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Energy Review

Volume 448: debated on Thursday 6 July 2006

I thank the Secretary of State for that full and comprehensive reply. As part of the review, will he tell the House what consideration he has given to the role that green crops such as sugar beet could play in producing biomass, and particularly biofuel? Until recently, the Drax power station, in the constituency of Selby, was taking green crops from the Vale of York to co-fire, but it has now stopped doing so. I am sure that the Secretary of State will realise that this is becoming a matter of some urgency, as the sugar beet factory at York is scheduled to close next year, and we are looking for alternative means of creating energy from these crops.

The hon. Lady makes a good point. There is some potential in that regard. She mentioned biofuels, and she will be aware that I announced last November that we would impose an obligation that 5 per cent. of fuels had to be biofuels. The impact on carbon of that measure will be the equivalent of taking 1 million cars off the road every year. These matters are under consideration, and I will have more to say about them shortly.

What discussions will the Department be having with British Sugar to determine how sugar beet can be used for biofuels? Is the Secretary of State aware that its Allscott factory in my constituency is to close in April 2007, with the result that 650 Shropshire farmers will no longer have a market for this important cash crop? In addition, 120 people working at the factory will lose their jobs. Is it not time for British Sugar to start working with the Government to create co-operatives with farmers to deliver biofuels using sugar beet, rather than just talking about it?

I am not in a position to tell the House what discussions have taken place, but, as I said to the hon. Member for Vale of York (Miss McIntosh) a moment ago, sugar beet is an important resource. I know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is particularly interested in this matter, because of its agricultural and environmental significance. I agree with the hon. Gentleman that this is something that we need to look at in respect of energy and, crucially, of biofuels.

Does the Secretary of State agree that it would be easier to meet our carbon targets if we moved to the so-called distributed model of electricity generation, in which power is generated on a more local level and sold back into the grid when surpluses are generated? What proportion of our energy demand does he think could be produced in this way?

I am hoping that there will be a large attendance in the House when I make my announcement, because I shall be able to answer all these questions more fully at that stage. My hon. Friend is right: we could do rather more with distributed energy than we have done in the past. I would sound a note of caution, however. Some people say that all our electricity could be generated in this way, but I do not think that that is the case. We could do more with distributed energy, but we will still need a grid and large-scale energy production as well.

The Secretary of State said that the energy review would be published shortly. He will also be aware that one of the main concerns of the renewable generators in Scotland is the question of transmission charges. They are the subject not of the energy review but of a separate review recently announced by Ofgem. Ofgem has made some concessions by changing the need to produce financial guarantees up front, but it has said nothing so far about the actual cost of the transmission charges. After the publication of the energy review, will the Secretary of State ask Ofgem to look closely at the whole question of transmission charges, and at the impact that they will have on renewable generation in Scotland?

Yes, I will keep a close eye on that. The hon. Gentleman will recall that we had exchanges about the matter when I was Secretary of State for Scotland. I made it clear then that I am concerned about the impact of the regime. The fact is that most renewables are more likely to be sited in Scotland—probably in the north of Scotland—which means that the right transmission regime must be in place. As I said to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) earlier, that also means that those of us in politics who say that we believe in more offshore, onshore or marine generation must back that up with a willingness to have the means of transmitting that power to where it is needed.