Given recent attention in the British press on climate change and energy security, I thought I would return to this theme which I already mentioned in my blog of 26 June. The scene setter for this is the report released last week by Ofgem, the UK energy regulator, which shows that the UK’s energy gap is growing at an alarming rate due to a lack of planning by the government.

A stark warning was given by Alistair Buchanan, Ofgem’s chief executive, who said: “There could be a potential shortfall in the period 2013-18 … Life might be pretty cold.” He said that the UK government’s failure to deal with the growing energy gap had left the country far behind France and Germany, which are “way ahead of us”, as a result of their investment in new, lower-carbon power supplies.

This view was confirmed during a visit I paid to the Culham Science Centre in Oxfordshire last month, which has done great work in the field of nuclear and fusion power, and yet is threatened by cutbacks. Concern was expressed there about the ‘teens’ problem, when existing nuclear plants will need to be shut down by 2015 with little idea as to what to replace them with which could be considered as carbon neutral. Indeed, the report underlined that the government has too few nuclear power plants planned. 

The cost of the government’s dithering on building new nuclear plants to fill the growing gap was calculated by Ofgem, indicating that bills could have to rise by between 14 and 25 per cent above inflation by 2020, with a possible peak of 60 per cent around 2016. As a result average annual household bills would rise from £1,220 to more than £1,950. As Jeremy Warner said in the Daily Telegraph, the UK’s energy gap is down to ministers, not market failure.

These nuclear power plants do not have to be big ones. Look at what the UK’s domestic fusion programme is developing through the MAST programme which aims to provide fusion energy from a small plant. After all, if we have devolved communications to the local level by means of the internet, would it not be logical then to also devolve energy supply on a local level as well?

For the record, there are three good reasons to support investment in nuclear energy, neatly summarised in the FT:

• Security of supply: Driven by the development of emerging economies such as China and India, global energy demand could rise by as much as 45 per cent by 2030, according to the International Energy Agency…As concerns have grown about the future availability of fossil fuels (increasingly provided by a small number of large suppliers), energy consumers have come to see the virtue in diversifying their sources of supply.
• Economics: The economics of nuclear power are fiercely contested, and highly sensitive to changes in variables such as construction costs. What is unarguable, however, is that it provides an energy source not linked to the oil price.
• Climate change goals: Finally, there is the growing pressure to meet climate change goals…The IEA has estimated that to keep the increase in global temperatures to acceptable levels, the world’s nuclear capacity might have to increase more than five-fold by 2050.

The vital realisation is sinking in to senior European policy-makers that Europe cannot allow itself to be held hostage on energy security to outside suppliers (the Nabucco pipeline is a prominent example where the EU is successfully working together as 27 Member States to help protect its energy supplies).

During his US election campaign last year, President Obama said, “I will set a clear goal as president. In 10 years, we will finally end our dependence on oil in the Middle East.” As Mr Barroso develops his EU 2020 vision, could he not make a similar commitment for Europe?

Energy Security