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Energy Policy (Scotland)

Volume 481: debated on Tuesday 21 October 2008

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Roy.]

I want to start by declaring an interest as chair of the all-party parliamentary group on nuclear energy. I am delighted to have this opportunity to promote discussion on the future energy needs of Scotland. This is a much-needed debate. We currently have a First Minister who is constructing his own folly in Edinburgh and creating a whole new age of irresponsibility by gambling like the banks with Scotland’s future energy. This has been brought through the back door with planning policy in a way that was never intended in the devolution settlement. And there was good reason for that, with energy being an issue that transcends borders and one which is fundamentally important to the whole nation.

The First Minister is pursuing not an energy policy but an energy prejudice, through planning restrictions that have only one criterion: no to nuclear, regardless of the effects.

No, I will not.

With power comes responsibility, and the First Minister’s opposition to nuclear power demonstrates his inability rationally to examine the need for a balanced energy policy and the benefit that nuclear generation has delivered over the past 40 years. It is safe, reliable and, according to expert analysis, affordable. It would help us to reduce greenhouse gases, maintain security of supply and provide affordable energy for Scotland. Today, I want to ask the Minister of State, Department of Energy and Climate Change what his Department will do about its responsibility to provide this for the people of Scotland who are being frustrated in that respect.

Throughout its history, Scotland has been extremely fortunate with energy. There has been a long-term contribution from our nuclear plants, which at their peak delivered over 50 per cent. of our electricity needs. Even today, they still provide over 20 per cent. of our current base load. We have been self-sufficient in oil and gas, due to the huge investment in and exploitation of our natural resources in the North sea, and we have also had a profitable and viable coal industry.

So nuclear, coal and gas, with a contribution from limited hydro generation, have provided core sources of energy and the welcome balanced energy policy that has been so important to maintaining our way of life. But this now hangs in the balance. Our two remaining nuclear plants, at Hunterston and Torness, will both reach the end of their life cycle some time in the 2020s. Hunterston recently announced a life extension until 2016, but it must be recognised that continuing generation after that date will be extremely difficult and will require substantial engineering solutions if it is to continue to contribute to our base energy load.

I congratulate my hon. Friend on securing this important debate. Having mentioned Torness, will he place on record the hard work of the skilled work force in my constituency?

My hon. Friend asked me to do that before the debate, and I am only too glad to support her work force and the excellent contribution that they have made to energy in Scotland.

It will come as no surprise to my colleagues that I was somewhat bemused when the Scottish National party Administration welcomed Hunterston’s life extension, but where there is life there is hope—and where there are nationalists, there is always hypocrisy.

In parallel to this, our two coal-fired power stations at Longannet and Cockenzie are scheduled to close at the end of 2015, on account of European emissions legislation. Even if this could be avoided, those two coal-powered stations will have reached their 48th and 52nd birthdays by 2020. Because of this, the environmental impact and the reliability of these fossil fuel plants will be significantly worse than modern equivalents. So, with the imperative of climate change, and the SNP’s manifesto pledge for a greener Scotland, this should be setting alarm bells ringing.

I am in favour of a comprehensive, balanced energy policy including coal, gas and nuclear, and I fully support the development of renewables to meet our future need. I am deeply concerned, however, that while the SNP Administration in Edinburgh advocate low-carbon energy, they reject nuclear power. Nuclear power is a proven, operational, safe and clean core source of low-carbon energy, whose emissions levels are, according to the UN, similar to those of renewables.

I will not give way to the hon. Gentleman, because he did not ask me before the debate whether he could speak.

So, the SNP’s dogmatic opposition is completely illogical and damaging. I have to say that, south of the border, the Conservatives are not much better. Their flip-flopping on nuclear is unhelpful and dangerous, and it is about time that Conservative Back Benchers gave their Front Benchers a wake-up call.

The need for a truly balanced energy policy utilising all proven sources, which the Government have recognised, has been reinforced by this year’s events. Increases and fluctuations in the price of oil and the effect on the economy have underscored the need to reduce our dependence on imported fossil fuels. My constituents feel that need when they get their food and energy bills, but current SNP policies will leave Scotland at the mercy of world events and dependent on gas for our core source of the energy needed to meet at least 50 per cent. of our electricity needs. I would urge the Minister not to stand by—energy is not a devolved area—as we surely cannot allow dogma and misinformation to impact detrimentally on the people of Scotland.

