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Answers to questions posed in “Our Energy Challenge” |
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Written by SONE
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Thursday, 20 April 2006 |
We briefly summarise our response to the “Key Questions for the Review” posed on Page 7 of “Our Energy Challenge” as follows:
1 – What more could the government do on the demand or supply side for energy to ensure that the UK’s long-term goal of reducing carbon emissions is met?
A – It would help if there were a vigorous and high profile energy saving campaign instead of the current more or less invisible efforts. For this to have much effect, price pressure would have to be sustained at what would probably be politically difficult levels. It is clear that for the foreseeable future renewables will contribute only marginally to electricity supply. This being so, nuclear power becomes an imperative. It is the only form of electricity generation, apart from renewables, that largely avoids carbon production. In the meantime, a vigorous R&D programme into carbon sequestration of power station emissions is required, though it should be recognised that this will not touch 70% of CO2 emissions arising from wider industry, the domestic sector and transport. To avoid bringing contempt on carbon sequestration, it has to be divorced from techniques for improving recovery rates in oil and gas fields.
2 – With the UK becoming a net importer and with big investments to be made over the next twenty years in generating capacity and networks, what further steps, if any, should the government take to develop our market framework for delivering reliable energy supplies? In particular, we invite views on the increased dependence on gas imports.
A – The first and obvious point is to clarify the objective and concentrate investment where it is required instead of throwing resources away, for example, on wind power generation and transmission for little return in useful electricity and carbon reduction.
It may be that unstable or politically motivated gas suppliers will nonetheless prove reliable, assuming the European distribution market starts to work, contrary to experience this past winter. But we can only imagine the price that will have to be paid for the gas in future. This means that, if only for balance of payments reasons, we should seek to minimise gas imports and consumption. This will not occur if another dash for gas into electricity generation is allowed. There may, however, be no dash for any sort of investment in generating capacity if the ruinous short-termism of the wholesale electricity regulatory regime is perpetuated. There is little prospect of obtaining real security of supply, as distinct from a hand to mouth existence, with recent regulatory policies.
3 – The Energy White Paper left open the option of nuclear new build. Are there particular considerations that should apply to nuclear as the government re-examines the issues bearing on new build, including long-term liabilities and waste management? If so, what are these and how should the Government address them.
A – First, the Government has to decide what the nation needs. If it concludes Britain needs a greater measure of security of supply, medium to long term, with clean electricity, then it should tell the nation nuclear power must be developed urgently. If that is to occur, it needs to do the following things:
a) create a level playing field for nuclear in terms of taxation, environmental damage (carbon), licensing and planning treatment; nuclear does not seek a subsidy but it is entitled to expect fair dealing. The imposition on it of the climate change levy, reinforced in the recent budget, is ludicrous.
b) ensure long-term access to the market on reasonable terms, given nuclear’s high front-end costs and the long-term need for secure supplies of clean electricity.
c) once the government has set the framework to secure its objective – secure and clean electricity – it should get out and stay out of the generators’ hair and stop trying to second-guess them.
d) in the NDA there exists the means by which competitive long-term decommissioning and waste storage contracts can be taken out, recognising that electricity consumers already pay a levy of around 4% on current electricity to offset decommissioning and waste management costs. It should be pointed out that the Treasury acquired substantial sums on electricity’s privatisation set aside for these purposes and the public should be told what they amounted to, given NDA estimates of the cost. We are also bound to observe that the NDA’s return-to-greenfield strategy for nuclear sites is unacceptable if the Government decides, as it must, that the nuclear generation industry needs developing on existing nuclear sites.
4 – Are there particular considerations that should apply to carbon abatement and other low carbon technologies.
A – We might not be having this review if the Government in 2003 had decided to
employ all reasonably useful and economic low carbon technologies. Instead, it decided to leave one – nuclear – on the shelf. The result is little prospect of meeting medium-term carbon reduction targets and, worse still, a serious risk of medium- to long-term shortages of electricity supply. If the Government deems carbon abatement necessary, it must decide what price is worth paying to achieve it. All the evidence suggests that nuclear is likely to be the cheapest method, especially as no costs whatsoever are attached to the current passions for renewables, microgeneration and technologies that have yet to be developed and are so far often capable only of theoretically boiling a few kettles.
5 – What further steps should be taken towards meeting the government’s goals for ensuring that every home is adequately and affordably heated?
A – This is not a question for energy policy which must concentrate on achieving security of supply at affordable cost in as clean a way as reasonably possible. Properly heated homes are a social issue that is best pursued in an armalite rather than a blunderbuss way by social services. They should know which homes are inadequate – and if they don’t they should find out – and make sure they are treated.
COMMENTS SOUGHT
We shall confine ourselves to three of the four points on which comments were sought:
ii) Implications in the medium and long term for the transmission and distribution networks of significant new build in gas and electricity generation infrastructure.
Comment: The development of the nuclear power industry on existing nuclear sites will minimise the cost of transmission and distribution; the infrastructure already exists unlike that, for example, for constellations of remote wind installations and new gas power stations.
iii) Opportunities for more joint working with other countries on our energy policy goals.
Comment: If international co-operation in the fight against global warming is to mean anything, collaboration on such things as taxation, technology and its licensing and application and the exchange of know-how on, for example, energy conservation is necessary. This is a global issue. This approach should embrace the international licensing of civil nuclear technology.
iv) Potential measures to help bring forward technologies to replace fossil fuels in transport and heat generation in the medium and long term.
Comment: The hydrogen economy, to replace fossil fuels, is a long way off and will require massive investment. It seems unlikely that the power required to produce the hydrogen could come from anything other than nuclear fission, given that nuclear fusion is also a very distant prospect. The case for nuclear now is strengthened by the desirability, putting it at its lowest, of maintaining national expertise in a clean method of electricity and motive power production and conceivably saltwater desalination in the longer term future. Looked at in this way, the nuclear issue confronting this review raises the question as to whether Britain intends to reach out to the future or curl up in its cold and impoverished nest and die.
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Last Updated ( Thursday, 20 April 2006 )
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