---

Mr. Michael Jack (Fylde) (Con): Will the hon. Gentleman give way?

Mr. Illsley: Not with only eight minutes to make my speech; I am sorry.

Who will pay for the nuclear power and for the new stations? How will we get the planning permissions through, given the 15 years that it took to get Sizewell going, and given that we cannot alter the planning legislation? This Government tried to do that shortly after 1997. What about the underfunding, or unfunding, of the nuclear liabilities? Back in 1990, when the previous Conservative Government tried to privatise the nuclear energy industry, they simply could not do it. When the Energy Committee at the time asked for the financial reports on that privatisation from Kleinwort Benson, Rothschild and all the rest—believe me, you could have jacked your car up on those reports, Mr. Deputy Speaker—they discovered that the City of London and the private investors were not prepared to invest in it because it was too expensive and too risky. I cannot see anyone wanting to invest in it now, either. So who will pay for these nuclear power stations? Will the Government and the taxpayer foot the bill, then franchise them out under some private finance initiative scheme so that private industry can run them? Are we going to let private industry take all the profit while the taxpayer pays all the costs? I can see that going down very well.

I mentioned coal earlier. We have an anti-coal DTI at the moment. There are elements in the DTI who simply do not want to know about British coal. They want it to wither on the vine and die away. Because of environmental restrictions, the energy supplied by coal will be down to 16 per cent. later this year anyway. My hon. Friend the Member for Bolsover (Mr. Skinner) has already mentioned Haworth and Rossington is in the same situation.

In fairness, some of the mining companies that bought into the coal industry after 1994 have not been the best, but coal still has some advantages, one of which is clean coal technology. I should point out that that technology has been around for 25 years. When the Energy Committee produced its report in 1990, the first evidence that we took was from Texaco, whose representatives came to us and said, "What are you doing? We've already got clean coal technology in
 
12 Jan 2006 : Column 510
 
America. Come and look at it." It was already there; it has been around for a long time. We do not need to reinvent the wheel. The power station at Grimethorpe copied the technology that was already running a power station in Stockholm back in 1990. Clean coal technology is already here.

The other major advantage of coal is that we can stockpile it, as the Conservative Government realised in 1984. They stockpiled a lot of it for a long time. It does not run out, and we can quickly build the stations to use it. However much the DTI does not like coal, and however much people think that it is a dirty fuel, it will clearly be part of any solution, given the 10 years or so that it will take to get the nuclear power stations built. As my hon. Friend the Member for Southampton, Test (Dr. Whitehead) said, if we press the nuclear button tomorrow, those stations will still be 10 or 12 years away. We have coal here, now, and we can use it.

The problems associated with gas are well documented. Even before the Ukraine situation, there were problems. Companies in my constituency, including Potters Ballotini, Rockware Glass and Carlton Brick, are experiencing problems. I chair the all-party group on the packaging industry, and we have made representations to Ministers. When I raised the question of gas supply at Question Time in December, I was told that there was no problem and that we had plenty of it. So why did the price quadruple in December? Somebody is trading it and manipulating the market to cause those problems.

I shall finish by mentioning co-firing, or co-generation. This uses biomass with coal. At the moment, renewal obligation certificates are available to anybody—Drax power station, for example—using renewables such as oil cake, olive cake and biomass co-generated with coal. They get a 25 per cent. ROC for doing that, which will reduce to 15 per cent. That should be extended beyond April of this year.

4.29 pm

Mr. Michael Jack (Fylde) (Con): The hon. Member for Barnsley, Central (Mr. Illsley), in advocating coal, should not regard nuclear power as a rival. I support the development of clean coal technology and a wide range of alternative energy supply developments. This debate on energy security, however, illustrates one key issue—diversity is the key to security. The Government, in a document signed by the Foreign and Commonwealth Office, the Department of Trade and Industry and the Department for Environment, Food and Rural Affairs, said:

"Britain's prosperity and wellbeing depend on access to secure and affordable energy supplies, and on mitigating the potentially catastrophic effects of climate change."

I agree with that statement and therefore support diverse energy sources.

Given the way in which Organisation for Economic Co-operation and Development countries have been depleting relatively cheap supplies of hydrocarbon fuels against a background of rapidly escalating world demand for energy, it is clear that we must take action immediately to deal with the energy security issue. In 1990, for example, 65 per cent. of the energy to generate electricity came from coal, which, by 2004, had decreased to 37 per cent., while the corresponding figure
 
12 Jan 2006 : Column 511
 
for gas increased from 0.7 per cent. to 35 per cent. A major change has therefore taken place in the energy market.

