Nuclear Energy

Thérèse Coffey Excerpts

Tuesday 22nd June 2010 Westminster Hall

[Mr Mike Weir (Angus) (SNP)]

I am pleased to make a brief contribution to the debate. I congratulate the hon. Member for Glasgow North West (John Robertson) on securing the debate. He is, of course, a well known and passionate advocate of nuclear power, as is the Minister—these debates often seem like a meeting of old friends. While I respect their positions, it will not come as a great surprise to either of them that I take a somewhat different position. The Scottish National party remains opposed to new nuclear power stations. We believe that Scotland neither needs nor wants such stations, and there is a clear majority in the Scottish Parliament against them. This debate centres on the new Westminster Government’s policy, and I do not want to debate the pros and cons of nuclear power as such, but will focus on what their policy is.

Before the election, the Conservatives made no secret of their support for nuclear power, and their manifesto clearly supported new nuclear power stations

“provided they receive no public subsidy”.

The Liberal Democrats clearly stated that they

“reject a new generation of nuclear power stations”.

However, the coalition agreement states unequivocally:

“We will implement a process allowing the Liberal Democrats to maintain their opposition to nuclear power while permitting the Government to bring forward the National Planning Statement for ratification by Parliament so that new nuclear construction becomes possible”—

a fudge if ever there was one. It gets worse, in that the Liberal Democrats can speak against it but are committed to abstain on any vote. That seems to lack principle completely. The present Liberal Democrat Secretary of State for Energy and Climate Change, the right hon. Member for Eastleigh (Chris Huhne), who once described nuclear power as a “failed technology”, has stated that it is very clear that there will be a new generation of nuclear power stations. No doubt the Conservative party are relying on a temporary coalition with Labour to ensure the measure goes through.

We should not be unduly surprised; the Liberal Democrats were against nuclear weapons, but now appear to be in favour as long as they cost less than Trident. The position appears to be that there will be new nuclear power stations provided the private sector meets all the costs, but how will that work? In November last year, Citigroup published a fascinating report entitled “New Nuclear—the Economics Say No”, in which it describes the “three Corporate Killers” and says:

“Three of the risks faced by developers—Construction, Power Price, and Operational—are so large and variable that individually they could each bring even the largest utility company to its knees financially. This makes new nuclear a unique investment proposition for utility companies.”

I presume it does not mean that in a good way. It makes the point that

“No where else in the world…have nuclear power stations been built on this basis”,

and concludes:

“Nor will they be built in the UK—We see little if any prospect that new nuclear stations will be built in the UK by the private sector unless developers can lay off substantial elements of the three major risks. Financing guarantees, minimum power prices, and/or government-backed power off-take agreements may all be needed if stations are to be built.”

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Has the hon. Gentleman not seen the comments by the head of EDF, Vincent de Rivaz, about how his organisation welcomes this new development and how it will continue to put forward its programmes despite there being no subsidy from the public sector? Such comments will be very pleasing to my constituents because it should mean that Sizewell will get built.

[Mr Weir]

I have heard Mr de Rivaz’s comments, but he seems to be the only one to make such comments. Different comments have been made by the head of E.ON UK, who is also interested in new nuclear power stations.

Let me return to what Citigroup was saying. I should add that the report was written before the oil spill in the gulf of Mexico, where BP has found that legal maximum liabilities are meaningless. Already, it has paid out more than the legal maximum under United States federal law and is facing many billions more in compensation payments. Just what would the cost be to any operator of a nuclear power station should—God forbid—there be a serious incident? The fact that there is a serious potential liability should be a red light to utility companies, and all those who invest in them. It is also worth noting that the present Secretary of State has already reported a black hole in the budget of his Department to meet the cost of decommissioning current stations and of containment of our existing stock of nuclear waste. Given that situation, how will the Government ensure that the new nuclear power stations will be built without public subsidy, especially as that has never been done anywhere in the world?

The coalition agreement gives us a clue when it states:

“We will introduce a floor price for carbon, and make efforts to persuade the EU to move towards a full auctioning of ETS permits.”

It seems that that is the answer as to how nuclear power is to be given a subsidy. Nuclear is to be made commercial by introducing a floor price for carbon. In a recent speech to the Nuclear Industry Forum, the Minister said:

“The carbon price is not a subsidy for new nuclear, it is to drive forward low carbon investment.”

An argument can be made that that is the case, but it is also undoubtedly true that new nuclear will be the main beneficiary of such a policy. It will have the effect of driving up, perhaps very substantially, the price of energy produced by fossil fuels, thus making nuclear much more attractive, which is why the nuclear industry is the cheerleader for this particular policy. In his speech, the hon. Member for Glasgow North West said that without nuclear power, we faced the prospect of very high energy prices, but if this policy is pursued, we may face very high electricity prices across the board with or without nuclear power.

In effect, the introduction of a floor price would be fixing the market, which I thought would have been anathema to free market Conservatives. It will no doubt be argued that that is a move that will help all other low carbon emitters, and that there are already many subsidies on different kinds of renewables. That point was also made by the hon. Member for Glasgow North West. Some of that is true, but other forms of renewables are new technologies that are receiving help to get them to a take-off postion in the market. The previous Government’s proposals to stagger renewables obligation certificates recognised that some of them had almost reached that position.

Nuclear is not a new technology; it is an old technology that has already had a shedload of money from the taxpayers. I am old enough to remember when it was said that nuclear power would be too cheap to meter. That did not happen, and we have seen the vast amount that will be needed to deal with the legacy of waste, now and far into the future.

It seems, therefore, that rather than making private investors take the risks, it is again the taxpayer who will do so, and I would be interested to know whether the Minister can give us more details on how the policy of the floor of the carbon price is to work. For example, when and how is it to be introduced? I noticed that The Independent suggested that it will be introduced when new nuclear power stations would be up and running in 2025. Will the policy apply only within the UK if he is unable to persuade the EU to adopt such a position, and how will that work with the competition laws within the EU?

Finally, I ask the Minister to confirm that the coalition Government remain signed up to the respect agenda with the Scottish Government that the Prime Minister talked so much about, and that there will be no attempt to amend the powers of the Scottish Parliament in that area so that we might continue to be nuclear-free.

As I stated at the outset, the SNP remains opposed to new nuclear power stations. We believe that Scotland has great potential to be the green powerhouse of Europe and that the determination of all three Unionist parties to pursue new nuclear power stations is an horrendous mistake that will cost the taxpayers dearly in the future.