Christopher Pincher is MP for Tamworth. Follow Chris on Twitter.
Britain faces an energy crisis. It is not the same as a political or economic crisis. It does not normally make the front pages (unless you read the FT) or lead on the Six o’clock news. It may only get a cursory look in on the Today Programme. Our energy crisis is creeping and insidious. And that is what makes it so dangerous.
Last week Centrica signalled that it may withdraw from its joint venture to build a new fleet of nuclear power stations. The week before, RWE and E.ON announced that they are not proceeding with their plans to rebuild the Wylfa station on Anglesey. With all but one of our nuclear stations due to shut down by 2023, the long term future of the nuclear industry in Britain is now in doubt.
If that is not a wake-up call to government, then set alongside the closure of up to one third of our coal-fired stations by 2015 in order to meet our carbon reduction targets, and the failure of CCS to take off at Longannet, this latest news should set alarm bells ringing in Whitehall. There is already a growing recognition that on-shore wind does not provide a free passport to clean energy. Whereas a nuclear power station generates 2 kilowatts per square meter a wind turbine churns out just 0.002 kilowatts per square meter. Maths says it all. Wind is unpredictable, unpopular and subsidises foreign producers. Moreover there is a general acceptance that all other renewable technologies are, at the moment, immature and under-scale. So unless we want to rely almost exclusively on gas in both the medium and the long term what must the mandarins, and their masters, do next?
Fundamentally, nuclear investors must be given certainty. Certainty that an Energy Bill will be a centre-piece of the Queen’s Speech and will be introduced quickly; certainty the contracts issued for clean energy like nuclear will be long term; certainty that those contracts will offer a reasonable rate of return; certainty that the post-Fukushima security review will not lead to unsustainable construction costs in a country where the industry has one of the best safety records in the world.
Nuclear power stations cost £6billion to build and their construction takes time and a great deal of highly skilled labour. So it is understandable that the industry and its pension fund investors look to the government, especially to the Treasury, for encouragement. They will want to know that any reasonable profit they make following record investment will not be clawed back in unreasonable taxes or swallowed up by unscripted changes in regulations.
The Government so far has a commendable record in supporting nuclear and the industry has a knowledgeable, highly articulate and sympathetic minister in Charles Hendry. The commitment ministers have shown to nuclear through their National Policy Statement must now be reaffirmed in a swift and supportive Energy Bill. The new Secretary of State, Ed Davey, must win the battle of priorities with the government business managers in the race for the Statute Book. He must persuade the Treasury that long term contracts with reasonable returns are the best guarantees of private money flowing into a public service. And he must not be deflected by the cries of those who claim nuclear is dangerous and that wind and solar are the ways forward. Nuclear needs his firm backing.