As far as electricity generation is concerned, nuclear has chugged on serenely at around 20 per cent. I am an avowed enthusiast for maintaining our share of nuclear-powered electricity generation. My constituency is home to the production of the majority of the fuel for Britain's nuclear power stations, and I know that by 2020, with the existing shutdown programme, the percentage of electricity from nuclear sources will be down to 7 per cent., with all the implications that that has for diversity of supply and greenhouse gas emissions.

John Hemming : Are the raw materials for nuclear energy imported, or are they mined locally?

Mr. Jack: I am sure that we are already buying nuclear energy from France through the interconnector, so the issue is of some importance to the United Kingdom.

I have been impressed by the work done on new designs. I suggest that the hon. Member for Barnsley, Central considers the OECD report, which compares and contrasts the full life costs—capital, running and decommissioning costs—of a range of new models of nuclear reactor. Even in Finland, the price of electricity generated from new nuclear reactors is comparable with that generated from gas and coal, considerably cheaper than wind, solar and micro-hydro power and cheaper than combined heat and power. That is a significant difference from the old days when we built nuclear power stations that were unable to cover their full costs without public subsidy. It is worth remembering that while Magnox power stations account for £13 billion of the £56 billion costs of Britain's nuclear legacy, our advanced gas–cooled reactors and pressurised water reactors are already covering their decommissioning costs in terms of their fuel and sites.

Frank Dobson (Holborn and St. Pancras) (Lab): Will the right hon. Gentleman give way?

Mr. Jack: No, I have given way once, and I wish to conclude my remarks.

The advanced-passive reactor, the AP1000, is already a proven technology in the world. If Britain were to move towards a family of those reactors, capital and other costs would decrease considerably. Some 1,300 man years of design and safety work has already been carried out on that type of design. In terms of fuel efficiency, the newer forms of nuclear reactor are some 10 times more economic than current counterparts—for each gigawatt of power produced, they require 30 tonnes of fuel per year, compared with 300 tonnes of the same fuel required by Magnox power stations. Those new designs are very safe and have a passive safety system, which is not reliant on electric pumps or other automated facilities as is the present case. In terms of proven technology, they have a good safety record.

The hon. Member for Barnsley, Central rightly pointed out that coal could be stored. Uranium can be stored just as easily, and as it comes from friendly
 
12 Jan 2006 : Column 512
 
sources such as Australia and Canada, it is not subject to some of the political vagaries of the international hydrocarbons market. The fuel space needed for a family of 10 AP1000 reactors could be accommodated in one small house for a year. It is not a large physical challenge to ensure that we have continuity of supply as a result of the review.

Members have spoken of the need for renewable energy. I strongly support it, whether it is land-based and harnessed from wind, harnessed from waves, or indeed obtained through the use of biomass, particularly in the context of bulk heat supplies. I note, however, a cautionary report from the company E.ON on the German experience of wind energy. Its 2005 wind report forecast that to ensure that wind can maintain its place in the energy mix, in 2020 Germany will need 48,000 MW of wind capacity—the equivalent of 2,000 MW of conventional plant. That demonstrates that if there is to be continuity of supply from wind energy, an awful lot will be needed.

The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) neatly sidestepped the critique issued by the former energy Minister Brian Wilson, who observed in the House that while in general the Liberal Democrat party seemed to be in favour of wind, whenever a specific project was suggested they objected to it. I heard nothing from the hon. Gentleman to disabuse me of that idea.

I strongly concur with what has been said today about energy saving. I applaud the Government's provision of money to mobilise citizens to become involved in energy-saving projects, but there must be a concerted effort by local authorities, the Department for Environment, Food and Rural Affairs, energy providers and everyone else to make citizens understand what they can do individually by reducing electricity consumption or improving the efficiency of their houses.

My purpose in speaking has been to emphasise the importance that I attach to nuclear energy. I hope that the Government will soon reach a conclusion on the review. We in the United Kingdom must maintain our nuclear skills, particularly in fuel manufacture, design and build. I firmly believe that nuclear energy is one of the key technologies for the future, and that the United Kingdom can play a positive role by replacing its existing nuclear power stations with a new generation of AP1000 designs.

---