Alternative Energy - Nuclear Power Is The Only Long-Term Option
A Fleet Street Letter Special Report
By Brian Durrant
Our government’s energy policy is incoherent and inconsistent. Its objectives are incompatible and because of this there is a good chance of serious cuts in power supplies in two or three years’ time. Let me explain.
Alternative Energy: Our gas won’t last forever and we’re stuck at the end of the pipe last in the queue
We haven’t had a long-term energy policy as such but rather muddled through following a number of short-term expedients. In the early 1980s, nearly four-fifths of our electricity was produced from coal-consuming power stations and the rest mainly from nuclear power stations. But then gas increasingly replaced coal. This was seen as desirable not only in view of the upheavals brought about by the 1984 miners’ strike but also because gas became a cheaper alternative which was conveniently available as a by-product of North Sea oil production. At the moment 40% of our electricity comes from gas and this percentage is increasing fast. Experts reckon that gas will account for 80% by 2020.
But we have a problem. We are becoming more dependent on natural gas just as our
North Sea gas production has already peaked and will soon decline sharply. Using the DTI’s own figures, by 2010 we will have to import 50% of our gas and ten years later some 90% will be imported. We will source our gas from the Caspian Basin, the Middle East, North Africa and Norway. Apart from the latter, these are not exactly stable regions politically. The government’s answer in its White Paper is to shop around the world for gas and at the same time improve our diplomatic relations in these political hot spots. I for one am not overly keen about the security of our energy supplies being in the hands of the Foreign Office.
Moreover, Britain’s geographic position makes a disruption to our gas supply more likely. When the pipelines from Russia and North Africa reach Europe they join the European gas network. Britain’s peripheral position means that in the event of a gas shortage, we would be hit hardest. Most European countries store up to 20% of their needs. But Britain, whose infrastructure was initially geared to exporting gas, has never invested in storage capacity and can only store about 4% of annual need, which adds up to only 48 hours’ supply in the depths of winter. Unless work starts on building storage capacity soon, serious disruption to our energy supplies is only a matter of time.
Predictably, the government’s White Paper on energy doesn’t make this a priority — gasometers after all are unsightly monstrosities. Unfortunately, when the great and the good sit down to draw up a strategy the result tends to be a mixture of bland but worthy mission statements, setting absurd targets and an evasion of hard choices. How do you meet the challenges of reducing greenhouse gas emissions by 60% by 2050, maintaining cheap and secure power supplies to households and replacing our declining indigenous energy supplies?
Alternative Energy: Wind power is a lot of ministerial hot air
One of the answers is wind. The government has set a target for 20% of our energy supplies to be from renewable sources by 2020. Expert Professor Ian Fells reckons that this would require twenty 2 megawatt machines to be installed every week from now on. The Danes, who are the leaders in this technology, are only able to install one machine every two days in the North Sea, weather permitting, and normally the weather permits one day in three. In any case there are times that it does not blow hard enough even in the North Sea to generate power, so you need 100% back-up from other sources. If we go along this fantasy route, power cuts are inevitable. If we don’t want to face power disruption something has to give. Either we scrap emissions targets or make electricity less affordable so there is a greater incentive to increase generating capacity.
But there is another option staring the government in the face: Nuclear power. But this is a dirty word to the new Labour generation. The White Paper is incredibly downbeat about nuclear power, despite its record in providing a safe and substantial contribution to energy supply without greenhouse emissions. Instead it says that it is committed to decommissioning all but one of our nuclear power stations by 2020. This thinking is jaundiced and out of date. New technology now exists which makes the overall production of nuclear energy much cheaper.
On the question of energy there is nothing modern about New Labour. However, for presentational purposes the government looks to have closed the nuclear option, it has laid the basis of a climbdown. In the White Paper it says: "however we do not rule out the possibility that at some point in the future new nuclear build might be necessary if we are to meet our carbon targets".
Brian Durrant is investment director of The Fleet Street Letter.
First published on March 13th, 2004
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