Monday, October 03, 2005

Government must take up the reins of power

The Observer | Business | Government must take up the reins of power

Brian Wilson calls for a new Department of Energy to make vital policy decisions in the interests of national security

Sunday October 2, 2005
The Observer


Tony Blair's decision to put new nuclear power stations back on the political agenda during his Brighton speech was as welcome as it was overdue. Just as significant, however, was the context in which he placed his nod to nuclear. 'For how much longer,' he asked, 'can countries like ours allow the security of our energy supply to be dependent on some of the most unstable parts of the world?'
The choice of the word 'allow' was a trifle disingenuous, portraying gross overdependence on imported gas as a prospect that has crept up on us by stealth. In truth, current UK energy policy will not merely 'allow' 70 per cent of our electricity to come from gas by 2020 (with 90 per cent of that gas imported) - it positively relies on it. Much against my own advice, that was the cornerstone assumption to emerge from the 2003 Energy White Paper.

Since then, the world may have become more unstable and the price of gas even more volatile. But it has taken this rhetorical question from the Prime Minister to cut through the foolish assumption that we should become so overwhelmingly reliant on imported gas as the major source of UK electricity generation. That approach, the antithesis of Britain's history of energy self-sufficiency, was driven by a desperate need to make the figures add up.

Quite simply, if your starting point is that our nuclear capacity is going to be virtually wiped out over the next 20 years, and that coal-fired generation has to go, something big is needed to fill the gap. Renewables targets were set as high as was plausible - and the remaining chasm was filled with heroic assumptions about the willingness of the world, for decades to come, to supply us with unlimited gas at affordable prices. For how much longer, indeed, as Blair implied, can this exercise in wishful thinking be allowed to pass for energy policy?

Already, reality is starting to close in. Carbon emissions are rising, largely because the Magnox nuclear power stations are coming offline earlier than expected, and the slack is being taken up by dirty old coal. Meanwhile, serious people are deeply worried about security of supply this winter because of the shortage of storage capacity. And, of course, prices to the consumer are soaring.

There are three imperatives that should govern energy policy - security of supply, affordability and carbon reduction. Yet current pressures are threatening the market's ability to guarantee any of them. In these circumstances - and particularly for those of us who actually believe the rhetoric about climate change and the need to counter it - it is fatuous to maintain that government does not have a substantial role to play in determining our energy strategy. If Blair's speech is an implicit recognition of this, it will start to reverse a 20-year trend towards disengagement.

When the Tories set about privatising the gas and electricity industries, they felt the need to send out a triumphalist political signal: abolition of the Department of Energy. The message of the Eighties could not have been clearer. Energy generation, distribution and supply are no longer the business of government; therefore, let us dismantle a Whitehall bureaucracy that no longer has a significant role to play. But times have changed once again, and there is now an urgent need for some government to give energy policy its proper place.

As Blair's words suggest, government can no longer be indifferent to the rundown of our only significant source of carbon-free electricity at precisely the time when we should be doing everything in our power to clean up. The reality is that whatever we do on renewables over the next 20 years will - in carbon reduction terms - at best cancel out what we are throwing away through the failure to maintain the nuclear component in the mix. How can this make any kind of sense?

Yet Blair had scarcely spoken when the inter-departmental bickering broke out, with the anti-nukes expressing their opposition to any move towards nuclear new-build. At least half a dozen government departments will regard themselves as having a stake in that debate, not to mention a clutch of quangos and committees. The one thing lacking is a single Secretary of State who has a clear mandate to promote an agreed policy: so the odds are on further years of procrastination and fiddling while the icebergs melt.

The structure of government needs to change in order to keep pace with the emphasis that must be placed on reducing carbon emissions. Government pays a lot of lip-service to this, and a lot of good work is being done. However, nobody who knows Whitehall could claim that it is an imperative that runs through policymaking. Responsibilities are scattered around departments, each of which has its own priorities. Cross-departmental committees are ritualistic, rather than decisive, contributors to policy.

We need a new Department of Energy and Carbon Reduction. That is the only way for the Prime Minister to send the message that this is an area of policy to which he attaches the highest priority. The department's responsibility would be to deliver in a cohesive way on the government's obligations to the three imperatives of security, affordability and emissions. And its first task, in the interests of all three, should be to take forward the nuclear new-build programme.

ยท Brian Wilson was Energy Minister from 2001-03

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