While I completely agree that Scotland is well endowed with natural resources to generate a large proportion of its electricity from renewables, there are practical problems that affect both security and cost. Research and development are never cheap and require huge capital investment to bring any development to fruition. Carbon capture and storage plants, for instance, are being developed in different countries at present, but that is expensive and on current estimates it will be 2030 before a commercially viable plant is fully operational. Investing in research and development for renewables is vital, but even if they can deliver the Edinburgh Executive’s ambitious target that 50 per cent. of our electricity will come from renewables by 2020, where will the other 50 per cent. come from?

We should not be taken in by the greenwash and saltire swathing of statistics by the SNP. It trumpets the 2006 figures on a lower proportion of nuclear generation as showing a greener Scotland, but it fails to disclose an increase in the use of gas and a reduction in the share from renewables. So a cleaner Scotland it certainly was not in 2006—and that provides a lesson on where I believe the Scottish Nationalists’ energy policy will lead us.

Further evidence was borne out in an astonishing piece in a recent Sunday newspaper, when the First Minister claimed that the green revolution would enter a new phase with a return to “Old King Coal”. While that might make for benign headlines, perhaps the First Minister is unaware of research showing that levels of radiation are up to six times higher for people living around coal plants than for those living around nuclear plants. Perhaps he is also unaware of the thousands of miners still living in Scotland today who suffer from the effects of working in the pits, and unaware of the heavy price they pay in terms of bronchial, chest and lung diseases. But he must surely know of the vast sums of money that the taxpayer has quite rightly had to pay for the extraction of coal and of the recent warning from the wind generation industry that a funding injection is needed to meet the targets. Our security of supply is now in real danger and the energy prejudice being played out by the SNP in planning policy is not only illogical, but highly dangerous. If the SNP continues to oppose nuclear and our two existing coal plants close in 2016, there will be no alternative but to turn to gas for our core energy supply.

The decision to build a new generation of nuclear plants is, in my view, sensible and necessary and should play a role in meeting our needs for Scotland. The decision to sell British Energy to EDF Energy will, I hope, kick-start new nuclear build as soon as possible, but the First Minister’s prejudice could deprive Scotland of the delivery of a low-carbon energy source.

A new reactor on the Hunterston site is supported not only by the work force, but by local communities, which is regrettably more than can be said for a number of renewable developments with which we have had problems. That opposition has set us further back in meeting the challenge we face. Taking the opportunity provided by new nuclear build, with no cost or subsidies to the taxpayer, makes sense and it is vital if we are to avoid dependency on imported gas. The First Minister will not listen to reason—[Interruption.]

Order. The hon. Member for Glasgow, East (John Mason) of the SNP needs to know that this is an Adjournment debate, not a general debate, so it is really a matter for the Member whose debate this is and the relevant Minister—and nobody else. I understand that the hon. Gentleman is new to the House, but he should bear that in mind.

It makes sense to have the opportunity of new nuclear build with no cost to or subsidies from the taxpayer. If we are to avoid dependency on imported gas, its development is vital. The First Minister will not listen to reason, but will my hon. and learned Friend? Few more important topics face the country at the moment than energy supply. Does he agree that the SNP should not frustrate Scotland’s needs by the back door? Does he agree that we need to revisit the issue of planning policy? Would he support an independent body with jurisdiction for all of the UK to advise on energy sources in planning decisions, which have been plagued by prejudice?

Tonight it is also important to express our thanks to those in the nuclear, coal and gas industries in Scotland. In particular, I thank the nuclear workers, not just those in the constituency of my hon. Friend the Member for East Lothian (Anne Moffat), but those at Hunterston who have contributed for almost 40 years and made sure that our core energy levels have been kept high.

