The Secretary of State was asked—
Renewable Technologies (Tariffs)
We are committed to achieving our 2020 renewable energy target, which is a European Union legislative goal. The coalition programme for government commits us to the establishment of a full feed-in-tariff, with the aim of securing a significant increase in investment in renewables while maintaining a banded renewables obligation and not changing the ground rules for existing investments. We are also strongly committed to action on renewable heat.
The last Government’s impact assessment on feed-in tariffs showed that domestic solar power is nine times as expensive as industrial turbines and hydro plants in producing clean energy. That means that poorer families must pay billions in their energy bills to subsidise those who can afford solar panels. How will the Secretary of State eliminate such distortions in the market for clean energy, so that we can sustain public confidence and so that our environmental policy makes wider economic sense?
Renewables are currently more expensive than fossil fuels, and, as the hon. Gentleman points out, there is a wide variation in the costs of different sources of energy. One of the things the Department must deal with is the enormous uncertainty about the development of costs in future. For example, the cost of onshore wind generation has fallen, and according to calculations that we obtained recently from our Mott MacDonald study, it is competitive with the cost of nuclear generation. As for photovoltaics—a subject that concerns the hon. Gentleman—it is true that ours is not a very sunny country and that Arizona produces about twice the yield that can be obtained anywhere in the United Kingdom, but the costs are falling by roughly 6% a year. We have to make a judgment about the uncertainties in the long run.
Tidal energy has great potential to contribute to the meeting of our renewable obligations. A fine example is the proposed development off sunny Anglesey, my constituency, which I invite the right hon. Gentleman to visit. The industry has difficulties in securing the investment. Will the Secretary of State ensure that there is a proper level playing field of subsidies, so that young technologies such as tidal energy can develop here in the United Kingdom?
I am grateful to the hon. Gentleman for highlighting that issue. It is important for the Department to make a judgment about increased support for promising technologies at a very early stage when commercial funding is not available. The essential framework that we are applying is that as the technology becomes older, more mature and market-tested, the subsidy should be gradually removed until it can wash its own face in the marketplace.
In the context of tidal energy, is recent press speculation about the Severn tidal barrage correct? Might it be time to consider smaller tidal barrage schemes such as the one on the River Wyre in my constituency, which has been on the table for 20 years?
I think that the Secretary of State and I agree about the importance of renewable technology and clean energy to Britain’s economic future, but does he recognise the rising concern about the possibility that, on the crucial issue of subsidies to make that economic future happen, the Government are going backwards? May I ask him in particular about the £60 million that the last Government pledged to improve port facilities? That £60 million is crucial to some of the investments announced by Siemens, GE and others. Can he confirm that it will go ahead?
The right hon. Gentleman knows that all the Government’s spending decisions are subject to the comprehensive spending review. It would not be comprehensive if they were not. Decisions will be announced on 20 October, but I can assure him that we consider it extremely important, given the enormous growth in offshore wind generation, that there is a supply chain capable of supplying that tremendously important and exciting market opportunity, and that it is based in this country. We will do what we can to ensure that that happens, given the limits to affordability.
Of course there are limits to affordability, but the last Chancellor made this a priority: he said that the £60 million investment would go ahead.
As the Secretary of State did not give me a very satisfactory answer to that question, let me test him with another. We announced four demonstration projects for clean coal technology. That should not be a worry for the Treasury, because it is funded directly by a levy passed by the House of Commons, but there have been reports this week that the projects may not go ahead. Can he scotch that speculation, and confirm that all four of them will go ahead?
I am glad that the right hon. Gentleman mentioned the last Chancellor because, of course, one of the legacies we are having to deal with in government is the fact that the last Government, of which the right hon. Gentleman was a member, identified £44 billion of expenditure cuts without a single expenditure cut specified in that total. The reality is that we have had to clear up the legacy of his Government. The reality is exactly as the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), said: there is no money left. We are therefore having to make some extremely tough choices, but on carbon capture and storage I can assure the right hon. Member for Doncaster North (Edward Miliband) that the coalition agreement between the two Government parties says very clearly that there will be four CCS projects. That is an extremely important part of our low-carbon future and, of course, it is crucial in ensuring that we have a competitive advantage in these areas, because the UK has a lead in CCS technology, as we have seen from our university researchers.
I am not quite sure whether that answer was a yes or a no. The Government’s short-sightedness in cutting investments that are necessary for our economic future is a fundamental issue affecting the future of the country, and the Secretary of State and the coalition parties have to realise that there can be no credible plan for deficit reduction in this country if we do not have a credible plan for growth and jobs. When will he start fighting for the investments that are necessary in offshore wind, in clean-coal technology and in Sheffield Forgemasters, where there was the absolutely terrible decision to cut back—[Interruption.] Coalition Members groan, but there is no credible plan for deficit reduction and no credible plan for growth and jobs.
