Forget wind – Britain needs nuclear subsidies
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By Max Hastings
Chris Huhne’s trumpeted summit with the Big Six electricity suppliers this week ended with a whimper: Britain’s energy secretary merely urged consumers to insulate their homes and consider switching providers. Meanwhile, deep cuts were revealed in subsidies for household solar panels. Scottish Power has pulled out of Mr Huhne’s only proposed carbon capture scheme, saying that the proposed £1bn subsidy is inadequate.
This government has never had much of an energy policy, beyond flatulent assertions that it would “make renewables come of age”. It lavishes billions on subsidising turbines, and Mr Huhne embraces some of the most ambitious carbon emission targets in the world. The consequence is that energy costs continue to soar – consumer prices have almost doubled in five years – while progress is meagre towards averting a threatened British energy crunch a decade hence.
The European head of Tata steel warned this week that his company is hesitating about making a new £1.2bn investment in Britain, because the coalition’s commitment to make this “the greenest government ever” threatens to burden industry with unaffordable costs. Karl-Ulrich Köhler, whose company is one of the UK’s largest manufacturers, said: “Why the UK government wants to be the leader of Europe in this field is difficult for me to understand.”
I profess no specialist knowledge of energy, but nurse a citizen’s acute unease about future supply. David Cameron’s appointment of the erratic Liberal Democrat Mr Huhne as the minister responsible always looked ill-judged, even reckless. Nothing since May last year makes it seem less so.
Whatever the government does, electricity prices must rise in the years ahead, but extravagant green policies make matters worse. Ministers refuse to admit, perhaps even to themselves, the inadequacy of their approach. Unless urgent action is taken, especially on building new nuclear plants, power cuts will loom in the next decade. Meanwhile, green posturing drives up industrial costs in a fashion that destroys jobs and hurts the economy.
Mr Huhne has long proclaimed the virtues of renewables, especially turbines. But the evidence seems overwhelming that wind is an expensive and unreliable source of energy. A new report from Civitas, a think-tank, offers impressive testimony. Its author, John Constable, director of the independent Renewable Energy Foundation, quotes Mr Cameron telling a conference last year that the renewables industry is “a triple win. It will help secure our energy supplies, protect our planet and the Carbon Trust says it could create 70,000 jobs”.
In truth, says Mr Constable, China will almost certainly dominate renewables technology manufacturing. Estimates for new British jobs created ignore the much graver employment losses that the cost of “clean energy” inflicts on other industries. Between 2002 and 2010, subsidies to Britain’s wind manufacturers cost £200,000 a job, and in 2009-10 still amounted to £57,000. If the government maintains present levels of state aid, in the next decade renewables will receive £39bn from taxpayers to generate modest supplies of electricity.
Mr Cameron and Mr Huhne are betting the ranch on technology that only environmental extremists think is capable of meeting demand. Countries that have invested hugely in wind over the past decade, such as Germany and Spain, are now thinking again in the light of grim numbers about cost and efficiency.
According to Mr Constable: “With the possible exception of nuclear fission, contemporary clean and green technologies cannot deliver a continuation of the current social and economic ascent in an environmentally sustainable fashion.”
This seems a sensibly humble view, contrasting starkly with government waffle and deceits. Britain’s long-term energy needs can only credibly be met through a mix that must include a new generation of nuclear power stations. Sixteen months into this government’s life, we are no closer to pouring any concrete for this purpose.
Mr Huhne’s department has identified eight sites for reactors. A recent study shows that the safety risks are small – Britain is not vulnerable to the sort of seismic upheavals that caused the Japanese disaster in March. Fukushima was about as bad as a nuclear accident can get yet killed nobody, while oil and coal extraction kill thousands every year.
But Britain’s next nuclear generation is stalled, because the government insists that plants should be built without subsidy – this, when windmills rotate on sheaves of taxpayers’ cash. Almost every other nation subsidises nuclear construction. It is not surprising this is necessary, when each plant costs an estimated £5bn.
With climate change and the passing of the western world’s Age of Abundance, every form of power generation becomes inescapably more expensive. One in four households in the UK spends more than 10 per cent of its net income on fuel. Such bills seem steep, but are among Europe’s lowest. The Swedes pay four times as much for gas, while electricity bills in Denmark are twice as high.
Nuclear power will certainly not give us cheap electricity, but it promises reliability of supply. Amid Whitehall’s dismaying display of ostrich feathers about energy, a rare ray of light was shed by chancellor George Osborne at the recent Tory conference. He said: “We’re not going to save the planet by putting our country out of business ... so at the very least resolve that we’re going to cut our carbon emissions no slower but also no faster than our fellow countries in Europe.”
But does Mr Huhne subscribe to this eminently sensible, indeed vital, formula for national self-preservation? Turbines should remain part of Britain’s energy mix, but they cannot meet our core needs. Only the wind industry’s strident and often mendacious lobbyists pretend otherwise. Downing Street needs to recognise the extreme urgency of building nuclear plants, for which subsidy will be essential. Ministers must come clean about how wretchedly little they have done, and how much needs to be done, to avert a 2020s energy crisis. Environmentalism is a priority in the new world – but so is keeping Britain’s lights on.
The writer is an FT contributing editor |
