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Energy and Climate Change

Volume 545: debated on Thursday 17 May 2012

The Secretary of State was asked—

Feed-in Tariffs

1. What assessment he has made of the effect of changes to the feed-in tariff on the number of solar PV installations in the last 12 months. (107609)

In the last 12 months, there have been approximately 270,000 photovoltaic installations registered on the microgeneration certification scheme database, against a forecast of just 35,000 installations when the scheme was launched in 2010. Moreover, having substantially reduced the cost of each installation to electricity bill payers, the coalition is now in a position to significantly expand the ambition of the feed-in tariffs scheme.

Following the chaotic cut to the feed-in tariff, there has been a 90% fall in solar panel installations, and 6,000 jobs have gone in the industry, including more than 100 in my constituency of Kingston upon Hull North. Does not the Government’s mismanagement and this debacle mean that the industry could be strangled at birth? It also puts at risk investment in the renewables industry, which is so important to areas such as Hull.

I am surprised the hon. Lady reaches that conclusion. Since the 21p tariff came in 10 weeks ago, there have been more than 26,000 installations with 86 MW of capacity, which is equivalent to the installation rate achieved in August 2011, when the tariff was at 43p. The installation rate in the period is 1.7 times what it was in the same period last year.

Feed-in tariffs are not the only way to encourage solar PV installations. Can more be done with building regulations, especially to encourage solar to be built in to new-build properties at the start?

I am sure local authorities will look at that proposal, but the key thing is to ensure that our new, more stable and predictable regime supports the solar industry, as we believe it will. We need to ensure that the message goes out that the solar industry is back in business and on a sound footing. There will be many more solar installations compared with what happened under the solar installation regime we inherited from the Labour party.

Last week, just 900 installations took place and two thirds of businesses had empty order books, but my question is about the Government’s next round of cuts to solar, which is due on 1 July. Last night, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), tweeted:

“Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in the #solar tariffs”.

The truth is that the Government have missed the deadline legally required to provide notice to Parliament for the next round of cuts to come into force. Is not the Government’s incompetence the real reason why they are backtracking?

The right hon. Lady seems to think that we should not listen to the industry, but I do. We are considering tweaking the start date for the next tariff reduction—if we change it, it will be a tweak, not a massive change. She needs to understand that the changes that we have consulted on and are introducing will bring stability and mean that we have solar power for the many, not the few.

There will be laughs echoing outside the Chamber at the Secretary of State’s suggestion that the Government have been listening to the industry, but my question was about parliamentary procedure. Parliamentary procedure requires that due notice must be given in advance of the cuts being brought into force on 1 July. My understanding is that the Department has missed—legally—the deadline required. Will the Secretary of State therefore confirm whether the Department has missed the deadline required to give notice to Parliament? If it has, it is absolutely the truth that the Government cannot legally impose the cuts on 1 July. Why does the Secretary of State not just own up, end the uncertainty and commit to scrapping the next round of cuts on 1 July?

The right hon. Lady started by saying that the industry will be laughing, but Paul Barwell, the chief executive of the Solar Trade Association, said in The Independent on 9 May 2012:

“The current 21p subsidy can actually give a return up to 10 per cent, tax-free, index-linked, for 25 years, making it one of the most attractive investments around.”

That is what the industry is saying. The Government will abide by all the procedures required by the House and lay the regulations when required.

Green Deal

The green deal is a flagship policy for the coalition. We are making good progress towards the introduction of the green deal this autumn. We are determined to have a solid framework in place for this transformational scheme, which will enable the green deal market to grow right through to the next decade and beyond.

Macc2020, an active and energetic community group in Macclesfield, has effectively used a local energy assessment fund to stimulate take-up of the green deal among home owners and to promote local small and medium-sized enterprises associated with energy efficiency. Does my hon. Friend agree that that is the right approach given that economic development potential?

Absolutely. Macclesfield is a terrific example of community activity. That is exactly the kind of approach we want to see followed across the whole country. It will help get the green deal off to a strong start. It is great that my hon. Friend’s constituency is blazing a trail, and I congratulate everyone involved—perhaps he will do so in person on my behalf—on taking advantage of the DECC LEAF scheme to such good effect.

I have had a very positive meeting on the green deal with Sutton Seniors Forum, Ofgem and the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow). One issue that arose was the importance of providing clear information to people, particularly senior citizens. What do the Government intend doing on that front?

We already have a lot of information on our website, but obviously the scheme has not been launched yet and we still have some way to go. The level of consumer information will be stepped up in the autumn to coincide with the launch, when there will be a call to action on the green deal. We are keen to ensure that pensioners and every other part of society are fully briefed on the opportunities presented by the green deal.

Like Macc2020, Energy Alton in my constituency has done a great job in blazing a trail for the green deal. What can be done now to ensure that local small businesses in East Hampshire benefit fully from the business opportunities?

My hon. Friend is right to raise the issues of small and medium-sized enterprises, which will be critical to delivering the green deal at a variety of levels in the economy. We have taken measures to reduce the barriers to SMEs, after working closely with them in preparing the green deal legislation, and we continue to engage closely with the small business sector.

