We had a range of discussions at ministerial and official level across Government to agree the package of measures in the energy White Paper. Those measures will have a powerful impact on our carbon emissions goals.
The energy White Paper is enthusiastic about encouraging decentralised renewable energy generation. The main mechanism for that is the renewables obligation, which costs the average householder £7 a year on energy bills. At a cost of only £5 a year more, the German system—which is common in most of Europe—has been far more successful in stimulating investment in decentralised renewable energy generation. Although there is to be a reform of the renewables obligation—
Order. I must appeal to the House. This does not apply only to the hon. Lady, but the supplementary questions are very long. They should be short and sweet. I know that the hon. Lady can do that, but I think that the Minister can manage an answer to what she has already said.
Thank you, Mr. Speaker. I know of my hon. Friend’s interest in, and commitment to, feed-in tariffs. Our energy market is different from that of Germany, and our electricity is cheaper. There is no clear evidence that alternatives such as feed-in tariffs would produce a better performance. When we had a similar measure—the non-fossil fuel obligation—it did not really work for us; between 1990 and 1998 it delivered 770 MW, and the renewables obligation has done a lot better than that. Our proposals in the energy White Paper to band it will make it even more effective as a policy instrument in future.
My apologies, Mr. Speaker, for my phone going off like a rocket earlier; I meant no discourtesy to the House. I have a new piece of parliamentary kit that is more persistent than I expected; I thought that I had turned it off before I entered the Chamber.
The possibility of there being new nuclear build is anticipated in the energy White Paper, and that will have an impact on renewables. Has the Minister estimated by how much new nuclear might reduce the contribution of renewables in meeting our likely future electricity needs? I ask that in particular because the capital costs of building a nuclear power station are so great that the intention would be to run it constantly at full blast, in contrast to carbon capture and storage or coal, gas or oil stations whose outputs are variable.
The answer is that we need both if we are to achieve our climate change targets and move the UK economy on to a low-carbon basis. The Government believe that there is a case for nuclear new build and we are consulting on that, but we also have a strong policy framework to encourage significant growth in renewables. We want renewables to account for 15 per cent. of electricity by 2015. The simple answer is that we need both.
Following on from the question of my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), my hon. Friend the Minister will be aware that 100 times more solar panels are fitted in Germany than in Britain, so is it not time to suggest to the Chancellor—who will soon be our new Prime Minister—that the cap on grants for solar panels should be removed so that we can invest massively in them, as Germany does, instead of some of the nuclear proposals?
One of the things that we are doing through the energy White Paper is doubling the size of the energy efficiency commitment, which is being renamed the carbon emissions reduction target—CERT. The doubling of the size of that scheme will provide opportunities for significantly more microgeneration in future. I am also aware that there are issues to do with making sure that suppliers stick to their commitments to make it easy for microgenerators to sell their electricity into the grid. All the major suppliers have stated their commitment to publishing transparent and easily accessible tariffs. Good progress is being made and we are continuing to work closely with suppliers on this important issue.
Did the Minister’s Department make representations on the Severn barrage proposal and its damaging impact on biodiversity and the environment? Is he aware that a meeting of the increasingly large and powerful body of objectors to this daft proposal will take place at Slimbridge in the next couple of weeks. Will he ensure that an official from the Government office for the south-west is present so that the serious objections of the environmental lobby can be properly put?
The Severn barrage proposal has been widely discussed for the best part of 20 years. The Sustainable Development Commission is considering it and is due to produce a report in September. I am aware of the potential environmental consequences of a Severn barrage, but I would also point out the potential benefits. A Severn barrage could provide up to 5 per cent. of the UK’s electricity. It would be a renewable source, and given what we know about climate change and our targets in addressing it, it is only right that we seriously consider this option and look at the benefits and costs in that context.
The trouble with the energy White Paper is that it flags up many interesting ideas, but totally fails to set a coherent strategy for ambitious implementation. Take combined heat and power, which has huge potential. Did the DEFRA team point out that exemption from the climate change levy, which is trumpeted in the White Paper as the principal policy incentive for more CHP, lasts only until March 2013? Given that it takes up to five years to get a large project up and running, the exemption for new projects is almost worthless. Is it not the case that the Minister’s—
I met representatives from the Combined Heat and Power Association earlier this week and they told me how encouraged they have been by the fact that the Government have been listening to their concerns. The hon. Gentleman raises the issue of the climate change levy exemption and we will need to look at that. We need to send the right long-term signals and the Government believe that CHP will be an important element of the UK’s energy mix for the future.