The passion of the right hon. Gentleman’s oratory reminds me that I ought to wish him luck in the forthcoming Labour leadership campaign. The reality is that we are struggling: we are struggling with the fiscal legacy that his Government left us and we are having to take some very tough decisions. It is fundamental to our national interest that we are not next in line among the countries affected by the sovereign debt crisis. I know that the right hon. Gentleman has in the past pooh-poohed that as the Greek defence, but the reality is that on the weekend after the general election in our country every single finance Minister in the European Union, including—
Energy Markets (Security of Supply)
2. What progress he has made on bringing forward proposals for reform of energy markets to improve security of supply. (15494)
I am delighted that there is so much recognition of the need to address our energy security. The Government have moved quickly to enhance our security of energy supply. We are developing a further package of measures to improve gas security. In the autumn we will be launching the most far-reaching reforms of the electricity market, which will look at the measures needed to secure investment in new capacity, and in July we introduced a new long-term regime for new grid connections.
I was pleased to hear the Minister refer to gas security given that according to some predictions 70% of our gas supply may in future be imported from overseas. Will he reassure my constituents that when proposals are made for new gas storage sites security, safety and geological hazard will not be put second to the need for more gas sites in this country?
My hon. Friend is absolutely right that we have to look at each proposed site, location by location. We have to be satisfied about the security and safety of each location, but there is no doubt that we have historically had low levels of gas storage compared with other European countries, and we are keen to address that as well as looking at issues such as long-term contracts and more pipeline interconnections, which all have an important part to play in this process.
Ministers have to be much more engaged in this process than has historically been the case. We have to have Ministers who are prepared to go around the world to identify long-term contracts and to secure those agreements in the interests of our long-term energy security. We are keen to have a relationship with Russia that is active and business-based. We think Russia can enhance our security. We are also keen to work with other European countries to identify the pressure points and to find new routes to market, and we are actively engaging with our European counterparts to achieve that.
I thank the Minister for his response. Given Yorkshire’s close proximity to the North sea and the vast amount of existing energy infrastructure across the region, are the Minister or Secretary of State pursuing any plans to develop a carbon capture scheme to prolong the life of coal-fired power stations in our area?
My hon. Friend raises an issue that is extremely important not just for Yorkshire, but for the country as a whole. We have already had significant discussions with representatives of the Yorkshire business and energy communities, and we salute the work that they are doing to identify strategic infrastructure, particularly in respect of enhanced large pipelines, which enables us to take a cluster approach. That is absolutely one of the areas that we will be looking at carefully for that type of development.
In recent years, for the first time in our nation’s history, we have become dependent on foreign fuel imports to generate enough electricity for our country. Will the Minister consider changing the capacity payment component of the electricity price to incentivise the use of indigenous fuels in power generation?
My hon. Friend has a great knowledge of these issues. We are looking at those sorts of solutions to the problems and challenges that we face. It is critical that we find long-term, robust approaches, but in that respect, it is also important to have a mix of energy solutions within the portfolio. Fuels from our own natural resources can contribute to, and greatly enhance, our energy security.
I was pleased to hear that gas is part of the future of Britain’s energy supply, but that runs contrary to a document published by the Department in July this year, “2050 Pathways Analysis”. The document looks at UK energy demands in 2050, but gas does not feature. Will the Minister look into that and have a rethink on what role gas will play in our future energy supply?
The 2050 document looked at a range of scenarios and energy mixes. However, let me reassure the hon. Lady that the Economic Secretary to the Treasury and I were in Aberdeen on Monday to talk to the industry—I think that that was the first such meeting involving both Treasury and Energy and Climate Change Ministers—to identify the long-term investment issues that are critical for the sector. It is absolutely in the national interest to develop the best possible resource return from our assets in the North sea.
The security of our future energy supply is heavily dependent on the implementation of major energy projects. Given that the Government have abolished the Infrastructure Planning Commission, which was designed to remove planning obstacles to the implementation of such projects, can the Minister assure me that he is in conversation with his colleagues in the Department for Communities and Local Government to ensure that the successor planning regime achieves the same objective?
I can give the hon. Gentleman an absolute assurance that I am in regular contact with my ministerial colleagues in other Departments, Sir Michael Pitt of the IPC, and the industry, to ensure that the transition arrangements pose no threat to such projects. The measures that we are putting in place will be a significant enhancement of the regime, because they will reduce the risk of judicial challenge and review, and provide parliamentary and democratic accountability. That is an important element of such critical infrastructure issues.
The new coalition Government are absolutely committed to achieving an ambitious global deal to cut emissions sufficiently to keep the rise in global temperatures below 2°C and also to providing support to developing countries in adapting to the inevitable consequences of climate change. However, although we are not raising expectations of a legally binding treaty being achieved at Cancun, we want to see substantive progress at COP 16.