My hon. Friend has been kind enough to visit Hastings on several occasions, as he is a neighbouring MP, and will be aware that many of my constituents live in housing association property. How will the green deal benefit residents in housing associations?

Absolutely. I know that my hon. Friend is a terrific advocate for Hastings, and I can assure her that social housing will be among the first to benefit from the green deal revolution. Dedicated funding within the £1.3 billion of energy company obligation subsidy will be focused on the most deprived areas of the country, so I would expect areas such as Hastings to be among the first to see the benefits. With her as its MP, I am sure it will.

Will the Minister explain what happened to the 30,000 people who applied for help through Warm Front last year? Despite an underspend, they did not get anything. Will he apologise to them for having to wait for this much heralded green deal and will it actually be delivered to the very poorest? I doubt it.

I am pleased to say that since I became Minister in the right hon. Lady’s place, the number of complaints about Warm Front has reduced substantially. She will know that there was a massive complaint bag about Warm Front while she was in office. We have not seen that since I entered office. Of course we will continue to run Warm Front though next year. It remains part of a suite of measures to tackle fuel poverty, and we remain committed to doing much more.

In the interests of transparency, will the Minister share with the House the benchmarks he has set for the uptake of the green deal scheme in the first to third years and what emissions reductions he has set as the benchmarks for the success of the scheme?

We have to get away from this target mania that existed under Labour and understand that this is not some sort of Stalinist five-year plan. We are unleashing the power of the private sector, and as a result we will be far, far more successful than any of these top-down Whitehall programmes initiated under the previous Government.

There is real concern that under green deal plans there is not enough money for fuel poverty. Will Ministers reconsider the possibility of recycling revenue from the carbon floor price and EU emissions trading scheme revenue into the ECO pot to top it up and to prevent the poorest customers from cross-subsidising rich customers?

The hon. Lady raises a serious point. I listened to what she said in the Energy Public Bill Committee, to which she made a constructive contribution, about how we should design the ECO and use it to tackle fuel poverty more effectively. More than half the £1.3 billion of ECO subsidy will be targeted at the fuel poor through various streams, which should go a long way to meeting her concerns about the need to ensure that the fabric of our housing and the improvements to it have the fuel poor at their heart.

I have listened carefully to what the Minister has said. The launch of the green deal is just five months away, yet we are still waiting for the secondary legislation to be published. Energy companies do not know whether they are going to be ready for the launch, no green deal assessors have been trained, no detail is available on the interest rate, and the Government’s wildly optimistic predictions on jobs and take-up are constantly being downgraded. The Minister said a moment ago that he did not believe in targets, yet only about 12 months ago he was saying that 14 million homes would be covered by the green deal by 2020. We now know that No. 10 is also worried about it, and is calling on the Cabinet Office to try to prevent this impending car crash. How will the Minister ensure that the interest rate is low enough to make sure that the green deal is a good deal for consumers?

I thank the hon. Lady for that speech. The fact is that the green deal is on track, and we will be publishing the secondary legislation very shortly; it will be done and dusted before the summer recess. We had an excellent meeting yesterday with the Prime Minister and the Deputy Prime Minister in which we reviewed the whole green deal programme, and I am glad to report that we are all on track.

Energy Bills

The Deputy Prime Minister recently announced an agreement with energy suppliers to ensure that all consumers have good information on their supplier’s best tariff. This builds on previous actions by the Government to help people to control their bills, and complements Ofgem’s proposals in the retail market review to protect consumers. We are also encouraging consumers to harness their collective purchasing powers.

I thank the Secretary of State for his reply. In my constituency, 6,563 over 75-year-olds would benefit by £200 a year from being put on the lowest tariff. I appreciate what the Government are doing, but many of those people are unable to access online facilities easily. What else can the Government do to ensure that they benefit from these measures?

Thanks to the deal that we have negotiated and that the Deputy Prime Minister has announced, those pensioners in the hon. Lady’s constituency will be written to every year by their energy supplier and advised of the best tariff for them. Furthermore, because of the warm home discount for which this Government have legislated, 600,000 of the poorest pensioners in the country are getting a direct discount of £120 off their energy bills. That is real action.

Will the Secretary of State commend the work of the Energy Saving Trust on reducing household bills? Will he also point it in the direction of reducing the cost of heating water, as a means of reducing overall energy costs, by heating only the water that a household needs to use each day?

My hon. Friend is right to pay tribute to the work of the Energy Saving Trust. It does a huge amount of work on providing information, advice and support to a whole range of people, particularly the most vulnerable, and I am sure that it will have heard her welcome comments.

If the Secretary of State is serious about the green deal, why will he not ensure that the energy companies have to put the 9,914 pensioners over the age of 75 in my constituency, and others around the country, on to the lowest tariff?

I think the hon. Gentleman is mixing up the green deal with the action that we are taking to help people with their consumer bills. The warm home discount, which targets the 600,000 poorest pensioners, is one of the most effective ways of providing that help. Under the scheme proposed by Labour, some of the wealthiest pensioners would get the discounts, and I am afraid that that shows that it is no longer the party of the many.

I very much welcome the move to ensure that the market works as efficiently as possible, so that consumers pay no more than is necessary. Should we not make it clear to consumers, however, given the amount of investment that needs to be made in our energy infrastructure, that future generations will have to pay a higher price to ensure that we can keep the lights on in a low-carbon way?

