Publishing its response to the Government’s energy review, the CBI said companies would seriously consider investing in a new nuclear build programme, without the need for Government subsidy, if the right long-term framework was in place to support low carbon energy sources.
This framework would also ensure that clean coal technology, and tidal and other renewable energy sources, could compete when investment decisions are taken.
But the CBI says the current lack of clarity about the mechanisms and policies for pricing carbon after 2012 is holding back investors from committing the large sums necessary – estimated at up to £50 billion – to construct new low-emission generating plants.
Fears over the feasibility of new nuclear power plants are often “more perceived than real” according to the CBI submission, and neither the waste nor the cost issue are insurmountable barriers.
CBI Director-General Sir Digby Jones said:
“We had a harsh lesson this winter that the UK desperately needs secure and affordable energy. The growing gap between UK and overseas energy costs, coupled with concerns over security of supply, is a problem for every household and business in Britain. Instead of irresponsible scaremongering by anti-nuclear lobby groups, what the country badly needs is a mature, factually based debate.
“We urgently need new investment in a whole range of low carbon energy sources, alongside improved energy efficiency, to help safeguard security of supply and cut emissions. Renewables are part of the answer but technologies such as nuclear and clean coal need to be able to compete on their own low carbon merits.
“Having a price for carbon is the most effective, technology neutral way to do this. Investment in these power sources won’t be unlocked until the Government clarifies how it expects a carbon price to be determined past 2012. Any meaningful Government announcement on energy policy must have this at its core.
“Nuclear power is potentially only one element to meeting our energy needs, and like other options should only be taken forward where it makes commercial sense to do so. But if the Government delivers, among other things, greater clarity about carbon in the summer, we could well see the power industry commit major sums to new nuclear build. This will not detract from investment in sustainable energy sources; both nuclear and renewable energy can have a place in solving Britain’s energy needs in the 21st century.”
In its response to the DTI-led Energy Review the CBI specifically calls on the Government to clarify whether the EU Emissions Trading Scheme (ETS) will remain as the core measure for pricing carbon emissions beyond 2012 – as both the Kyoto period and ETS phase II will have come to an end. And if so, the CBI wants the Government to:
* set out how it aims to build consensus at EU level of the ETS rules beyond 2012;
* set realistic intermediate milestones towards the Government’s own 2050 target of a 60 per cent reduction in UK carbon emissions; and
* consider setting carbon emission ‘National Allocation Plans’ for 15 or 20 years, rather than the current five.
The CBI submission dismisses recent scaremongering about the feasibility of nuclear power as part of the UK’s future energy mix. It makes clear that a new nuclear programme would not significantly add to the problem of nuclear waste, with more efficient power stations only adding only about 10 per cent to the existing volume already requiring disposal. And it argues that nuclear’s historically high cost is explained by factors which could be avoided by a well-designed new-build programme.
Nuclear power also has several clear advantages, the CBI says. It is the only low carbon technology proven to deliver a consistent supply of electricity on a large scale. And it can contribute strongly to more secure UK energy supplies, given the substantial uranium reserves available in politically stable countries and the ability to store significant uranium stocks. The operating costs of nuclear power are far more stable than for fossil fuels, because fuel only accounts for 5-10 per cent of generating costs.
Sir Digby concluded with a warning about the UK’s laborious planning system. He said:
“A planning process designed in the middle of the last century is hampering the ability of business to deliver the energy projects needed today and in the future. From renewable energy schemes to desperately needed gas storage facilities, the system is failing to give proper priority to energy projects.
“With 80 per cent of the anticipated expansion of gas storage capacity still bound up in the planning system and subject to the whim of inconsistent planning authorities, Government must not take its eye off the ball. We got away with it this winter but may not be so lucky next time. An energy policy based on crossing fingers and the use of the prayer mat is not acceptable for the fifth biggest economy on Earth.”
SOURCE: CBI press release.