Energy and Climate Change
The Secretary of State was asked—
Before I answer may I, on behalf of many Members of the House, welcome the election of the new pope, Pope Francis?
The green deal, which went fully live on Monday 28 January, will help transform the homes of British people over the coming decade and beyond. This transformational policy, along with the energy company obligation and the roll-out of smart meters, will drive the development of a new energy efficiency market, providing unprecedented choice, benefits and access to low-cost finance for British households.
The green deal has got off to an excellent start. As the hon. Gentleman may know, we have released data today which show that nearly 2,000 green deal assessments have been made, and already that figure is out of date. There are more than 600 accredited advisers and more than 600 installing firms have been accredited. Nearly £30 million of ecos have been traded on eco-brokerage. The hon. Gentleman should listen to the industry. I do not often recommend that people listen to tweets, but if he looks at the tweets of British Gas, GHE Solar, Toriga and Green Deal Shop, they will tell him and other right hon. and hon. Members how well those firms are doing with assessments and, they believe, taking those on to installations.
It is estimated that 8 million homes would benefit from solid wall insulation and 4 million from cavity insulation. There is a huge market out there for the green deal. What is my right hon. Friend doing to promote the green deal to make sure that as many people as possible take it up?
I can assure my hon. Friend that I, my Ministers, the whole Department and the whole Government are pushing the green deal. The solid walls that he referred to—those 8 million homes—have not featured in energy efficiency programmes in any major way before. It has been an undealt-with issue in energy efficiency. We have not ducked that and we are tackling it.
It is just over a month since the green deal was launched. We have just heard that more than 2,000 assessments have taken place. However, the Secretary of State refuses to reveal how many households have actually signed for a green deal package. We know that the Department is monitoring green deal uptake in real time through the energy performance certificate register. Why will he not share that information with the House today?
I am surprised that the hon. Lady has asked that question as it suggests that she does not understand how the green deal plans work. She should know, and I think she probably does, that after an assessment has been made and an installation programme has been booked, the green deal plan is signed only after the installation has been completed and then goes on to the green deal register for the green deal payments to appear on the bill. So there is quite a lag, as the hon. Lady would know. We did not expect a huge number of green deal plans to have already been signed. The key issue at this stage is the green deal assessments and the green deal assessors, and we are making huge progress, as the industry is saying.
I thank the Secretary of State for that response, but he will know that the public want to know how many people, having seen their assessment, have signed on the dotted line for the deal. Given that Nationwide is offering energy efficiency loans with an interest rate of just 2.29%—less than a third of the interest rate under the green deal—does the Secretary of State believe that more people would take out the green deal if offered a better deal?
The green deal is going well, as the industry says. I welcome Nationwide’s product because it shows that there is more competition in the market. It shows what the green deal is spurring. It is not just green deal plans that will be a mark of the programme’s success; it is green deal self-funded plans, which will be a result of the green deal assessments being made. They would not be made in the way that they are if we had not gone forward, and the hon. Lady should welcome that.
Domestic LED lighting can use as little as 5% of the power of a normal light bulb. Though more expensive initially to buy, LED light bulbs require very little maintenance and have a very long life. What incentives are there in the green deal or elsewhere to promote domestic LED lighting?
My hon. Friend makes an important point. We strongly support LED lighting. There are issues about whether different types of lighting can come under the green deal because light bulbs can be taken away, and if the cost of those is in the electricity meter for the next tenant or the next owner-occupier, that would not be fair and would not, therefore, abide by the green deal rules. However, we agree with my hon. Friend: there is a strong case for people investing in LED.
Deep-mine Coal Industry
The Government value the role of British coal in meeting our energy needs. Equipped with carbon capture and storage, coal generation can continue to play a significant long-term role as part of a future low-carbon energy mix.
The Minister is very much aware of the situation at Daw Mill colliery, where 650 miners who have given their lives to the coal mining industry are facing uncertainty with regard to redundancy payments. Will he give a commitment to do everything in his power to ensure that these men receive their entitlements in full?
There are few in this House who can match the hon. Gentleman’s understanding, knowledge and support for the coal industry. I cannot match it, but what I can match is his determination to do right by the workers there. I had a positive meeting with the unions yesterday; I also met UK Coal yesterday and, again, had a positive meeting. The Government will do all they can, not only to protect the future of the coal industry, but to protect the interests of those workers who will lose their jobs at Daw Mill. I made that abundantly clear. We cannot match the hon. Gentleman’s knowledge of these things, but I can certainly match his determination.
The Minister said in his response that coal had a good future in this country if it was combined with carbon capture and storage, a technology that is many years from working. Across the rest of the world, unabated coal is accelerating. In particular, countries such as Germany that produce 20% more carbon per unit of GDP and 20% more carbon per capita than us are launching a number of coal-fired stations. Why is their position so different from ours?
We are committed to CCS because we believe it can work. My hon. Friend will know that the carbon capture and storage cost reduction taskforce predicted it could work much earlier than previously estimated—by the early 2020s. With carbon capture and storage, coal can play an important part in our future. I cannot be clearer than that, Mr Speaker, surely.