My hon. Friend is right to say that we face a big investment challenge in this country. That is why, in the Gracious Speech, Her Majesty announced that we would be legislating for electricity market reforms to bring forward that investment, but at the lowest possible cost.

People have real concerns about energy prices. They also have real concerns about the amalgamation of energy companies—be they electricity, gas or oil companies—and the control of prices that results from that. What assurances can the Minister give us that the Government will always be the protector of prices for the consumer?

The hon. Gentleman is right. Energy bills are a real concern for many households around the country. That is why we are taking the action we are. He refers to consolidation in the sector. That certainly happened under the last Government. What we are doing is trying to make sure we can get more competition into the sector. We have seen Ofgem’s proposals for dealing with liquidity in the wholesale markets, while the work I am leading on collective switching is intended to enable consumers to generate more competition. Competition is what we want to see.

New Nuclear Power Stations

5. What discussions he has had with the Secretary of State for Communities and Local Government on the potential long-term community benefits of the Hinkley Point C nuclear power station and other major infrastructure projects. (107614)

I have regular discussions with other Government Departments, including the Department for Communities and Local Government, on how to ensure that local communities hosting new nuclear power stations benefit in the long term from these large and nationally important projects. The Government will announce our conclusions shortly.

Thank you very much, indeed, Sir.

The Minister will know of my concerns about the long-term impacts of both the Hinkley Point project and the National Grid’s proposals to put pylons across the Somerset Levels, when we would naturally prefer that it was done underground. Has the Minister had distinct discussions about the crucial importance of business rate retention for the benefit of the local communities? Will he meet me and representatives from local authorities in my area to discuss this further?

The humour arose because I inadvertently sat on the Secretary of State, which shows our commitment to work seamlessly together in this coalition! My hon. Friend makes an important point. We recognise that EDF has already committed about £90 million for a section 106 agreement, but we recognise, too, the need for greater signals for the long-term benefit of the community from those who deliver nationally important projects.

I will endeavour not to sit accidentally on either of my Front-Bench colleagues this morning. One of the claimed community benefits of Hinkley Point is the ability to create and maintain highly skilled jobs. Will the Minister give his reaction to the comments of Citigroup in response to the reports of construction costs at Hinkley increasing by 40%, suggesting that an already very challenging programme might be reaching the point of impossibility?

The hon. Gentleman nearly did sit on his right hon. Friend the Member for Don Valley (Caroline Flint). He makes an important point. We are in close conversations with EDF and other potential developers of nuclear plants and we recognise that they have to be delivered in a cost-efficient way. We do not recognise the figures in the Citibank report, but we will continue to work with the company to ensure that this low-cost, large-scale, low-carbon source of generation can be part of the future energy mix.

I am grateful to the Minister for that response. I am sure he will also be aware of the evidence that Volker Beckers, the chief executive of RWE npower, gave to the Energy and Climate Change Committee earlier this week. He explained that the company was pulling out of the Horizon joint venture because continuing

“would have meant a downgrading and we could not afford to do that”.

Given the report from Moody’s suggesting that if EDF were to continue with Hinkley and, indeed, Sizewell, it would be at risk of having its credit rating downgraded, how concerned is the Minister about the prospects for nuclear new build in the UK?

The hon. Gentleman provides a partial quote, in that Volker Beckers also said that this was a result of German Government policy and of the constrained balance sheets that resulted from the nuclear levy in Germany, and that RWE is selling off £7 billion-worth of assets worldwide, making a further €2 billion-worth of cost reductions elsewhere. Essentially, this is part of a global restructuring of the company. We continue to believe that the measures we are putting in place through market reform—more detail will be published very shortly—will create the right environment for investment in our low-carbon infrastructure for the future, which is so critical for our energy security.

Does my hon. Friend agree, however, that there is no prospect of a new nuclear power station at Hinkley Point or anywhere else in the UK until we have absolute clarity about the contracts for difference regime? That clarity must extend to the credit status of the counter-party, compliance with the EU state aid regime and the setting of the strike price. Will the Minister tell us when we will have that clarity?

I can give my hon. Friend the assurance that the clarity he seeks will be published very shortly, within the next few days. When we publish the Bill, we will publish a further technical update, which will provide much of the information for which he asks. We have been very keen that the Bill goes through the process of pre-legislative scrutiny, so that his Committee, the Opposition Front-Bench team and others can contribute actively to it.

Climate Change

7. What steps he is taking to listen to a diversity of views on the causes of change in the Earth’s climate. (107616)

My Department considers many views on the causes of climate change, and I encourage my officials to take all available scientific evidence into account when developing policy. However, the fact that we are open to a range of views does not mean we ascribe equal value to each.

As with all scientific endeavour, climate science involves uncertainties, but it is considered very likely that human activities are the major cause of current climate change, and compelling evidence shows that climate change brings major risks for us all. It would be deeply irresponsible not to act decisively and urgently to deal with climate change in the United Kingdom and globally.

I am no scientist, and I do not know the truth about the controversies that are raging around global warming, although I note that Dr James Lovelock wrote recently that, in his view, temperatures had remained broadly constant over the last 12 years. I do not know whether that is right or wrong; what I do know is that before we spend trillions of pounds on reining in our competitive economy and desecrating our country with wind farms, we should actually listen to a range of views.

