I am submitting evidence as an individual. I have worked on energy issues since 1989, for think tanks (including IPPR), NGOs, government/opposition and energy companies. I am now freelance:
- 2 days a week I am director of the Alvin Weinberg Foundation (www.the-weinberg-foundation.org), a think tank working on advanced nuclear energy;
- 1 day a week I am consultant to Tidal Lagoon Power (http://www.tidallagoonpower.com);
- 1 day a week I am consultant to the ReEnergise Group (http://www.reenergisegroup.com/) on community energy;
- 2 days a month I do consultancy for INEOS shale;
- I also run a website on solutions to climate change (www.climateanswers.info).
Strengths and weaknesses of the Northern energy system
Strengths include electricity networks, training capacity, port and manufacturing facilities, and research centres, eg Sheffield’s Nuclear Advanced Manufacturing Research Centre.
Weaknesses include the building stock and inefficient power stations (in that few capture and use the heat) and lack of much district heating.
Areas of potential
Marine. Cumbria has a high-enough tidal range for a lagoon. Tidal lagoons would deliver major energy security and decarbonisation benefits, and also potentially £70 bn of industrial benefits. See the ‘Ours to Own’ report from Tidal Lagoon Power (http://www.tidallagoonpower.com/news/2016/10/03/tidal-lagoon-sector-worth-70-billion-uk-industry/).
Nuclear. There are many licenced nuclear sites in the north of England. The proposed AP1000 reactor at Moorside would bring many jobs during construction and some during operation, and would almost certainly be cheaper to build than the EPR at Hinkley, because the reactor design is less complex.
The North also has the potential to be a global leader in Generation IV nuclear: fast reactors and molten salt reactors. These would be even safer than existing nuclear reactors. They could initially use uranium as fuel, as a supply chain for this exists already. Subsequently (or alternatively), they could re-use spent nuclear fuel, since most of the energy in the uranium remains in the spent fuel. Deep disposal of spent fuel amounts to throwing away a valuable resource.
Generation IV reactors could also use plutonium as fuel. The UK has the largest global stockpile of plutonium, with no obvious policy for dealing with it.
The advantages of Gen IV nuclear are summarised in a Weinberg 2015 report Why nuclear innovation is needed. Proposals for what the UK should do are in our 2016 report Next steps for nuclear innovation in the UK.
The UK should work with the Canadian and US authorities on advanced nuclear technologies. One of more Gen IV reactors should be built at or near Sellafield, to avoid the security risks of transporting plutonium. The Weinberg Foundation will publish a report on this in the spring.
Progress on Gen IV nuclear could deliver major economic benefits to the North as there is a clear and expanding market for this technology globally.
The climate impact of shale gas was comprehensively assessed in 2013 by David MacKay, then the Department of Energy and Climate Change’s Chief Scientist, and Dr Tim Stone (Gov.uk: Potential greenhouse gas emissions associated with shale gas production and use). Shale gas from properly regulated sites has a lower carbon footprint than coal does. It also has a lower carbon footprint than Liquified Natural Gas (LNG). Public policy should focus on the need for proper regulation: the Environment Agency must be well funded.
Carbon capture and storage (CCS) is necessary for climate protection globally, and countries which commercialise it first will be well placed to secure significant shares of this market. (For more on this see http://www.cer.org.uk/publications/archive/report/2010/carbon-capture-and-storage-what-eu-needs-do). Osborne’s cancellation of the CCS competition in 2015 was a major mistake.
CCS projects in the North should be supported financially by central government. This should include industrial energy use and power generation.
Key challenges likely to arise
The two key challenges for decarbonisation, which have already arisen, are:
- how to finance it in a socially-progressive way;
- how to achieve decarbonisation fast enough and deep enough in the absence of a high enough carbon price.
Raising most of the money through levies on fuel bills, the current approach, exacerbates fuel poverty – a major problem in the North as in the rest of the UK and so is not the most progressive way to collect revenue.
The £1bn allocated to CCS demonstration was to have been raised through taxation rather than fuel tariffs. Central government should fund more decarbonisation projects through taxation.
The UK’s Carbon Price Floor makes emissions trading in the UK more effective than it is in the rest of the EU. But that is not saying very much. A carbon price high enough to internalise all relevant externalities would be around £50 per ton. Implementing this in one country without international agreement would do major damage to competitiveness. International agreement on carbon pricing has had little chance of agreement for many years. Under a Trump administration this chance reduces to zero. The UK government should therefore continue to use regulation to achieve decarbonisation. (See http://www.cer.org.uk/publications/archive/policy-brief/2013/europe-should-regulate-promote-carbon-capture-and-storage).
Role of an industrial strategy.
An industrial strategy should identify energy sectors to be supported, and deliver support in terms of public policy, training and, where necessary, financial support for identified sectors. Identifying sectors does not constitute ‘picking winners’: government should set out criteria for qualification and then encourage competition between companies which meet the criteria.