I thank the Minister for that comprehensive response, on which I hope we have a debate in the House soon. Does he accept that climate finance is critical to reaching an effective agreement? We need the UN advisory group on climate finance, on which the Secretary of State sits, to provide not only a menu of options for the future, but concrete recommendations that can be agreed now.
My hon. Friend is absolutely right that the Secretary of State is an important member of that group. Its report will be published later in the year. Here in the UK, we are taking an active role in trying to develop the private sector solutions that must be part of the overall funding package for developing countries, both in adaptation and mitigation.
I recently announced the extension of the energy companies’ carbon emissions reduction target to December 2012, which will provide a greater focus on helping low-income vulnerable households. Additionally, we expect up to 250,000 poor pensioner households to receive an £80 rebate from the six major energy supply companies through the current energy rebate scheme, and we are hard at work ensuring that a focus on fuel poverty is a key feature of the green deal.
On the social tariff, I congratulate the right hon. Member for Doncaster North (Edward Miliband) on the powers introduced in the Energy Act 2010. We can use that important set of powers to try to alleviate these problems. The Department’s approach, most fundamentally, is to try to deal with the causes of the problem, not merely to use sticking plaster on the symptoms. The key thing is to identify those in fuel poverty and ensure that they have the energy-efficiency measures in place to make sure that they do not get into fuel poverty in future. With social price support we can help for one year, but if we get the energy-efficiency measures right, we help for ever.
I am sure the Secretary of State agrees that if we are to move to a green economy, we have to do so in a way that is fair, so can he confirm that he is making representations to the Treasury to keep the Warm Front scheme which, as he knows, is a successful scheme that has helped 2 million of the most vulnerable fuel poor?
As the hon. Lady knows, the Warm Front scheme has played a very important part in ensuring that there has been an improvement in energy efficiency for many of the people who are most vulnerable to fuel poverty. We will ensure that there continues to be a commitment that the scheme will continue but, as she will know from previous questions, our key focus—the key instrument—in dealing with fuel poverty and energy efficiency will be the green deal. A very important part of the green deal will be tackling fuel poverty and, over time, it will gradually take on a more important role and the Warm Front scheme will take on a lesser one.
On 27 July, my right hon. Friend the Secretary of State delivered the first annual energy statement to Parliament, which set out the Government’s strategic energy policy. Catalysing private sector investment in new low-carbon technologies is a crucial part of our strategy. My most recent discussions in the sector, specifically in the area of new technology, took place last Wednesday and were with the chief executive of the Energy Technologies Institute.
I thank the Minister for that response. We all want to catalyse the private sector, and he will know of the potential for tens of thousands of jobs in the wind turbine manufacturing sector. However, he will also know that European ports are wooing British and other manufacturers to settle in them, particularly as a result of the uncertainty over the offshore wind infrastructure competition. Can he guarantee us that that competition will be opened, in order to provide manufacturers with the certainty that there is a future for locating their base here in Britain, not in European ports?
I can assure the hon. Gentleman that the new coalition is absolutely committed to making sure that we capture far more of the manufacturing supply chain associated with the expansion of offshore wind power than was the miserable case under the previous Government, when 90% or more of this was manufactured overseas. I cannot comment on any specific spending programmes ahead of the comprehensive spending review, but I can assure him that offshore wind power and capturing the opportunity right the way down the supply chain is at the heart of our policies.
I welcome the review of the four clean coal demonstrator sites, particularly the focus on retro-fitting. Will the Government give proper and full consideration to the proposal for carbon capture and storage put forward by Kingsnorth, in my constituency? Will it be possible to allow that to go ahead with the fitting of CCS to only one of the four turbines, rather than the two previously suggested, to bring things down to the level of gas?
I thank my hon. Friend for his interest in this vital technology. As my right hon. Friend the Secretary of State said, we are absolutely committed to driving forward CCS. I can inform him that it is one of the two schemes that are in that particular competition.
The Secretary of State this morning said that he was strongly committed to renewable heat, but last week the independent Committee on Climate Change wrote to him to say that uncertainty about the renewable heat incentive means that “projects are not progressing”. Yesterday, in evidence to the Select Committee, he said that he had simply forgotten the renewable heat incentive when drawing up the coalition agreement. Does the Minister not realise that certainty about the renewable heat incentive is essential in meeting the need for the creation of jobs and investment in industry and, indeed, is crucial in reducing the deficit?
I have to say that when we came into office this Government were not only shocked by the state of the public finances but appalled at the lack of preparation for the renewable heat incentive, which left a great deal of work to be done by the new Administration. We will not be able to make an announcement about the RHI until we have had the comprehensive spending review, but I can assure the right hon. Lady that renewable heat is very important to this Government and that we will continue to support the industry.