The Minister will be aware that UK Coal, which owns Daw Mill colliery, is one of the principal owners in the coal industry that remains. The worst case scenario that we had put to us the other day was that if UK Coal cannot survive, two more pits—one that is loss making, one that is making a bob or two—could go, as well as some other land sites. When he is talking about Daw Mill colliery and talking to UK Coal, will he ensure that he protects the redundancy money? There is someone in my constituency who used to work in Derbyshire but who now travels 100 miles there and back to Daw Mill. Will he get his redundancy pay? He was finished before the fire, so will the Minister get on with it?
The hon. Gentleman is absolutely right—again, he is an authority on these matters. The pits at Thoresby and Kellingley are, of course, also owned by Daw Mill. Part of our determination—the determination I outlined a moment ago—is to ensure that the future of those pits is secured. However, he is also right to say—this goes for me, too—that the workers matter most in all this. That includes the workers who were made redundant in the early restructuring, the workers at Thoresby and Kellingley and the workers at Daw Mill. I have made that abundantly clear to the unions, with which I had such a positive meeting, and I have told the company that, for the Government, it is a key priority.
The Minister has already referred to the importance of CCS in relation to the medium and long-term future of coal generation. I am sure he will be aware that around two thirds of the coal we burn to generate electricity in the UK is imported. He might not be aware yet that, as of 9.5 this morning, 46% of all the electricity being generated in Britain today is from coal-fired stations. Given those two factors and his determination, as he has said in the past, to put the “coal” into coalition, may I urge him to put the “sense” into sensible and get on with developing a short-term strategy for coal to protect the indigenous industry in the UK?
That is a good point. There is a good argument for making a clear statement about how we see coal developing in the short to medium term. It is absolutely right that we pursue CCS. Perhaps we will get the chance to say more about that later in these questions—who knows, Mr Speaker? The hon. Gentleman is right, and I will certainly consider making a statement on that. The appropriate time for that will be when we make further progress at Daw Mill, Thoresby and Kellingley. He is right. The Government can learn from the Opposition, and the wise Ministers on the Front Bench recognise that.
It is as though all my Christmases have come at once, Mr Speaker.
My regular discussions with energy companies about the cost of our electricity infrastructure are essential to ensure that the Government guarantee energy security, meet decarbonisation objectives and, just as important, do so in a way that makes energy affordable for customers across Britain.
I thank the Minister for that answer. He will be aware that, as a result of statutory undertakings, companies such as ScottishPower have a virtual monopoly over electricity industry infrastructure, which hinders commercial development, particularly in my constituency. What can be done about that?
Let me be clear that my Department expects network companies to provide connections in a timely and affordable way while maintaining the secure electricity on which we have all come to depend. Connections to the distribution network are a matter for the distribution network operator, as my hon. Friend knows, and the independent regulator, Ofgem. I entirely agree that those companies must behave properly, as we make extremely clear in our discussions with them. Indeed, I was with a number of transmission companies earlier this week doing just that.
Bloomberg research has shown that investment in renewable energy has halved since this Government came to power, and the Pew group has found that Britain has slipped to seventh in the world for investment in clean energy, so is it not the case that, although the Government talk a good game, we are actually slipping behind in investment?
That is an interesting tangential question, given the question on the Order Paper, but the hon. Gentleman is absolutely right that it is vital to our energy security that we have an energy mix. Our Energy Bill underpins exactly that strategy—a mixed economy of generation—purely because only by that means can we be sufficiently flexible and responsive in a highly dynamic set of circumstances.
Does my hon. Friend agree that it is very important to avoid incurring costs by building infrastructure that is not needed? Is he aware that the National Grid proposal to construct overhead pylons across Suffolk was based on the assumption of early completion of new nuclear power stations at Sizewell and completion of a large number of offshore wind farms, none of which is certain to be built? Does he agree, therefore, that the proposal should now be deferred?
It is right that the infrastructure we put in place should meet a purpose; infrastructure without a purpose can hardly be legitimised. I am not as familiar with the intimate details of the affairs of Suffolk as my hon. Friend is; he would hardly expect me to be, but I am more than happy to take a look at that. Furthermore, and not for the first time, I would be delighted to meet him to discuss these matters more fully.
It is not the first time the hon. Gentleman has raised that matter. Scotland has a particular interest in that, because of the transmission circumstances that prevail there. That is something the Department has looked at and we continue to have those kinds of exploratory discussions. If he wants to feed into those, of course his contribution, as ever, would be most welcome.
The green deal went live, on time, on Monday 28 January. The Government’s “Green Deal With It” communications campaign was launched the same day. By the end of February, according to the official statistics, 1,803 assessments had been carried out.
I am grateful to the Minister for that answer. Major employers in Worcester, such as Wolseley, npower and Worcester Bosch, are looking forward to participating in the green deal, but the latter warned that for the programme to reach its full potential more ordinary installers need to be given the chance to sell it. What steps are the Government taking to reach out to installers and ensure that they have a chance to play a part in rolling out the green deal?
