First published in Industry Link – 29.09.15
Writing this autumn edition, following as it does the long parliamentary recess, is always tricky. Whilst the PM’s well deserved holiday(s) provide riveting gossip
column material – Cameron eats Pringles on EasyJet etc – major energy policy announcements, the bread and butter of this column, are thin on the ground.
I could of course dissect the Labour party leadership election – which would be infinitely more interesting – but this is outside my remit. That said there have been some important developments since Parliament returned following the general election. In particular the Chancellor has delivered his Stability Budget and launched the 2015 Comprehensive Spending Review (CSR).
The CSR will report in late November and will identify further savings the Government believes are necessary to eliminate the deficit by 2019-20.
Since (unprecedently) officials have been asked to model two scenarios of 25% and 40% savings in real terms, this could have a major impact on non-protected Government departments, not least our friends at DECC. This is important because the Nuclear Decommissioning Authority’s funding makes up the bulk of DECC’s overall expenditure.
As the trade association for the nuclear industry we have therefore argued strongly that the review should recognise decommissioning and cleaning up the UK’s legacy safely, securely and cost-effectively as a national priority, and act accordingly. Quite simply major progress has been made over the past decade since the NDA was created and any pause to the process could prove very costly in the longer term, both to the country and the nuclear supply chain.
Readers will recall that in the two year lead up to the general election energy prices were a hot political potato, and in a bid to defuse the issue the Coalition Government referred the matter to the Competition and Markets Authority (CMA).
The CMA has finally published its provisional findings, identifying the main problem as engaging customers in the retail market and, importantly from our perspective, concluding that competition in the wholesale gas and electricity markets worked well.
Whilst this will probably not put the story completely to bed – electricity prices are too politically charged for that – the report concluded there was no negative impact from vertical integration and therefore no case for reverting to the pool system. The removal of this threat to the status quo is helpful from a nuclear new build perspective.
More good news came from Amber Rudd, who told the Energy and Climate Change Committee in July that Government were committed to building new stations to maintain nuclear’s proportion in the mix, and she anticipated ‘a happy conclusion’ to the Hinkley Point C investment decision later this year. Hopefully therefore my next column will be reporting good news!
Despite my assertion in the first paragraph, it would be remiss of me, given its importance, not to conclude this column with a few remarks on the nuclear implications of Jeremy Corbyn’s election.
For the last few years the NIA’s presentations have emphasised the bipartisan support for new nuclear, and until the past few weeks our expectation was this would continue post-election. This seemed eminently reasonable given the support on the Labour benches and the fact the current policy was initiated by them (in the 2008 White Paper).
Recent developments have dramatically illustrated the need to avoid complacency. In parliamentary debates over the past few years there have only been a handful of Labour politicians opposed to nuclear power. However one of them is now at the top of the party.
Jeremey Corbyn has said he is ‘passionately opposed to nuclear power and nuclear weapons in equal measure’.
Mr Corbyn has emphasised these are his thoughts rather than firm policies, and they could well change, if the experience of Chris Huhne or Ed Davey are any precedent, when he is exposed to the arguments.
It will however be important for nuclear supporters within the party to make the energy security, climate change and industrial case for new nuclear stations without delay.