As this is my last appearance at the Dispatch Box, perhaps I can share a secret with the hon. Gentleman. That is, of course, that the Treasury will always be opposed to mechanisms such as the renewable heat incentive. Will he and his colleagues tell us this morning that they are fighting tooth and nail to get the incentive introduced as planned next April? We convinced the Treasury that that made sense for jobs, for investment and for growth—will he do the same?
I am extremely sad to hear that the right hon. Lady will be taking early retirement, and I am sure that she will find herself pressed back into service, whoever the leader of her party is. Renewable heat is vital to our agenda and I can assure her that that commitment runs right through the Department and is just as strong as when she was there, if not stronger.
Carbon Floor Price
In the Budget, Her Majesty’s Treasury and Her Majesty’s Revenue and Customs announced that the Government will publish proposals this autumn to reform the climate change levy to provide more certainty and support to the carbon price. Subject to consultation, the Government will bring forward relevant legislation in the Finance Bill 2011.
I am a great believer in the virtues of the market and of the price mechanism, and I am sure that my hon. Friend is, too. It is fairly well established that if the price of something goes up, the supply of it tends to follow. If we provide a carbon price floor, as we intend to do, we anticipate that that will send precisely the sort of price signals to suppliers that will bring forward the capacity that we need to provide us with energy security in a low-carbon way.
When the right hon. Gentleman has discussed the matter of a carbon floor with the Treasury, has he raised the possible intervention contingency that might be necessary for a UK carbon floor? If he has, have they directed him to talk to the EU about common border-based carbon taxes?
The discussion with the Treasury will get under way later, after the comprehensive spending review. The hon. Gentleman will understand that the Treasury is otherwise engaged in a very serious mopping up of the legacy problems that we have already discussed. Later in the year, as part of the public consultation, we will go through all those issues, including the issues that impact on our EU partners.
Onshore Wind Farms
Onshore wind farms can claim one renewables obligation certificate for each megawatt-hour of electricity actually generated, which focuses investment in those areas where the wind resource is strongest. It is therefore in the developers’ direct interest to study very carefully the historical wind measurements.
As my hon. Friend is no doubt aware, Leicestershire is one of the most inland and least windy counties in England. Will he please assure me that subsidies for wind farms will only be allocated in areas that can demonstrate that the amount of wind is sustainable and economically viable?
I can absolutely assure my hon. Friend that the way the ROC system works ensures that the greatest incentive is there to develop wind projects where the wind resource is strongest. We are absolutely committed, too, to the principle of localism for those below 50 MW and for local communities to be directly involved in these decisions and to receive a more direct benefit than was the case under the previous Government.
We recognise that onshore wind is one critical element of the process. We set out in the 2050 pathways, which were mentioned earlier, a number of different options. Offshore wind is going to be critical, as is biomass. We want a range of renewable technologies to come forward to help us meet the 2020 targets, and the policies that we are putting in place are designed to drive forward investment in those sectors.
8. What representations he plans to make at the October 2010 Tianjin climate change conference for amendment of the UN proposals governing emissions from land use, land use change and forestry to ensure that the managed forest emissions of developed countries are properly accounted for. (15501)
At the United Nations framework convention on climate change intersessional in Tianjin in October, although I will not be present, my officials will continue to push for accounting rules for robust forest management that maximise incentives for action while ensuring strong environmental integrity.
Under the current proposals, 465 megatonnes a year—almost half a gigatonne—of emissions from the logging industry will not be properly accounted for, because the Minister is going to support reference levels that are based on business-as-usual projections rather than on historical data. When are the Government going to stop pandering to the logging industry? They have already abandoned their manifesto commitment for UK legislation and now they are giving the industry a half-gigatonne backhander.
The hon. Gentleman has great experience in this sector and I am sure that his green credentials will stand him in very good stead in the shadow Cabinet elections, but I assure him that we are committed to having very robust rules and transparent mechanisms for land use, land use change and forestry—LULUCF. I hear what he is saying, but there are a range of options on the table and we have not yet reached a definitive end to this. We are absolutely committed to saving the rain forest, we have put the finance in place and we are leading the debate on this issue. We really are determined to push it further forward at Tianjin.
Is the Minister convinced that the impact of the new EU regulation on illegal logging, which prohibits only the first placing on the market of illegally logged timber, will genuinely reduce emissions from land use changes to the same extent as the promise that the coalition Government now appear to have dropped, to legislate to prohibit also the sale or possession of illegally logged timber here in the UK, would have?
We have not dropped a commitment from the coalition agreement, but we will be looking very carefully at the new measures to see whether they can do the job. I remain as committed to ensuring that we are at the forefront of the battle against illegal logging as we were on the day we were elected.
Rented Accommodation (Insulation)
The recently announced green deal should go a long way toward solving the problem of split incentives that has hampered progress in the private rented sector. It will remove the need for landlords to pay up-front costs for measures that they do not directly benefit from and will therefore make some real progress in this area.