A whole range of installers will be absolutely vital, and I was delighted to see that Wolseley has said that it is seeing strong demand not only for its products, but for adviser training, as it is a trainer. For small and medium-sized enterprises, we are waiving all fees and oversight costs for the first two years. We are hosting a range of networking events with the Federation of Small Businesses, the British Chambers of Commerce and the CBI, and we are co-hosting eco roadshows with Energy UK. We are also committing money to training assessors and installers, and there is more to come.
Stafford borough council is working with green deal providers to raise awareness among my constituents of access to the scheme. Will the Minister and his green deal team meet me and the council to discuss how we can encourage the best possible take-up in Stafford and the surrounding areas?
Will the Minister reflect a little further on the question that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) put to the Secretary of State—namely, are the interest rates for the green deal too high to encourage take-up and ultimately too high for consumers to get a good deal out of the green deal?
I understand what lies behind this point. However, if the right hon. Gentleman looks at this carefully, he will see that when people quote interest rates such as the one for Nationwide they are not comparing like with like. Crucially, the green deal interest rate is fixed for 20 years. I am aware of only one other such product in the market. Access to the green deal interest rate is incredibly fair and open, and not only for people who are lucky enough to own their own homes.
The Minister’s answer just will not do, because the blunt truth is that the green deal interest rate is set at almost 7%. Is it not the case that many people who take up the green deal will find that interest repayments end up costing more than the original measures, and, worse still, that if they try to repay their loan early they will be clobbered with hefty fines? How is that fair?
I will tell the hon. Gentleman what is not fair: scaremongering about the green deal, particularly when that puts off vulnerable people who would otherwise have no access to affordable finance. [Interruption.] The hon. Gentleman can scoff at 7%, but he should compare that to any other form of unsecured lending that is available to people on low wages or the minimum wage. How many people on low incomes, or people who are not lucky enough to be a home owner, can access interest rates like that? He might be a smart home owner himself, but he should think about those who do not have the same opportunities. This actually represents a really good deal.
11. What steps he is taking to help households with their energy bills. (147688)
We have a range of initiatives to help people with their energy bills, including tariff reforms, energy saving programmes, and additional help for those on the lowest incomes. From our proposals to help get consumers on the cheapest tariffs to the green deal, from the warm home discount to our promotion of collective switching, this Government are working to help people keep their energy bills down.
I thank the Secretary of State for that answer. However, supply is also crucial. Ofgem forecasts that UK spare electricity capacity will slump to 4% by 2015, and that highlights the acute need to get more nuclear power on stream. May I urge him to strain every sinew to finalise the right deal with EDF to build a new nuclear power station at Hinkley Point?
I assure my hon. Friend that we are straining every sinew in the negotiations with EDF. He will recognise that I cannot be more explicit than that given that they are commercial negotiations. I will say, though, that we take energy security very seriously and listen to Ofgem, National Grid and others. However, we do not imagine that new nuclear power will assist in the rest of this decade, because new nuclear power stations take such a long time to build.
We are currently going through a cold spell and, as night follows day, we know that in a few months’ time the energy companies will announce even bigger boosts in profits because people have been using more energy. Is it not time to get to a situation whereby a cold spell is not an occasion for energy companies to make even more profits but to keep prices down for consumers?
The hon. Gentleman will know that we have taken a lot of extra powers in the Energy Bill to make sure that Ofgem’s reforms on tariffs can go through and that the energy companies cannot be allowed to drag their feet. That has been welcomed by many consumer groups. This Government have also taken action to help people on the lowest incomes. We have trebled cold weather payments, so when there is a cold snap people get the help they need when they need it.
When the House of Commons analysed the DECC-produced fuel poverty data set of 2009, the figures suggested that the renewables obligation could have pushed 100,000 people into fuel poverty, in 40,000 to 50,000 cases because of the wind element. How many people were pushed into fuel poverty last year because of expensive wind energy?
I congratulate my hon. Friend on his ingenuity, but the analysis that others have done of those figures shows that what has really pushed people into fuel poverty has been gas prices, with global gas prices having increased significantly. We also have to deal with the renewal of the transmission mechanism and distribution networks. Those things have far bigger impacts on prices and bills. The hon. Gentleman ought to have a balanced approach.
The single biggest driver of rising energy bills is global gas prices. Last week the Institute for Public Policy Research think tank found that household energy bills would be lower and less volatile if the Government decarbonised the power sector by 2030. Does the Secretary of State agree?
Although the Secretary of State says he agrees, the problem is that the Government are not tackling the issue. The truth is that the Energy Bill does not require the Government to set a decarbonisation target. Even if such a target were set, there is nothing under the Bill’s present arrangements to ensure that it would be met. The Committee on Climate Change is absolutely clear: the Government should set a decarbonisation target now, not in 2016, and all the Government are doing is extending the uncertainty for another two years. Was not the former Energy Minister, the hon. Member for Wealden (Charles Hendry), right when he said that this uncertainty will lead to higher capital costs and, ultimately, higher energy bills for the public?
