The future of energy

Written by Vincent Cable MP and published in Informer on Mon 17th Jul 2006

This week the government made a commitment to a new generation of nuclear power stations. It argues that replacing the existing plans is necessary to help control global warming and to supply indigenous, not imported, energy. It promises that private companies will build the new stations without any subsidy or help from the tax payer.

I and my Lib Dem colleagues are critical of this decision. No UK nuclear power station has ever been built on budget and on time. Britain's main nuclear company, British Energy, went bust and was bailed out three years ago. There will be a massive bill, currently estimated at £90 billion, for decommissioning and waste disposal. No one has yet explained where the waste will eventually be stored. The risk of a Chernobyl type disaster, or terrorist act, is remote but would be catastrophic.

Nor is the new commitment necessary. There is enormous scope for economising on energy use through energy saving at home (long lasting light bulbs; switching off 'stand by' on TV sets; better insulation), on the roads (smaller cars, or the new hybrid vehicles) and in offices and industry. We have scarcely begun to use new renewable technology. Some towns like Woking are developing their own local heat and power source, saving big loses on the transmission system.

I don't pretend that it is easy to change. That is why I argue for a tax system under which we tax people less on their income and more on the resources, including energy, which they use. Some industries, like aviation, would clearly pay more, and that might be unpopular. But choices have to be made.

It is good that the government is thinking ahead to the next generation; but the nuclear option is almost certainly the wrong option.