National Policy Statements

Martin Horwood Excerpts

Wednesday 1st December 2010 Commons Chamber

[Charles Hendry]

The hon. Gentleman is new to the House and he might therefore be unaware of the extent to which we worked very constructively with the previous Secretary of State, the now noble Lord Hutton, and others to try to ensure that we took this agenda forward. As the hon. Gentleman has been a special adviser however, he will be aware that nuclear was taken off the agenda for five years. There was a Government White Paper that said, in effect, “We do not see a need for new nuclear in this country.” There were no qualifications to that statement; it was just stated that there was no requirement, full stop. For five years, that delayed the development of new nuclear.

I completely applaud the work of the previous Secretary of State, which has contributed to our country becoming one of the most exciting in the world for new nuclear development. The reality is that we were constructively involved in that process, but for five years nuclear was taken off the agenda.

[Martin Horwood (Cheltenham) (LD)]

To be candid, the Minister may know that, as per the coalition agreement, many Liberal Democrat Members are still absolutely opposed to nuclear power. Will he confirm that at no point in the last 30 years has it been impossible for private investment for nuclear to come forward, and if Government policy was not preventing that, why does he think no private investment did come forward in the last 30 years?

[Charles Hendry]

The Government are seeking to address a comprehensive range of issues to do with new nuclear. There have been planning issues; for example, the Sizewell B project took five or six years just to go through the planning stage. Also, regulatory justification is a legal requirement, and that process had to be gone through. Last week, a measure on that passed through this House with a massive majority of over 500 to a couple of dozen, so there has been a significant step forward in that respect. The long-term cost of waste management also needs to be known, and that figure is now being made clear and given to the industry. Other barriers to investment are also now being addressed. Therefore, although it is technically right that there was nothing to stop people investing in new nuclear, it is also absolutely clear that the circumstances did not encourage people to come forward with new proposals.

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[Charles Hendry]

I pay tribute to the work that my hon. Friend has done as an ardent supporter of the Heysham plant in his constituency and of the case for a new plant in that area. The role for nuclear has been set out clearly in the national policy statements. We believe that it has a fundamental role, but we also have to be realistic about what is achievable. We have identified sites that could be used for 16 GW of new nuclear power, but that is as much as the energy companies believe can be constructed over the next 15 years, which is the time scale that the national policy statements cover. That is not necessarily the end of the ambition, but it looks like what is achievable and realisable over those 15 years. There is no doubt about the Government’s ambition in terms of new nuclear.

[Martin Horwood]

On the subject of what is realistic, and referring back to what the Minister was saying about sustainability, is he aware that the Chartered Institution of Water and Environmental Management has said that current known reserves of economically extractable uranium may last only between 40 and 85 years? Given that other economies are also investing in new nuclear, we may be looking at the lower end of that scale rather than the higher, so new nuclear cannot be regarded as sustainable in any real sense.

[Charles Hendry]

I have certainly heard that point before. The OECD has a fundamentally different view of the availability of uranium stocks, and there is work to be done in plutonium reprocessing, which would provide an additional source of fuel. Furthermore, work is being done on the development of thorium reactors, which do not give rise to many of the concerns that people have about uranium reactors. A great deal of progress can be made and, at the end of the day, the decision is for investors to make. If they do not believe that there is sufficient uranium to power their plants for their lifetime, they will not make that investment. They will base their decision on the facts available to them and they will need to be reassured about the availability of stocks.

The overarching national policy statement contains information on the impacts that need to be considered for all energy infrastructure, while the technology-specific NPSs contain additional information on the impacts that are specific to each technology. They take into account the appraisals of sustainability. We have revised the AOSs for the non-nuclear NPSs substantially, which is why we are a carrying out a fresh consultation.

We believe that the revised appraisals put readers in a much better position to evaluate the revised draft NPSs. The revised AOSs give a clear picture of the likely significant impacts at the strategic level of consenting energy infrastructure projects in accordance with the NPSs, by reference to a wide range of relevant environmental, social and economic factors. They also explain more clearly why we have not chosen a number of alternative policies that others proposed, but which would not have been as good in meeting our overall objectives of maintaining safe, secure and affordable energy supplies while moving to a low carbon economy and reducing carbon emissions by 80% by 2050.

We have made significant changes to the statement of need in the overarching national policy statement. It now includes research that was not available for the first draft, including more detailed analysis of scenarios to achieve an 80% reduction in carbon emissions by 2050. We have also included more detail on what is required for an economic feasibility assessment to ensure that fossil fuel generating stations are carbon capture-ready.

