Electricity Supplies: Cross-Channel Link (Hansard, 9 April 1986)

Lord Campbell of Croy
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Scottish Office (Lord Gray of Contin)
My Lords, the Central Electricity Generating Board has advised that, under an agreement between the board and Electricité de France, the 1,000 megawatt capacity of the first half of the cross-channel electricity link will be used to import electricity into the UK for two years. The quantity of electricity involved will depend on a number of factors, including practical operating experience with the link. Discussions on possible arrangements for the second 1,000 megawatt of the link are continuing between the utilities.

Lord Campbell of Croy
My Lords, I am grateful to my noble friend for his reply. Is it correct that the French will shortly be able to sell electricity to this country, economically, at about 20 per cent. less than United Kingdom prices because over half of their electricity is now being generated by nuclear power stations and more of those nuclear stations will soon be coming into operation?

§ Lord Gray of Contin
My Lords, it is correct that the French have made substantial advances with the production of nuclear power and that the majority of their power generation now comes from that source. My noble friend is also correct that the cost at which they can now export electricity through the link to us is some 25 per cent. less than that already available to the Central Electricity Generating Board from other sources.

§ Lord Mackie of Benshie
My Lords, can the Minister say how much the electricity is costing French industry? Are the French selling electricity to us at a lower price? In other words, are they dumping electricity here?

§ Lord Gray of Contin
My Lords, that is something which I cannot answer. The negotiations which have taken place between EDF and the CEGB are commercially confidential. They are to the advantage of the CEGB but I am not in a position to say whether the prices are being subsidised by the French.

§ Earl Lloyd-George of Dwyfor
My Lords, will the Government bear in mind the possibility of using the service tunnel in the proposed Channel link for any future electricity cables, or indeed other utilities from this country to the Continent?

§ Lord Gray of Contin
My Lords, that is a point which I have little doubt is being considered; but there are technical difficulties of which the noble Earl will be aware. However, I have noted what he said.

§ Baroness Seear
My Lords, will the noble Lord find out whether the French are in fact subsidising the electricity and reply to the question asked by my noble friend Lord Mackie? It is a matter of considerable importance.

§ Lord Gray of Contin
My Lords, with respect to the noble Baroness, this is not a matter for the British Government or the French Government. It is a matter for the utilities concerned.

§ Lord Stoddart of Swindon
My Lords, but does not the noble Lord agree that this is an important aspect of energy policy? Is it not a fact that the French are using this country to dump some of their over-capacity? Does not he also agree that it would be most unfortunate for security of supply if we made too many of these arrangements? It would be bad not only for our own electricity industry but also for the construction and engineering industries in this country.

§ Lord Gray of Contin
My Lords, I am rather surprised at the attitude of some noble Lords opposite. The CEGB has been able to negotiate a highly advantageous commercial transaction but all sorts of doubts now appear to be placed upon it. I can say to the noble Lord, Lord Stoddart, that for the present link a two-year period has been negotiated in which the French will supply electricity to this country. No arrangements have been made beyond that. The link is designed so that of course electricity can be imported or exported. Beyond the two-year period no negotiations have so far taken place.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that the main incentive, which has been in existence for some years now, is that the peak point for the consumption of electricity in France is at a different time to our own? Therefore, it has been an advantage, for the past two decades I think, for France to export electricity to us, and I believe for this country to export electricity to France in off-peak periods. There is therefore a perfectly sensible commercial objective to this arrangement.

§ Lord Gray of Contin
My Lords, my noble friend is absolutely correct, and that is precisely why I emphasised that the link is designed for the import or export of electricity.

§ Lord Stoddart of Swindon
My Lords, the noble Lord will surely agree that it would be unrealistic to see this as a two-year agreement when the link has cost £760 million to build. Therefore, it is a permanent link. Is the noble Lord aware that I am not the only 193 one concerned about the effect on our civil engineering, construction and engineering industries if too many of these agreements are made? I think the existing agreement may very well be reasonable, but it will be most unreasonable to extend this beyond what is reasonable.