I have to remind the right hon. Lady and the House that no single party—not the Labour party, the Conservative party, the Liberal Democrats or even the Green party—argued in its 2010 manifesto for a decarbonisation target for the power sector. It was this Government and me as Secretary of State who argued for such a target and got the power to set one in the Energy Bill. When it comes to targets and having the policies to meet them, this Government have done far more than the previous one. The previous Government were right to set targets in the Climate Change Act 2008, but they did not produce the policies to meet them. This Government are doing that.
We agree that effective sustainability controls must be in place for bioenergy. We already have biomass sustainability criteria for the renewables obligation, and we now propose to improve them by adding new sustainable forest management criteria for wood fuel and a requirement for an independent audit, and by setting a trajectory so that greenhouse gas life-cycle savings targets become tougher over time.
I welcome the commitment to reforestry targets, but how do Ministers stand up the rather curious proposition that wood burning is carbon neutral? They support the conversion of coal-fired stations to wood burning, but that is only carbon neutral if emission at the point of burn is ignored, and it takes up to 98 years for tree growth to neutralise that. Will the Minister confirm that this dubious practice is simply an interim measure? I understand the need to protect the investment at Drax and elsewhere.
Biomass certainly needs to be sustainable as well as affordable, but it is not carbon neutral. However, I can tell the hon. Gentleman that greenhouse gas savings from biomass are at least 68% less than those for coal. Although it may not be carbon neutral, it is certainly much cleaner so far as carbon is concerned.
A number of recent papers—the Searchinger paper, the Hudiburg paper and the Schulze paper—have noted the problems of life-cycle biomass. The Minister is right to have taken steps to address that in forest regrowth and the sustainability standards, but he has not yet addressed the impoverishment of soils and how the resulting increase in the use of fertiliser will lead to an increase in emissions. Will he publish the basis on which he amended his Department’s projections on biomass?
The hon. Gentleman makes a sensible point. He is right to highlight the impacts not just on the burning of wood or biomass, but on indirect land-use change. The Government are taking this seriously and we are working on it with colleagues at the Department for Transport. In order to be effective, land-use change needs to be dealt with on a pan-European basis. We would welcome support from throughout the House for work with our partners in Europe to put in place robust sustainability criteria.
The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) met representatives of Eggborough this week and I can confirm that we are committed. As I have said, biomass conversion needs to be sustainable and affordable, and it is an important part of a balanced mix of clean technologies.
Plutonium Reuse (Sellafield)
The process and timetable on the reuse of plutonium were set out in the Government’s consultation response in December 2011. Work on the reuse of plutonium as a mixed oxide fuel is progressing well and remains on track.
May I register my disappointment that the Minister has been forced to come to answer questions this morning, when as late as last night, some of us still held out the hope that he might be translated to the Holy See? Be that as it may, does he share my belief that the Nuclear Decommissioning Authority needs to ensure that more than one technology, not just CANDU, is deemed credible for plutonium reuse, so that any subsequent licensing round is competitive and transparent, and delivers best value for the British taxpayer?
I was always an outsider for Pope, although my infallibility was a strength. My hon. Friend is right that the licensing round needs to take account of those considerations. Following extensive discussions and consultation, we settled on making MOX for nuclear reactors our preferred policy option. However, the Nuclear Decommissioning Authority is still working on alternatives. We are finalising guidance on regulatory justification for the reuse of plutonium, and I can commit today to that being published shortly.
Independent Power Generators
Since our call for evidence last year, Ministers and officials have held meetings with a wide range of independent generators, suppliers and other stakeholders covering route-to-market issues, including the availability of power purchase agreements.
Does the Minister recognise the difficulties that independent low-carbon generators will have with the passing of power purchase agreements following the end of the renewables obligation? Is he looking at alternatives to PPAs, such as the green power auction market, and will he seek to implement such a market in consideration of the Energy Bill?
The hon. Gentleman has been consistent in his advocacy of independent generators. He raised this issue during the Committee stage of the Energy Bill. He knows that I am not unsympathetic to his assertions about the difficulties that independent generators face. I believe that contracts for difference will make it easier for independent generators to access the market, as he knows, because they will remove wholesale price risk and eliminate the requirement to market renewables obligation certificates, which will also reduce risk. I make this commitment: I think that we need to look at this matter more closely and to do more. We need a more plural and a more liquid market to create competition and drive down prices.
Wind Farms (North Lincolnshire)
The proposed height of wind turbines is set out in the planning applications that are submitted for proposed wind farms. The local planning portal shows four wind farms with applications submitted in north Lincolnshire, with heights that vary from up to 100 metres to 126.5 metres. We are committed to supporting onshore wind as part of a balanced mix of energy to meet the UK’s needs. Wind farms must be well designed and well sited to be approved, and the planning process can take account of concerns, including landscape and visual amenity concerns.
