No, I think that wind has an important part to play in the mix, but I am unequivocal when I say that we should have subsidies in the nuclear power industry as well.
There are many misconceptions about the nuclear industry, not least the energy market reforms that are hugely generous to companies such as EDF. The reality is rather different. All three new-build companies—Horizon, EDF and NuGen—are building plants at their own expense. Contracts for difference guarantee a price for the electricity produced, but that is done for one simple reason: it is impossible to raise £7 billion to build a nuclear power station unless the banks have some idea of what the turnover will be. That is why we need contracts for difference to bring predictability to the price.
A recent report by the Department of Energy and Climate Change suggested that contracts for difference could lead to a fall in bills of between 6% and 8%—welcome news during these difficult economic times—but to characterise that as a subsidy is wrong. In fact, DECC has made it clear time and again that it will not subsidise new nuclear energy. I have not always supported that position, but it would be remiss of me not to point out that the Department is firm in its view.
Every study I have seen shows nuclear energy as one of the cheapest large-scale low-carbon technologies. It is also a huge employer and will soon account for 0.4% of British GDP, equating to 32,500 jobs. I believe that nuclear is the future of low-carbon technology. It is clean, cheap and provides employment opportunities in areas that really need them. I support nuclear energy and the energy market reforms. They are the way forward and will keep the lights on for decades to come.
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