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Energy and Climate Change

Volume 589: debated on Thursday 18 December 2014

The Secretary of State was asked—

UK Energy Sources (Subsidy)

The Government recognise the hon. Gentlemen’s point regarding the impact on taxpayers and consumers of Government support for renewable and low-carbon energy. However, Government policies are also aimed at reducing bills. Without Government policies, particularly on energy efficiency, bills would overall be on average around £90 higher this year.

Yesterday the Prime Minister confirmed that he is happy to see the levy control framework increase to £371 per year per household by 2020. At a time of falling oil prices and at a time when the shale gas revolution holds out the tantalising prospect of cheap energy, is not the Department carrying on subsidising windmills unnecessarily, and are we not making policy on the basis of outdated assumptions that need to revised?

We recognise the importance of keeping bills down for consumers, particularly when times are difficult, but this Government’s initiatives are to help reduce bills and our support for renewables is unquestionable. We feel it is essential to have some subsidy to get renewables going. I note that the hon. Gentleman is a big supporter of solar. Those costs have come down and our support has consequently come down. We expect it to reach grid parity by 2020. We are optimistic that wind farms are also beginning to come down in cost, and we have seen a 10% reduction in the support for them very recently.

Does my hon. Friend agree that linking oil prices to energy, and particularly heating bills, is nonsense given that we do not have any oil generation to speak of that generates electricity here in the UK—there is only maybe a tenuous link with heating oil? We should be focusing on driving down the cost of home-grown energy, particularly clean energy.

As always, my right hon. Friend makes an important point. Renewable electricity is essential, and I hope his Christmas tree lights burn even brighter this year, because 15% of that will indeed be from renewable energy, which is twice as much as under the last Government.

At a recent conference, a Treasury official, when asked about the levy control framework, said:

“A priority for the next Government is to review what should happen after 2021.”

He also said that he would hope to get clarity early in the next Parliament about what should happen, rather than towards the end of it, and that:

“We shouldn’t sprint towards a cliff edge.”

Is that the Minister’s position on the levy control framework, or is she sitting there doing nothing about it?

The hon. Gentleman will be aware that those decisions are largely for the next Government. However, the levy control framework is an important part of controlling our expenditure. It is a classic example of the competence under this Government, as opposed to the chaos under the last, who had no levy control framework at all.

The Prime Minister said at the Liaison Committee this week that his party would scrap subsidies for onshore wind after 2015 and he did not expect any more to be erected without subsidy, but onshore wind is one of the cheapest forms of green energy. Does the Minister not agree that an essential part of trying to reduce energy bills is having onshore wind as part of the mix?

Onshore wind has been an important part of the mix and, of course, we have more onshore wind in this country than in the rest of the world, so I think that it may be time for us to spend our scarce resources on other types of renewables to ensure the best return for taxpayers.

One of the technologies we provide support to is carbon capture and storage. Is the Minister aware that UKIP is opposed to carbon capture and storage? It has described it as “expensive, difficult and pointless”. Does she agree with me that UKIP’s policy would mean that there is no long-term future at all for any of Britain’s coal mines or coal-fired power stations?

I share the right hon. Lady’s views on this. Carbon capture and storage is indeed an important part of our energy mix and an important part of supporting all energy sources in this country.

Energy Bills

Mr Speaker, with permission I will answer this question with questions 3, 7, 10, 15 and 16.

There are three main ways in which we help people with their energy bills: first, with money, to help vulnerable customers with their energy bills with policies like the winter fuel payment, the warm home discount and cold weather payments; secondly, by helping people save energy and so cut their bills with policies like energy efficiency, product regulations, the energy companies obligation and the green deal; and, thirdly, by making our energy markets more competitive, where our reforms have seen the market share of smaller independent companies grow from less than 1% in 2010 to 10% today, enabling people to save hundreds of pounds on their bills by switching supplier.

Order. The Secretary of State may have been reading from an old list. It is important to have an updated list, and he ought to be able to look to people to provide him with an updated list. This is very unsatisfactory. The grouping is with 6, 9, 14 and 15. We really must get these things right.

