National Policy Statements (Energy)

Paul Flynn Excerpts

Monday 18th July 2011 Commons Chamber

[Charles Hendry]

This debate is intended to fulfil our commitment to parliamentary approval of the national policy statements. The motion constitutes a further important milestone in the Government’s programme to secure affordable low carbon energy which will make the UK a truly attractive market for investors in energy infrastructure.

Let me briefly explain the background to the national policy statements and the purpose of each one. I shall, of course, be happy to take interventions as I go through them. Members may find it convenient to concentrate on the subjects individually, but I am mindful of the number who wish to speak in the debate.

The national policy statements do not contain new energy policy or change the standard for consenting projects, but they set out clearly and for the first time the national policy that must be considered before the granting of consent to infrastructure projects that are examined by the Infrastructure Planning Commission and, when the Localism Bill has been enacted, by its successor. The policy statements are critical to the new fast-track planning system that will encourage developers to embark on energy projects without facing unnecessary hold-ups. It will also ensure that local people can have their say about how their communities develop, and that decisions are made in an accountable way by elected Ministers.

We urgently need new electricity-generating infrastructure to replace our ageing power stations. If we are to meet our ambitious carbon targets, we must electrify much of our industry, heating and transport sectors. That could mean doubling our electricity generation, with about 60 GW of new capacity coming on line by 2025. Over the next 10 years, a quarter of our generating capacity will close as old or more polluting plants close. As the reserve margin of spare generating capacity falls, the risk of interruptions to our energy supply rises.

More than half the new capacity that we urgently need should be met with renewable energy, and a significant proportion of the remaining capacity should be met with other low-carbon technologies. That is a real challenge. Business and industry tell us that investment in infrastructure will help them to create growth and jobs. By setting out the need for new energy infrastructure, including a mixed portfolio of electricity generation, the national policy statements will unlock that investment and provide market certainty.

As Members will know, having considered the Energy and Climate Change Committee’s report and responses to the first public consultation in 2010, we made changes to the draft national policy statements and accompanying documents. Given the nature of the changes that we made, we decided to consult on the revised draft national policy statements between October 2010 and January 2011. Alongside our public consultation was parliamentary scrutiny of the revised draft statements. That work was undertaken by the Energy and Climate Change Committee, which considered the changes from the drafts that were consulted on by the previous Administration. The Committee then published a report, setting out 18 recommendations on the revised drafts.

We intend the national policy statements to be approved if that is the will of Parliament. My right hon. Friend the Secretary of State will designate them as quickly as is reasonably practicable. It has been suggested that designation should have been delayed until after we had reviewed them in the light of the electricity market reform White Paper which was published last week, but we do not think that delay is either necessary or desirable, as the policies have been developed in parallel to ensure they are consistent.

[Paul Flynn (Newport West) (Lab)]

Does the Minister consider it wise to omit any reassessment of the costs of nuclear power, given that many countries have abandoned their nuclear power plans in the wake of Fukushima? Has he thought about a possible increase in costs, especially to guard against a natural disaster or a terrorist attack?

[Charles Hendry]

The hon. Gentleman, who understands these issues, will be well aware that the national policy statements concern not the costs of different technologies, but the planning consents for them. If companies decide that the costs have risen and are not affordable, and that they will not achieve a return, they will not go ahead with the investment, but that is not the subject of this debate. However, we have conducted a thorough assessment of the lessons that need to be learned after Fukushima to determine whether any adaptation is needed in the policy statements. That is why we have reflected further, and have taken more time to consider them.

The overarching national policy statement, EN-1, sets out the need for each of the different energy infrastructure technologies. It makes it clear that we need a diverse mix to provide affordable, clean energy. It explains the Government’s policy on clean coal with carbon capture and storage and the need for gas and biomass electricity generation plants to be “carbon capture ready”, and sets out the part that renewables and new nuclear power stations will play in meeting our emissions reductions targets.