§ Lord Gray of Contin
My Lords, I am sure that we are all most anxious to be reasonable. I suggest to the noble Lord that, as time passes and we come toward the end of the two-year period, that would be an appropriate time to re-assess the situation and arrange future commercial contracts.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that the question of what the French charge internally to industry or to anybody else is something of a red herring? The lesson that we have to learn is that the French have proved that energy from nuclear power is cheaper and as efficient, and we shall neglect that knowledge at our peril.

§ Lord Gray of Contin
My Lords, I fully appreciate what my noble friend has said. I agree with him because he has stated a fact which cannot be refuted.

Lord Campbell of Croy
My Lords, is it satisfactory that we should be falling so far behind France in the nuclear production of energy, with its great advantages in cost and cleanliness? Once the Sizewell Inquiry is over, will the Government make the decisions that are necessary for this country a matter of the highest priority?

§ Lord Gray of Contin
My Lords, I can give my noble friend the assurance that as soon as the report of the Sizewell Inquiry is received, the Secretary of State for Energy will make it a top priority to consider it carefully, and a decision will be reached as soon as is reasonably possible.

§ Lord Cledwyn of Penrhos
My Lords, will the noble Lord be good enough to show a little more concern about the situation? Is it not an extremely serious matter that we appear to be lagging behind France and possibly other Continental countries in the efficient and economic production of electricity, which is our most important source of energy? What action are the Government taking? France has a public undertaking and we have a public undertaking. What precisely are the Government doing to ensure that we do not become over-dependent on another country in the production of this vital energy?

§ Lord Gray of Contin
My Lords, so far as concerns the production of energy, this country has been singularly fortunate over the years in that our resources of fossil fuels have been very great indeed. France has not had that advantage; consequently minds have been concentrated and it has moved ahead with its nuclear power programme very much more quickly than anybody else in Europe, with the consequent benefits to its industry which are now becoming apparent. However, there is no question of the Government not pursuing our own advancement in the energy field.
194 I find it difficult to decide exactly what the noble Lord is asking me to do. I do not think that the Government can do more at the moment as regards the nuclear side of the industry. However inconvenient public inquiries may be in respect of the decision-making process, they are the democratic way of setting about things, and however frustrated we may be in waiting for the outcome of a public inquiry, I do not think that there is any way in which we can circumvent this process.

§ Lord Mellish
My Lords, are there any assurances that the Minister can give, in view of the fact that the CEGB will obtain electricity from France at bargain prices, that the poor old consumer will also get a reduction?

§ Lord Gray of Contin
My Lords, I have no doubt that that point will be well noted by those who are responsible.

§ Lord Aldington
My Lords, will my noble friend remind noble Lords sitting opposite that it was they who, some 10 years ago, prevented those of us who advocated the adoption of PWR and the building of PWR stations in this country from going ahead, and it hardly lies in their mouths to accuse my noble friends of having delayed the adoption of nuclear power?

§ Lord Gray of Contin
My Lords, that is a point which my noble friend has made very well. I do not think that I can improve on his choice of words.

§ Lord Stoddart of Swindon
Oh, yes; yes, indeed, my Lords. The accusation was made by the noble Lord against the Labour Party and a Labour Government, whom he accused of dragging their feet on the installation of nuclear power. May I remind the noble Lord that it was the Select Committee on Science and Technology of the House of Commons which recommended against the PWR, and it was a Labour Government who planned the two nuclear power stations that are being constructed at Heysham and Torness? We are concerned that we should have the correct form of nuclear power in this country, and that has not yet been decided and will not be decided until Parliament has its say following the Sizewell Inquiry.

§ Lord Gray of Contin
My Lords, it is perhaps best to look forward rather than back and we cannot make reasonable progress until we have the result of the Sizewell Inquiry. But everything reasonable is being done to ensure that the result of the inquiry will be given to the Government as soon as possible, and when it is given, a decision will be taken in all haste.