was still seen as much too limited. Dr Kevin Anderson, director of the Tyndall Centre’s energy programme, said the review had ‘a highly disproportionate focus on electricity supply as opposed to heat and transport- neglecting the other 82% of UK energy use. It has the traditional over-emphasis on large, centralised and big power supply using conventional engineering thinking. There is no real action proposed to realise the substantial potential of alternative means of generating low-carbon power, such as micro-generation of electricity at the community-level and the widespread implementation of combined heat and power.’

He added ‘Electricity provides just 18% of the UK’s final energy consumption, with nuclear providing only 3.6% of UK energy. Consequently, replacing ageing nuclear plant with new nuclear power stations has an irrelevant impact on targets for reducing the UK’s carbon dioxide’. He went on ‘The low hanging fruit of cheap and practical energy efficiency will save far more from carbon emissions. Though energy saving is much discussed in the Review, there is no strong commitment by Government to implement polices that could very significantly reduce the UK’s energy consumption for the same level of energy services. Energy saving is once again the Cinderella issue.’ Similarly transport was neglected, apart from the familiar idea of extending the EU emissions trading scheme to cover aviation.

Inevitably much of  the criticism focussed on nuclear power. Predictably the various environmental groups all objected (see Box on p.5). Politicial battles clearly loom. internallly and externally.  SERA, Labours Environment group, commented that a nuclear revival would hinder the transition to a sustainable energy future and ‘distract from Labour’s efforts to impact on emissions in the next ten years, the most important ten years we have to really address climate change when new nuclear will make little or no contribution. Without greater energy efficiency and a step-change in sustainable energy production no amount of nuclear will slow down carbon emissions. The biggest challenge will come in tackling the vested interests in energy production and moving away from old-style power generation to newer, more sustainable local networks where we are all engaged in and aware of our energy use and no doubt our energy contribution.’ 

And the Irish government were not amused. The Environment Minister commented ‘While the UK may wish to proceed on such a path, Ireland has chosen not to and we will oppose any negative consequences in terms of safety and environmental impacts that will arise for Ireland from a new nuclear programme in the UK.  We do not accept the argument put forward by the UK Government that the nuclear option provides a solution to problems of climate change and energy supply.  The reality is that the nuclear industry carries with it serious environmental, nuclear proliferation and safety risks. The hitching of nuclear to the climate change wagon is both simplistic and disingenuous. It ignores the real economic costs and the unsustainable environmental legacy left to the future generations.  It proposes a “solution” which in the long run could be worse than the problem.’

The Nuclear Free Local Authorities network said it was worried about the potential emasculation of the planning system that seemed to be proposed in order to get nuclear plants built.  ‘The Government appears intent on denying local communities and their local authorities the right to address safety and economic issues at any inquiry by limiting these to local environmental impacts.’

Political Backlash  Elliot Morely backed a critical Commons motion along with other Labour MPs- who had produced a damning report arguing that nuclear was not the answer whereas renewables, efficiency and CHP could be. Sarah Boyack MSP, a former minister, lodged a motion in the Scottish parliament arguing strongly against new nuclear. She claimed that ‘even with an accelerated planning system, new nuclear power stations could not contribute either to plugging the ‘energy gap’ or to carbon reductions by 2020’. The Scottish Executive has already said it would oppose new nuclear plants in Scotland unless the waste issue had been resolved- Scotland is already generating 16% of its electricity from renewables and should get 30% by 2010.

The Commons Trade and Industry Committee warned of ‘rushing into hasty decisions’ which risked ‘repeating the mistakes of the past’, and claimed that ‘the review risks being seen as little more than a rubber-stamping exercise for a decision the Prime Minister took some time ago’.

The pro’s 

Predictably British Energy  welcomed the Review: ‘British Energy owns valuable nuclear licensed sites, in areas which have excellent community support, and which are very strong candidates for new nuclear build’.  

Westinghouse said it was ‘now confident that utilities will come forward, wishing to discuss investment in new reactors, and the company is keen to work diligently to help make their plans a reality’. It said its AP1000 reactor was ‘one of the leading candidates for a series of new UK plants’. It claimed it was ‘even safer in operation, through the use of passive safety features, based on gravity and natural circulation’.    

