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Energy Infrastructure Investment

Volume 555: debated on Thursday 13 December 2012

7. What discussions he has had with the Chancellor of the Exchequer on the implications of the autumn statement for investment in new energy infrastructure. (133325)

18. What discussions he has had with the Chancellor of the Exchequer on the implications of the autumn statement for investment in new energy infrastructure. (133337)

My Department and the Treasury regularly discuss how to incentivise investment in new energy infrastructure. That is why we were able to reach agreement, paving the way for the introduction of the Energy Bill and the Chancellor’s autumn statement. These enable us to meet our legally binding carbon reduction and renewable energy obligations and ensure the investment required to bring affordable power to our nation.

Given the recent announcement on consumer price rises, how will the Minister ensure that decisions over the next six months on investments in new nuclear generation capacity, before the Energy Bill is even on the statute book, will be made at the lowest possible cost to consumers?

The arrangements in the Energy Bill allow for precisely the eventuality that the hon. Lady describes: they allow final investment decisions to be made in concert with contracts for difference. She will know that we are in ongoing discussions about the Hinkley Point development. I cannot say too much about its commerciality, but she should know that we intend to proceed with that with alacrity and diligence. I am confident that new nuclear can play its part in an energy mix that is fit for the future.

Centrica recently pulled out of investment in a new energy plant at Scawby Brook, and the Siemens and Able UK renewables investment on the Humber, although hopeful, are still uncertain. How will the Government ensure that areas such as the Humber do not miss out on opportunities for investment and jobs because of ongoing uncertainty?

The Energy Bill brings a framework of certainty that will allow investors to be confident about the Government’s direction of travel. I am obliged to say that, frankly, those decisions could have been made five, 10 or perhaps 15 years earlier, given that we knew that our energy infrastructure was ageing and that we would have to rejuvenate it by means of legislation. The hon. Gentleman is right to make the case for the Humber. I have met one of his near neighbours to discuss that, and I will be happy to meet him and delighted to meet representatives of his community to discuss what we can do to assist his cause that we are not already doing.

Cumbria has the fastest flowing water in England, a strong, well developed and world-class hydro-technology industry and strong public support for hydro-technology schemes, so will the Minister strongly consider energy infrastructure schemes for hydro-technology in Cumbria?

The hon. Gentleman is right that hydro-technology can also play a part. The critical point is that the energy infrastructure investment that has been discussed in the House this morning is central to our macro-economic plans. We are speaking not merely of tens of thousands of jobs, but of hundreds of thousands of jobs and new skills in his area and others. Given that I have offered to meet the hon. Member for Scunthorpe (Nic Dakin), I think that I should meet the hon. Gentleman, too, to discuss the specifics of his area.

That is tremendously generous of the Minister of State. I think that there is a glow of appreciation across the Chamber.

What can the Minister do to ensure that adequate investment finance is available to marine energy and its attendant infrastructure? Is he aware that it is now more than eight years since a marine current turbine was trialled off the north Devon coast, which more than twice exceeded expectations for energy production but has not come to market because of a lack of finance? If he cannot make new finance available, can he rebalance existing finance away from 30-year-old wind technology and towards the new technologies that could drive forward the process of decarbonisation?

I do not want to take the opportunity to put the wind up anyone, so I will concentrate on the first part of the hon. Gentleman’s question. He is right that we need to look at all kinds of technologies to achieve the mix that we have described. He will be familiar with our work on green energy parks and will know that six of the eight major wave and tidal energy projects around the world are in this country. I know that the Environment Agency certainly believes that, because it told me so last night. We are investing in that significantly, but I will look at it again because it is absolutely right that we are at the cutting edge of technological change when that can contribute to the energy mix I have described.