Blair warned of 'energy gap'

Tony Blair was warned about a possible energy "gap" by senior MPs last night, and urged to rethink his plans for a new generation of nuclear power stations to tackle the country's predicted energy crisis.

With almost a quarter of the country's current electricity-generating capacity to be decommissioned by 2016, the Commons Environmental Audit Committee said that there was not time to wait for a new generation of nuclear reactors, which, if built, may not be generating at full capacity until 2030. The committee said that Britain could face the prospect of electricity black-outs within a decade unless there was urgent investment in new gas-fired power stations.

I went to read the report from the Commons Environmental Audit Committee, which can be found here and which states, in its executive summary:

Over the next ten years, nuclear power cannot contribute either to the need for more generating capacity or to carbon reductions as it simply could not be built in time. The potential generating gap during this period will need to be filled--largely by an extensive programme of new gas-fired power stations, supplemented by a significant growth in renewables. Contrary to popular belief, a further 'dash for gas' would result in significant carbon savings. Moreover, it is not clear how much effect the replacement of older coal and nuclear plant by gas will have on the security of total electricity supplies, as we will in any case become highly dependent on foreign imports of fossil fuels for our total energy requirements--including over twice as much natural gas for industrial and domestic uses as we use for electricity generation.

So they do note (i) that renewables should be tapped as well and (ii) that gas will cause security of supply issues.

More interestingly:

 All lower-carbon generating technologies are more expensive than coal and gas, and will require a long-term funding framework in order to reduce investment risk and ensure that the necessary investment takes place. The current highly liberalised UK electricity market structure is too short term and fails to provide such a framework. Indeed, it is not clear whether it will even ensure that enough investment takes place to keep the lights on by 2016.

This is exactly the points I made in other articles:

• a liberalised energy market structurally encourages investment in coal-fired and gas-fired plants, whose initial investment costs are lower;

• there are not enough incentives/constraints for even gas-fired plants to be built in sufficient numbers today, thus the fear of brownouts - which can only be compounded by gas shortages;

But at least they are looking at things in the right way.

A Government decision to support a major programme of nuclear new build must also take account of the impacts on investment in other areas--notably energy efficiency, renewables, carbon capture and storage, and the development of distributed generation systems. The potential of these various technologies over the next 20 to 30 years is immense, and any public subsidies for nuclear must be weighed against the substantial progress towards reducing carbon emissions and ensuring a greater degree of security of supply which these alternatives could achieve with similar subsidies. However, as all forms of lower-carbon generation will require financial support, the Government should accept that the shift to a sustainable energy strategy cannot be based--at least in the medium term--on maintaining low energy prices.

If the Energy Review is focussed mainly on electricity generation and, in particular, a decision on nuclear, then it is unclear what the nature of such a decision could be and the Secretary of State himself was unable to explain this. Indeed, the Government has always argued that its role is not to prescribe the fuel mix, and it has invested much effort in developing a fully liberalised market which will determine for itself such investment decisions. The frequent statements that it must make a decision on energy, and specifically on nuclear, fundamentally conflict with such an approach and would therefore represent a major U-turn in energy policy. Moreover, if the Government does indeed come to a decision on nuclear, it is unclear why it should not also come to a decision on off-shore wind, marine, or micro-CHP - let alone the array of possible measures to support energy efficiency. Yet we never hear Government ministers talking in such terms.