Lord Foulkes of Cumnock
Main Page: Lord Foulkes of Cumnock (Labour - Life peer)
Lord Foulkes of Cumnock
My Lords, we should be grateful once again to my noble friend Lord Hanworth for drawing our attention to the looming crisis in the electricity supply industry. We raised it in the energy sub-committee of the Cabinet in 2001. To be fair, successive Governments have done nothing about it—I was going to use another phrase there, but nothing about it is more polite. A total of 19% of our electricity now comes from nuclear power and all but one of the existing power stations will close by 2023. What are the Government planning? They hope to build 16 gigawatts of nuclear capacity by 2025, but we have already heard from my noble friend Lord Jay that even he is pessimistic about EDF being able to deliver the only one that is in prospect, which will produce just over six gigawatts. It really is a looming crisis.
As my noble friend Lord Hanworth said, the markets are failing to deliver. In the past, nuclear power stations have either been funded by Governments, and we cannot do that any more because we privatised British Energy and now it is owned by the French—we know we have one person looking after our interests there, but mostly by the French—or were provided on the balance sheets of companies against their other revenue and assets. As the departing chief executive Volker Beckers of RWE nuclear power made clear, balance sheet financing is not now an option. Therefore the only option is to try and find these loans from the market, and they are proving both illusive and expensive. That is why, as the noble Lord, Lord Jenkin, said, they have been pulling out of the option of building. What is the way forward? By contrast to these expensive loans, the cheapest source of funding would be for the Government to build the nuclear power stations and then either sell them to the utility companies or bring companies in to operate them.
I have only one question for the Minister and I will conclude on it. Why is the Government’s ideology stopping this being done? I predict that this is the only way that we will be able to fund this—I see no other way forward. It would be cheaper, easier and quicker for the Government to build their power stations with the option of selling or hiring them to contractors once completed. Is it only ideology that is stopping the Government doing that?