I know that, as a former distinguished Chair of the Public Accounts Committee, the hon. Gentleman wants to take evidence and science into account, and that he understands risk and probability. The case for action is overwhelming, whether it is made by the Intergovernmental Panel on Climate Change or the Stern review.

Feed-in Tariffs

8. What assessment he has made of the change in the number of solar panel installations since he announced changes to the feed-in tariff. (107617)

When we announced proposals to reform the feed-in tariffs scheme for solar PV at the end of October 2011, approximately 126,000 solar PV installations were registered on the microgeneration certification scheme database. Since then, an additional 190,000 installations have been registered. In the 10 weeks since the introduction of new tariffs for small-scale installations on 3 March, more than 26,000 solar PV installations have been registered. That is equivalent to the installation rate in August last year.

I hear what the Secretary of State says, and I heard what he said in response to my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and my right hon. Friend the Member for Don Valley (Caroline Flint), but I can tell him that in my constituency there has been a catastrophic collapse in the demand for feed-in tariffs. It has been particularly catastrophic for small businesses which have invested many thousands of pounds of their own money in what would have been a very positive regime. Will the Secretary of State clarify, very soon, what will happen after July, so that my constituents who have invested money in this scheme can ensure that they will still have their businesses in October and at the end of the year?

We will respond to the consultation very shortly, but I can tell the right hon. Gentleman that installation rates are already increasing, although there was a downturn after the introduction of the new tariff. I think there is a sunny future for the solar industry.

We are soon to see a new generation of highly efficient solar panels, and we are also soon to see efficient domestic battery storage technologies. Combining that with a mass programme of insulation and a Severn barrage would remove the need for nuclear generation. Will the Government think again about the need for it?

The uncertainty surrounding climate change, and surrounding all technologies, is such that it would be irresponsible not to pursue every possible low-carbon technology. The hon. Gentleman is right to suggest that renewables have a positive future, as does solar power. We propose to deliver an additional 620,000 installations at a cost of just £500 million by 2015—that is, to deliver nearly three times as many installations as were delivered under the old scheme, at a third of the price.

Energy Policy

9. What recent discussions he has had with the Scottish Government on the effect of potential Scottish independence on energy policy. (107618)

I have had no recent discussions with the Scottish Government on the effect of potential Scottish independence on energy policy. The UK Government’s position on the independence debate is clear: Scotland is stronger in the UK, and the UK is stronger with Scotland in it.

I think that a few people will have been slightly disappointed by the Secretary of State’s answer. According to evidence given to the Select Committee on Energy and Climate Change by Peter Atherton of Citigroup Global Markets, investment in Scottish renewables in an independent Scotland would be “highly questionable”. Given that other companies are also saying that they are withholding investment, should not a referendum on Scottish independence be held now rather than later, for the good of energy in this country?

The hon. Gentleman knows the position of Her Majesty’s Government. He knows that we would like a referendum to be held sooner rather than later. We are very committed to ensuring that there is investment in the UK’s energy infrastructure, whether it takes place in Scotland, England, Wales or Northern Ireland. However, some people are saying that uncertainty about an independent state is putting off some investors, and that is one reason for thinking that the independence referendum should be held sooner rather than later.

Domestic Energy Bills

The Government are committed to reducing domestic energy bills, and have put energy efficiency at the heart of their energy policy. The green deal will drive the take-up of energy efficiency measures in homes, helping to reduce energy bills. In addition, the roll-out of smart meters will further reduce energy use. Vulnerable customers will also benefit from the warm home discount, which is worth £1.1 billion over four years.

My right hon. Friend will be aware from his constituency, as I am aware from mine, of the pressure that people are coming under with their fuel bills. Will he outline for my constituents, as well as everybody else’s, what the electricity reform Bill will do to help keep costs down?

My hon. Friend is quite right to point to the fact that one reason for bringing forward electricity market reform and the energy Bill is to ensure that we meet this country’s energy infrastructure needs, which are huge, as we see 20% of power plants coming offline over the next decade and the need to make the transition to low-carbon energy. That is a huge challenge, which could be very expensive for consumers. One of the reasons we need to reform the electricity market is therefore to ensure that that infrastructure investment can be made at the lowest cost imaginable.

Can my right hon. colleague update the House on his Department’s progress in cutting red tape for small energy suppliers to help increase competition in the market and thereby keep prices down for my constituents in the city of Lincoln?

I am grateful to my hon. Friend for that question. There are two things I would point him to. We are helping small suppliers to compete by increasing the customer threshold for participation in schemes such as CERT and CESP—the carbon emissions reduction target and the community energy saving programme—and the warm home discount scheme. Ofgem is currently consulting on proposals for a mandatory auction in the wholesale electricity market to improve liquidity, and has recently completed a consultation on tariff simplification. All these measures will, we believe, help small suppliers in my hon. Friend’s constituency and elsewhere.

Will not the biggest impact on reducing domestic energy bills be achieved by bringing shale gas online as quickly as possible?

