I rise to speak to my proposals and give notice that I will press amendment 24 to a Division.
I am pleased to follow the hon. Member for Cheltenham (Martin Horwood), who made a compelling case, demonstrating that, even if the word “subsidy” does not appear in the document, we are talking about a public subsidy for nuclear, which goes against the coalition agreement. The bulk of my proposals on new nuclear simply seek to return us to the coalition agreement, which said that new nuclear should receive no public subsidy. Many people are hugely disappointed that Ministers are ditching their commitment so shamelessly.
A Government who genuinely want to tackle high electricity bills would not sign taxpayers and bill payers up to a 35 or 40-year contract—we do not know how long the contract will be for, but that is the ballpark figure out there. The contract would also involve paying around twice the current market price for power. As has been said, that money will line the coffers of French nuclear corporations.
If we were serious about tackling fuel poverty, we would not be going down that route, yet that is precisely what the complex mechanisms for providing financial support for nuclear in the Bill do. We should add the liability cap, underwriting, and indirect subsidies such as for decommissioning and for the unsolved waste problem. Essentially, we are writing a blank cheque for an expensive, inflexible old technology that we cannot afford and simply do not need.
A Government who were serious about tackling fuel poverty and high energy costs would instead pursue more effective ways of meeting our energy needs and decarbonising our power sector, namely through renewable energy, energy efficiency, demand reduction, and demand-side measures such as energy storage, genuinely smart grids and interconnectors.
The UK has the potential to be a massive industrial leader in renewables and efficiency—solutions that could deliver huge cost reductions and a substantial boost to the UK economic recovery, manufacturing and jobs, yet the Bill goes in the opposite direction. Moreover, the secrecy of the Department of Energy and Climate Change negotiations with EDF further undermines confidence in the credibility of the Government’s claims that the deal represents value for money for consumers.
Even if hon. Members are happy for the coalition to break its promise of no public subsidy for nuclear, one would hope that they had some interest in the Minister’s claim that any deal reached would be fair, affordable and value for money. Nuclear costs more than the alternatives and does not represent value for money. We have the opportunity to test that via the expert panel, or by giving the National Audit Office a role in ascertaining value for money, which one of my amendments would do, but Ministers do not look favourably on those proposals.
The truth is that nuclear is a mature technology that has enjoyed nearly 60 years of support. Despite that, the price tag keeps going up. The hon. Member for Cheltenham mentioned the price of nuclear in Finland and France. We should compare that with the fact that the costs of renewables are falling across the board. Last month, Citi Investment Research and Analysis highlighted that, in many cases, renewables are at cost parity with established forms of electricity generation. Recent analysis by Bloomberg New Energy Finance found that the levelised cost of onshore wind had fallen dramatically in recent years, that the best onshore wind farms in the world currently produce power as economically as coal, gas and nuclear generators, and that the average onshore wind farm will reach grid parity by 2016.
That is the point of my first three proposals. They are not anti-nuclear; they would simply ensure that Minister’s warm words on cost-effectiveness and value for money for bill payers were kept. They would also introduce transparency to a shockingly opaque process. If nuclear power is as cost-effective as we are told, I can see no reason why hon. Members would not support my proposals
to ensure it. Amendment 24, which has cross-party support, would simply ensure that payments under a CFD for nuclear electricity are not greater than payments for any form of renewable generation, in terms of price per megawatt-hour and taking into account the length of the contract provided.
Amendments 26 and 27 deal with transparency and parliamentary scrutiny of investment contracts and CFDs. They are essential if the public and the House are to have any hope of deciding for themselves whether the terms provide anywhere near value for money compared with alternatives. They would require the Secretary of State to ask the NAO and Parliament to examine whether the contracts represent value for money, in line with the motion debated in a Backbench Business Committee debate on 7 February, and a letter sent recently to the NAO by a cross-party group of MPs and academics.
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Amendments 23 and 25 are more far-reaching. They would in effect rule out new nuclear altogether. Having examined the evidence, I am increasingly convinced that we should reject new nuclear for economic and environmental reasons. There are better, cheaper and faster ways to achieve a zero-carbon power sector by 2030 than going down the nuclear route. Moreover, many experts are concerned that Government support for new nuclear power would mean significantly less investment in renewables and energy efficiency. To do the right thing for our economy, for constituents struggling with fuel bills, and for the environment, amendment 23 would rule out payments for new nuclear through CFD mechanisms. Amendment 25 would rule out any public underwriting of construction costs or other public support for new nuclear through investment contracts.
I will be brief because other hon. Members wish to speak. Amendment 29 would rule out handouts for new fossil fuel plants under the capacity mechanism, which means that capacity payments would go to non-fossil fuel ways of ensuring that power supply met demand. The big six energy suppliers are pressing the Government to support gas-fired power, and urging Ministers to go faster on their capacity market plan to encourage investment in new gas-fired power stations, but a dash for gas, as envisaged by the gas strategy, would be completely incompatible with the nation’s legally binding carbon emissions targets. According to the Committee on Climate Change, that should be plan Z. Perpetuating our reliance on expensive and imported gas means perpetuating high fuel bills. Nor is that the golden solution to energy security that lobbyists would like us to believe it is. Alternative solutions, including the construction and use of interconnector routes, electricity storage, and temporarily shifting or reducing demand during peak periods, should be considered instead. Such solutions should be prioritised.
Finally, anyone who is willing to do the maths on climate change should look at how much more carbon can be safely emitted into the atmosphere and compare it with how much carbon is stored in fossil fuel reserves. For the UK to fulfil its repeated commitment to keep climate change below 2°, around 80% of known fossil fuel reserves must stay in the ground. In the context of that unburnable carbon, using the capacity mechanism to encourage a new dash for gas is both dangerous and irresponsible.