UK: Chris Huhne's Energy Policy Statement to Parliament

Last Updated: 25 October 2010
Article by Robert Lane, Vivek Gambhir, Munir Hassan and Juliet Stradling

On Monday, Chris Huhne, the Secretary of State for Energy and Climate Change, updated Parliament on the Government's energy policy and published a number of documents.  Whilst the update contained few surprises, it confirmed the direction of the Government's policy on new nuclear power stations, clearing the way for nuclear support to be proposed in the forthcoming electricity market review consultation, and confirmed that some further steps were being taken towards putting in place the regulatory framework for new nuclear.  It also confirmed that the Government has decided against pursuing a large-scale power project in the Severn Estuary.

1. Publication of revised National Policy Statements for further consultation

  • Chris Huhne announced the commencement of the further consultation on the six draft energy National Policy Statements (NPSs) and accompanying documents (namely, Appraisals of Sustainability, Habitats Regulations Assessments and Impact Assessment), all of which have been revised by the Government since they were originally published for consultation in November last year. The revised draft NPSs have now been laid before Parliament for a period of scrutiny, which will end on 31 January 2011.  The formal consultation will close slightly earlier on 24 January 2011.  The Government has also published a formal response to its earlier consultation. 
  • The significant policy changes to the NPSs include the identification of eight sites as potentially suitable for new nuclear power stations by 2025, namely, Bradwell in Essex, Hartlepool, Heysham in Lancashire, Hinkley Point in Somerset, Oldbury in Gloucestershire, Sellafield in Cumbria, Sizewell in Suffolk and Wylfa on Anglesey. The sites in Dungeness, Kent and Braystones and Kirksanton in Cumbria have not been included due to environmental concerns.
  • The revised NPSs also reflect the Carbon Capture Readiness (CCR) and Carbon Capture and Storage (CCS) requirements for new thermal power stations.  The Overarching NPS confirms that, if the Government decides to implement an additional Emissions Performance Standard as part of the forthcoming electricity market review, this will not be part of the consents process. 

2. Regulatory Justification of two new nuclear reactor designs

Draft statutory instruments containing Chris Huhne's decision that two nuclear reactor designs, Westinghouse's AP1000 and Areva's EPR, are justified were laid before Parliament. This is one of the steps that the Government is required to take in order to allow new nuclear power stations to be built.

3. Financing of Nuclear Waste and Decommissioning

  • The draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010 was laid before Parliament.  The Regulations set out the matters, in addition to those included in the Energy Act 2008, for which operators of new nuclear power stations will be required to estimate the costs and set aside funds to meet in full their waste management, waste disposal and decommissioning costs. If approved by Parliament, this Order will be followed by Decommissioning and Waste Handling (Finance and Fees) Regulations, which will allow the Secretary of State to monitor operators' decommissioning plans and activities over time.
  • Whilst the laying of these Regulations is helpful progress, potential operators will be more interested in the forthcoming consultation on the contents of funded decommissioning plans. 

4. No public subsidy for new nuclear

Chris Huhne took the opportunity on Monday to clarify what would constitute a subsidy for new nuclear power and therefore what the Government has ruled out by its frequent statements that there will be no public subsidy for new nuclear power. In doing so, it is now clear that the Government has not ruled out providing support for new nuclear, so long as that the support is also available to other types of generation.  This would allow the Government to introduce a "low carbon obligation" to replace the existing renewables obligation or a carbon floor price.  It has also cleared the way for the Government to take title to radioactive waste and implement the Brussels Convention on nuclear liability. 

5. Severn Tidal Power Feasibility Study: Conclusions

Having conducted a two-year feasibility study into the proposed 8.6 GW tidal power scheme in the Severn Estuary, the Government has chosen to exclude it from the NPSs. The project was intended to provide for up to 5% of current electricity generation but the study concluded that in the context of the relative costs, benefits and impacts of a Severn tidal power scheme, as compared to other options for generating low carbon electricity, this project was less attractive than other low-carbon projects.  In addition to the environmental opposition, a key factor seems to have been that the project would have been a "one off" project that could not be replicated within the UK or provide export opportunities. 

Further information

To view the statement on DECC's website, please click here

To view the consultation on DECC's website, please click here

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 20/10/2010.

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