"With permission, Mr. Speaker, I wish to make a statement on UK energy policy. Our strategy, as set out in our energy White Paper last year, is designed to achieve two objectives—first, to ensure that the UK has access to secure energy supplies and, secondly and together with other countries, to tackle the global challenge of climate change.
"The competition for energy resources is increasing. Access to supplies across the world is becoming increasingly politicised. As a result, the cost of energy is rising. And few who have been exposed to the science of climate change now doubt the immediacy of the threat to our planet. As the UK shifts from being a net energy exporter to a net importer, our ability to source a diverse range of secure, competitively priced energy supplies will be one of the most important challenges that we face as a country—affecting our economy, our environment and, ultimately, our national security.
"Our strategy to manage these risks is based on three key elements, which are increasing energy efficiency and helping people and businesses make a real contribution to solving the challenges we face; using the widest range of cleaner energy sources; and ensuring that the UK is as energy independent of any one supplier, country or technology as possible. Let me touch on each of these.
"We have already set out the measures that we are taking on energy efficiency. These could result in savings of between 25 tonnes and 42 million tonnes of CO2 by 2020. We will keep these measures under review, going further and faster wherever we can. We are also planning for the amount of UK electricity supplied from renewable sources to treble by 2015. The Energy Bill, published today, will strengthen the renewables obligation and help to speed up the deployment of an even greater share of energy from renewable sources. Offshore wind, wave and tidal power will all gain from that new approach.
"The Government are also committed to funding one of the world’s first commercial-scale demonstrations of carbon capture and storage. CCS is a technology that has the potential to make a critical contribution to tackling climate change. Measures in the Energy Bill will enable that to move forward.
"If we are to be as energy independent as possible, it is also vital, first, that we continue to press the case for energy market liberalisation in the EU, and secondly, that we look to maximise economic domestic energy production. Finally, we must ensure that energy companies have the widest range of options open to them when it comes to investment in new low-carbon power generation.
"Over the next two decades, we will need to replace a third of the UK’s generating capacity, and by 2050 our electricity will need to be largely low-carbon, so we must be clear about the potential role of nuclear power.
"In October, we concluded a full and extensive consultation across the UK, seeking people’s views on whether new nuclear power should play a continuing role in providing Britain with the energy that it needs. Today I am publishing the Government’s response in the form of a White Paper alongside our analysis of the comments that we received.
"I can confirm that, having carefully considered the responses, the Government believe that new nuclear power stations should have a role to play in this country’s future energy mix alongside other low-carbon sources.
"The Government’s view is that it is in the public interest to allow energy companies the option of investing in new nuclear power stations and that we should therefore take the active steps necessary to facilitate that.
"Nuclear power has provided us with safe and secure supplies of electricity for more than half a century.
"It is one of the few proven low-carbon technologies that can provide base load electricity. Nuclear power currently provides us with around 19% of our electricity requirements.
"Nuclear power will help us to meet our twin energy challenges: ensuring secure supplies and tackling climate change. First, a continuing role for nuclear power will contribute to the diversity of our energy supplies. Secondly, it will help us meet our emissions reduction targets, as every new nuclear power station will save the same amount of carbon emissions as are generated by about 1 million households. The entire lifecycle emissions from nuclear power—from uranium mining through to waste management—are only between 2 and 6 per cent. of those from gas for every unit of electricity generated. Thirdly, nuclear power will reduce the costs of meeting our energy goals. Analysis of future gas and carbon price scenarios shows that nuclear is affordable and provides one of the cheapest electricity options available to reduce our carbon emissions.
"Our energy suppliers recognise that, and in a world of carbon markets and high fossil fuel prices, they recognise that nuclear power makes commercial sense. For those reasons, I do not intend to set some artificial cap on the proportion of electricity that the UK should be able to generate either from nuclear power or from any other source of low-carbon energy. That would not be consistent with our long-term national interest. Given that nuclear power is a tried and tested, safe and secure form of low-carbon technology, it would be wrong in principle to rule it out now from playing any role in the UK’s energy future.
However, it is right that we should work closely with the regulators to explore ways of enhancing their efficiency in dealing with new nuclear power stations. I am keen, therefore, to ensure that the UK has the most effective regulatory regime in the world. I believe that it could be a critical differentiator for the UK in securing access to international investment in new nuclear facilities. I have asked Dr. Tim Stone to take that work forward, alongside his continuing work on the financial arrangements regarding new nuclear power stations.
"During the consultation, many argued that a permanent solution for dealing with existing waste must be developed before new waste is created. We have considered the evidence fully, and our conclusion is that geological disposal is both technically possible and the right approach for managing existing and new higher-activity waste. It will be many years, of course, before a disposal facility is built, but we are satisfied that interim storage will hold waste from existing and any new power stations safely and securely for as long as is necessary. In addition, before development consents for new nuclear power stations are granted, the Government will need to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste that those station will produce.
"The third concern relates to cost. It will be for energy companies, not the Government, to fund, develop and build new nuclear power stations. That will include meeting the full costs of decommissioning and each operator’s full share of the waste management costs. The Bill includes provisions to ensure that, and transparency in the operation of the arrangements will be essential.
"So, in order to increase public and industry confidence, we will establish a new, independent body to advise on the financial arrangements to cover operators’ waste and decommissioning costs. The advice of that new body will be made public. The nuclear White Paper published today sets out a clear timetable for action to enable the building of the first new nuclear power station, which I hope will be completed well before 2020. The Planning Bill will improve the speed and efficiency of the planning system for nationally significant infrastructure, including new nuclear power stations, while giving local people a greater opportunity to have their say. A strategic siting assessment, to be completed by 2009, will help identify the most suitable sites for new build. We expect that applications will focus on areas in the vicinity of existing nuclear facilities. Work is already under way on assessing the safety of the new generation of reactors.
"Finally, we must work with our EU partners to strengthen the EU emissions trading scheme to give potential investors confidence in a continuing carbon market. We look forward to the Commission’s proposals later this month. I remain firmly of the view that there should and will be room for all forms of low-carbon power technologies to play a role in helping the UK meet its energy objectives in the future. Nuclear power can be only one aspect of our energy mix as, on its own, it cannot resolve all the challenges that we face. Meeting those challenges requires the full implementation of our energy and climate change strategy, with nuclear taking its place alongside other low-carbon technologies.
"The Energy Bill will ensure that we have a legislative framework enabling all of those technologies to make a positive contribution to our future requirements for cleaner and more secure energy.
Giving the go-ahead today that new nuclear power should play a role in providing the UK with clean, secure and affordable energy is in our country’s vital long-term interest. I therefore invite energy companies today to bring forward plans to build and operate new nuclear power stations. Set against the challenges of climate change and security of supply, the evidence in support of new nuclear power stations is compelling. We should positively embrace the opportunity of delivering this important part of our energy policy.
"I commend this statement to the House."