The CBI said the Government must now ‘introduce proper but not drawn-out consultation to produce energy policies which deliver on this promising start’ and must ‘tie other EU states to rigorous emissions limits to promote a sustainable long-term carbon market up to 2012 and beyond’.

However, not everyone was convinced that this would be enough to attract private investment. Although long term carbon prices seemed likley to rise, as concerns about climate change grow, the idea of relying on an increased value for crabon permits was seen as dubious given that the carbon market has so far been very volatile with prices falling by 80% at one point earlier this year. Keith Palmer of N.M. Rothschilds said, ‘The one thing the government has to do is create certainty about the carbon premium. Anyone looking at investing very large sums into projects with 15 to 50-year life spans needs to know what the framework is. The big problem is that at the moment carbon costs are very uncertain and the permit arrangement has a very short perspective.’

The Energy Debate- what next? 

The nuclear issue is bound to dominate the next few months in the run up to the White Paper probably early next year. The Commons Trade and Industry Select Committee produced what its chairman saw as a checklist ‘of the major questions against which the government’s policy on nuclear power can be judged’. They included: ‘whether it is right to create new radioactive waste; whether the UK’s nuclear policy poses security risks and undermines efforts to prevent proliferation; and the extent to which the UK needs to demonstrate leadership in reducing carbon emissions’.

The public opinion polls still continue to show uncertainty about a nuclear future. An ICM survey for GMTV in July showed that only 38% of people wanted nuclear power to play a role in meeting Britain’s future energy needs. The vast majority opted for renewables- some 79% wanted solar to play a part, 76% backed wind while half said they would like to see more efficient coal and gas-fired power stations having a role. Almost three-quarters, some 72%, of respondents, said that they would be concerned if a nuclear power station was built near them. Asked how they rated the safety of nuclear power, 16% described it as “very safe”, 42% as “quite safe”, 24% as “not very safe” and 12% as “not safe at all”. The debate continues- see the green groups inputs below.

In terms of renewables, the focus is likely to be on the proposed banding of the Renewables Obligation.  The BWEA is very worried about the potential disruption to investor confidence in the system given these proposed major changes e.g. what price levels will be offered for the various technologies? Former Cabinet Minister Alun Michael MP said that the RO should be adjusted to ensure that local community projects were backed. ‘At present there’s a knee-jerk reaction to oppose wind turbines- but it all changes if you hand the decision to local people and accept a co-operative approach to wind energy.  If people feel they are in charge- rather than having things done to them by councils or big business, the whole atmosphere changes.’ He cited Awel Aman Tawe community project as a key example, as well as Baywind and Energy4all. The debate on that continues too.

So taking stock, where are we now? Godfrey Boyle from the OU Energy and Environment Research Unit, produced a good overview of what has emerged. ‘The Energy Review has given a green light to new nuclear power, but that’s not the end of the story. Big power companies need a political consensus before investing billions in nuclear plants, and that’s conspicuously absent.  Nuclear is regarded as a last-ditch option by a wide range of opponents, from David Cameron at one end of the spectrum to Ken Livingstone at the other, with the Liberal Democrats- and even Labour’s own Peter Hain- also expressing skepticism. Also, despite Government protestations to the contrary, nuclear tends to be the ‘cuckoo in the nest’ that crowds out investment in other, better, energy options.  Instead, we should be putting much greater emphasis on using energy efficiently, and on investing in offshore wind power and combined heat and power plants. Britain has been described as the ‘Saudi Arabia’ of offshore wind.  This Labour Government should sieze the challenge of offshore wind with the same enthusiasm as its Labour predecessors did with offshore oil and gas in the 1970s.  If it did, as our Open University’s submission to the Energy Review showed, by 2024 it could be making a bigger contribution to our electricity needs than nuclear, with bigger reductions in carbon emissions at lower cost.  It would also create many tens of thousands of jobs to offset the decline in offshore oil and gas employment. Combined heat and power plants enable the ‘waste’ heat from power stations to be used for heating buildings. At present, about two thirds of the fuel used in UK power stations is thrown away  in ‘cooling towers’. Combined heat and power is widely used in other countries: half the energy used for heating buildings in Denmark comes from such plants. The Government should set a long term goal of harnessing at least half the otherwise-wasted heat from Britain’s power stations. This could cut UK carbon emissions by 10%.’