Will my good friend visit me in north Lincolnshire so that we can stand together on the edge of the Wolds, an area of outstanding natural beauty, near the Ramblers church at Walesby and look at the amazing Lincolnshire clay and the 40-mile view? Will he then come back in 10 years’ time to see that great view desecrated by vast arrays of windmills 100 metres high, all in the name of some controversial science? Can we not place these windmills somewhere where they do not desecrate our lives?
The hon. Gentleman will know that I benefit from an infallible Minister of State who comes from Lincolnshire. He keeps me informed of all the issues to do with Lincolnshire and gives me his own particular line on them. I can reassure the hon. Gentleman that I am well versed in Lincolnshire issues. We take community concerns seriously, not just in Lincolnshire but across the country. That is why we published the call for evidence on community benefits in September. We will report to the House on that in the summer.
We have in place the green deal and the energy company obligation, which we expect to provide support for at least 230,000 low-income and vulnerable households each year. In addition, our warm home discount scheme supports 2 million households in total, and this winter has already helped more than 1 million of the poorest pensioners. We also make cold weather payments and winter fuel payments.
My hon. Friend is right and I am sure more could be done. That is why we designed the green deal and the ECO to be flexible and responsive to the needs of a range of energy consumers, particularly the fuel-poor. If my hon. Friend has any particular ideas on that, I would be happy to discuss them with him.
My hon. Friend is absolutely right; the Government are committed to bringing new ambition and vision to tackling fuel poverty. The last fuel poverty strategy was published 10 years ago, and we will be coming forward this year with an ambitious strategy, pulling together all strands of policy and building on the latest evidence and creative thinking in that area. I would welcome my hon. Friend’s input, given his knowledge and experience in the area.
I make my usual declaration of indirect interests. All MPs will be aware of the effect of fuel poverty on our constituents. A housing association in my constituency is trying desperately to upgrade its properties, which are in an appalling condition. It has fallen foul of the vested interest of a financial investment company which is the latest owner of the freehold for those properties. The company wants only to make a fast buck and is not prepared to renegotiate the contract, but in the meantime my constituents are suffering from bad health and an inability to pay their fuel bills. What can the Department do to help tackle those vested interests?
The hon. Lady is right and has a real point. The leasehold-freehold issue is one of the knottiest to tackle and has eluded successive Governments. I would be happy to sit down with her and look at that specific case to work out what more we can do to help the sorts of tenants to whom she refers.
Will the Minister confirm that, even by his own contentious estimates purporting that thanks to his measures the average effect of reduced energy use will offset the increase due to green levies, taxes and subsidies, two-thirds of households will be worse off? Since giving those figures, the Government’s estimates of savings from energy-saving measures have been reduced.
I am afraid I just do not agree with my right hon. Friend, despite his considerable experience and knowledge of the sector. None of us knows for sure whose forecasts are right, and we will not know until the time. A great deal of uncertainty is attached to all forecasts, but the latest Government forecasts to 2020 show that consumers will be better off due to our policies.
North Sea Oil
The North sea has been a major UK success story, and oil and gas will continue to play a key role in the energy mix for years to come. The Government continue to promote activity and investment in the North sea, and we maintain a close dialogue with the industry on how to support its continued development.
My hon. Friend knows that the Government have issued more exploration licences than ever before, which is fantastic. However, there are many mature wells from which about 80% of the oil has been extracted. How can we set up a new procedure whereby we wring every single last drop of oil from those mature wells, and benefit the UK economy accordingly?
My hon. Friend is absolutely right: North sea oil and gas have a long and bright future. He may not have seen the report from Oil & Gas UK—as you may not have done, Mr Speaker—but it states that we are seeing the highest investment in UK offshore oil and gas development on record. The Government, too, are doing their bit. The brownfield allowances have encouraged that investment, and this is about growth, jobs and skills, as well as energy. I look forward to a bright future in the North sea for the United Kingdom and all those who work in that wonderful industry.
Indeed, the oil industry does have a bright future; it is not a twilight industry. Miraculously, Scotland’s First Minister seems to have found a great deal more oil at the weekend, which will be very interesting to see. For the last drop to be wrung, as the hon. Member for Lichfield (Michael Fabricant) said, assets in the North sea will need to continue and many were not built to last as long as they have. What will the Government do to help companies to improve their asset integrity in the North sea?
The hon. Lady is, I am aware, the chair of the all-party group on British offshore oil and gas. I visited Aberdeen a week or so ago, and I am going again in a week or two. I have committed to visiting Aberdeen more often even than my predecessor, who had a proud record in that regard. We need to bring in a new type of investor to the North sea industry. To that end, I have run investment events that will encourage the industry to link up with a new breed of investor. She is right: infrastructure matters and we must facilitate the investment to rebuild that infrastructure.
I am delighted to hear that my hon. Friend will be visiting Aberdeen as often as I did, because I found that to be one of the most inspiring parts of the energy portfolio. What more can we do to support groundbreaking, world-class companies here in the UK supply chain, so that they can take advantage of the opportunities here and overseas, and we can get the industrial benefit alongside the energy benefit?