The nuclear industry is a soft target for the media and those opposed to nuclear energy. Any problem, however trivial, has been blown out of all proportion and the atmosphere of mystery and fear has been perpetuated. Yet there has not been a single major nuclear emergency in Scotland and the industry has an enviable safety record compared with coal, gas and oil. That safety record is no accident: the regulation and safeguards adopted by the industry, which is more closely monitored, isolate the dangerous radioactive waste from the living environment. Nuclear power contributes only 0.5 per cent. or so to the population’s annual exposure to radiation, with 85 per cent. occurring from natural sources and 14 per cent. from medical treatment. Therefore, the First Minister should be ashamed of his constant misleading rhetoric and demonisation of workers in the nuclear industry.

I want to move on from how we will keep the lights on, to press my hon. and learned Friend about another important energy issue: keeping the heating on. I have raised that topic with several Ministers, in several Departments, and in several Sessions. I make no apologies for revisiting it today.

Throughout the country, many people would have switched on their heating on 1 October. But as a Glasgow MP whose constituency has high levels of pensioners and benefit claimants, I know that many of my constituents will face an unacceptable dilemma this winter as they weigh up which essential costs to cut. The rise in food and energy prices means that two core needs are being hit, and that will not come as news to my hon. and learned Friend. From his time in the Department for Work and Pensions he will know that the measure that we use to calculate the state pension increase—the retail prices index—is at its highest level since 1991.

In Scotland the problem is more acute than in the rest of the UK: incomes are lower, but the heating season is longer and more bitter. About a third of homes in the country have no connection to mains gas, and in the multi-storey flats in my constituency I see people with storage heaters, running on the most expensive fuel. I would be the first to admit that the Government have done a lot to prevent people from having to face such unacceptable choices. In my constituency the unemployment rate is down by 4 per cent. and 15,000 people receive payments worth hundreds of pounds a year to help with their heating bills. But we can and must do more.

Back in March, I asked my hon. and learned Friend to work with energy companies to identify the poorest consumers in need of social tariffs. I know that the BT basic scheme for a fixed phone line involves the DWP helping it to identify eligible customers. Therefore, can he tell me what progress has been made on co-ordinating action over energy?

I welcomed the statement by the Secretary of State for Energy and Climate Change last Thursday that he would bring in legislation if energy companies continued to overcharge customers on prepayment meters. But earlier this year Ofgem also found that customers on social tariffs often did not receive the best deal available, so will my hon. and learned Friend undertake to follow the Secretary of State’s no-nonsense approach on social tariffs?

When my hon. and learned Friend was in his former post, I also lobbied him for a consolidation of the increase in the winter fuel allowance. I put my support for that on record again. Moreover, I repeat my call for support in relation to winter fuel bills to be extended to other vulnerable groups who receive no extra support in the winter—the unemployed, those on income support, the disabled and those with children.

My hon. and learned Friend may mention the cold weather payment in this context. I will make two points about that payment: it is available to only a small minority of those in fuel poverty, and it kicks in only after seven days of below-freezing temperatures have been forecast.

As my hon. and learned Friend will doubtless know, it does not take a week to die or fall ill in the cold; it takes just one bitter night when someone does not put the heating on. I urge him, in his new Department, to work with colleagues throughout Government to provide more help for people this winter. If he is looking for somewhere to start, I suggest the profits of the energy companies themselves. He cannot miss them: they are huge.

I hope that the link between the two issues that I have raised is clear. Both are key to Scotland and my constituents. We cannot have a new age of irresponsibility that gambles on keeping the lights or the heating on.

I congratulate my hon. Friend the Member for Glasgow, North-West (John Robertson) on securing the ballot. He is right to ask, on Scotland’s behalf, whether the Scottish National party will keep the lights on in future decades.

In recent decades, Scotland has been dealt a wonderful hand in energy. North sea oil and gas have boosted its economy, and still have much to contribute. Scotland is rich in potential for renewables such as wind turbines. However, that hand has changed in recent years. Oil and gas are there now, but will decline in the decades to come. Onshore wind turbines will be vital to the achieving of our renewables target. Offshore wind turbines in shallow water have further potential, but some of the shallow areas involve environmental and other issues. Scotland, with United Kingdom Government support, has developed the first deep-water offshore wind farm, the Talisman project, but offshore wind farms in deeper water are more expensive. The technique still needs to be improved if the cost is to be reduced.

In any event, wind requires back-up generation. Given the requirement for steady and consistent electricity supplies at times of peak demand and the fact that wind is by its nature intermittent, there have to be other sources of generation. Onshore wind turbines have potential, but planning is a devolved matter. Unless the SNP wants turbines all over the Scottish landscape, it will limit the number of turbines.

