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Renewable Electricity Generation

Volume 475: debated on Thursday 1 May 2008

2. What discussions he has had with the Secretary of State for Business, Enterprise and Regulatory Reform on the development of renewable forms of electricity generation. (202788)

I regularly discuss a range of issues with my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform, including the importance of renewable energy in reducing CO2 emissions.

I thank the Secretary of State for that answer. He will be aware that the Government’s performance and innovation unit has said:

“A sustained programme of investment in currently proposed nuclear power plants could adversely affect the development of smaller scale technology.”

When will his and other Departments work together to make sure that renewables are given a fair chance?

In fairness, I think the hon. Gentleman would recognise that since the renewables obligation was introduced in 2002, renewable generation in this country has nearly trebled in size. That is a practical example of change taking place. We have recently consulted on the nature of the renewables obligation certificates, and we will introduce double ROCs, which will encourage some of the newer technologies. We are, of course, a leading country in the world for investment in offshore wind power, and the Government are very committed to a transformation in the investment in renewables. The simple reason why we are where we are is that we had North sea oil and gas. I think that the whole House recognises that, but we are committed to change, and the policies that we are putting in place will ensure that it happens.

I am sure my right hon. Friend will be as concerned as I am at today’s news that Shell is pulling out of the London Array, which will be the UK’s biggest offshore wind farm. When it is ever suggested that there should be a windfall tax on the vast profits of energy companies, they say that they need the money to invest in new technologies. In view of Shell’s announcement today, should that policy be revisited by the Government?

I have to say that I would describe the news that Shell wishes to sell its stake as very disappointing, and that many people would want to understand why that was the case, especially in a week in which the company has announced record profits. What I would say on the Government’s part is that we have given, and will continue to give, full support to this important project, which, when completed, will produce enough electricity to power about one in four homes in Greater London.

The Secretary of State will know that planning applications for wind turbines on industrial estates are beginning to show themselves. I know of one for a 147 m tower on an area containing 161 businesses and covering 8,000 sq ft. Clearly there must be some limit on the number of wind turbines on industrial estates—[Interruption.] Clearly there must be some limit. What is that limit? How does that impact on fair trading, given the recognition that we need to ensure that access to alternative power sources is available to all industry?

What I would say to the hon. Gentleman—I am comparing the two questions that we have just heard—is that we cannot have it both ways; there are choices to be made about how we generate our energy. It is for the planning authorities to take decisions about individual applications, but if we talk to renewable energy companies, including those involved in wind power, they will tell us that in the UK, the regulatory regime is not a big obstacle as far as financial incentive is concerned; they will tell us that the obstacle is the planning system. We need to examine carefully, in the end, the decisions made at local level on whether permission is given or not, because those decisions will have a huge impact on the speed with which we are able significantly to increase our renewable energy generation.

I suspect that the Secretary of State may share the disappointment felt by hon. Members on both sides of the House that the Government felt it necessary yesterday to vote against new clause 4 of the Energy Bill, which would have paved the way for the introduction of renewable energy tariffs. Will he assure the House that he will hold discussions with ministerial colleagues to find alternative ways of ensuring that tariffs are introduced that will enable and encourage decentralised renewable energy generation?

I am very committed, as I know my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform is, to doing precisely that. That is why the Minister for Energy announced a couple of months ago that, as part of the renewable energy strategy, one of the things on which we will consult in the summer, because we are determined to make progress, is, indeed, feed-in tariffs for microgeneration. One has only to look at a country such as Germany to see the impact that such a system has had. We will examine that as part of the strategy, and we will publish our proposals in due course.

I am listening to the Government describing us as leading on offshore wind power, yet Shell is pulling out of key offshore wind farm projects in this morning’s newspapers. When we look further at the Government’s biomass co-firing feedstocks, we find that a fifth of those are coming from palm oil products, which are causing deforestation and loss of habitat for the orang-utan. We know that things are not being sustainably sourced, and we know that we will not even be close to meeting the EU target of 20 per cent. by 2020 if we lose wind farms and Shell’s investment. I do not think that the Minister’s response that it is all very disappointing is good enough. Will he please see what he can do to try to meet these targets, which the whole House would support?

The Government are responsible for many things, but the decision that Shell has taken is not one of them. Shell made it clear in its statement that the regulatory framework that the Government have set is not the reason for its decision. I said in answer to the earlier question that many people would like to know the reason because Shell has spoken previously about its commitment to investment in renewables, and this is an important test. I hope that the project will be sustained.

On offshore wind, 3.3 GW already have permission. Round 2 should deliver another 7 GW. The Government want a further major expansion up to 25 GW, so we are serious about this.

On biofuels, Ed Gallagher is carrying out the review. As far as the climate is concerned, there are good biofuels and bad biofuels, and we have to be able to distinguish between the two. The review will be important, but we need to encourage the right kind of biofuels. We also need to encourage the second generation of biofuels, and we are determined to do that.

When my right hon. Friend meets the Secretary of State for Business, Enterprise and Regulatory Reform, will he remind him that it is profoundly wrong for politicians or political parties who advocate renewable energy to then deny applications involving that technology? That is the case with the nimby Scottish National party Administration in Scotland.

I agree with my hon. Friend, and I made the same point a moment ago. We have a choice to make. It is instructive to compare and contrast the policies advocated from the Opposition Benches with the decisions taken by the representatives of those same political parties when it comes to individual planning applications. In the end, we have to be held to account for our decisions.