My hon. Friend is absolutely right, and let me repeat that he was highly thought of in the industry, not least due to his commitment to the visits he made and to his work. It is key to recognise that many small and medium-sized companies are a part of this exciting opportunity. Often we see this issue in terms of very large oil companies, but it is the SMEs that require the extra investment I described in answer to the hon. Member for Aberdeen South (Dame Anne Begg).
New Generating Capacity (Investment)
The UK is one of the most attractive places in the world to invest in energy infrastructure, and still more so since we published the Energy Bill. The certainty this provides is backed by complete cross-Government support unmatched by any other country in Europe.
The Minister seems to be living in a parallel universe. I have a declared interest: I am on the environmental scrutiny board of Veolia, the environmental company. When I meet people who are being asked to make a long-term investment in the production of energy, they are very cautious of making any commitment at this time. What will he do about that? An energy gap, which is totally frightening for the people of this country, is emerging.
Just last week the Secretary of State, the Minister of State and I were in Downing street with the Prime Minister, making exactly the case to the investment community for which the hon. Gentleman is calling. I want him to join me in my universe. That universe is the universe of optimism, the universe of growth, the universe of success.
There was not much good news for bill payers in the answer to my last question, so let me try one about businesses. I am glad to hear about the summit in No. 10. Ministers say that investment in energy infrastructure is at a record high, but four out of five of the projects that they claim credit for either received planning permission or started construction under Labour. My hon. Friend the Member for Corby (Andy Sawford) earlier quoted independent sources saying that under this Government investment in clean energy has fallen by half. Businesses are saying that what they need now to invest is a target in law to decarbonise the power sector by 2030. Why will the Government not listen to them?
I have all sorts of prepared notes but I am not going to use them because the answer to this question is as plain as this: it is fine to have targets; targets matter because they signal direction. However, one must have weapons to hit those targets. What the Government have done that the previous Government did not—I do not want to be excessively critical—is put measures in the Energy Bill that will allow us to develop the weapons to hit targets. That is what investment is about: meeting targets, not setting them.
Energy Market Competition
Like my hon. Friend, we want more competition. One of the biggest barriers to entry and to greater competition is low liquidity in the wholesale power market. Ofgem is currently taking forward reforms to address that issue, and we are supportive of its progress, but the Government are also seeking backstop powers in the Energy Bill to allow us to act, should Ofgem and industry actions prove insufficient.
I thank the Minister for that response. The billing stakeholder group produced a number of recommendations to increase competition, including putting more tailored information on the face of quarterly bills. Those recommendations were taken up by Ofgem and they chime with what the Prime Minister has said, but we know that the energy companies oppose them. Will the Minister give us an assurance that the energy companies will not be allowed to row back on those recommendations?
Yes, I can. I pay tribute to my hon. Friend for ensuring that these proposals, which will make a transformational difference to consumer bills, end up being enacted, and for the work of his stakeholder group. I can tell him that the proposals will be part of the licence conditions, and that if energy companies fail to deliver on them, they could be fined up to 10% of turnover. We are of course taking powers in the Energy Bill as well.
Marine Renewable Sector
The most recent assessment of the marine energy sector was undertaken last year in the UK renewable energy road map. Our assessment showed that marine energy had real potential to contribute to our emission reduction targets beyond 2020. Up to the end of last year, 11 MW of wave and tidal technologies were deployed around the UK, but the coalition Government have big ambitions for the sector, which could expand to as much as 27 GW in the coming decades.
I am grateful to the Minister for that response. The £20 million investment that was announced two weeks ago is very welcome for marine renewables, but it will go into the tidal sector, which is already reasonably well developed. There are also major opportunities in wave power, however. Will the Minister meet me and industry representatives to try to move the wave hub forward and to bring it up to a commercial scale?
Most certainly; I know that my hon. Friend is a powerful champion of wave power. I am delighted with the progress of the marine energy park in the south-west. I was there last week for the RenewableUK conference to witness the signing of a memorandum between the south-west marine energy park and the Pentland Firth and Orkney waters marine energy park. I would be delighted to work with my hon. Friend to see what more we can do to drive the exciting progress in this sector.
The core purpose of the Department of Energy and Climate Change is to power the country and protect the planet, and to avoid catastrophic climate change while providing secure, affordable energy supplies to the UK.
I want to take this opportunity to express my regret at the closure of Daw Mill colliery following a fire. The closure will be felt keenly by the communities surrounding the colliery, and particularly by the families of those whose jobs are threatened as a result. We are in close contact with UK Coal and the unions to try to develop a way forward, as the Minister of State, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) said earlier. Since the last oral questions, the Energy Bill has continued its passage through this House and we remain on track.
There are proposals to create what will be the largest onshore wind farm in the country on the edge of my constituency. I am a huge supporter of renewable energy, but I have major reservations about onshore wind, as I believe it is very expensive and unreliable. I am therefore not at all supportive of the proposals. Does the Secretary of State agree that we have enough onshore wind farms already?
