DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/005)
issued by The Government News Network on 10 January 2008
Building blocks
for low carbon future outlined with publication of the Nuclear
White Paper and Energy Bill
Energy companies were invited today to bring forward plans to
build and operate new nuclear power stations as part of the
UK's strategy for a secure, diverse, low carbon energy mix.
The Government's response to its nuclear consultation, in
the form of a White Paper, was published alongside the Energy Bill
which sets out a range of measures to address the twin challenges
of tackling climate change and securing energy supplies.
Energy Secretary, John Hutton, said:
"Giving the go ahead today that new nuclear power should
play a role in providing the UK with clean, secure and affordable
energy is in our country's vital long term interest.
"Set against the challenges of climate change and security
of supply, the evidence in support of new nuclear power stations
is compelling. We should positively embrace the opportunity of
delivering this important part of our energy policy.
"I therefore invite energy companies to bring forward plans
to build and operate new nuclear power stations.
"With a third of our generating capacity coming offline
within the next twenty years and increasing reliance on imported
energy it is clear we need investment in a range of new energy
infrastructure. Measures in the Energy Bill will drive a greater
deployment of renewables and enable investment in carbon capture
and storage and offshore gas infrastructure. These will help build
our energy security, reduce emissions and place the UK at the
forefront in the development of low carbon energy technology."
The Government believes it is in the public interest that new
nuclear power stations should have a role to play in this
country's future energy mix alongside other low-carbon
sources; that it would be in the public interest to allow energy
companies the option of investing in new nuclear power stations;
and that the Government should take active steps to open up the
way to the construction of new nuclear power stations. It will be
for energy companies to fund, develop and build new nuclear power
stations in the UK, including meeting the full costs of
decommissioning and their full share of waste management costs.
Nuclear power is:
* Low-carbon - helping to minimise damaging climate change;
* Affordable - nuclear is currently one of the cheapest
low-carbon electricity generation technologies, so could help us
deliver our goals cost effectively;
* Dependable - a proven technology, currently supplying a fifth
of our electricity supplies, with reactors capable of producing
electricity reliably;
* Safe - backed up by a highly effective regulatory framework; and,
* Capable of increasing the diversity of our energy supplies and
reducing our dependence on any one technology or country for our
fuel supplies.
The UK's diverse electricity generation mix will be
strengthened further through the publication of the Energy Bill.
The Bill includes measures to ensure adequate funding provision is
made by potential developers of new nuclear power stations, to
drive greater and more rapid deployment of renewables, creates the
framework for investment in carbon capture and storage, which has
the potential to reduce the carbon emissions from fossil fuel
power stations by up to 90%, and enables investment in new
offshore gas infrastructure projects.
NUCLEAR WHITE PAPER:
To encourage nuclear investment the Government over the coming
months will be taking forward the following steps:
* Publishing today the Energy Bill, which contains clauses to
ensure adequate funding provision is made by potential developers
of new nuclear power stations for the full costs of
decommissioning and their full share of waste management costs;
* In Feb / March 2008 publishing a consultation on waste and
decommissioning financing provisions guidance. This would set out
the proposed arrangements for ensuring the full costs were met by companies;
* Starting to scope a new independent advisory body, the Nuclear
Liabilities Financing Assurance Board (NLFAB). This will provide
public advice to the Secretary of State on all aspects of the
financial arrangements operators plan to put in place to cover
waste management and decommissioning;
* Further strengthening the Nuclear Installations Inspectorate to
enable it to meet a growing workload. The Government will work
closely with the regulators to explore ways of enhancing the
effectiveness of the regulatory regime in dealing with new nuclear
power stations;
* Make use of the provisions of the Planning Bill to ensure that
nuclear development projects are treated like other critical
infrastructure projects. The Planning Bill will make the new
system fairer - but it will also be faster. By establishing the
national need for infrastructure first, delays will be reduced
later on;
* In March 2008 issue a call for Justification applications. This
Justification process meets requirements of EU regulation that new
nuclear processes should demonstrate that their benefits outweigh
any possible health detriment;
* In March/ April 2008 publishing a consultation on draft
Strategic Siting Assessment criteria. This would be used to rule
out those areas of the country in which there are no suitable
sites and establish the framework for assessing the suitability of
proposed sites. We expect that applications will focus on areas in
the vicinity of existing nuclear facilities;
* In spring 2008 announcing the start of the process for
selecting reactor designs for the next stage of Generic Design
Assessment (GDA). GDA is intended to ensure that the technical
aspects of designs for nuclear power plants are considered ahead
of site specific applications; and,
* Working with our EU partners to strengthen the EU Emissions
Trading Scheme so that investors have confidence in a meaningful,
long-term carbon price when making decisions. This will benefit
all forms of low carbon generation.