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[Huw Irranca-Davies]

I will make a little progress.

Although I welcome this debate, we now have only one hour and 20 minutes to debate issues that, as I am sure the Minister will agree, are critical to our national strategic energy needs and to the balance between those needs and democratic accountability at national and local levels. Unlike the over-long process of reconsultation, this short debate demonstrates all speed, but limited accountability. It will therefore be impossible to do justice to the six core energy documents and the accompanying materials. This must be seen instead as a useful staging post to a much longer debate in this place in Government time.

I will begin with some points on the reform of planning in relation to NPSs, in response to the Minister’s opening remarks.

[Martin Horwood]

Before we leave the question of Labour’s legacy, can the hon. Gentleman put a figure on the unfunded liabilities for cleaning up the last generation of nuclear power? Some estimates put it as high as £160 billion. Does that sound accurate to him?

[Huw Irranca-Davies]

That question should probably be put to the Minister. I recognise the hon. Gentleman’s long-held position on nuclear power. I pay credit to the Minister and the Government for pulling the coalition into a semblance of agreement on nuclear—albeit with the odd person against it—which means that we can move forward.

Labour’s Planning Act 2008, which underpins this matter, made the planning system for major infrastructure quicker, more efficient and much more predictable. It laid the conditions for essential new investment in the UK’s infrastructure, including large-scale, low-carbon energy projects. The coalition Government have a responsibility to ensure that their plans, which include scrapping the Infrastructure Planning Commission, do not add delays or remove the clarity and certainty that industry needs to invest in new renewable and nuclear capacity, and low-carbon energy. I give credit to the coalition Government and the Minister, because they have wisely decided, despite the unnecessary delay, to continue with the Labour Government’s national policy statements, with the revisions, rather than wait for wholesale reform of the planning system. That is a welcome recognition of the excellent work of the Labour Ministers who formerly occupied the Minister’s office and of my right hon. Friend the Member for Doncaster North.

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[Huw Irranca-Davies]

If the hon. Gentleman is seeking apologies, may I suggest that he starts by knocking on the door of No. 10? He should ask the Prime Minister why it took so long for him to move from a position of equivocation on nuclear new build to a position of indifference. Following Labour’s leadership, the Prime Minister finally rowed in behind on the need for nuclear new build. The five-year hiatus to which the Minister referred happened, as someone remarked earlier, because there was no appetite in the country or among the body politic to move forward on new nuclear. We showed leadership; certain individuals rowed in behind, but it took them a long time to do so.

For the sake of taxpayers, who are always in the mind of the coalition Government, will the Minister tell us what he knows about the cost of abolishing the IPC? What are the costs of the transition to the new major infrastructure unit within the planning inspectorate? Will there be savings for the taxpayer, and if so, will he or the Government publish those figures after the debate?

In the absence of the much anticipated localism Bill, where in the reformed process does localism rear its lovely head? Will the Minister explain how parliamentary scrutiny of NPSs, which represent the Minister’s opinion on the strategic needs of the UK, allows for localism? If the answer to that question is not in the Government’s response and if we will not be told in January, where is it?

What is the expected lifespan of NPSs? I ask that for a very good reason. The Minister recently spoke with clarity and purpose at a meeting of the World Coal Association, which I was pleased to attend, and made a bold prediction. He said with certainty that next spring, he would draw a line in the sand on his forthcoming decisions on a range of market mechanisms and incentives, including electricity market reforms, carbon floor-pricing, emissions performance standards, capacity payments and so on. The NPSs are part of that line in the sand, giving investors certainty for years ahead, yet they do not stand alone. There are so many “What ifs?”, and the Minister has to take these into account—it is like multi-dimensional chess.

I know that the Government do not particularly like the idea of school sport, as we discovered yesterday, but the Minister has been indulging in his favourite sport with his ministerial colleagues—an extreme sport known as Treasury-wrangling. After some delay, he came out with a partial win, announcing the first stage of commercial CCS—carbon capture and storage—which has delivered, after a slight delay of six months, the first part of Labour’s commitment to CCS. We look forward to him rapidly bringing forward not only that pilot, but the three others, including a pilot on gas CCS. However, may I urge—or should it be “nudge”, in the Government’s new lexicon?—the Minister to get on with that pronto? He has honestly and publicly acknowledged that there is no future for coal in the UK unless that technology is made to work. However, there is also a global imperative, as developing nations rush towards their own coal-powered futures. As such, this Government must avoid any further delay on the complete CCS programme of work.

