Rushing at the nuclear fence, and then failing to clear it

The Energy Challenge is a curious policy statement. Its origins appear to lie in changes that have occurred in domestic and international energy conditions since the major, and radically new, policy statement in 2003 (Our Energy Future). These changes, tenuously linked, are

- instability and high prices in international hydrocarbon markets, together with the UK twist that gas and oil imports are starting to rise, and;

- the beginnings of a revival in the fortunes of nuclear power as a new-build option in several countries.

The hydrocarbon issue is scarcely original and was analysed at length in the 2003 statement. No structural change has occurred since 2003: we always knew that imports would rise, and the familiar volatility of hydrocarbon prices — though severe in recent years — is hardly an issue that would cause a government to change tack from a broadly agreed strategy set so recently. Inescapably it is the nuclear revival that has made the difference and led to the Energy Challenge.

The turnaround in the debate about nuclear power is significant, though not yet matched by a major increase in investment decisions. However, nuclear is an important issue for an energy policy that emphasises carbon emission reductions as its cornerstone. For nuclear is, unambiguously, a very low carbon source of electricity.

What should this mean for UK energy policy? It certainly means that government needs to re-appraise its potential future role. The 2003 statement was brief and dismissive — it simply said that nuclear was uneconomic, though it might need re-visiting at some point. But re-appraisal of nuclear does not imply a need to re-cast energy policy across the board.

Superficially a re-casting is what the Energy Challenge does. It re-visits all the main 2003 issues and tries to say original things about them. Thus ‘energy saving’ — a welcome re-badging from ‘energy efficiency’, which was the 2003 headline — occupies almost 25 of around 150 substantive pages. But the Challenge says almost nothing new about energy-saving policy.

After a detailed description of a range of individually interesting and mostly well-analysed, but limited, proposals, the Challenge summarises 14 of them.

The language used gives the game away: government will ‘consult’ (three proposals); ‘work on/with’ (mentioned three times); and (one mention each) ‘discuss’; ‘examine the scope’; ‘consider’; ‘play its part’; ‘monitor impacts’; and — perhaps best of all for modesty of ambition — ‘keep under review’. In other words: plenty of worthwhile work in progress on the part of civil servants, but no new decisions. The same is broadly true of all the other non-nuclear areas of the Energy Challenge.

So, perhaps not unexpectedly, there is nothing really new in the non-nuclear areas. This leaves the discussion on nuclear — the part of the Challenge that was due to deliver new policy. But the nuclear sections are an anti-climax. The government discusses two main issues: the changed economics of new build and the potentially new planning framework that might support nuclear revival.

The economics discussion is tortuous. Nuclear might now bring ‘economic benefits’; the ‘welfare balance’ (undefined) may be swinging in favour of nuclear, which might be ‘justified’ on economic grounds. But decisions and all costs will have to be made/borne by private firms and nowhere do we get an analysis of the private profitability of nuclear investment.

Tellingly, the word ‘risk’, critical to private investor assessments, does not appear. The likelihood is that this ‘economic’ analysis is needed as a pre-cursor of the ‘Statement of Need’ that government believes it will need to develop to help serve its planning objectives.

It is in the area of planning that the issues are most interesting. The Energy Challenge is explicit that a major enabling condition for nuclear investment will be to avoid nuclear proposals getting enmeshed in public inquiries.

It says what is needed in principle, primarily a severe curtailment of the length of the planning process and some certainty about its duration. This issue is, as the review says, relevant to other controversial energy proposals, but is most problematic, if unresolved, for nuclear power.

But here the government is hamstrung by other incomplete processes, especially the Eddington and Barker reviews of related, economy-wide planning issues. So we get no planning proposals on nuclear either, only a new ‘Consultation on the Policy Framework for New Nuclear Build’ to be an input to a further white paper around the turn of the year.

This white paper will have to deal with at least one very tough issue — how to reconcile increasing public appetite for consultation and deliberation on controviersial issues with the equally powerful desire on the part of government for quick and ‘efficient’ decision processes.

But the question for now is: why go to the trouble of producing an ostensibly new energy strategy in the shape of the Energy Challenge when such a strategy is neither needed nor remotely yet available? It would have been enough to set up the consultation on nuclear power issues and provide a simple annual progress report on everything else.

As it is, the Energy Challenge involved a rushed and quite inadequate consultation process, accompanied by a political process that seemed clearly hell-bent on promoting a nuclear revival in advance of serious analysis or public engagement. It is likely to be a recipe for more controversy and delay than if a more measured process had been adopted — the opposite result from that desired by the government.

Professor Gordon MacKerron is Director, Sussex Energy Group, University of Sussex.