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Topical Questions

Volume 523: debated on Thursday 10 February 2011

Since the previous departmental Question Time we have published proposals to increase liabilities for nuclear operators under the Paris and Brussels conventions. We have also opened a consultation on the long-term management options for the UK’s civil plutonium stocks, and launched a review of the feed-in tariff scheme to ensure that we have investment certainty at reasonable budgetary cost.

Britain’s electricity system is at its most vulnerable during winter cold snaps when the wind is not blowing and the wind turbines are not moving round. What steps is the Secretary of State taking to ensure that the plant capacity margin is big enough to ensure that we can keep the lights on with power from conventional sources during those periods?

My hon. Friend is right to highlight that as an important and ongoing issue, and it is one to which we have devoted a lot of attention in the Department. In the short term, the key is that the capacity margin has increased quite comfortably—sadly for the wrong reasons: because of the impact of the recession—but in the long run we are trying to ensure that we pay for capacity through electricity market reforms. That is in the consultation documents that we have tabled, and I believe that it will provide a long-term solution and ensure that we have an adequate margin.

T3. The Secretary of State for Business, Innovation and Skills came to the Environmental Audit Committee last week and told us that DECC had been heavily involved in the development of the green investment bank. What input has this Secretary of State had to the formation of the bank? Can he tell the House whether he is in favour of a bank or a fund—and whether the Treasury is pushing him towards a fund in order to keep the scheme off its books? (39436)

There are ongoing discussions between Ministers—[Hon. Members: “Ah!] I would merely make the point to Opposition Members that it is more important to get this right than to do it quickly and get it wrong. With the green investment bank, let us remember that we are looking at an institution that will be crucial in supporting the transition to a low-carbon economy not over a two or three-year period, but over 40 years. If we look back at our economic history, and at similarly massive changes in the way our economy has been powered—for example, the move to coal and then oil, with the internal combustion engine—we see that these things do not happen in a day. Let us get the green investment bank right. That is what Ministers are going to do, and announcements will be made in due course.

T2. The green deal will bring huge fuel efficiency benefits in heating homes. Will the Secretary of State consider extending it to cover water efficiency, and in particular to educating households to save water, and to save energy by heating only the water that they need to use? (39434)

I am very sympathetic to my hon. Friend’s points. There is an important agenda for trying to make water use sustainable, as well as the other elements covered by the green deal. The difficulty lies in attaching measures that would affect water to an electricity and gas Bill, and that has so far proved insuperable for the ministerial team. We would like to see real improvements, however, and we have been working across Government on this. I know that the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman) is also concerned about this, and is working hard on proposals.

The Secretary of State will be aware that the Hatfield colliery in South Yorkshire is in administration. It has more than 100 million tonnes of coal. Has he had meetings with the owners or their representatives to try to resolve the situation, and will he agree to meet me and other representatives to discuss it?

We had regular contact with the owners prior to the administration. We have not had direct face-to-face contact with them subsequently, because we believe that this is a matter for them to sort out with the administrators. However, we recognise the great potential of that location and of the technology that is being developed there for carbon capture and storage, and as we take forward our plans for CCS, we hope that the plant will still be able to bid into the process.

T5. Is the Minister aware of ECCO, a not-for-profit co-operative in Harlow that recycles textiles and batteries? Will he visit ECCO with me to see this important example of the big society, and to see whether such a contribution to recycling could be rolled out across the country? (39438)

It is important to take a holistic approach to these green and sustainability questions. My hon. Friend is a fantastic champion of the big society in Harlow, and I would be delighted to go there with him to see what is being achieved there.

As the Minister knows, the Meadows neighbourhood in Nottingham South is striving to become a low-carbon community. The three local primary schools, the community gardens and 55 local families are now benefiting from the feed-in tariff through their community-owned energy company, MOZES. Can he guarantee that his review of the feed-in tariff will not endanger its continued success?