--- Later in debate ---

[Huw Irranca-Davies (Ogmore) (Lab)]

I am pleased we are debating the national policy statements after we discussed them in draft form in December. Our debate then was short and our debate today will be even shorter—I hope the Minister joins me in deeply regretting that fact. We cannot do justice to the number of national policy statements and to the Members present in the Chamber, who will, I suspect, have roughly an hour and a half for debate once I have concluded my remarks, and that is terrible.

The final national policy statements, if they are approved by the House, will be critical in achieving a green, affordable, secure and diverse energy future. The building blocks for that future were, as the Minister suggested, shaped under Labour and we want them to be put in place without any further delay. Much has happened since our debate in December. We watched the terrible incidents in Fukushima unfold and, rightly, across the globe, across Europe and across the UK, we sought to see what lessons we needed to learn. The Minister is right to say that in the UK we did not rush to judge but carefully examined our sites, a process that is ongoing under Dr Weightman, while all countries across the EU carried out their own stress tests. Understandably, and with our support, the Minister delayed the NPSs, including the one on nuclear, to allow proper consideration to be given to those events.

We agree firmly with the conclusions reached in EN-1 and EN-6: nuclear, as a low-carbon proven technology, could play a key role in diversifying and decarbonising our energy and in meeting our climate change objectives. It is a proven low-carbon technology that can be deployed on a large scale and could complement carbon capture and storage, if it is successful, renewables and fossil fuels as part of the mix. The eight identified sites in EN-6 are potentially—I stress potentially—capable of development by 2025. Many in the green movement, although not all of them, now recognise these and other benefits of nuclear generation, although those who have long been opposed to the technology should be respected for their views, too.

[Paul Flynn]

My hon. Friend will know that there are plans in the document to build new nuclear power stations at Oldbury and Hinkley Point. If those power stations are built, large areas of Wales will fall within the diameter that has been set for the no-go area at Fukushima. Should not the people of Wales be fully consulted on those plans, in the interest of localism, before they go ahead?

[Huw Irranca-Davies]

I would expect the people of Wales, the Welsh Assembly Government and the National Assembly for Wales to have a full input and I am sure that the Minister, when he concludes, will be able to confirm that that is exactly what would happen. My hon. Friend’s point is very well made: such a decision cannot be made unilaterally and there has to be input from across the regions, too.

I said that those who doubt the technology should be respected, and not long ago the Secretary of State was one of those doubters. Confronted with the evidence and, I guess, with office, he has changed his tune. I must tell the Minister that the manic contortions of the Secretary of State over the financial support for nuclear have surpassed those of a Chinese acrobat in recent weeks. Last week, during the electricity market reform statement, when challenged by his party colleagues, he laid out three financial mechanisms that could support the development of new nuclear facilities alongside other low-carbon technologies. He did that to explain to the House that there was no subsidy for nuclear.

As the Secretary of State has come out of the closet on nuclear, he ought to stop trying to hide his embarrassment. The expansion of low-carbon technologies does not come free and they will all—onshore and offshore wind, biomass, future wave and tidal, CCS and nuclear—require some support and market intervention to drive in the levels of capital required. The medium to long-term protection that that gives through the diversity of energy security is in the interests of UK plc and we support it.

We do not, however, support sleight of hand or the appearance of double dealing. The carbon floor price announced in the recent Budget is a pretty poor way of generating the new low-carbon investment that the documents envisage. It was, in fact, a back-door windfall for existing nuclear and renewables to the tune of £1 billion and a far from stealthy Treasury tax grab of £740 million in 2013-14 rising to £1.4 billion in 2015-16. That decision shook confidence in DECC’s grasp of electricity market reform, shocked some of the big six utilities on which the Minister explicitly depends for the level of new investment required and it hammered the energy-intensive users, risking exports of jobs abroad along with carbon leakage. It gives carbon tax a bad name and shows who is in charge of DECC policy: the Chancellor.

On EN-6, although it is good to see the groundwork physically being dug for the first of the new generation of stations at Hinkley Point, will the Minister tell us when he anticipates that the first such station will be completed and online? Can he give us an indication of the dates for bringing the others online? Will he please not say that it is entirely up to the market, as that would suggest that he has not met any nuclear operators over the past year? He has, as I have, and I am sure he will have some idea of when that will happen.