Why Britain needs an independent energy policy

A strange thing happened in the middle of February as the shrill pre-election circus gathered speed. Messrs Cameron, Clegg and Miliband promised to work across party lines to agree a programme of further reductions in carbon emissions. At a stroke, they confirmed publicly what has long been known: that Britain has no credible, independent energy policy. Instead, we pay homage to the EU and its desperate push to a “low carbon economy”, tellingly dubbed a post-industrial revolution.

This is a precarious position for a modern industrial country. We import most of the coal we burn. North Sea oilfields are in a state of near collapse. Power stations are closing – Centrica, one of the largest suppliers of electricity, announced in February that it will close two gas-fired stations. At present we can store just 15 days’ supply of gas, compared with the 100 days other European countries consider prudent.

Most of our nuclear power stations are close to the end of their working lives, with question marks hanging over replacements. Renewable sources such as solar, wind, tidal and biomass are providing just a fraction of the energy we use.

If Britain struggles along in this fashion for much longer, our luck will be all out. And so will the lights.

Quick fixes

For decades, successive governments have been allowed to neglect our need for energy self reliance. The quick fix prevails over the long-term interests of Britain – from opening up the North Sea to international markets, through the dash for gas, to selling our nuclear capability to another country.

If we want to continue living in a society where energy is so central to our lives, where is it going to come from? Some advocate a move away from energy altogether, as though the spinning wheel was morally superior to the loom. British workers are not seduced by this nonsense. We know that energy gives us work and the tools to make the world a better place.

But we are less robust in our thinking when confronted by false attributes attached to particular forms of energy, as characterised by “coal bad, biomass good”, or “internal combustion engine bad, solar panel good”.

We cannot afford to be so indulgent. Burning fossil fuels currently creates unwanted emissions. It’s a scientific matter and not answered by fanciful ideas about escaping from industry. We are finding, and will find, scientific solutions to these problems. Nuclear power offers the best option of a sustainable long-term resource, and we must reassert our control over it. Meanwhile imported gas and coal remain essential to our industrial survival over the next few years, whether we like it or not. It’s time to set out a policy for Britain.

Demand 1. Restore British control over our nuclear industry.

Sizewell B in Suffolk was the last new nuclear reactor to be built in Britain, commissioned in 1988 and on line from 1995. Since then successive governments have capitulated to the anti-nuclear lobby and set their faces against replenishing our nuclear stock. The 2003 energy White Paper solemnly intoned “...its [nuclear] economics make it an unattractive option”.

Reality began to intrude: dependency on imported oil and gas left Britain exposed to spiralling prices and insecurity of supply. From 2006, the government began making tentative steps towards nuclear expansion. In the past eight years expectations have increased from an initial 1 gigawatt of power on stream by 2020 to 16 gigawatts, with the first reactor in place by 2018.

But governments have also decided that all production will be in the hands of private companies – anyone but the British public sector.

All but one of our existing nuclear plants are now run by the French state subsidiary EDF. Unsurprisingly it is the preferred option for the construction of new plant. EDF leads the £16 billion contract for construction of a new reactor and power station at Hinkley Point in Somerset. But even the government’s favourable terms are not enough to guarantee that construction will be complete by the 2023 deadline.

‘All but one of our existing nuclear plants are now run by the French state subsidiary EDF.’

The original start date was July 2014, now pushed back until this autumn at the earliest due to disputes over funding and design. Two of China’s state nuclear companies between them have put up 40 per cent of the funding. EDF insisted on the French-designed European Pressurised Reactor. But this design has proved to be hard to construct and more expensive than estimated.

The Chinese want further guarantees from the French government before they release funds, a larger slice of the contract for Chinese manufacturers, and for EDF to hand over the site at Bradwell, Essex, to build a reactor to a Chinese design.

Now Austria has challenged the EU approval of the British government’s planned £17.6 billion subsidy to the operators of the Hinkley station. That case could take up to five years to resolve. And EDF wants its investment back should the Austrians succeed. As well as the delay to generation capacity, the uncertainty jeopardises thousands of construction jobs and hundreds of site operation jobs once the station is built.

The delays at Sizewell arise largely from disputes between the Chinese and the French, and the EU and Austria. This highlights the failure of British governments to nurture what was once a world-leading British industry in the construction and operation of nuclear power plant. They have placed a key component of Britain’s vital infrastructure and security in the hands of sovereign nations.

The government’s handling of the nuclear issue is perverse. It talks of market forces, but is prepared to guarantee £92.50 a megawatt hour, twice the market price of electricity in Britain. It also promises to shoulder the costs of decommissioning, on top of the costs associated with any major incident. That’s privatisation of profit and nationalisation of loss.

Demand 2. Research clean coal to reduce dependence on imported oil.

Coal is still a major component of British energy production. We burned 60 million tonnes in 2013, contributing 37 per cent of electricity generated. But 49 million tonnes were imported even though we have arguably 300 years’ worth of coal under our feet.

Thatcher’s onslaught against the coal industry was not motivated by saving the planet but by her hatred of workers, especially organised workers. But the damage is now done; most closed pits can’t be reopened. Their seams will have collapsed and flooded. We will have to be creative to be able to use the coal still in the ground.

Open cast mining is a consideration, but most of the remaining coal deposits are either under the sea bed or deep beneath the surface of the earth; extraction will be complex and expensive. But 300 years’ worth of coal is too much to ignore.

