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Address to the Supporters of Nuclear Energy's AGM

Malcolm Wicks MP,  Minister of State for Energy
DTI Conference Centre,  23 October 2006

Thank you, [Sir Bernard], for the opportunity to address SONE’s annual general meeting. It is very timely that I have been asked to speak here today, given the Energy Review’s conclusions earlier in the year. And, of course, we are currently consulting on the nuclear policy framework to feed into the Energy White Paper to be published early next year.

As you all know, the Government believes that nuclear does have a role to play in the future UK generating mix, alongside other low carbon technologies. I have been asked on several occasions: “what is different now compared to 2003, when we left the nuclear question open”? Well, there are three main factors that made us think again :

Firstly, the economics of nuclear has changed since the time of the 2003 Energy White Paper largely the high prices of oil and gas. However, we are clear it is for the private sector to make decisions on new build.

Secondly, diversity of energy supply.

When we speak about energy supply to the United Kingdom we also have to speak about energy security.
Although North Sea supplies are in decline it is still an important industry to the UK. However we will increasingly rely on international markets to give us access to the supplies we need. For example, we could be importing as much as 90% of our gas needs by 2020 compared with 20% now. Electricity from nuclear is also in decline. New nuclear could be a contributor to help sustain a diverse generating mix, by reducing the total UK gas consumption and gas imports.

The third reason is that nuclear has a small carbon footprint. Nuclear can be part of the solution to helping the UK reduce its carbon emissions. According to the Sustainable Development Commission’s analysis, the full life-cycle release of carbon dioxide from nuclear power is about the same as wind power, and of course much less than fossil fuel plants.

Nuclear in the UK - vision for the future

So what does the future hold for the nuclear industry? We will continue to decommission those power plants that have reached the end of their useful lives and continue to deal with the nuclear legacy that remains from past UK involvement in nuclear generation. That is why we set up the Nuclear Decommissioning Authority (NDA), who will continue their excellent decommissioning work for many decades to come.

For businesses who may be contemplating building and operating a new fleet of nuclear power stations the Government, is working to address barriers to nuclear new build by:

• Improving the process for licensing new reactors;
• Improving the planning process, which can delay large electricity projects generally, not just nuclear; and
• By clarifying how the costs of decommissioning and managing waste will be paid for.

I want to emphasise a fundamental change in the building of any new nuclear, from what has happened in the UK in the past. We are clear that any new nuclear power stations would be proposed, developed, constructed and operated by the private sector, which would also meet the full decommissioning costs and full share of long-term waste management costs.

Energy Review

I now want to give you a flavour of what the Energy Review was about and the wider implications arising from the Review.

The remit of the review was to examine the UK’s progress against the medium and long-term Energy White Paper goals, and consider options for further steps to achieve them.

We recognise that there are two major long-term challenges in UK energy policy:

• We need to tackle climate change by reducing carbon dioxide emissions; and
• We need to deliver secure, clean energy at affordable prices, as we move to increasing dependence on imported energy.

Our conclusions are a large, ambitious, evidence-based package of measures. The wide-ranging nature of the conclusions reflects the scale and complexity of the challenges that we’ve set ourselves. From the outset, this has not been about finding one single answer to all the difficult issues we face. We need action on a variety of fronts.

We remain committed to the UK’s competitive energy market as the best way to deliver secure energy supplies, and maintain competitive prices. Our aim is to set the right regulatory framework to enable the market to move in the right direction to meet the long-term challenges.

We have a raft of measures to reduce carbon dioxide emissions and to ensure the security of our energy supplies. Let me give you a few examples:

• In order to save energy, we are looking to phase out inefficient consumer goods and improve the energy efficiency of new and existing housing;
• To encourage the use of cleaner energy, we will continue to be steadfast in our commitment to long-term carbon pricing;
• We are seeking to boost renewable energy by strengthening the Renewables Obligation (RO) and tackling barriers such as planning;
• There is currently a consultation on changes to the Obligation that should bring on renewable technologies that are further from the market for example marine technologies around wave power;
  We will also take steps to exploit the potential for distributed generation, which would enable us to generate energy efficiently, near to where we use it; and
• Of course, last but not least, as I have already explained, we are going to address the regulatory barriers to, and reduce the uncertainty for, new nuclear investment.

Nuclear Consultation

As I said earlier, we are currently consulting on the development of a nuclear policy framework, to address potential bottlenecks in the process to bring forward new build. We expect the framework to deliver a more efficient system that should shorten the lengthy, and often repeated, investigations and analyses that have occurred in the past, whilst at the same time of course maintaining the rigorous safety, security and environmental assessments, that are carried out by the independent regulators.

The consultation ends in one week, next Tuesday. I hope that you will, if you have not already, submit your views on our proposals.

Nuclear waste

I now want to turn to probably the biggest issue concerning nuclear generation which is that of waste and what we should do about it. The Government initiated a review of nuclear waste policy and appointed CoRWM (Committee on Radioactive Waste Management) in November 2003 to take this forward. CoRWM started with a blank sheet of paper, with no pre-conceptions.

They adopted a rigorous approach, based on engagement with the public and other interest groups and business, expert knowledge and examination of ethical issues.

The recommendations that CoRWM arrived at are:

• Deep geological disposal for long-term storage;
• There should also be an essential role of robust interim storage; and
• A new approach to implementation based on the willingness of local communities to participate and work in partnership.

The Government is currently considering the proposals and will respond soon.

Skills & Science

I know some of you have concerns about the provision of a skilled workforce for the nuclear industry, especially now that the prospect of new build is back on the agenda.

I want to assure you that we are working with the industry to ensure that training and personnel are available to the meet the industry’s needs. We set up the Sector Skills Council, Cogent, to work with employers to ensure their needs are met.

Also in relation to skills, the Secretary of State announced only today in a written statement to Parliament that we intend to set up a new National Nuclear Laboratory, based around the current Nexia Solutions and British Technology Centre sites in West Cumbria. The Laboratory will be expected to play a key role in supporting the UK’s strategic R&D requirements, and operate world-class facilities. As the market for the provision of R&D skills develops, the NNL will ensure key skills are safeguarded and enhanced, part of which will entail playing a key role in the development of the UK’s R&D supply base. The laboratory will be set up as soon as is practicable. I am sure you will all agree that this is a very welcome announcement.

You may be aware of a new initiative that has transpired from a meeting between the Prime Minister and President Chirac, a meeting I attended wit the French Energy Minister in Paris, - namely the formation of a UK-Franco Nuclear Forum.

It was agreed to establish regular meetings to develop opportunities for civil nuclear cooperation between our two countries. We consider that there is considerable scope for sharing experience and expertise, for example on research, skills, decommissioning and waste management. The membership will consist of representatives from industry, policy makers, regulators, scientists and the two respective Energy Ministers.

The first meeting will be held in Paris later this year, which I will be co-chairing with my French counterpart.

Closing remarks

Finally, I hope you, and the wider population, will recognise that the conclusions we have reached and the decisions we have made, and are yet to make following detailed consultation, are not based on knee-jerk reactions or unfounded sentiment. They are based on sound, evidential policy making, which will benefit the UK and help us to take the global lead in combating climate change while securing our electricity supply and indeed our energy future.

I think we all recognise that nuclear is not the panacea for solving all our future energy issues, but it does have a part to play. It is up to Government to have the right policy framework in place. But frankly it is up to industry to come forward with firm proposals.

Chairman thank you very much.