I thank the Secretary of State for his response, but old, cold and poorly insulated is the state of many private rented properties in Nottingham South, which are home to 16,000 households, including some of the most vulnerable families in the country. Will he match Labour’s commitment to regulate landlords and so tackle these issues, or will his Government once again put the interests of private landlords above those of tenants and communities?
The hon. Lady takes her seat in the House following the distinguished contributions of her predecessor on all these issues, and I am delighted that she retains his interest in these matters. I assure her that the Government are absolutely determined to try to make progress on fuel poverty and to deal with the scandal that when we have a cold winter a large number of old and vulnerable people are pushed into an early death through lack of heat. We need to try to deal with that as fast as we can. I merely remind her that, although she is new in the House, she succeeds an MP who was here for 13 years supporting a Government who made precious little progress in this area.
The coalition Government are committed to providing the transparency, longevity and certainty needed for business to invest in the transition to a low-carbon economy. Specific programmes to support these objectives include the green deal for businesses, our proposals to establish a green investment bank, and a commitment to provide more certainty in the carbon price through reform of the climate change levy.
I am very pleased to tell the hon. Gentleman that, despite the utterly appalling and irresponsible state of the public finances that we inherited from the Labour Government, we are still able to spend £150 million on innovative technologies in key sectors in the current year. What is more, by finding savings elsewhere, we have been able to find £150 million extra to invest in new apprenticeships in key skills, many of which will be in the low-carbon economy.
Waste Plants (Electricity Generation)
Energy from waste plants can generate electricity from a wide range of different wastes. Overall, these contributed almost 8,600 GWh of electricity in 2009, equating to 2.3% of UK electricity generation.
We strongly support energy generation from waste. We are working with other Government Departments to ensure that, where possible, waste should be seen as a resource, although it remains the responsibility of local authorities and communities to decide on the best waste management arrangements in their areas.
My hon. Friend raises a critical issue. In the past, we simply have not had enough joined-up thinking on this matter. We are putting in place higher penalties for landfill to discourage people from using it, but at the same time we will be supporting a range of technologies, including anaerobic digestion, which can make a significant contribution to the problem.
Offshore Renewable Energy
We are committed to support for renewable electricity, through the establishment of a full system of feed-in tariffs—as well as the maintenance of a banded renewables obligation, with the aim of encouraging investment. The development of marine energy parks around the British coast will help promote rapid development of the sector. We are also consulting on a new licensing regime to facilitate the connection of offshore capacity to the national grid.
The Orbis energy centre in Lowestoft is the home of many businesses at the cutting edge of the new technologies that aim to capture the economic benefits of offshore wind, wave and tidal technologies. Will the Minister accept my invitation to visit Orbis to see for himself the vital role that those companies can play in the drive towards a low-carbon economy?
My hon. Friend has already established himself as an effective and vocal advocate for those interests in his constituency. I should be delighted to visit his constituency to understand more of the work that is being done, and the pioneering approach of his local businesses.
In the summer, companies from Hartlepool and Teesside joined to form Chain Reaction, a renewable energy supply chain cluster. This is a marvellous opportunity to win business, promote new technologies and ensure that the engineering and industrial base of our heartlands in the north-east have a brilliant future.
Notwithstanding the disappointing response that the Minister, the hon. Member for Bexhill and Battle (Gregory Barker) gave to my hon. Friend the Member for Ogmore (Huw Irranca-Davies), what practical and tangible support can he and his Government give to ensure that Chain Reaction, this private sector enterprise, can thrive and flourish?
One of the things that has impressed me most since I became a Minister is the wealth of activity and expertise in British business right across the country and, indeed, in the hon. Gentleman’s constituency. I repeat my offer to come and visit some of those businesses with him.
Our approach is to say that the Government have to facilitate and put in place the measures that will encourage investment, but one of the most critical things that we can do is bring down the tax and regulatory burdens on British businesses to encourage people to invest and develop their ideas. That is the main focus of the Government.
I can confirm that I am already working closely with my hon. Friend the Minister for Universities and Science to ensure that we have a flexible training framework that will deliver the skills required for the low-carbon economy.
The coalition Government have already taken clear steps to address shortfalls in low-carbon skills provision, including, as I said earlier, an additional £150 million deployed from savings to create a further 50,000 new apprenticeships, many of which will be in the new low-carbon sector.
I am grateful to my hon. Friend for his answer. My constituency is becoming known as one of the centres of the UK energy industry, and it is home to some of the many big-name employers in this sector. As a result, we have established what we call the Warwick and Leamington energy forum. One of its aims is to bring together industry and local skills providers to match skills to jobs to ensure that future demand for skilled employees can be met. Will he agree to meet members of the energy forum? What steps will his Department take to improve public awareness of innovations in green technology so that young people may be inspired to take up training opportunities that exist in this sector?