I do not think so. We had a seminar at No. 10 recently, which the Prime Minister participated in, along with myself and the Business Secretary. We heard from experts in the shale gas industry who had been working in America and looking at the major opportunities in places such as Ukraine and China. They were clear that it would take some time for shale gas to be exploited in the UK. They were also clear that we needed strong regulation to proceed and that the shale gas reserves in this country are not quite as large as some people have been speculating.

Given that so few large companies took part in last week’s big switch, does my right hon. Friend agree that we should be concerned about the responsiveness of large companies to customers’ concerns? What can the Government do to ensure that all companies engage with any such initiative in future?

At least three of the big six were involved. I thought that the way in which the reverse auction was conducted by the consumer association Which? was a real success, and I am delighted that my hon. Friend noticed it. It brought a saving of £25 million to consumers who were part of that collective switch, with an average saving of £120. It was therefore a success, and I want to see more energy companies getting involved in such schemes.

Carbon Capture and Storage

Bidders were required to register their interest in the carbon capture and storage commercialisation programme with the Department by 13 April, and must submit bids by 3 July. Once bids are submitted, a full and thorough assessment will be carried out, and decisions on which projects to support will be taken in the autumn.

I am grateful for that answer. Obviously the Minister will know that we in the UK have vast reserves of untapped coal, including much in Fife. Will he try to ensure that the opportunity for clean-coal technology is not lost in the current process, and will he find the time to come to Fife and see our technologies first hand?

I would always be delighted to find a chance to go to the hon. Gentleman’s constituency. As he knows, I fought Clackmannan in the 1983 election. They did not see the need for my presence there at that time, but finding other reasons to go back would be a great pleasure. We see this issue as an important part of coal policy, and we want it to provide a long-term future for coal in the energy mix. There are tremendous resources around the United Kingdom, and the work being done in his constituency and elsewhere is important to that process.

22. The Minister also fought a seat in Mansfield, very close to Thoresby colliery. If he wants to come half way up the country, he might come to see the good work going on at Thoresby colliery. I hope that he can assure the House that when the clean coal technology is developed, it will give this country a great future of energy reserves. (107633)

I did eventually work out that fighting mining seats was not the best way to get elected to this House; it is more accurate to say that they fought me, rather than I fought them. Many areas around this country have tremendous resources that can benefit from this technology and, in addition, great technological skills that we can bring forward in this process. This is a world-class, world-leading competition, and it is a very exciting time for this industry.

The Minister of State is a self-effacing fellow. If memory serves me correctly, although he was unsuccessful in Mansfield he did lose in 1987 by only 56 votes, and I think the House ought to know that.

I welcome the progress on carbon capture and storage, a technology with great potential. Will the Minister also update us on another clean coal technology being pioneered in Newcastle, underground coal gasification?

I have yet to be tempted to fight a seat in Newcastle, but these opportunities may still happen. I was grateful for the chance to meet the hon. Lady and some of the team from Newcastle university—they and others are doing very important work in this area. We are still looking at some of the work, and I have a meeting coming up with one of the major global companies, Linc Energy, to try to understand more fully and effectively the work that it is doing in this sector. We think that it can be a player, but it is not in the forefront for the first stage of carbon capture and storage projects, because of the current stage of the technology.

It is estimated that carbon capture and storage technology could support an amazing 100,000 jobs by the end of the next decade, so does my hon. Friend agree that speed is very much of the essence if we are to maximise the huge opportunities that this technology offers?

I agree strongly with my hon. Friend, and the reason why we have brought forward this competition with the speed that we have—three months for submissions to be made and another three months or so before the final outcome is known—is the importance of speed. Work is going on around the world to try to deal with this. We think that with £1 billion up front and £125 million for research and development, and through our new market reform structure—a long-term mechanism for supporting that industry—we can move this from being a few pilot projects to an industry.

Energy Efficiency

12. What support he plans to provide for Cambridge retrofit and other schemes to improve the energy efficiency of existing buildings. (107621)

I am very glad to report that my Department is already working closely with the Cambridge retrofit project, which is just the sort of ambitious city-wide retrofit programme the green deal is designed to support.

I thank the Minister for that comment. The Cambridge retrofit is an excellent programme that will make a huge difference. How will the Government ensure stability of energy and climate policies in the long term, so that investors are willing to put finance into major schemes such as the Cambridge retrofit?

My hon. Friend raises a good point. We know what investors want. They want TLC—transparency, longevity and certainty. Unlike previous short-term or stop-go policies, such as the carbon emissions reduction target and the community energy saving programme, the green deal is designed to run well into the 2020s, giving investors exactly the sort of longevity and certainty they need.

Induced Hydraulic Fracturing

14. What discussions he has had with the chair of the Environment Agency on induced hydraulic fracturing. (107623)

I very much welcome the comments made by the chair of the Environment Agency. I believe he is correct in assessing that, subject to rigorous regulation and monitoring, hydraulic fracturing can safely be used in the UK for shale gas exploration. I also agree on the need to proceed with caution. Fracking should be carried out only under close regulatory control, to ensure that risks are minimised and the environment is fully protected.

It is a relief to know that mentioning the abbreviation “fracking” is within the House rules. Many of us believe that fracking has real potential for energy security, and although we should proceed with it carefully, it could be of huge benefit to this country. Please, do ignore some of the siren voices in the environmental lobby and get on with doing it in a cautious but determined way.