In addition, progress continues on the Government's Managing
Radioactive Waste Safely process. DEFRA has today published a
summary of responses and their analysis of the Managing
Radioactive Waste Safely consultation. A White Paper is planned to
follow in spring which will set out the framework for implementing
geological disposal.
ENERGY BILL:
The purpose of the Energy Bill is to update and strengthen the
legislative framework so that it is appropriate for today's
energy market and fit for the challenges we face on climate change
and security of supply.
Key elements of the bill include:
Nuclear
* Measures to ensure adequate funding provision is made by
potential developers of new nuclear power stations to pay the full
costs of decommissioning and their full share of waste management costs.
Carbon Capture and Storage (CCS)
* The Government has announced details of a competition for the
first commercial scale demonstration of CCS - this will help
reduce costs and risks for future projects and put the UK in the
lead on the design, construction and operation of CCS.
* CCS has the potential to reduce the carbon emissions from
fossil fuel power stations by up to 90%.
* We are creating a regulatory framework to enable private sector
investment in CCS projects while also protecting the environment -
for example by putting in place a licensing regime for storing
carbon dioxide offshore.
Renewables
* We will strengthen the Renewables Obligation (RO) to drive
greater and more rapid deployment of renewables in the UK. For
example we will amend the RO to give more support to new and
emerging technologies such as offshore wind, wave and tidal by
banding the Obligation. Our proposals will also enable the RO to
provide additional support to microgenerators (50 kW or less).
* To support the growth of offshore renewables we will create
additional powers enabling Ofgem to administer an efficient and
effective regulatory regime for offshore electricity transmission
to connect large scale offshore renewables projects to the onshore
electricity network.
* With our new proposals in place we expect a tripling of
electricity supplied from renewable sources to around 15% by 2015.
Offshore gas supply infrastructure
* The current offshore regime for gas infrastructure projects is
complex and a barrier to investment.
* The Bill will strengthen and simplify the regulatory framework
to give investors more clarity and certainty, reducing costs and
risks for private sector investment in offshore gas supply
projects such as offshore storage and LNG infrastructure.
* This will help maintain reliable supplies of gas given we
expect the UK will need to import well over half of its gas
supplies by 2020.
Offshore oil and gas decommissioning
* The Energy Bill will update legislation in this area to reflect
that there are more small players in today's oil and gas
market and to ensure adequate environmental and tax payer protections.
Offshore renewables decommissioning
* Similar tax payer protection measures will be brought forward
in the context of offshore renewables decommissioning, ensuring
that companies have adequate decommissioning funds so that both
the tax payer and the offshore environment is protected.
The Energy Bill, alongside the Planning and Climate Change Bills,
will ensure our legislation underpins the long term delivery of
our energy and climate change strategy.
Notes for Editors
1. The Future of Nuclear Power consultation ran from 23 May to 10
October 2007.
2. We conducted a full consultation based on Government's
preliminary view that it was in the public interest for energy
companies to be allowed to invest in new nuclear power stations.
In particular:
* Consultation ran for 20 weeks - longer than
usual 12 week period for Government consultations.
* In total, over 4,000 individuals and groups responded to the
consultation or attended one of our events.
* Over 2,700 written responses. Nine meetings with nearly 1,000
members of the public. A further 20 meetings with 600 stakeholders
and those who live near existing nuclear sites. Direct mail to
5,000 + grassroots / community organisations. Placed copies and
posters in all public libraries.
* Consultation website designed to make it easy for people to
respond, although people could respond by post if they preferred.
All who responded are receiving individual response directing them
to published response on our website. Individual responses
published except where people asked for their responses to remain confidential.
* All written responses have been published in full on the
website, except those where participants requested confidentiality.
3. Dr Tim Stone was appointed in January 2007 as an advisor to
the Secretary of State for Trade and Industry and Chief Secretary
to the Treasury on nuclear new build decommissioning and long-term
waste management cost allocation. Today we can announce that the
Government will be extending his contract. In addition to this we
announce today that he will also work with the regulators to
explore ways of enhancing their efficiency in dealing with the
challenges of a nuclear new build programme.
4. The response to the Renewables Obligation consultation on
banding was published today and is available on the BERR website.
5. The Government today issued its response to views on the July
2007 Policy Statement on the new offshore transmission regime. The
Government has confirmed that Ofgem should run the tender process
for licensing connections of large scale offshore renewables
projects to the onshore electricity network. We are seeking
additional powers in the Energy Bill to enable Ofgem to carry out
this role effectively.
6. The summary of responses and analysis of the Managing
Radioactive Waste Safely consultation is available on the DEFRA
website: http://www.defra.gov.uk