I would be delighted to meet my hon. Friend’s constituents in the Warwick and Leamington energy forum, and I am very happy to work with him to highlight the exciting career path that this might offer. Raising awareness of green technologies is a vital part of the transition to a low-carbon economy. A number of programmes are run, including DECC’s low-carbon communities challenge, and funding to eco-schools, but, ultimately, it is the signals that come from the private sector that will really drive this agenda forward.
Although we would certainly support the importance of training to create green jobs, is not the reality that all this Government’s policies are about stunting growth, with measures such as the refusal of the loan to Forgemasters? There is no point in increasing training in jobs if we are not going to help to create an environment that will support business and the Government in creating those future green jobs.
The hon. Gentleman has very cleverly put his finger right on the key divide between the last, failed Government and the new coalition. We believe, ultimately, that the recovery, our wealth and new jobs will come from the private sector; Labour Members believe that all our jobs should come from the public sector. We will put in the framework, but wealth creation in the green economy will come from the private sector.
Ofgem (Energy Prices)
Ofgem does not need to change licence conditions to monitor these links: it already monitors the link between wholesale and retail prices and produces a quarterly report, which is an integral part of transparency in the sector.
Energy companies have blamed their price increases on an increase in wholesale prices. Considering that research by Which? shows that 77% of consumers are concerned about energy prices, will the Minister urge Ofgem to make a change to licence conditions to require more detailed and comparable information from energy companies to allow for effective monitoring and scrutiny, as well as fair prices?
I understand from the discussions I have had with Ofgem that it believes that it already has the right powers to do this. We must understand that one of the reasons for the pressure on prices is that, as a result of the failure to secure investment under the previous Administration, we are looking at these companies to rebuild our energy infrastructure, with £200 billion of investment over the next 10 to 15 years. There is a real energy challenge in this crisis, and we have to encourage companies to put that investment in place if we are to be able to keep the lights on in future.
Electricity Generation (Local Authorities)
Many local authorities are keen to take forward renewable energy projects. New regulations introduced on 18 August mean that local authorities can now sell electricity and can also benefit from renewable incentives such as feed-in tariffs and the renewables obligation. This new provision gives them the freedom to do that, enabling them to play their part in reducing emissions and meeting national renewable energy targets while saving money on their energy bills.
I am grateful to my hon. Friend for that question, which does not directly relate to local authorities, but I can say that we are looking at these rates in the totality of the comprehensive spending review. We inherited schemes from the previous Administration that were extremely generous but which were not absolutely clear as to who was going to pay for them and how they were going to be paid for. We are absolutely committed to encouraging the roll-out of renewable electricity and renewable heat, but we must study very carefully exactly how these schemes can be paid for.
My Department has responsibility for managing our energy liabilities, securing our energy supply, improving our energy efficiency, leading UK action on climate change, and moving to a low-carbon economy.
Since I last answered departmental questions, we have published the first annual energy statement, overturned the law banning councils from selling renewable electricity, and launched a new search for deep geothermal energy. Together with my French and German counterparts, I have argued in favour of greater ambition in raising the EU emissions target to achieve a 30% reduction in emissions by 2020.
The Secretary of State may be aware of some anaerobic digestion schemes that have secured planning permission but are struggling to secure finance from the banking sector, so will he conduct an emergency review of feed-in tariffs from farm-based, medium-sized anaerobic digestion units?
The coalition agreement commits the Government to a huge increase in energy from waste through anaerobic digestion, and to that end we brought the industry together in a meeting on 6 July, together with colleagues from the Department for Environment, Food and Rural Affairs and the Department for Communities and Local Government, to drive the agenda forward. It is early days for the feed-in tariff scheme generally, and as we know it is a new scheme. I am fully aware of the specific problems with farm-based anaerobic digesters, which the hon. Gentleman raised, and I am commissioning further technical work in my Department to try to deal with them.
T2. The renewable heat incentive is a particular concern for Worcester Bosch, a boiler manufacturer, and for the benefit of the Minister I should say that Worcester Bosch is a private sector company, not a local authority. It is particularly concerned about the Government’s decision to scrap the low-carbon buildings programme and to offer no commitment to the renewable heat incentive. Does he appreciate how that indecision is affecting the green jobs that Worcester Bosch and other manufacturing companies that rely on the incentive could create in order to develop a greener future and jobs? (15519)
I can assure the hon. Gentleman that I am aware of the reputation of Worcester Bosch as a good provider in that area, and I am under no risk of confusing it with town-twinning arrangements involving Worcester. We have to ensure not only that there is clarity and certainty in our regulatory framework, but that we look at value for money. As has been pointed out, in the context of the comprehensive spending review we need to review some schemes that we have inherited from the previous Government, and we will come forward with as much detail as we conceivably can as soon as that review has been completed.
