Lord Whitty
Main Page: Lord Whitty (Labour - Life peer)
Lord Whitty
My Lords, my noble friend’s question relates to the contribution that nuclear energy can make to both energy security and climate change. I shall focus mainly on the latter. The answer to the question obviously depends on the timescale and, in a different sense, on the nuclear industry overcoming the legacy to which the noble Lord, Lord Moynihan, referred, of economic overconfidence, not to say mendacity on the part of the economics of nuclear power. I support nuclear power, but I recognise that history. We have to overcome it and the continuous slanging match between those who support renewables, who slag off nuclear power, and those who support nuclear power who slag off the renewables lobby. We have to get over that because both are vital if we are to meet the climate change target. Mutual recrimination only benefits longer-term use of damaging fossil fuels.
In the short term, nuclear power will not make a huge contribution to carbon targets. To meet our carbon trajectory, we will have to rely on increased renewables and a switch from coal to gas. In the medium term, however, it could be different. In the nearest thing to a road map that the Government have come up with—the carbon plan—it is envisaged that at the end of the fourth carbon budget we will have 10 to 14 gigawatts of new nuclear power on stream, potentially rising to 20 gigawatts by 2030. On present form that seems pretty improbable, but it is no more improbable than that, in the same plan, we will also have 35 to 50 gigawatts of renewable energy, which will be equally difficult, even if we have the subject of the next debate on stream and working. It is important to take decisions now to set the guidelines for nuclear investment to ensure that we get somewhere close to the 27 or 30 targets for nuclear contribution.
The immediate prospect before the Government is the Energy Bill, which will be before this House in a couple of months. The test case for contracts for difference is the nuclear investment by EDF in Hinkley Point. It is a terrible dilemma for the Government and a severe test of whether the contract for difference can actually work. It will also determine whether we have a viable means of delivering nuclear investment in this country. Part of the media coverage on this has been misconceived. The Treasury has a stronger hand against EDF than is indicated. There is not a lot of demand for nuclear power in Europe. The state-aid issue, to which the noble Baroness, Lady Parminter, referred, will be an important inhibitor on what the Government can do for EDF in any case. The idea that we all have to roll over to EDF demands to bring Hinkley Point on stream is exaggerated. That is not to say that it will be an easy negotiation or that the precedents set in the outcome of that negotiation will necessarily be tenable for other proposals for investment into other nuclear sites. I urge the Government to play hardball in this respect, and ensure that the deal that is done on Hinkley Point, which I very much support, is one that benefits the British people and the British economy rather than straightforwardly EDF.