The requirement for that steady and consistent electricity supply must be borne in mind. It is possible to obtain some of it from coal, and, as a Member of Parliament with a working pit in his constituency, I do not need to be reminded of the importance of coal in the context of energy. In the long term, if we can get carbon capture and storage right, coal—as part of a wider energy mix—has the potential to make an enormous contribution. We should therefore work very hard to develop carbon capture and storage, but we cannot pretend—for it is a mere pretence—that coal provides the complete answer. King coal may have been the way forward 100 years ago, but in an era in which we must deal with climate change issues, we cannot claim that it provides the whole answer. It must be seen as only part of a wider energy mix, which means recognising the key role that nuclear generation will have.

Nuclear generation can provide part of the back-up generation that, as I have explained, is necessary, but the SNP has rejected new nuclear power generation. That leaves an emerging gap in Scottish energy provision. In the decades to come Scotland will have to obtain some of its baseload electricity from other sources, perhaps from England and probably from nuclear power stations in England.

That is not a problem in the United Kingdom, because we share energy generation, which is the way it should be. Scotland supplies England with power, and we work together. For an independent Scotland, however, it just does not add up. The First Minister is a bright guy—he is, after all, an energy economist—and he knows that there is a gap in the SNP’s energy policy. It is just too tough a decision for him to acknowledge that he must do something about the nuclear case.

My hon. and learned Friend makes a strong argument. May I draw his attention to the knock-on effect on jobs and infrastructure at Hunterston and Torness, and to the billions of investment that could come Scotland’s way if it signs up to new nuclear energy?

My hon. Friend makes a strong point. It is not just the jobs that are enormously important. My hon. Friend the Member for East Lothian (Anne Moffat), who represents Torness, identified the risk that SNP policy poses to Scottish jobs in the nuclear industry at the moment. The rejection of future development of nuclear generation does put jobs at risk—it is very difficult to get away from that. Not only is there an emerging energy gap but jobs are at risk, and substantial investment that could otherwise be made would be denied to Scotland

There is a real gap in SNP energy policy. It is too tough a decision for the First Minister to acknowledge the nuclear case, so he is letting it drift. He will not endorse the case for nuclear but he wants British Energy to keep its offices in Scotland. He opposes new nuclear build but has extended the life of Hunterston to ensure that jobs and generation continue a bit longer. It is a half-baked policy and we need some change.

Energy policy cannot be allowed to drift. Energy powers our economy, heats our homes and propels our transport. It is essential. Securing the UK's energy supplies as we make the transition to a low carbon economy is one of the greatest challenges that our country faces. As a result, our efforts are focused on three principal issues. First, we must ensure the greatest degree of energy security for the United Kingdom, including Scotland. Secondly, we must address the threat of climate change. Thirdly, we must do all that we can to ensure energy is affordable.

These challenges require tough decisions and effective action. The UK Government is making those decisions and we want to work with the Scottish Executive in delivering on them, but the SNP policy on nuclear is not sustainable. Nuclear can play an important role in giving all of us in the UK a diverse low carbon energy mix and increasing our energy security. To remove nuclear from the mix, as the Scottish Nationalists propose, would seriously threaten our ability to deal with our energy challenges and increase the costs in doing so, including for consumers.

Nuclear accounted for 26 per cent. of electricity generation in Scotland in 2006, the latest year for which figures are available. The position of the SNP inevitably will impact upon the jobs available in Scotland and the massive—approximately £3billion per reactor—investment opportunity that a new nuclear power station brings to an area.

Industry has made clear its interest in investing in new nuclear in the UK. The recent £12.5 billion proposed takeover bid by EDF for British Energy confirms this; that is important for Scotland. The timetable of actions set out in the Nuclear White Paper published earlier this year should allow companies to start building new nuclear power stations in 2013-14 and start operation in 2017-20.

We know we are in a competitive global market for new build. Across the world other countries are also supporting nuclear because it is low carbon and adds to the number of technologies in the energy mix. That is why we have set up the new Office of Nuclear Development and the Nuclear Development Forum. Both will help to facilitate new build, help to maintain the UK as one of the most attractive places in the world to invest and help business take advantage, both here and overseas, of the opportunities new nuclear will bring. I hope therefore that the Scottish Nationalists will reconsider their position on nuclear policy.