There are technologies that can potentially give a new lease of life to coal reserves too deep or inaccessible for conventional mining. One such is Underground Coal Gasification (UCG) which involves burning coal underground and using the gas produced to drive turbines. A UCG facility in Uzbekistan has been producing gas for power generation since 1961. It took many years to come to fruition and there are still considerable challenges to practical exploitation, but the science is there.

Britain leads in the technology aimed at reducing emissions from burning coal, such as coal washing, scrubbing and gasification. We have continually advanced and demonstrated the scientific evidence and technological competence to clean up coal’s dirty tag.

One example is the White Rose research project involving a number of universities and centred on the Drax power station in Yorkshire. This ambitious plan takes existing technologies and brings to a new level our ability to remove more emissions during combustion, and to capture, transport and store those emissions.

The government must decide whether or not to back the construction of the power station and associated pipeline infrastructure in North Yorkshire and Humberside. They are presently dithering, as did the previous government when the original plan was mooted in 2007. The sooner developments like White Rose are allowed to prove their worth, the sooner we can get away from dependence on imports.

Demand 3. Stop short-term tax breaks and plan for the proper use of oil and gas.

The recent collapse in oil prices has encouraged some investment. But it also has serious implications for investment and jobs in the oil sector and other fuel extraction industries.

Approximately 16 billion barrels of oil are thought to remain under the North Sea. An estimated 400,000 jobs are dependent upon North Sea oil and gas extraction, but activity was winding down even before prices fell.

Royal Dutch Shell applied to start decommissioning its Brent field operations in February 2014. BP has already announced 300 layoffs in the North Sea and plans to cut its investment this year worldwide by £4 billion. We can expect to see more jobs lost and research into extraction and exploration curtailed.

Worldwide crude oil stocks are at or near the record 1998 levels of 2.83 billion barrels. The cost of extraction in difficult areas like the North Sea becomes unattractive to oil companies. Hence the plea to George Osborne for new exploration credits and relief on corporation tax at the recent Aberdeen Conference.

OPEC, especially Saudi Arabia, has maintained production levels. That seems odd until you recognise that the Saudis are keen to stifle Russia as a rival producer and to prevent the US shale oil and gas industry from developing.

When North Sea oil came on stream in the 1970s, Labour Energy minister Wedgwood Benn presented a comprehensive national plan for the extraction and use of this national resource. Then Thatcher opened up our country’s resources to all and sundry. Those who followed her have abandoned any notion of planning and managing North Sea oil and gas stocks.

There are about 25 years of oil and gas supplies left in the North Sea, if they can be exploited. There may be new stocks elsewhere around our coasts, but exploration and development costs are likely to be high as is the potential for political disputes to disrupt supplies. But granting short-term tax breaks to oil giants is no guarantee of a long-term supply. Along with developing other energy sources, we urgently need to start planning the future for Britain’s oil and gas extraction.

Fracking

It’s time, too, to have a grown-up debate over “fracking” – an ugly US abbreviation for “fracturing”.

Amid the claim and counter-claim about the environmental effects of fracking, the plain fact is there is too little data, and almost all of it comes from the US, where environmental protection standards are much lower than in Britain.

Generating energy from shale gas releases far less carbon dioxide than from coal (possibly half as much), and less even than from oil. Much of the clamour against fracking comes from the green lobby precisely because it has the potential to be less “carbon polluting” than other fossil fuels. Their vitriol is poured out against anything that might make fossil fuels more usable.

‘The contagion has spread to the TUC, whose policy is scientifically ludicrous.’

The contagion has spread to the TUC, whose policy is scientifically ludicrous. It has adopted the “precautionary” principle, saying that there should be a moratorium on fracking “unless proven harmless to people and the environment”. That sounds all nice and friendly, but in reality science cannot prove a negative.

No human industrial activity has been without some measure of risk to people and the environment – but against that has to be set the benefits of industry. Life expectancy in Britain was less than 40 in 1700. Now it is over 80 – no thanks to the TUC.

Without energy homes go unheated, meals go uncooked, hospitals stop working, and people die. Estimates of the volume of shale gas that fracking could deliver suggest that Britain has enough reserves to meet our gas needs for 400 years. That measure of indigenous energy resource cannot be dismissed by an ugly word.

Equally, the shales that hold the gas are not going anywhere. A brief moratorium to establish the science will help, but only if people are prepared to look at the evidence rather than their prejudices. And with all that potential wealth underground, we must ensure that it is not handed over piecemeal to individual capitalists to waste. It is a national resource, and should be owned and controlled by the nation.

Wind, solar and wave power may
contribute to Britain’s energy needs, but can’t be the whole answer. Apart from expensive offshore wind, their contribution is very small. Government does no more than pay lip service by supporting inland wind farms – all the handouts to landowners (even when the turbines are producing no energy) contribute next to nothing to the grid.

Remote locations and the unpredictability of weather militate against using renewables for large-scale energy production. As with oil, nuclear and coal, more research is needed. That must be part of a national plan, not left to market forces or EU grants.

Demand 4. Leave the EU. Stop Brussels dictating how we plan our energy.

The lack of a coherent national plan for the generation of energy leaves us in a vulnerable position, unable to guarantee power supply into the near future.

We must demand, of this and future governments, an end to the dependence on others. Let British firms compete for the contracts, and let British workers build what we need. Such a demand is impossible while we remain members of the EU. For our own integrity and security Britain must leave that sinking ship.