The price of oil has been coming down quite dramatically in recent weeks. This opens up the prospect of lower prices, particularly for people who live off the gas grid. What is he doing to ensure that companies selling to those consumers bring their prices down to help them with their heating bills this winter?

First, Mr Speaker, I apologise for not getting the list of questions right. My hon. Friend the Member for Argyll and Bute (Mr Reid) makes a good point. We expect heating oil companies to pass on the savings they are making. They do not hedge in the way that electricity and gas companies do in relation to the long-term forward markets; I understand that heating oil forward purchases are done on a much shorter time scale. We would therefore expect reductions in the price of oil to be fed through much more quickly.

It is all very well to talk about making the energy companies reduce their bills, but does the Secretary of State not agree that it would be a lot more effective if the regulator had the power to force them to bring prices down, as Labour is proposing?

Actually, it was the last Labour Government who got rid of price regulation from the regulatory tool book. This Government have supported the referral of the energy market to the independent competition authorities. That is a policy that the last Government—and the present Leader of the Opposition when he was doing my job—failed to pursue.

Does the Secretary of State share my concern about the annual fuel poverty statistics report, which shows that the fuel poverty gap—the difference between people’s bills and what they can afford—has grown to £480 in 2014? That is a shockingly worrying statistic, and the real story behind it is being told in the homes in our communities. Does he agree that it is now time to back Labour’s energy market reforms?

Fuel poverty needs to be tackled thoroughly, which is why we are bringing forward ambitious fuel poverty targets and a new fuel poverty strategy. Opposition Members should note that fuel poverty has actually fallen under this Government, whereas it rose under the last Government. That suggests that we should not be taking advice on energy policy from the Labour party.

Households with a disabled member have high fuel poverty levels, but working-age disabled people are not always able to access warm home discount schemes. In bringing forward a fuel poverty strategy, what will the Secretary of State do to ensure that that vulnerable group is protected?

We have a whole panoply of measures to help vulnerable people, as I set out in my original answer. Some of the wider policies that we are implementing, particularly those relating to competition, are helping people across the board. We are in discussions with other Government Departments, particularly the Department for Work and Pensions, in relation to the point that the hon. Lady has raised.

It is not just heating oil prices that have fallen. Wholesale gas and electricity prices have fallen significantly in the past year, yet consumers have seen little reduction in their bills. Does the Secretary of State now regret voting against Labour’s motion on 18 June, which would have given powers to the regulator to ensure that when wholesale costs fell, the reductions were passed on to the consumer?

It is interesting to look at the history of wholesale prices coming down and reductions not being passed on. There were much greater falls in wholesale costs when the Leader of the Opposition was doing my job, and they were never passed on. This Government have taken action by giving consumers far greater choice. They can now switch from companies that are not offering them a good deal and, in some cases, cut their bills by hundreds of pounds.

Does the Secretary of State agree that the best way for the Government to keep energy bills down is to stop subsidising working windmills? We are now subsidising those that are providing energy when the windmills are not working. Instead, we should get cracking with fracking.

That is a good soundbite, but I have to tell the hon. Gentleman that his understanding of how these things work needs a little work. It is important that we have an energy mix. That encourages greater competition as well as enabling us to tackle all our energy objectives, including keeping bills down and ensuring that we cut carbon and have secure energy.

The Minister is right to say that the number of households in fuel poverty has fallen every year since this Government came to power in 2010. However, those who are affected the most are the poorest families living in energy-inefficient homes. Will he tell us what steps are being taken to help that vulnerable group of people?

My hon. Friend is absolutely right; energy-efficiency should be at the heart of our policies. Our new fuel poverty target is focused on energy-efficiency for the very reasons he outlined. I can tell him, and announce to the House today, that up to October this year the green deal and the energy companies obligation have together led to more than 1 million energy-efficiency measures being installed, producing permanent reductions in energy bills, this Christmas and every Christmas.

I wish to place on the record the contribution of the warm home discount scheme to Thirsk, Malton and Filey. Does my right hon. Friend agree that it would have been particularly ill-advised to have frozen energy prices at the time a certain party was recommending that policy?