I am delighted to answer this question, not least because I had the privilege of going to the Meadows last autumn and was very impressed with what I saw there. I can absolutely confirm that there is nothing retrospective about the feed-in tariff review. Any community, group or individual claiming the tariff will see no change in their tariff.

T6. Has my hon. Friend had any discussions on the future of the treaty of Almelo, particularly in relation to modifying it to allow British and European companies to take full advantage of the opportunities offered by China’s expanding programme of civil nuclear power? (39439)

May I begin by paying tribute to the important work that URENCO, which is based on the outskirts of my hon. Friend’s constituency, does in this area? The treaty of Almelo was signed in 1970 by the Governments of the UK, the Netherlands and Germany, and covers the operation of the tripartite URENCO uranium enrichment company. It is not a vehicle for the promotion of specific commercial opportunities, and if there were to be any change in its nature there would have to be a new treaty, or an adaptation to the existing one.

We have recently begun to see the decoupling of oil and gas prices, and technological innovations enabling us to exploit shale gas might expand that decoupling still further. How is that affecting the Government’s thinking on electricity market reform, and what repercussions do they foresee?

That is absolutely right; this is one of the most interesting things happening in energy markets. The last figures that I looked at were very striking, showing that the price per therm in the United States is virtually half what it is in the UK or on the continent of Europe. Any electricity market reform must obviously involve a framework that could accommodate such changes, if this turns out to be a long-run trend. For example, if gas with carbon capture and storage were a particularly attractive technology providing low-carbon electricity for our consumers, the electricity market reform would have to enable it to be produced. It is not our job to pick winners in technology, but it is our job to ensure that we have low-carbon electricity and that the market framework can deliver it.

T7. Farmers in my Devizes constituency really welcome the inclusion of anaerobic digestion in the overall tariff and review currently taking place. That is long overdue, and an important way of reducing emissions and cutting waste from the farming industry. However, communities living close to existing or proposed sites are expressing real concerns about the possible impacts—an increase in traffic, unpleasant odours and so forth. What can be done to reassure communities and farmers that those things can co-exist in the countryside? (39440)

Obviously, the Environment Agency will continue to have oversight of such matters, but the brilliance of farm-based anaerobic digestion is that it is an on-farm solution, so it should diminish the number of road journeys that need to be made. As my hon. Friend the Energy Minister said earlier, at the heart of our proposals for an ambitious roll-out of renewables is the idea of community consent. We want a bottom-up approach, in which everyone has a chance to participate and be incentivised, rather than have things imposed from the top.

The north-east of England has a burgeoning offshore wind sector, supported by the new renewable energy centre in Blyth. What is the Department offering to support the growth of that industry now that the very successful regional development agency, One North East, which provided a lot of vital support, is being wound down?

As the hon. Lady will know, the £60 million for the building of the manufacturing facility on the ports could be of massive benefit to the north-east and to other parts of the country. Companies such as Gamesa, Siemens, Mitsubishi and General Electric are already looking at the United Kingdom because of the massive opportunities that they see here. We are determined to have the jobs coming to this country, whereas historically too many of them have gone overseas.

T9. Solar power offers a great opportunity to reduce both our carbon footprint and our household costs. Will the Minister say what his Department is doing to encourage its use in cities such as mine of Gloucester? (39442)

We recently launched “Community Energy Online”, which demonstrates to communities and local authorities the easy steps that can be taken to benefit from the range of schemes and initiatives that DECC has already launched and will launch in the future. I encourage people to look at this online initiative, which is easy to access. If my hon. Friend has any feedback about it, I would be delighted to hear it.

How does the Secretary of State intend to help the chemical and steel industries and other manufacturers of energy-intensive products, which will be less able to compete globally or even within the EU in response to his proposals for electricity market reforms and CO2 floor prices?

