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Renewable Heat Incentive

Volume 518: debated on Thursday 11 November 2010

9. If he will take steps to ensure that the renewable heat incentive does not make UK energy-intensive industries internationally uncompetitive. (23152)

As announced in the spending review, the RHI will now be funded from Government spending and not from a levy on bills, so we do not believe that there will be any negative impact on the competitiveness of UK energy-intensive industries. On the contrary, the RHI will offer a great opportunity for energy-intensive industries to gain financially.

The deal for Sahaviriya Steel Industries, a Thai company, to buy Redcar steelworks is likely to be completed within a few weeks. Will the Minister meet representatives of that company to reassure them about the future carbon and energy policy for their industry?

I know that my hon. Friend is working extremely hard on this issue. I would be delighted to meet him and the potential purchasers to see what we can do to help to secure those important jobs.

Order. I am grateful to the Minister because he has heeded the advice that I have given to him. The exchange that has just taken place between the hon. Member for Redcar (Ian Swales) and the Minister is a good illustration of how these matters should be conducted. I feel confident that the Minister will want to build on the great advance he has made in recent minutes, and I hope that the House will also feel that this is beneficial to the way in which we do our business. We can always do better, each and every one of us, and there will be further opportunities.

The House will now stand and observe two minutes’ silence.

The House observed a two-minute silence.

On this subject, will the Minister meet the UK Energy-Intensive Users Group, because its report, published this week and entitled “The Cumulative Impact of Climate Change Policies on UK Energy Intensive Industries”, suggests that without a change of course, electricity prices for the steel industry—which is very important for south Yorkshire—could rise by as much as 141% by 2020? We are all climate-changers and carbon-reducers, but not at the price of eliminating our steel industry.

The right hon. Gentleman makes a serious point and last week I had a very good visit to Stoke and the constituencies of several of his hon. Friends to look at how this problem affects the ceramic industry. I would be happy to talk to him about how we can ensure that we do not unduly undermine the competitiveness of the steel industry.

I welcome the Government’s commitment to the renewable heat incentive. What representations has the Minister had to include deep geothermal energy in the RHI?

There is a lot of interest in geothermal, which is a very exciting technology with much potential. I have had several representations, not least from my hon. Friend, who is a great champion of this new technology. I am working with my officials to see how we can ensure that geothermal is fully exploited in the UK.