A new power station in Sizewell will be needed - but costs will have to come down to compete with other sources

PUBLISHED: 09:09 14 January 2015 | UPDATED: 12:33 15 January 2015

Secretary of State for Energy & Climate Change Ed Davey at Holkham Hall for the official opening of the Sheringham Shoal Offshore Wind Farm. Picture: Ian Burt

Secretary of State for Energy & Climate Change Ed Davey at Holkham Hall for the official opening of the Sheringham Shoal Offshore Wind Farm. Picture: Ian Burt

Archant © 2012

A new power station in Sizewell will be needed, energy secretary Ed Davey has said - but costs will have to come down to compete with other low carbon technologies.

Not every offshore project will be backed

Not every offshore wind project plan will be backed, the energy secretary has said, as he urged the industry to cut costs to ensure a healthy long term future.

But Ed Davey said that despite the setbacks for the offshore wind farm industry in East Anglia, he believed the industry had a bright future.

Last year Scottish Power Renewables – the developer of East Anglia One with Vattenfall Wind Power – announced that it was significantly scaling back its wind farm, while the developers behind the 68-turbine Galloper wind farm project, located south of Suffolk, shelved the scheme altogether.

Although it has indicated that its plans could be resurrected in the Spring.

Mr Davey said: “The truth is there are more projects than we have money for, or consumers have money for. You cannot back every project, you don’t want to, you want competition. You want the cheapest and most cost effective projects to come forward.” He refused to talk about RWE Galloper and East Anglia One specifically, but hailed the Sheringham Shoal plan, saying: “I think the offshore wind industry is great news for East Anglia now and will be even better news in the future.

“Energy policy is not about individual projects, it is about the whole mix. We have offshore wind, onshore wind, solar, nuclear, carbon capture, gas, energy efficiency, storage. If you have a mixed approach you are not putting all your eggs in one basket we are putting some eggs.” He said that the industry could do more to bring down costs, but said: “There are some individual companies who are showing real leadership and are definitely bringing the costs down.”

The Liberal Democrat minister, who has been in charge of the UK’s energy policy since 2012, said that he had changed his mind on the need for nuclear because of his concerns about climate change, but was adamant that he would do the industry “no special favours”.

He said that if plans started soon, the plant could be in operation by the middle of the next decade, but that it was up to the French energy company EDF to come forward with proposals for the Suffolk project.

Mr Davey, who took over at the Department for Energy and Climate Change when Chris Huhne stepped down in 2012, said that the Sizewell power would be needed because by the end of the next decade as coal power stations closed, there was less oil, and the current nuclear fleet was mothballed - but said the industry would have to compete for its share of the market by bringing down costs.

“We are having to run for the long term and running for the long term means investing now for schemes that are not going to open until 2023 and beyond,” he said.

“Hinkley Point C, if we sign the deal later this year, maybe in this Government or the next Government, it won’t start generating until 2023.

“Sizewell C, if we started soon, would be the middle of the next decade, I don’t know exact times.”

He said the timetable for Sizewell C would depend on the developers.

“It is not a Government operated scheme. It is EDF who owns the site and it is up to them when they come forward. I suspect they will wait until Hinkley C, is my guess. But we are not putting obstacles in their way.”

The initial proposals for a multi-billion pound project in Suffolk to the north of Sizewell B power station were published in November 2012.

Formal proposals to create a new wildlife site to compensate for the loss of an internationally recognised habitat have been submitted, but EDF is yet to put in plans to the Government.

Before taking the top energy job Mr Davey condemned nuclear power as dangerous and expensive and he admitted he had always been sceptical about the energy source.

“I have been sceptical for one major reason and that was cost,” he said.

But he defended the “new model and market reforms” announced last year which will provide a guaranteed price for nuclear, claiming that it would have to compete with other things.

“My view has increasingly become that whatever low carbon technology is out there we should give it a fair run for its money because climate change is the thing we should worry about for our children so therefore nuclear and carbon capture and storage, whatever it may be needs to be part of the story,” he said.

But he added that he believed nuclear power stations, offshore wind farms and carbon and capture storage projects would be built in the 2020s, but he did not know how many of each there would be.

“What we don’t know now is whether it will be 80pc nuclear, 10pc carbon capture and storage and 10pc offshore wind, 80pc offshore wind, 10pc nuclear and 10pc carbon capture and storage.

“The mix we won’t know now. We will know towards the end of this decade as technologies develop, and the challenge for nuclear, and that is why a lot of people are coming up with new nuclear technologies and new nuclear reactor designs, is it can see the costs of things coming down and it knows it is going to have to be competitive.

“This is what I think is so fantastic.

“The best thing for the consumer and our economy in the next 30 to 40 years is we have competition between the technologies.

“If we say we are just going to have nuclear, or we are just going to do carbon capture and storage, we are going to pay higher prices, but because we have several low carbon technologies we are backing now, that it is going to be great news for the consumer because they are competing against each other.”

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