However, what if CCS on a commercial scale does not work? What if there are delays because of cost, lack of funds or complexity, or because the technology to bring it forward is not available on time, or even not at all? We all want CCS to succeed—we all say that it has to succeed—and we are full of hope that it will, both for UK energy security and abating the global exploitation of fossil fuels. However, a reasonable man—and a reasonable Minister—cannot just assume that that will happen, and must therefore make contingency plans.

[Martin Horwood]

Given that carbon capture and storage technology has been in use on a commercial scale in the United States for some 40 years—albeit not on the same scale as that envisaged for the power stations in question—what does the hon. Gentleman imagine the technical barriers will be?

[Huw Irranca-Davies]

I am glad to say that I am not an engineer, but that is exactly the point behind the large-scale commercial CCS pilots. That is exactly why we are running them, and we all hope that CCS will work. Indeed, I recognise the hon. Gentleman’s confidence that it definitely will work. However, there are some nagging “What ifs?”. What if CCS is not delivered on time, or cannot happen because of the technology, the scale or the investment?

In my short time in this post, I have come to realise that the Minister’s Front-Bench colleague, the hon. Member for Bexhill and Battle (Gregory Barker), positively exudes enthusiasm. Indeed, he leaves a trail of enthusiasm wherever he goes, and for every conceivable energy source. His enthusiasm is demonstrated in photo-ops around the country and around the world, but what if the latest enthusiasm for decentralised energy, which the Minister mentioned, and combined heat and power is not realised, because the electricity grid is not smart enough to make it work locally or because the right incentives are not in place, or for other reasons?

I have a final “What if?” for the Minister: the nuclear “What if?”. He has been categorical in recent days—heroically categorical—that new build nuclear is on schedule for 2017-18. Yet he knows that the Health and Safety Executive will not be issuing final certificates next year on the two designs that this House has taken through in the past few days through justification orders, but will instead issue interim certificates. There is more work to be done on the designs and, equally importantly, the build speed of new nuclear, as evidenced by delays internationally, in Europe, the US and Asia.

The coalition Government have struggled to come to terms with their identity crisis on nuclear—do they love it or hate it, and will they unequivocally support it or sit on the fence—but the Minister deserves some credit for helping his Lib Dem comrades down off the fence. However, the industry still waits for the long-term certainty of market signals that will bring forward the investment at all, let alone on time. So, there are “What ifs?” on nuclear, decentralised energy and CCS, as well as on other things, if only we had the time to discuss them in this short debate.

[Martin Horwood]

rose—

[Huw Irranca-Davies]

I will not take another intervention because there are other people waiting to speak.

Meanwhile, part 3 of the overarching energy policy statement details new electricity projections. It outlines the need for 59 GW of new capacity by 2025, of which as much as 33 GW will be from renewables, thus leaving a significant potential gap, on top of the energy gap that we already acknowledge, if the Minister’s best laid plans do not come to fruition. This raises the question of how the Minister can avoid re-carbonising instead of de-carbonising the energy sector if an unabated dash for expensive imported gas rushes in to fill the looming energy gap. The dash for gas and the energy gap could be made far worse if any of the “what ifs” were to happen. The Minister has honestly and openly accepted that gas will form part of our journey to a de-carbonised future, but how will he ensure that we do not stumble into a new generation of unabated gas use by default?

As a former Minister, I recognise the problem of dealing with highly complex issues and scenario planning. I therefore ask the Minister to share with the House his scenario planning and risk analysis for the energy market, before we come to debate the national policy statements in detail on the Floor of the House in January. If there is to be real democratic accountability, the House needs to see the complete assumptions on which the Minister is making his case for the NPSs and for the energy market underpinning them. We assume that these have been done. If nuclear, CCS, decentralised energy or a whole host of other variables were delayed or undeliverable, what is plan B, plan C or plan D, and would any of them allow us still to reach our aims on energy security and low carbon energy?

In that regard, what is the Minister’s response to the recommendation of the Committee on Climate Change, in response to the proposals for national policy statements on energy, that the Government act on the Committee’s proposal that the widely accepted concept of fully de-carbonising the electricity sector by 2030 should be made explicit in Government policy and NPSs? It has been widely accepted anyway, and it would drive the achievement of the 2050 targets on greenhouse gases. The Committee asserts that making explicit that commitment would drive forward decision making on new generating capacity and give certainty to investors regarding the Government’s overarching energy policy.