T4. I noted the Secretary of State’s earlier strong commitment to drive forward carbon capture and storage technology, and Opposition Members’ rather faux outrage about the lack of public finances—as a result of the mismanagement of the economy. What assurances can he give that the programme will be delivered, and does he believe that the involvement of institutions such as the green investment bank are key to ensuring that it is delivered? (15521)
As my hon. Friend knows, that commitment is in the coalition agreement, and I merely point out that the current Chancellor of the Exchequer was of course on the negotiating side for the Conservative party in the coalition agreement, so he is as aware as everyone else of the importance of such matters as carbon capture and storage and others in driving forward a low-carbon agenda. I should like particularly to pay tribute to the Chancellor, who was, I think, the first person to put forward specifically the ideas on the green investment bank. My hon. Friend is absolutely right, and I am confident that the Government will come forward with a plan, when we have the results of the comprehensive spending review, which will make further and accelerated progress towards the low-carbon economy that we want to see.
T3. New green jobs will be crucial not just to securing our economic recovery, but to bringing growth to the economy. We are leading the way in Sunderland with the manufacture of the electric car at Nissan, but we need further support for low-carbon industries and jobs, so why are the Government cutting that support? (15520)
The hon. Lady knows that we have already made an announcement, and my right hon. Friend the Secretary of State for Transport has announced support for electric vehicles, which I hope her constituents and Nissan employees at Sunderland will welcome. That was a very unusual exception to the general rule that we have to wait for the outcome of the comprehensive spending review before we are able to announce such matters, so on that issue we have bent over backwards.
T7. We all know that these are difficult times and Departments need to make spending reductions, but what action is the Secretary of State taking to ensure that Departments, agencies and our many, many quangos continue to reduce their carbon emissions and use energy more efficiently? (15524)
I am happy to tell my hon. Friend that we are gripping that agenda, and that we have replaced the singular lack of ambition that radiated across Whitehall under the last Government with a commitment to 10% reductions in our energy consumption within our first year in Government. We were told when we came into office that it could not be done, but good progress is already being made. The matter is gripping the Prime Minister, and we will report to the Cabinet on it within weeks.
I was with my ministerial colleague with responsibility for climate change policy, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), at a meeting only yesterday, along with colleagues from other Departments that are directly interested in the green investment bank, to establish the scope for it, identify possible sources of funding for the capital base and ensure that we are making real progress, which I think we are.
T8. In recent years, extreme weather events have meant that Leeds city centre has been just one inch from being flooded. Given the potential threat that flooding poses to major company headquarters in the city and to the city’s economy, will my right hon. Friend agree to consider that danger when assessing the city’s proposed flood alleviation scheme? Should he wish, he would be more than welcome to see it for himself. (15526)
My hon. Friend is absolutely right to point to the increasing dangers of flash flooding in areas where, in some cases, there can actually be floods at the top of hills. Around the world over the past year there have been mudslides in China, floods in Pakistan and forest fires in Russia, and there is no doubt among the hard-nosed businesses that insure against risks that they have been attributable to climate change, which is a wake-up call. I am afraid that floods are a departmental matter for my colleague the Secretary of State for Environment, Food and Rural Affairs, but I am sure that she will take my hon. Friend’s points into account. I know that she is very aware of the dangers of flooding and the importance of flood defence.
I was encouraged to hear the warm words earlier about reducing our energy use, but when I contacted my energy supplier recently to acquire a smart meter, I was told that it was no longer supplying them. That was a change made following the election, brought about partly because of a lack of direction from the Government about support for smart metering. Will the Minister write to me about what representations or discussions the Government have had with energy companies about providing consumers with smart meters, and about how they intend to encourage them, so that we can take ownership of reducing our energy usage?
I would be more than happy to write to the right hon. Lady to set that out in more detail. Speeding up the roll-out of smart meters has been one of our priorities. We felt that the ambition of 2020 roll-out across the nation that we inherited was pathetically unambitious, and we have already managed to bring the target forward by a couple of years. We are continuing to drive the roll-out forward and consulting industry on how to put it in place most quickly. Every day, 10,000 dumb meters are installed in our homes across the country. We want to ensure that the new meters installed in our properties are fit for purpose for the needs of the 21st century.
T9. I am sure that, like me, the Secretary of State will have welcomed the introduction of green energy certification, but he will also know the central role of utility broker websites in consumer decisions. Will he join me in urging those broker sites to incorporate green energy certification in the information that they provide to consumers? (15527)
I am grateful to my hon. Friend. It is very important that consumers have the information that they need when assessing their energy use, and that is very much one of our departmental objectives. We are considering every possible way to ensure that consumers are fully informed so that we have a marketplace that drives energy saving and energy efficiency. As my ministerial colleague with responsibility for energy, my hon. Friend the Member for Wealden (Charles Hendry), has just pointed out, the smart metering programme is part of that, but it is also crucial that we have a commitment to the display of energy use details.