I am sorry to disappoint my hon. Friend but I cannot agree with that bold statement, not least because onshore wind is one of the cheapest—if not the cheapest—of the large-scale renewable technologies. It has huge benefits. The planning system is important, however, and local communities can have a say on these matters. One reason that we published the call for evidence on community benefits was to ensure that local communities benefit more from hosting such installations.
T3. The village of Salsburgh in my constituency is not on the gas distribution network, which means that the inhabitants have to spend more money on electric and oil heating systems. That situation is replicated throughout the country. What are the Government going to do to tackle the issue? (147797)
The hon. Lady raises an important issue, and it is one that many hon. Members have experienced in their constituencies. In the past, people who are off the gas grid have not had the support they deserve, but the Minister of State, my hon. Friend the Member for South Holland and The Deepings is looking into the matter. We are looking at tackling fuel poverty through mechanisms such as collective switching, for example, and at renewable heat, which can really help people who are off grid. We are looking across the range of our policies to see whether we can help.
T2. In my Stroud constituency, we have a large number of innovative energy firms eager to pursue research and development projects. One area I think worth developing is energy storage, particularly storing electricity, which answers quite a few questions about engineering and providing an industrial base, as well as the peak problem in relation to renewable energy. What measures will the Government take to encourage investment in energy storage? (147796)
My hon. Friend is absolutely right. I think energy storage technology holds out massive potential for the future, and UK firms are at the cutting edge of some of these technologies. When we finalised the Energy Bill, we said that we were minded to run a capacity market next year. One thing we would do with that is to have an early capacity market auction for demand-side response and storage technologies. That would send a very clear signal to these innovators.
T5. I have written previously to his Department, so the Secretary of State should be aware that the people of Merseyside pay more for their electricity than people anywhere else in England. Will he therefore insist that Ofgem recommends a price reduction so that people in Liverpool pay the same tariff as others elsewhere in the country? (147799)
I am sure Ofgem will have heard the hon. Gentleman’s question. He will also know that Ofgem has proposed major reforms of tariff, which we believe will help many people, particularly those stranded on the so-called dead tariffs who are paying far more than they need to. This will, I believe, support competition in the market. Let me point out that the hon. Gentleman’s Front-Bench team is in favour of abolishing Ofgem—a particularly interesting position.
T4. In my constituency, a number of groups are looking at ways to set up new renewable energy projects. However, I have met some who have faced barriers from organisations such as the Environmental Protection Agency and other Government bodies. Will the Minister outline what help is being given to local community groups to get their organisations off the ground and will he look at ways of ensuring that the regulatory regime is proportionate both in cost and time to the scale of the projects involved? (147798)
This coalition is absolutely committed to driving a transformation in the take-up of community energy, so we are really keen to help community groups such as the ones my hon. Friend mentions. That is why we established LEAF—the local energy assessment fund—with £10 million and the low carbon communities challenge with up to £20 million. I would be delighted to talk to my hon. Friend about how we can help his communities to access that cash.
T7. What could be more topical than a challenge to the recently announced infallibility of the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes). Indeed, there has been such a challenge—from Mitsubishi, Vestas, Alstom, Areva, Doosan and Gamesa. The Minister maintains that there should be no decarbonisation target until 2016; they have said that postponing the 2030 target decision until 2016 creates entirely avoidable political risks and slow growth in the low-carbon sector, handicaps the UK supply chain, reduces UK research and development and produces fewer jobs. (147801)
I am grateful for the hon. Gentleman’s question. I have seen that letter. He will know that there is a case, which I have supported, for bringing this forward and setting a target in 2014, but we have reached an agreement across the coalition. I think it is a very sensible agreement, because we are the first Government ever to propose setting a decarbonisation target. I think we should be proud of that. Rather than talking it down, the Opposition should realise that we have moved further and faster than they did.
T6. I want to thank the Minister of State, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) for hosting a constructive meeting with the Welsh Assembly Member Russell George and myself earlier this week about planning permission for onshore wind farms and associated infrastructure in mid-Wales. Will the Minister tell us how he intends to ensure that more weight be given to the view of planning authorities and local communities when they fiercely oppose wind farms in their areas? (147800)
The Secretary of State has said—and I can do no more than echo his words:
“I am clear that local people and their councils should not feel bullied into accepting proposals they do not want.”
It is critical to listen to local communities. The call for evidence that my right hon. Friend has mentioned is, in turn, critical to that. I am delighted that I was able to meet my hon. Friend and his colleagues. He will await our response to the call for evidence with interest, as will the whole House, and I am sure it will be very good news.
Further to Question 2 on the deep-mining industry outlined by my hon. Friends, Britain could be facing a sharp rise in the importation of coal. On that basis, what assessment has the Minister made of the future security of energy supply in Britain?
Coal matters, for reasons of energy security, but jobs and skills matter too. People who do a dirty, difficult, dangerous job deserve our respect and support. The job that they do helps our energy security, and the Government understand that, which is why we will work to preserve that security and protect those people.
Only just last week we hosted, here in London, a meeting of EU member states which either have nuclear power or want to invest in it. We are working with them, not just looking for opportunities for new finance and so forth, but trying to ensure, together, that the EU understands the case for investment in low-carbon energy sources such as nuclear power.
