21 July 2005 NEW INQUIRY

21 July 2005 NEW INQUIRY

Keeping the Lights on:  Nuclear, Renewables, and Climate Change

The Environmental Audit Committee is today launching an inquiry to examine the options for investment in meeting future requirements for new electricity generating capacity.  The inquiry will focus on the relative costs of different technologies, including nuclear, the various forms of renewables (wind, wave, tidal, PV), and microgeneration, and the contributions which they can make.  It will consider the scale of the investment required and the extent to which such investment would help achieve the objectives set out in the Energy White Paper of promoting a step-change in energy efficiency and the deployment of renewables.   It will also examine the role these different technologies might play in reducing carbon emissions and contributing to security of supply.

The Energy White Paper, published in March 2003, set out a vision in which renewables and energy efficiency would play a key role in UK energy policy and plug the gap left by the decline of current nuclear and coal generating capacity.  It saw no need for promoting a new generation of nuclear power stations although it suggested that technical expertise in this area should be maintained.  Over the last year, however, there has been renewed discussion of the nuclear option, prompted by the recent poor performance of the UK in terms of carbon emissions and by a widespread perception that parts of Government are strongly in favour of nuclear new build.  There is also some concern that uncertainty regarding the Government's intentions in this respect might also damage future investment in renewables and energy efficiency, and a number of recent studies have emphasised the important role that these can play.  In view of such developments, and the scale of investment required in future electricity generating plant, the Committee believes an inquiry on this topic would be timely.

The Committee invites organisations and members of the public to submit memoranda setting out their views on this inquiry.   Some specific issues on which the Committee would welcome comments are set out overleaf, though respondents are free to comment on any issues which they consider relevant.

Written evidence should be sent to the Committee by 21 September 2005, preferably by e-mail to eacom@parliament.uk (it is important we are also sent a hard copy by post).   A brief guidance note on the preparation and submission of evidence is available on the Committee's web pages.  For further information on the this inquiry, please telephone 020-7219-1378.

Inquiry Issues

[NB:  'nuclear new build' is used to refer to a programme of building at least eight AP1000 reactors (or equivalent).]

A:  The extent of the 'generation gap'

1: What are the latest estimates of the likely shortfall in electricity generating capacity caused by the phase-out of existing nuclear power stations and some older coal plant?   How do these relate to electricity demand forecasts and to the effectiveness of energy efficiency policies?

B:  Financial costs and investment considerations

2: What are the main investment options for electricity generating capacity?  What would be the likely costs and timescales of different generating technologies?

• What are the likely construction and on-going operating costs of different large-scale technologies (eg nuclear new build, CCGT, clean coal, on-shore wind, off-shore wind, wave and tidal) in terms of the total investment required and in terms of the likely costs of generation (p/kWh)?  Over what timescale could they become operational?

• With regard to nuclear new build, how realistic and robust are cost estimates in the light of past experience?  What are the hidden costs (eg waste, insurance, security) associated with nuclear?   How do the waste and decommissioning costs of nuclear new build relate to the costs of dealing with the current nuclear waste legacy, and how confident can we be that the nuclear industry would invest adequately in funds ring-fenced for future waste disposal?

• Is there the technical and physical capacity for renewables to deliver the scale of generation required?  If there is the capacity, are any policy changes required to enable it to do so? 

• What are the relative efficiencies of different generating technologies?  In particular, what contribution can micro-generation (micro-CHP, micro-wind, PV) make, and how would it affect investment in large-scale generating capacity?

3: What is the attitude of financial institutions to investment in different forms of generation?

• What is the attitude of financial institutions to the risks involved in nuclear new build and the scale of the investment required?   How does this compare with attitudes towards investment in CCGT and renewables?

• How much Government financial support would be required to facilitate private sector investment in nuclear new build?   How would such support be provided?  How compatible is such support with liberalised energy markets?   

• What impact would a major programme of investment in nuclear have on investment in renewables and energy efficiency? 

C:  Strategic benefits

4: If nuclear new build requires Government financial support, on what basis would such support be justified?   What public good(s) would it deliver?

• To what extent and over what timeframe would nuclear new build reduce carbon emissions?

• To what extent would nuclear new build contribute to security of supply (ie keeping the lights on)?

• Is nuclear new build compatible with the Government's aims on security and terrorism both within the UK and worldwide?

5: In respect of these issues [Q 4], how does the nuclear option compare with a major programme of investment in renewables, microgeneration, and energy efficiency?  How compatible are the various options with each other and with the strategy set out in the Energy White Paper?

D:  Other issues

6: How carbon-free is nuclear energy?   What level of carbon emissions would be associated with (a) construction and (b) operation of a new nuclear power station?  How carbon-intensive is the mining and processing of uranium ore?

7: Should nuclear new build be conditional on the development of scientifically and publicly acceptable solutions to the problems of managing nuclear waste, as recommended in 2000 by the RCEP?

Notes for Editors

1. Details of all the Committee's press releases and inquiries, together with its Reports, oral evidence and other publications, are available on the Committee's Internet homepage.