Hopefully parliament will get a chance to have a say.  Certainly the government will not get an easy ride even from its own supporters. A group of Labour MPs who are members of SERA issued the following statement: ‘We believe climate change is the most important challenge we face. Changing the way we use and produce energy is central to meeting this challenge.  We do not believe nuclear power is the solution- it is costly, risky and leaves a legacy of dangerous waste.  It is not carbon fee.  The mining of uranium, the construction of stations and the fabrication process are all carbon intensive.  Bringing new nuclear onstream cannot contribute to tackling climate change in the next ten critical years.  We are concerned that investment in this technology could divert resources from improving energy efficiency and developing renewable supplies and micro generation.  We welcome the Energy Review’s commitment to these alternatives and hope to see proposals for legislation in the Queen’s Speech to bring them onstream as soon as possible.’ The MPs are: Colin Challen, David Chaytor, Helen Goodman, Nia Griffith, Mark Lazarowicz, Joan Ruddock, Des Turner, Joan Walley and Alan Whitehead.

Green groups views 

Although trade and industry secretary, Alistair Darling, said that the Reviews’ proposal could save up to 25m tonnes of carbon by 2020 on top of savings already planned, most environmnetal groups were not convinced or impressed.  

Keith Allott, WWF-UK’s Head of Climate Change, said it was ‘a damp squib, full of rehashed and recycled policies. The government’s continued dalliance with new nuclear power is a massive distraction from delivering a truly sustainable energy future.... The review admits that at best, just one nuclear reactor could be up and running by 2020. Nuclear is a costly red herring and it will be the taxpayers who end up covering the costs of an uneconomic industry and future generations who deal with its legacy of radioactive waste.’  On renewables he said that ‘the government has simply reaffirmed its existing 20% target for 2020- but offers no real concrete measures to actually deliver this goal. We hope that the Government is serious in its focus on reducing demand for energy and encouraging a new market in energy services. But the proof of the pudding will come later- numerous earlier promises of a ‘step change’ in energy efficiency have come to nothing.’

Friends of the Earth director Tony Juniper said it was clear that the Government priority is nuclear power. ‘This is a huge mistake. Nuclear power is unsafe, uneconomic and unnecessary. We can tackle climate change and meet our energy needs through clean safe technologies. The UK is currently one of the Europe’s worst performers on renewable energy. The Government must aim to make the UK a world leader in developing a low-carbon economy... Without massive public subsidies it is very doubtful that private sector companies will take the huge financial risks of building new nuclear reactors. To this extent it looks like the government is opening the door for new state handouts for nuclear.’

Stephen Tindale, Greenpeace executive director, said ‘Blair is fixated with getting new nuclear power stations built.  Blair’s basic assumption- that nuclear power and renewables can work side by side- is fatally flawed; nuclear power doesn’t complement renewables & efficiency- it undermines it.  Nuclear power is the epitome of a centralised energy system. True energy efficiency depends on a decentralised system. The vast financial, political, institutional and technical investment needed for new nuclear power stations will not only suck investment away from renewables and efficiency, it will also lock the UK into its current, criminally wasteful, centralised energy system.’

Green Alliance director Stephen Hale said, ‘We welcome government commitments to do more on energy efficiency and renewables, for which we, and others, have long argued. But by identifying nuclear power as essential, the government will discourage potential investment in other technologies. If Peter Hain and Northern Ireland can deliver an energy system without nuclear power, then why can’t the UK do the same? It is a u-turn on the evidence-based conclusion of the 2003 Energy White Paper. It is a mistake that the government and the taxpayer will regret bitterly. Another u-turn is needed in the forthcoming White Paper.’

Green Party Principal Speaker Keith Taylor said that the governments claims that the private sector will ‘fund, construct and operate new nuclear plants and cover the cost of decommissioning and their full share of long term waste management’ was ‘a sham and a fudge- no where in the world is nuclear power entirely self financing’.