Source: BBC Radio 4: Today Programme
URL: N/A
Date: 16/05/2011
Event: MP Tim Yeo on low-carbon electricity subsidies in the UK
People:
John Humphrys: The government said we need new nuclear power stations, but it won't subsidise them. Well, now the Conservative MP who chairs the Energy and Climate Change Committee, Tim Yeo, has said it must not only subsidise them but it must be upfront about doing so. Mr Yeo's on the line, good morning to you.
Tim Yeo: Good morning, John.
John Humphrys: I suppose the first and obvious question is can we afford to do that?
Tim Yeo: I think we can't afford *not* to do it, really. I think if we're going to get anywhere near the targets we've set for reducing carbon emissions from electricity generation, that requires a huge investment in low-carbon energy, and one of the best forms of low-carbon electricity generation is, of course, nuclear. Er, but it will need some sort of price support to get the huge, upfront investment that a nuclear power station requires.
John Humphrys: You say some sort of price support, but it goes beyond that, doesn't it, because what we found in the past is that nuclear power stations have proven to be prohibitively expensive, parly because of the waste that they generate.
Tim Yeo: Yes - the new generation, the new technology in nuclear is actually, I think, more reliable and probably going to offer better value for money, but the truth is it's a sort of seven or eight-year investment, and therefore companies which are going to have to put their hands in their pockets for several billion pounds do need some sort of idea of what return they're going to earn when they finally start generating electricity. And that's why I think the government has been right to acknolwedge this, but they'e done so in a slightly covert way, because they didn't want to admit there was going to be any special support for nuclear. I think there is an acceptance that *all* forms of low-carbon electricity are likely to cost more, and therefore require support, probably from consumers.
John Humphrys: So - I'm slightly puzzled by this, because when I talked to Chris Huhne in the past, the Energy Secretary, he said no, categorically, there won't be subsidies for the nuclear industry.
Tim Yeo: Well, there won't be any from the taxpayer, because of course that's not the way in which we support low-carbon electricity, we have -
John Humphrys: So from whom, then?
Tim Yeo: Well, it comes in the form of the consumer price. Even at the moment, we have what are called Renewables Obligations Certificates, and the cost of those are [sic] borne by consumers, in prices that are slighly higher than they otherwise would be -
John Humphrys: Comes down to the same thing in the end, doesn't it, because we all have to use electricity. We don't have a choice in the matter, we have to pay for our electricity, so whether we pay for these subsidies through our taxes or through our electricity bills, it comes down to the same thing in the end, doesn't it?
Tim Yeo: Yes, it does, pretty much, and frankly I think the government are right to recognise this, that consumer prices will have to be slightly higher to get the low-carbon electricity. Not just from nuclear - it applies to offshore wind, it apples to solar, it applies to a variety of technologies. I think they're right to propose this. I think it would be a more - a clearer debate and perhaps more honest debate, if we recognised that nuclear will get this kind of support alongside other low-carbon electricity.
John Humphrys: Tim Yeo, thanks very much indeed.