In their response to the Environment Audit Committee’s report “Protecting the Arctic”, the Government said that oil drilling would be necessary in the Arctic to preserve domestic energy security and meet global demand. That was based on projections in the 2011 World Energy Outlook report. However, the 2012 report shows that projected demand can be met entirely by production from already discovered fields. Will the Government be reviewing their position in the light of that?
As we said in our response to the Committee, we are working with members of the Arctic Council, which are the key countries that develop policies of that kind. We do not have the power to infringe their sovereignty, and I would not wish that, but we are working closely with them, particularly with close colleagues such as Norway.
T9. Many of my constituents are concerned about fracking, but I am not aware of any applications for fracking in the south Devon area. Can the Minister reassure my constituents that the Government are not aware of any such applications? (147803)
As the hon. Gentleman will know, we have established an office for unconventional gas and oil precisely in order to co-ordinate such matters. It is absolutely right for us to explore this opportunity, which could prove very fruitful, but we must do so in a safe and secure way, and a way that encourages communities to understand the benefits that it can bring them as well as the whole nation.
The CBI estimates that more than a third of the pitiful economic growth that we saw last year came from the green economy. Why is the Secretary of State listening to the Chancellor rather than to green businesses, which say that they want a target in law for the decarbonisation of the energy sector by 2030 and they want that target now?
The hon. Gentleman is right: green growth enables our economy to perform. We are seeing green growth, and I welcome that. I have been working closely with the Chancellor. The deal that we agreed before Christmas will mean a tripling of support for renewable energy, and, for the first time, the power to set a decarbonisation target will be put into law. That provides a framework that the last Government did not provide.
I am concerned by the Secretary of State’s brush-off of my constituency neighbour, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), in connection with the Penny Pot Lane wind development. Communities throughout north Yorkshire are being bullied by wind companies, and money is being wasted. Will the Secretary of State meet me, and other north Yorkshire Members of Parliament, to discuss why the Liberal Democrat obsession with wind is not what north Yorkshire wants?
I did not give my hon. Friend’s neighbour a brush-off. His hon. Friend—and my hon. Friend—asked me whether I thought that we had enough onshore wind. I do not think that, but, as my hon. Friend the Member for Skipton and Ripon (Julian Smith) knows, Secretaries of State rightly do not comment on local planning applications.
The last Labour Government helped to lift 1.75 million people out of fuel poverty. Does the Secretary of State expect next year’s fuel poverty figures, which will show for the first time what has happened under this Government, to reveal that fuel poverty has risen or fallen on his watch?
I must remind the hon. Gentleman that the figures based on the old way of counting show that fuel poverty increased under the last Government. This Government have conducted an independent review of the way in which fuel poverty is measured, and it showed that the last Government could not even measure it correctly. According to the old measurement, the Queen was sometimes in fuel poverty. However, we are reforming not just the measurement of fuel poverty but the policies themselves, and I shall be producing a fuel poverty strategy later this year.
I want to thank the Minister of State, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) for the care and support he has shown for the workers at the Daw Mill colliery during this difficult time. In addition to the work he is doing, will he make representations to the Department for Business, Innovation and Skills to ensure that it is fully engaged with local organisations in the provision of careers advice, support and retraining opportunities for the workers who cannot be redeployed in the coal industry?
My hon. Friend has been a powerful champion of his constituents in this regard, as have my hon. Friends the Members for Sherwood (Mr Spencer) and for North Warwickshire (Dan Byles) of their constituents. I will, indeed, do what has been asked. In fact, I already have: there will be a bespoke tailored event run with local colleges, local authorities and Jobcentre Plus aimed at providing new job opportunities and reskilling for those who find themselves made redundant.
The Hills fuel poverty review said that unless the Government changed course a further 200,000 families would be in fuel poverty within four years. Does the Secretary of State agree with the Hills conclusions, and if not, will he place in the Library the evidence on which he is basing his views?
Professor John Hills’ report was extremely welcome and had a very important analysis. In reforming the design of the ECO, we took account of the understandings and research Professor Hills laid out, and that is also one of the reasons why we will be developing and publishing a fuel poverty strategy to show we are serious about tackling this issue.
We do not have an exact figure, but we do think the green deal framework, supported by the ECO, is the best way of driving forward the very ambitious take-up of insulation measures that we will need not just in this Parliament, but throughout the decade.
I am sure the Secretary of State knows about the Innovate UK conference held in Islington in London this week. Will he take a greater interest in clean, energy-efficient, sustainable production? There is a great market for Britain in this field; we lead the world, but we need leadership to make sure we conquer China, India and other markets.
I was not aware of that particular conference, but I did attend an exhibition called Ecobuild, which showed many British companies that are innovating in saving energy. I am extremely aware of companies that are involved in clean energy, and I am working with my right hon. Friend the Secretary of State for Business, Innovation and Skills to develop supply-chain policies so not only are low-carbon technologies developed, but innovating British firms get the benefit and we have green jobs in this country.