On coal, I repeat that I represent a mining constituency and I recognise the importance of coal. Coal carbon emissions are clearly an issue that we cannot duck. But in the long term, coal is potentially an important alternative source of energy if we get the science right. That is why the UK Government are exploring the possibility of overcoming the problems with carbon capture and storage. The UK is leading the way in the search for technological solutions that will make these fossil fuels cleaner. We are supporting the world's first commercial-scale demonstration project for post-combustion carbon capture and storage in a coal-fired plant. This technology has the potential to capture 90 per cent. of carbon emissions and is a crucial tool in the global fight against climate change. However, old king coal cannot be the single answer to the need for back-up generation, but coal should be part of that diverse energy policy to ensure long-term security of supply.

Renewables are important in our energy and climate change strategy. The UK is committed to meeting its share of the EU target for 20 per cent. of renewable energy by 2020 in heat, power and transport. We are making rapid progress, but the 2020 target requires us to go dramatically further and faster. Therefore, the measures we set out in our draft renewable energy strategy published over the summer are aimed at delivering a tenfold increase in the use of renewable energy by 2020.

Scotland is rich in renewable resources, and much of the renewable deployment necessary for achieving the UK’s EU targets will be in Scotland. Scottish Ministers have responsibility for the implementation of the renewables obligation in Scotland, our main mechanism for stimulating the growth in renewables. We welcome the Scottish Executive’s commitment and work in this area, in particular through their co-operation on the Energy Bill currently before Parliament. We are working to develop a new regulatory regime for offshore electricity transmission to support the development of up to 33 GW of offshore generating capacity. I am delighted to say that today’s opening of the Lynn and Inner Dowsing wind farms off the Lincolnshire coast, which I was able to attend, has taken us through the 3 GW barrier for wind generation. It also means that we have now overtaken Denmark to become No.1 in the world for installed offshore wind capacity. My right hon. Friend the Secretary of State for Energy and Climate Change announced that we would be making an amendment to the Energy Bill to allow feed-in tariffs to encourage small-scale electricity generation, in view of the important role that it can play in meeting our renewable targets.

The exploitation of oil and gas is another important issue that is close to Scotland’s heart. We want to work with the Scottish Executive to make sure that where we can develop the resources—which are often now much more difficult to access than they were in the past—we can develop a strategy that ensures that Scotland and the whole of the UK can make best use and get the best benefit from what remains of oil and gas in the North sea. It will be there for some time to come. The offshore industry is a global industry that places a premium on stability. The UK’s fair and flexible fiscal and licensing regime successfully incentivises the research, innovation and investment that are in Scotland’s interests as much as those of the UK as a whole.

In the light of rising fuel bills, we must also protect the vulnerable in our society. High oil prices are impacting disproportionately on the poor, so we must continue to make the eradication of fuel poverty a priority for action. That is why the Government announced last month a new £1 billion package of measures to help families on middle and modest incomes permanently cut their energy bills. Alongside targeted extra help for the vulnerable this winter, and with new funding of £910 million from energy suppliers and electricity generators, this will support the widest programme of energy improvement to British homes since the conversion to North sea gas in the 1960s. Following Ofgem’s report on energy supply published earlier this month, we told the representatives of the big six energy companies that we needed to see rapid action.

We believe that the interests of Scotland are best served by being part of a UK-wide energy policy. The Scottish National party knows it has a gap in energy in Scotland in the future. Only as part of the UK can we ensure Scotland has the right energy mix. No one says the lights will go out tomorrow in Scotland—that will not happen—but my case is that the energy gap in the future can be filled by a number of energy sources, including nuclear as part of a wider energy mix. Our policy is based on the principle that a regulated, competitive energy market is the most cost-effective way to deliver secure energy supplies and lower emissions. We need to ensure that devolved energy policy in areas such as Scotland include the promotion of renewables and energy efficiency and a wider energy mix. We recognise the importance of the Scottish Executive—

The motion having been made after Ten o’clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at one minute to Eleven o’clock.