The hon. Gentleman is absolutely correct, because we cannot ignore what is happening elsewhere around the world. The gas price in the United States is now one quarter of that in Europe and one seventh of that in Asia, so this is a game-changing technology. However, our commitment is absolutely clear: for this to go ahead, we have to have the tightest regulatory controls and the greatest focus on environmental protection. This is a densely populated island, we have to have public support for this technology going forward and we intend to go about this in a very constructive way, involving all the expert opinion we can.

Is there not another side to all this? Does not the process use a vast amount of water and involve chemicals as well? It runs counter to all this green deal talk that we hear so often. Will the Minister ensure that all those reservations are taken fully into account?

Let me give the hon. Gentleman an absolute assurance that all those issues will be completely taken into account. The fluid used is 99% water and there are already very strict controls on how it is used and on what happens after it has been through the process. There are very strong regulations, too, on how the fracking activity is separated from the water table and they are often several thousand feet apart. All those issues will be considered with the greatest care before we go forward. We believe that this technology has real potential, but it must be used in the safest possible way.

Biomass Gasification Plants

We see a big role in the future for combined heat and power gasification plants. The coalition has introduced the renewable heat incentive to support exactly that type of technology and will shortly publish details of future subsidies for renewable electricity under the renewables obligation. Furthermore, DECC’s UK renewable energy road map clearly sets out the actions we are already taking to remove non-financial barriers to deployment.

The university of East Anglia campus in my constituency is able to receive considerable heat and power from its unique biomass gasification plant, which is the first of its kind in the UK. When sustainable syngas cannot be produced due to the maintenance cleaning cycle, the boiler switches to natural gas. However, dual fuel plants are ineligible to receive renewable heat incentive payments. Will the Minister consider whether the RHI guidance could be made more flexible further to encourage investment in innovative low-carbon technologies?

My hon. Friend raises a good point and we are keen to be as flexible, pragmatic and ambitious as possible. I can confirm that the Government will explore the inclusion of dual fuel biogas and fossil fuel installations within the RHI and I thank him for his idea.

Nuclear Power

New nuclear power will have a vital role to play in our energy mix alongside other low-carbon forms of generation provided it can be delivered in a way that provides value for money for consumers and that is consistent with the coalition Government’s commitment to no public subsidy.

I thank the Minister for that reply. Given the uncertainties about future investment, will he give us again an absolute assurance that if it is to be delivered, there will, as the coalition agreement requires, be no subsidy and no hidden subsidy, either?

I refer the hon. Lady to the statement we made in October 2010 about exactly how we define subsidy and what would be meant by that commitment. We are absolutely clear that this technology must stand on its own feet. The process for taking it forward is designed to ensure that that is the case and it will be very transparent. We recognise that higher costs are associated with low-carbon technologies than with high-carbon technologies, but we remain firmly committed to that statement.

19. May I put on record, Mr Speaker, our admiration of your awesome knowledge of electoral history? Nuclear power is an important source of stable energy in this country and press reports about the ability to continue to have 20% of our power coming from nuclear energy have been worrying. Will the Minister repeat his reassurances that 20% of our energy will continue to come from nuclear power? (107628)

Your knowledge, Mr Speaker, is sometimes not so much awesome as scary and I find that you know more about my electoral history than I do.

I can give my hon. Friend that assurance. We believe that the initial role of new plants will be to replace the old plants that are coming out of commission. We do not have a set Government target for delivery, but the industry thinks that it can deliver 16 GW of new nuclear power by 2025. We have identified the eight sites where that will go forward and, taking forward the work of the previous Administration, we have created the most attractive regime anywhere in Europe for new nuclear investment.

20. The Minister has mentioned the target of 16 GW by 2025 that the industry states it can provide, but the industry clearly is not in a position to provide that given recent developments. What work has he undertaken to revise his estimate, particularly in relation to the national planning statements, of the number of gigawatts that will be provided over the coming period through nuclear power? (107629)

I would take the hon. Gentleman to task on this. The two consortia that continue to go forward as planned—the EDF-led one and the one in Cumbria—are looking at 9.7 GW. The Horizon one—I have strong hopes that new investors will come in and take forward that programme—will deliver an additional few gigawatts as well. I firmly believe that, following on from the work of the previous Administration, we have created a very attractive regime for people from around the world to look to be part of the nuclear renaissance in the United Kingdom. We cannot do this without international investment and we recognise that we need to create the right framework for that to come forward.

Energy Efficiency

The launch of the green deal this autumn will put in place the biggest and most ambitious energy efficiency programme Britain has ever seen. Furthermore, we anticipate that our electricity market reforms will create further opportunities for large-scale investment in energy efficiency projects.

Last year, nearly 30,000 households that applied for help through Warm Front were turned down even though the budget had an underspend of more than £50 million. Will the Minister take this opportunity to apologise to all the families who were left in the cold last winter because of his Department’s incompetence?

We need to send a very clear message from this House that Warm Front remains open. Certainly, the scaremongering from the Opposition last winter that Warm Front had closed and was no longer available was extremely unhelpful. That was coupled with a very mild winter, but one message that I want to get over is that Warm Front remains open and that those who think they can benefit from it should definitely apply.