On the question of anaerobic digestion, does the Minister understand that when planning applications for plants are made in built-up areas such as Whitwell, in my constituency, those making them know that the contents of the lorries coming from the plant will not be clean and green but will be a different colour and stink to high heaven? Will he ensure that his Department examines such plans carefully?
I would have thought that the hon. Gentleman, above all, knew that where there’s muck, there’s brass. It just goes to show that the face of old Labour is not green—they do not understand new technology. The first whiff of any environmental problem and they want to go back to old coal—I guess that that is the hon. Gentleman’s solution. However, I assure him that we are committed to new, decentralised technologies, working with communities, and getting the technologies operational as soon as possible. He can live in the past, but we are fast-forwarding to the future.
Community organisations and charities that invested in renewable technologies have found themselves significantly disadvantaged through unexpected changes in the feed-in tariff. Will Ministers look into that and ascertain whether charities and community organisations that found themselves with a significant shortfall could be assisted?
I am very happy to deal with any specific cases that my hon. Friend raises. I ask him to write to me, please, and I shall ensure that officials advise and that we come back to him. As a ministerial team, one of the things that we are determined to do is try to ensure that we have a framework, so that when we make an offer to provide an incentive for renewable energy, investors can rely on it. We are determined to avoid some of the criticism that has been made of our EU partners, who have changed the arrangements with retrospective effect.
The hon. Lady makes a point that is dear to my heart, not only in the context that she raises, but in that of, for example, the feed-in tariff for wind. Unfortunately, I do not benefit from that tariff as a pioneer. I considered the issue carefully on a value-for-money basis, and I am afraid that the advice from my officials was clearly that we cannot introduce retrospection in such cases because it does not represent value for money. We are trying to introduce new schemes in future, and therefore, sadly, the only incentive and payback that people such as the hon. Lady and I will get is the warm glow of being pioneers.
As the Secretary of State has been good enough in the past to speak encouragingly about the potential of the Kishorn and the Nigg former oil fabrication sites in the Scottish highlands for future offshore renewable manufacturing, and given recent developments at both, may I extend him a warm invitation on behalf of all involved to visit either or both? He is guaranteed a warm welcome.
I am grateful for my right hon. Friend’s kind invitation. I would love an opportunity to visit his constituency. Indeed, I will visit the north of Scotland and Orkney and Shetland in the next few weeks, and I intend to inform myself about the important pioneering energy developments, particularly in renewables, that are under way in the area.
A moment ago, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker) suggested that the difference between the previous Labour Government and this Government is that the latter want to get government out of the way and let the private sector create the jobs in the green economy. Does the Secretary of the State believe that that is the appropriate approach to developing the green economy?
The hon. Gentleman knows from previous answers that I have given on the matter that any sensible Government policy has to have a balance between providing a strategic framework, which gives incentives for us to move towards the green economy, and avoiding unnecessary bureaucratic burdens on business. We prefer the approach of simplifying signals and providing market and price signals to the bureaucratic entanglement, on which, I am afraid, some of the friends of the right hon. Member for Doncaster North (Edward Miliband) were particularly keen when the Labour party was in government.
I have already visited several nuclear power stations in recent years and I am keen to visit others and see the work that is being done there. It is critical to understand the work that is involved in decommissioning old power plants—a key part of our Government’s programme—as well as the sort of measures that need to be put in place to encourage new investment in those important facilities.
In view of reports that the ambition of the green deal is shrinking to the extent of residual interventions in loft and wall insulation, does the Secretary of State agree that now would be a good time to review the idea that microgeneration should be outside the green deal? In view of the programmes that have already introduced stuff without cost to the taxpayer, will he now think again about putting those arrangements inside the green deal?
I am grateful to the hon. Gentleman for his question, especially given his impressive track record in this area. I can assure him that the premise of his question is incorrect. There is no scaling back of ambition on the green deal. Far from it, we are proceeding with what I believe will be a model of how to have comprehensive retrofitting of energy efficiency measures. On whether microgeneration should be incorporated in the green deal, I anticipate that providers of the green deal will want to provide microgeneration as well, precisely because of the substantial price incentives that we have introduced in order to make that happen. I do not think that it is necessary to incorporate microgeneration into the green deal, because it is an insulation package, but I have no doubt that householders—
The House has heard much this morning about the Government’s laudable plans to give energy users more information and more detail about the energy that they are using. What progress has been made to ensure that domestic energy bills provide further detail for electricity users on the cost breakdown of the electricity that they have used?
That is a matter for Ofgem, rather than directly for the Department. We have certain powers that we can use to ensure that that is happening, but as I said earlier, it is crucial that consumers are fully informed about their options and what their bills are likely to be. We need to encourage as much informed competition as we can. In this market, as in banking, consumers are often very reluctant to switch suppliers, but if they do, it is likely to have a demonstrable impact on improving competitive pressures.