Articles
The energy level can tend to rise among politicians when they are discussing energy. David Cameron’s promise in the Commons to legislate that utilities should put all customers on the lowest tariff was followed by a heated debate. And, with winter setting in, the issue generated widespread coverage in the media.
Labour was quick to seize upon what it saw as the “chaos” of government policy. Shadow energy and climate change secretary Caroline Flint claimed that energy bills had risen by £200 since the coalition came to power.
Cameron’s pledge had been “another shambles” and the draft Energy Bill contained nothing to reform the way energy was bought and sold or to make the energy market more competitive, she said.
“If the government is concerned about energy bills as it claims to be, why is it that its flagship Energy Bill does absolutely nothing to help people struggling to make ends meet?” asked Flint.
Meanwhile, Labour was criticised for an alleged failure to reform Ofgem during its time in power. Ed Davey, energy and climate change secretary, argued there had been increased consolidation in the energy market in that 13-year period, not increased competition. The government backed increased competition and energy saving, he said.
As the argument developed in the House, Vincent de Rivaz, boss of EDF Energy – which has just raised its prices by 10.8% – was giving evidence to the Energy and Climate Change Committee. Once again, he made the case for new nuclear power stations as a “vital” part of the future energy mix. He told MPs that electricity prices in general were set to rise and that the business case for new nuclear still needed to be made in the second reading of the Energy Bill – expected to be before Christmas.
This was necessary despite the extensive preparations EDF has already made to build four new reactors at Hinkley Point, Somerset, and Sizewell, Suffolk.
But some believe there are few economic grounds for subsidising new nuclear. Lobby group Supporters of Nuclear Energy (SONE) – surprisingly – wrote to the Chancellor in September to argue that the “strike price”, or subsidy, which will ultimately be paid by the consumer and businesses for new nuclear power, is unnecessary.
EDF could still expect to generate £88 billion with minimal subsidy over a 50-year period on an outlay of £14 billion for one reactor, SONE suggested. Receiving a high subsidy that priced new nuclear at the same level as some renewable technologies, such as the £130/MWh which EDF is thought to be seeking, would see the giant make £163 billion in cash under the same scenario.
“Nuclear should be developed on the basis of its real needs,” SONE said in its letter. “Common sense suggests that these could be met without subsidy.”
Westminster, amid concerns over energy prices among households and with a mountainous budget deficit to contend with, will have to consider carefully the subsidies made available to facilitate the building of nuclear power stations.