Topical Questions

As the hon. Gentleman will know, my Department’s key objectives are to have secure, clean and affordable energy and we have been working hard on those objectives. The energy Bill measures to reform the electricity market are very important for that. We hosted the clean energy ministerial very recently, which was attended by Ministers from 23 leading economies, and we worked together on clean energy technologies. I was particularly pleased to see that Professor John Hills’ report—the independent review of fuel poverty—was published.

I thank the Minister for that answer. Last week it was Centrica and this week it was Scottish and Southern Energy announcing record profits at a time when household bills continue to rise. In those circumstances, why will not the Government insist that the big six must write to customers telling them what is the cheapest tariff rather than directing them to the phone or the internet, where there is no guarantee that they will get the right information?

I do not think the hon. Gentleman has been listening. The Deputy Prime Minister announced the deal we have struck with the six big energy providers. They are now committed to writing every year to their customers telling them what is the best tariff for them.

T2. Under the previous Labour Government the number of households living in fuel poverty rose to almost 6 million. What are this Government doing to help the poorest households in my constituency? (107635)

We are doing a huge amount, from the warm home discount to the push on collective switching. My hon. Friend will know that today’s figures on fuel poverty show a fall of 0.75 million, but we should not celebrate that because those figures are based on the current measure of fuel poverty. If they were recalculated using the methodology proposed by John Hills, the fuel poverty figures would stand still. There can be no room for complacency; we have to redouble our efforts to tackle fuel poverty.

This week, we learned that the Foreign Secretary—for whom I understand the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) was once the chief of staff between elections, just to add to his biography which we are learning about today—does not think the Government are doing enough to support the low-carbon economy. I absolutely agree with him. We also learned that the Energy Secretary and the Business Secretary wrote back urging caution. It was bad enough when the Chancellor was talking down the green economy, but for him to be joined by the Energy Secretary absolutely beggars belief. Is not the Foreign Secretary right that unless Britain shows strong leadership on the green economy, there is no hope of securing international agreement on climate change?

Unlike the right hon. Lady, I have read the letter from the Foreign Secretary and I wrote the letter to the Prime Minister. They are very positive about what we want to do on low carbon technologies and climate change in this country and abroad. We are leading the way.

T4. Despite assurances from my hon. Friend the Minister, small double-glazing companies in my constituency still feel that they are being elbowed out of green deal work by larger national companies. What more can my hon. Friend say to reassure small and medium-sized enterprises in Sittingbourne and Sheppey that they will be able to access green deal work? (107637)

Of course, the green deal has not actually started yet; it will not be launched until the autumn and we have yet to see the full framework, but I can assure my hon. Friend that we have already taken several steps to make it easier for SMEs to engage in the green deal across the board. We shall continue to work with SME working groups to ensure that there is maximum availability of the green deal and the ECO—the energy company obligation—for SMEs, who will be vital for their delivery.

T5. The Minister will be aware that although the ECO will be delivered in Scotland by the Scottish Government, the underlying legislation applies to England, Wales and Scotland. Given concerns about how the green deal will be implemented, what steps are the Government taking to ensure that my constituents and those of other Scottish MPs get full benefit from the ECO when it is finally brought into effect? (107638)

The hon. Gentleman will know that we are still finalising the details of the ECO, but I should be happy to meet him to reassure him that the scheme really will benefit the whole country.

T6. As high energy bills continue to affect local households in my constituency, can the Minister outline what the Government are doing to improve the UK’s long-term energy security problems? If energy security is not addressed—I stress that it is a long-term issue—energy bills will continue to soar. (107639)

My hon. Friend is exactly right. Later this month when we publish the energy Bill, he will see that we have very ambitious electricity market reforms to deliver, among other things, energy security in the future. We need investment of £110 billion in our energy infrastructure over the next decade. That is a real task, and we need to make sure that there are incentives to bring forward that low-carbon investment.

T8. Speaking in the House on 9 February, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) said he expected to see“steady growth in the number of people who will be employed”—in the solar industry—“until 2015 and beyond.”—[Official Report, 9 February 2012; Vol. 545, c. 479.]Why then have 6,000 people in the solar industry lost their jobs since last summer? (107641)

We have now put the whole solar industry on a much more stable foundation. We shall shortly be publishing our plans for a feed-in tariff system that really can go forward into the next decade and beyond, with a real sense of ambition. It is affordable, it is ambitious and it will bring real clarity to the industry.

T9. Earlier, the Secretary of State mentioned the excellent Which? big switch scheme to save people money. What I particularly like about it is the fact that it is based on co-operative action—individuals choosing voluntarily to work together rather than a statist top-down approach. Does my right hon. Friend share that view and what support was he able to give? (107642)

I am grateful to my hon. Friend for his question. He will know that when I was at the Department for Business, Innovation and Skills, I stimulated a huge amount of research and work on collective purchase and co-operative principles so that together we can purchase not just energy but other things more cheaply. I asked if the Department had any detailed research, because I thought the previous Government, who were supposed to be in favour of collective and co-operative principles, might have done some—they had not.

