Energy Bill

Lord Bishop of Hereford Excerpts

Tuesday 18th June 2013 Lords Chamber

[The Lord Bishop of Hereford]

My Lords, as others have said, there is much to commend in the Energy Bill, which proposes significant and welcome changes to create an energy sector fit for the 21st century, not least the reforms to the electricity market and the attention paid to domestic tariffs. However, there are some glaring omissions, which seem to present an opportunity missed. I regret that the Bill does not put into law a requirement on the Secretary of State to set decarbonisation targets for the electricity sector. The reasons have been debated in the other place and there have been references to it in your Lordships’ House, but I would be grateful if the Minister would comment on simply leaving it as a power and not making it a requirement, a point raised by so many others.

Furthermore, it seems to me that to have phased targets would be a benefit. There has been debate about even the 2030 target, but that is many years away. Given our five-year electoral cycles, I would have more confidence that we would address seriously the 2030 target, let alone the 2050 target, if we were to give ourselves graded and stepwise targets along the way, and certainly a requirement that there be at least a 2030 one.

Given the focus on decarbonisation, I am surprised that there is not more emphasis in the Bill on nuclear. The noble Lord, Lord Judd, has just referred to it in relation to waste products and some of the risks—I will say something about those in a moment. It saddens me that the newly suggested body, the Office for Nuclear Regulation, is to be given tasks focusing only on safety and security. Those are, of course, crucial, and nobody questions that. However, it leaves aside many of the other dimensions of the nuclear option that I think we so greatly need. We need, not least, more money for research and development, and we need government investment. There has been a great deal of talk from other noble Lords who know far more about the economics than me, and about the way in which a decarbonisation target would itself help to lever in private investment. If we are to have investment in nuclear energy, with further middle and longer-term aspirations, it seems that without a government commitment, private money is less likely to follow.

It is worth reflecting, perhaps, when we consider nuclear energy in relation to our decarbonisation targets, that to produce 1 gigawatt of electricity, which would power a city of about 1 million people, would take 3.2 million tonnes of coal, which itself would produce 8.5 million tonnes of carbon dioxide—to say nothing of 900,000 cubic feet of toxic waste. Noble Lords will not be surprised to hear that, by contrast, those 3.2 million tonnes of carbon could be produced by 200 tonnes of uranium or 1 tonne of thorium. The green arithmetic is not too difficult for us to understand. That alone, notwithstanding what the noble Lord, Lord Judd, said, should surely justify putting more money into our nuclear research.

Back in 1975, nuclear fission research and development received about £450 million a year. The figure reduced a bit in 1980, and I believe that the current levels of investment are only 7% or 8% of the 1980 levels, let alone the 1975 heyday. Sir John Beddington, until recently, as Members of the House will be all too well aware, our government Chief Scientific Adviser, said that he could not see a future for UK energy without nuclear energy. It is currently producing about 18% of our energy needs, and he anticipated, as others have, that it could rise to well over the 80% that we are already seeing in France. It may be 86% here but, of course, this cannot be achieved without research and development funding. It needs the Government to lead on that. It needs a joined-up approach, not just in government money but in our national nuclear laboratories, which I would love to see become national again. It also needs a joined-up approach involving the NNL, as well as our universities, and the encouragement of our own industry in its development and research, both here and indeed overseas. John Beddington also said:

“Clearly I think that if we’re going to be thinking about a significant expansion of nuclear capacity as we move toward our goal in 2050 of an 80 percent reduction in greenhouse gas emissions, we need to keep options open … And part of those options is … having the R&D to think about taking it forward”.

There is reference in the Energy Bill’s summary impact assessment to decommissioning, which, I understand, takes currently about 69% of DECC’s £2.3 billion a year. Our own view about decommissioning is remarkably negative in that we see all the waste products, to which the noble Lord referred, only as waste. I do not think we have enough confidence yet to see them also as an asset—as a fuel. It will be quite possible to use some of the plutonium in MOX reactors, with both uranium and thorium reactors, to make the waste into a fuel and make it an asset rather than a liability. Exploration of that is urgently needed. I understand that this is happening in Canada and certainly in China, to which much reference has been made. Indeed, India, to which little reference has yet been made, is also investing huge sums of money in precisely these routes and these options. I ask again whether the Minister would give consideration to that, and whether a wider brief could be given to the new body that will be set up.

We need, therefore, to change our mindset as well as put money into research and development. If we were able to make some waste into an asset and use it for our nuclear fuels, perhaps that would help to reduce the decommissioning budget. It could also release money which could be put back into the research and development that originally enabled some money to be released. More of that is needed for us to be able to walk this path with greater confidence.

Reference has already been made, not least by my noble friend the right reverend Prelate the Bishop of London, to reducing the energy demands. A number of other noble Lords have spoken about Clause 37. I, too, would encourage that. As well looking at reducing our carbon footprint from energy, we also should look to complete the circle through reducing our carbon footprint by reducing our demands.

The number of lights switched on in the House has been mentioned. It may seem rather a small matter in comparison with the rather grander and much greater issues in the Energy Bill, but taking small steps as individuals would have a cumulative effect as well as give a lead. I would couple the comment about the number of lights that are on with the fact that it always amazes me that our printers are not set to a default mode of double-sided printing. We can make little steps. If we can get into that mindset, there would be a cumulative contribution and effect, even if it seems rather removed from the arithmetic that we are mostly addressing in this debate.

Noble Lords have also spoken about fuel poverty. I want to close by saying that I regret that this legislation is not bolder in addressing the inequality of domestic energy tariffs. The Government go some way towards addressing the complex and impenetrable tariffs that consumers face today, which is to be commended. However, I am not confident that this sufficiently addresses issues of fuel poverty. Members of the House are well aware that those who pay the most for their domestic energy are often the poorest in our communities. Many of those in fuel poverty pay inflated prices through the meters in their homes or are paying for other types of fuel, which are not addressed in this legislation. Is the Minister able to assure the House that the Government will address these wider issues, so that those currently experiencing fuel poverty can pay a fair price for their energy?

EDF recently said that it will have one domestic tariff if other energy companies follow suit. I understand that Ofgem does not recommend this as a way forward. It may be right. As we debate this legislation in this House, I hope that we will take the opportunity to send a clear message to Ofgem and the energy providers that the pricing structure needs to be fairer, more transparent and clearer. I wonder whether this debate also offers the opportunity to discuss again the possibility of setting a legal framework that requires domestic customers to pay more the more energy that they use. The current position whereby the more energy I use at home, the more likely my tariff is to reduce, is surely unsustainable. There is a cost to the earth and to the poor of the world who are most impacted by climate change as a result of our energy consumption. Surely the Bill provides an opportunity to reflect the wider costs of all our energy habits.