The hon. Gentleman raises an extremely important issue. We have to be careful not to have carbon leakage and to ensure that the measures put in place in this country do not drive British manufacturing jobs abroad. That is why there is cross-co-ordination between DECC, the Department for Business, Innovation and Skills and the Treasury to make sure that we fully understand any knock-on implications and avoid any such unintended consequences: it is critical to keep those manufacturing jobs in Britain.

We have heard how households such as those off the gas grid, of which there are many in my constituency, would benefit from the new green deal. If demand for it initially outstrips supply, how will the Secretary of State determine who should have access to it first?

My hon. Friend raises an interesting point; it is a high-class problem. Up until now the main difficulty Governments have faced is in encouraging consumers to go for energy efficiency measures, which are enormously beneficial economically. For example, the payback period for both cavity-wall insulation and loft insulation is less than 18 months, yet there are still millions of homes outstanding. I look forward to having to deal with the problem of high demand, but it is not one that has detained us greatly as yet. We want to make sure that the market takes off, and that is where we have been focusing our attention.

The all-party offshore oil and gas industry group heard this week of the difficulties faced by developers of small oil and gas fields in accessing infrastructure at a reasonable tariff. They say that the existing mechanisms do not work, and that the legal process for determining resolution has never worked either. Will the Minister turn his attention to that and ensure that they have proper access at reasonable tariffs, because it is these small developers that will be the future of the offshore oil and gas industry in the North sea?

We want a different relationship between Government and the offshore developers. We are considering restructuring PILOT, the organisation that deals with such matters. One of the most important aspects of its work will be access to infrastructure, alongside decommissioning and other issues that have been intractable for a long time. I am grateful for the work that the all-party group is doing in the House.

I welcome the Minister’s recent meetings with private sector organisations in Cornwall that are working on deep geothermal and marine energy. Can the Secretary of State confirm that both those exciting technologies will be included in the review of the banding regime for renewables obligation certificates?

I am grateful for my hon. Friend’s ongoing enthusiasm and determination to fight for geothermal energy. She has made some excellent points. The ROCs banding review will examine those issues and others to ensure that the right incentives are there to drive forward the whole green economy.

May I return the Secretary of State to the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)? Will he agree to meet a delegation from the all-party parliamentary group for the steel and metal-related industry to discuss the effects of the carbon floor pricing proposals on high energy users such as the steel and ceramics industries?

The hon. Lady will know that we have been in close contact with high energy users. We are happy to continue to meet them to discuss their concerns.

Is the Department still considering the marine energy parks project, which was proposed before the election? What is its perspective on opportunities for the marine energy sector?

We think that there is huge potential for growth in the sector, which now needs to be gripped and driven forward. There has been about a decade of talking about the issue, but no real growth. I was delighted to go to the south-west to convene the new marine energy programme board and to announce that the south-west would host the first marine energy park, consisting of a cluster of marine energy firms. I hope that that will be replicated all round the coast of Great Britain.

Much of the new low-carbon capacity plan will require either enhanced or new transmission lines. Will the Department encourage National Grid to consider installing underground and submarine cables as well as enhancing existing pylons?

The hon. Gentleman has raised a particularly important issue, which I know is of great significance to his constituency because of the possible building of a nuclear plant there. I am pleased about the work being done by the Institution of Engineering and Technology, which is trying to establish in detail what the costs of undergrounding will be. Additional work is being done by National Grid to ensure that we fully understand the relative costs of the various approaches, which will be one of the most contentious issues.

The Minister will be aware that the development and expansion of wind and wave technology are having a very positive impact on research and development and manufacturing in my constituency. What discussions is he having with his counterparts in the Northern Ireland Assembly to ensure that the economic as well as the environmental benefit is harnessed?

The hon. Lady will be pleased to know that we have regular contacts with members of the Northern Ireland Government, as well as with devolved Governments elsewhere in the United Kingdom. We are keen to adopt an all-islands approach. We intend to assess the potential throughout the British Isles, including the channel islands and the Irish Republic, to establish where the resources are greatest and how they can be harnessed for the greatest overall good.