In his preparation for COP 18, what analysis has the Secretary of State made of Professor Sir David King’s proposals for common but differentiated cap and trade schemes, using the human development index as an appropriate measure?

We are taking forward a lot of analysis, not just on that scheme, but on a number of other things. COP 18 in Doha at the end of the year will be really important; I met the Deputy Prime Minister of Qatar recently, to discuss how we can make sure that it is a successful set of discussions.

T10. What discussions is my hon. Friend having with energy-intensive industries such as ceramics and steel, which are key employers and exporters, to ensure that their prices are competitive with countries such as Germany and France? (107643)

We are very much engaged with all the energy-intensive industries, because we are absolutely determined in DECC to ensure that decarbonisation does not lead to de-industrialisation. On the contrary, if we are smart the low-carbon transition should enhance our competitive position. But that does mean being sensitive to the burdens that we place on manufacturing industry. We are starting with a package of compensation worth £250 million for energy-intensive industries, but that is only the beginning of a much more nuanced and ambitious policy.

Will the Secretary of State join me in congratulating Brighton energy co-op on its launch last night of the first community generation scheme in Brighton? What is he doing to ensure that the electricity market reform proposals will properly support community energy schemes, particularly those by co-ops, housing associations and local authorities?

I can congratulate the scheme in the hon. Lady’s constituency. It shows that under the new regime of solar feed-in tariffs that we have introduced, there are still many communities that are going forward and making those investments. That belies much of the criticism we have heard in the House today. I can assure the hon. Lady that we want to continue to encourage such community schemes in our future policies. Quite a lot of those schemes will still get the more standard and common renewable obligation approach support. Some of those community schemes will not have to go to the larger-scale contracts because of the difference in the electricity market reform.

Will Ministers redouble their consistent and very welcome efforts of the past couple of years in support of the onshore manufacturing sites for offshore wind turbine production—not least sites like Kishorn in my area, which I raised with the Minister’s predecessor—which have lost out in enterprise zone status, and therefore find themselves at a bit of a competitive disadvantage over the next five years? I am sure that a summer recess ministerial visit to Kishorn and the west highlands would be most welcome and would boost morale.

My right hon. Friend will, I am sure, be delighted to know that I am already planning that. We are looking at a visit to Nigg before going on to Shetland and doing other parts of Scotland at the same time. I am delighted to have the chance to take part in that process. We should absolutely celebrate the way that some of our great, historic industrial facilities, built for the oil and gas industry, have been given new opportunities and a new lease of life, as they start to build the infrastructure that will be necessary for our renewable future.

Have Welsh Government Ministers requested at any point that they should have the final say in whether fracking developments take place on Welsh soil?

As the hon. Gentleman will be aware, decisions on energy infrastructure matters for Wales are made on a nationwide basis. We know that that is what the industry looks for. But of course, in that process there has to be local authority planning consent for the specific project. There has to be approval by the Environment Agency and its equivalents in Wales and Scotland, if the project is taking place there, and by the Health and Safety Executive. All the appropriate bodies are involved in that process.

I welcome the current carbon capture and storage competition. As the Tees Valley has 18 of the top 30 UK carbon emitters, I am sure the Minister will agree that its bid has a lot to commend it. Will he ensure that the needs of heavy industry are given due weight alongside the needs of energy generators?

I am grateful for my hon. Friend’s question. I know he does a huge amount to support industry in his constituency. I can tell him that in the competition that we announced at the beginning of last month, we were very clear that we wanted to encourage clustering, so after listening to the industry we were encouraging change. Bigger pipes are needed, so that more than one power plant can take part in those schemes with other industries that emit a lot of carbon.

Coal will continue to provide between 27% and 50% of electricity in the UK for the foreseeable future. Can the Minister explain what Government support will be given to the British deep-mined coal industry to prevent it from extinction in the next few years?

The most important thing that we can do for the coal mine industry is to show that there is a continuing role for coal in the generating mix. We are all clear that we cannot have unabated coal in the mix in the future, and new plants will need to be equipped with carbon capture and storage technology. That is why the competition that we are launching here to put the United Kingdom at the forefront of the development of CCS technologies offers the best possible future for coal to have a long-term role in the energy mix going forward.

Further to the question asked by the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), Warm Front was, in my view, undermined by the extortionate charges of a small cartel of suppliers. Given that only 22 companies are so far among the providers for the green deal, can the Minister assure us that local fitters and local suppliers can be part of the programme, so that costs are competitive?

My hon. Friend has hit the nail on the head. Previous programmes were monopolistic, did not offer real choice and were not open to real competition. The green deal will change all that. We are going to have genuine competition, real choice and real ability for local players to come into this exciting market.

The Secretary of State knows that if we are to get energy security and diversity, we have to invest now in big infrastructure projects, but he knows also that nimbyism, often so rampant in the questions put in this Chamber, is a great barrier to planning permission. What is he going to do about planning for decent infrastructure to achieve those objectives?

The hon. Gentleman knows that this House passed a relevant national planning statement and that the Department for Communities and Local Government produced the national planning policy framework. The hon. Gentleman must recognise that there is a balance to be struck between the need to make sure that the local democratic voice is heard and the need for the types of investment that both he and I support. There is a balance, but we are determined to ensure that, with electricity market reform, we get the investment needed in this country.