Energy: Climate Change

Lord Jenkin of Roding Excerpts

Tuesday 2nd November 2010 Lords Chamber

[Lord Jenkin of Roding]

My Lords, I, too, should begin by declaring a couple of interests. I am the honorary president of two organisations connected with the energy industries—one is the National Skills Academy for Nuclear, and the other is the Energy Industries Council—but I do not think that anything that I am going to say will impinge on their valuable work.

I agreed with the noble Lord, Lord Grantchester, on one thing—here I must challenge the view put forward by my noble friend Lord Lawson—which is that I do not think that anybody can now seriously doubt the weight of the scientific evidence about global warming. What I think my noble friend Lord Lawson leaves out of account is the huge cost and damage of the effects of that. If he doubts that, perhaps I may suggest that he read the report of the Adaptation Sub-Committee of the Committee on Climate Change, which is a sub-committee presided over by the noble Lord, Lord Krebs, who without doubt is one of the most distinguished scientists in this House and indeed in the country.

I do not want to talk about adaptation; I want to talk about mitigation—the measures necessary to try to reduce the human input of carbon into the atmosphere. I think it right that one should be seeking to aim to make the energy industries as carbon free as possible, however difficult that may be. It will take a long time, I have no doubt on that, but I support the view that policy should move in that direction.

Today's debate could cover a very large canvas but I have time in this short speech only to touch on a very few points. The first point that I would like to make and put to my noble friend on the Front Bench is that I hugely welcome the emphasis in 2050 Pathways Analysis—on which my noble friend organised a very useful briefing for a number of us before the Recess—and, in particular, its emphasis on 2050. As my noble friend will recognise, in the past I have argued that energy policy, and indeed even more climate change policy, has to have a very long perspective. It takes a very long time, to use a hackneyed phrase, to turn the tanker round. I therefore very much welcome that.

However, when one looks at the national policy statement for nuclear, which is one of the documents published with the pathways document and contains a large number of changes from the original draft statement, one sees that it concentrates only on the period up to 2025. What is the logic of setting a framework that takes us to 2050 if on one of the most important parts of the whole effort you are only going up to 2025? I am reinforced in this view by a very interesting paper that was published in the journal Science and headed “Generating the Option of a Two-Stage Nuclear Renaissance”. In that paper, Robin Grimes and Bill Nuttall say:

“We suggest that the first stage of this process will include replacing or extending the life of existing nuclear power plants, with continued incremental improvements in efficiency and reliability”—

and that is happening. They continue:

“After 2030, a large-scale second period of construction would allow nuclear energy to contribute substantially to the decarbonization of electricity generation”.

Is it not already implicit in the 2050 pathways paper that there will be more nuclear generation? Nuclear generation is low-carbon, an established technology and highly reliable, unlike wind power, which is intermittent. It cannot possibly be right to be planning on the basis of nuclear only up to 2025. I wonder whether my noble friend will comment on that, particularly if there is to be any chance of achieving the purposes of the longer-term analysis.

I very much welcomed the Statement by the right honourable Chris Huhne on 18 October, which set out the Government’s policy very clearly and has been widely welcomed by the nuclear industry. The Statement makes it perfectly clear that nuclear will be taken forward and must be a major contributor to low-carbon energy production. However, I have one question on this for the Minister. In the Statement, Mr Huhne said that there will be no subsidy for nuclear,

“unless similar support is also made available more widely to other types of generation”.

I am not sure that I quite understand the implications of that.

We are already promised a floor price for carbon, which will help all low-carbon energy sources—in particular, new renewable sources—but I would welcome an indication of what might be done in support of that. There is a growing view that a carbon floor price will by itself not be enough to attract the huge sums of investment that will be necessary. In one representation that I have had, what is being called for is,

“a suite of energy or capacity signals or payments that reward the characteristics required in new generation investment, for example low carbon energy or secure and predictable energy supply”.

Will my noble friend say whether the Government are considering capacity payments? They would be very useful not only in nuclear but, for instance, if we are going to have standby generation to supplement wind power when the wind is not blowing.

That takes me to wind power, on which I want to be brief. I read in the Independent the other day that, for every completed onshore wind farm, no fewer than 18 have been abandoned or turned down. They are hugely unpopular and very expensive. When I look at offshore wind farms, where the costs are several times higher, I seriously begin to doubt whether the huge emphasis placed on wind power by the previous Government and by the coalition Government is wise policy. There are other forms of renewable energy that are every bit as environmentally acceptable but that can operate at a substantially lower cost. One of them is nuclear, but there are others; for example, the use of biomass. I have had a representation from one of the companies complaining bitterly that so much subsidy is going in the direction of wind power. It is subsidy paid by the consumer, as I am sure the noble Lord, Lord Whitty, recognises. One of the problems of the pricing is that the fuel-poor pay the subsidy on wind power whereas other sources based on biomass and so on are a good deal cheaper. I hope that the Government will look at this because I do not believe that it is viable in the long term.

We suffer from a plethora of different incentives and support mechanisms covering widely different forms of energy generation. In a complaint that was reported in the Times the other day, people were saying that it may be that the big companies can steer their way through the complexity of the system, but the increasing number of small and medium-sized companies that are coming into this world find it intensely confusing. As I have asked before, is there not a case for trying to simplify the system? If one is going to provide support, subsidy or incentive—I much prefer the word “incentive”—to encourage the kind of generation you want, it should be as simple as possible and apply so far as possible across the board. I hope that my noble friend will be able to give us some assurances about that.

Finally, I shall say a word about carbon capture and storage. There was disappointment on the part of the CCSA about the comprehensive spending review. My noble friend will recognise that as a whole the department has done rather well out of the spending review and has secured a number of really important targets and policy statements. The one I particularly welcome is the recognition of the longer-term nature of the spending by the Nuclear Decommissioning Authority in decommissioning and preparing for the handling of waste. That is something that I have argued for in the past, and I welcome it. It is interesting that not only does it reinforce confidence in the new nuclear programme, which is very necessary, but a recent report by the University of Cumbria has drawn attention to the regional and national significance of this huge programme of decommissioning in which we lead the world. There has been a lot of hype about that in other areas, but in this one we can point to that. The setting up of the NDA by the previous Government was an important step in this direction and it is important for all the supply industries that are based on it.

We are now going to have only one CCS demonstration project. There will be another four but, without funding, what will become of them? I hope that the Minister will be able to say something about that. We need a clear statement of the Government’s longer-term policy intentions in the area of carbon capture and storage. As my noble friend Lord Lawson rightly said, there are huge supplies of coal and gas around the world. The other day, I learnt that most of our coal is now imported from huge open-cast mines in Russia. The coal is shipped to Murmansk and then comes here by sea, but that is only part of it. There are enormous supplies. If they are going to be used, and if one is going to try to tackle the problem of carbon, carbon capture and storage seems to be enormously important. I hope that at some stage soon my noble friends will be able to say something about this as their general policy. There was a lot of hype from the previous Government about us leading the world in this field. That is not true. There is carbon capture and storage in America, north Africa, India and China. Unless we get on with it, we will not play a part in it. This is something that Ministers need to take into account.

I have said more than enough. We will have plenty of time and other debates in future on the new statements of national policy that will come before us in due course and on the proposed energy security and green economy Bill, but I have made a number of points to which I hope my noble friend will respond.