Indeed, one danger of the regulatory approach is not only that it discourages investment and reduces competition, but that one can freeze prices at a high level. The benefits of competition and falling wholesale prices will mean that bills will come down—indeed, people can save on their bills through the competition we have stimulated.

Members on both sides of the House recognise that some of the households with the highest bills are in the private rented sector, where we simply have to raise standards. We want to go further than the coalition, but the Secretary of State has repeatedly assured us that the coalition Government will act to improve the very worst homes by 2018. May I therefore ask him, straightforwardly, whether this Government will introduce the regulations on the private rented sector before the end of this Parliament? If not, why not?

I share the hon. Gentleman’s view that it is very important to get energy-efficiency in the private rented sector—something that the previous Government failed to act on. We have legislated in the Energy Act 2011, we have consulted on this and we will be making proposals.

Tidal Lagoons

4. What assessment he has made of the potential contribution of tidal lagoons to the UK’s energy supply. (906713)

Tidal energy offers huge potential. Tidal lagoons alone could provide for up to 8% of the UK’s energy needs. To help with progress of tidal deployment, as part of the autumn statement, we announced a commitment to starting closer discussions with Tidal Lagoons Ltd to establish potential at Swansea bay. In addition, we have made a number of studies of UK tidal potential.

Others have remarked upon it, Mr Speaker. It is good news that the Government are in discussions with the proposed developers of the Swansea tidal lagoon. Does my hon. Friend agree that proposals for a much larger lagoon at Colwyn bay also merit serious consideration? Does she also agree that a chain of lagoons along the west coast could make a huge contribution to British energy security?

I thank my right hon. Friend for that question. As he rightly says, tidal power provides a huge opportunity for the UK. My Department has started to explore the potential for a future lagoon programme and is aware of proposals for the tidal lagoons at Colwyn bay. Any such scheme will need to demonstrate strong evidence of value for money, economic benefits, energy saving and environmental impact mitigation before the Government could take a view on its potential, but I share his enthusiasm.

May I say merry Christmas to everyone, Mr Speaker? That should help climate change because I do not have to send out cards now. How are the Government’s talks on the Swansea tidal lagoon, which were announced during the autumn statement, progressing? As part of the studies that the Government are undertaking, are they working with the Welsh Government to look at proposals for a possible tidal lagoon, again on a larger scale, between Cardiff and Newport?

May I also exchange Christmas greetings with the hon. Gentleman? We are doing our best to progress with the Swansea bay tidal lagoon. He will be aware that there is only so much the Government can say at this stage, because there are other issues to consider. We will continue to keep an open mind to as many opportunities as possible, as long as we can reassure ourselves that there are clear economic benefits.

Energy Companies Obligation

The latest Department official statistics show that we are getting closer to reaching our target of delivering energy-efficiency measures to 1 million homes. As my right hon. Friend the Secretary of State has said, we have already reached 1 million measures. In addition, legislation came into force in early December to help simplify the scheme and reduce costs. This has enabled energy suppliers to cut energy bills by £30 to £35 this year. The scheme will also be extended from March 2015 to March 2017 to provide greater industry certainty and enable us to reach an additional 840,000 homes.

I thank the Minister for her reply and welcome the news that the scheme will be extended to March 2017. Will she explain what is being done to make the scheme easier to understand and to access?

We are constantly reviewing ways to make the scheme easier and more accessible to people. We have different schemes that will add to its value. Some communities are working with our green deal communities fund in conjunction with the energy companies obligation to ensure that they reach and engage with people street by street. We want to have the widest reach possible, which includes not just the easiest to reach but the most vulnerable.

With more than 2 million people sadly still in fuel poverty, why is more than half the money being spent on this scheme going to people who are not in fuel poverty?

May I reassure the hon. Gentleman that the changes to ECO clearly did not change at all the targets to help vulnerable people. Although we made the changes to reduce the amount on the bills, we have continued to focus on vulnerable people and will continue to do so as a priority.

Will the Minister confirm that as a result of the changes to the energy companies obligation, nearly half a million homes will not be able to receive that financial assistance to upgrade their energy units to get cheaper bills?

As I just said, the Government are absolutely committed to helping the most vulnerable. Although we reduced the charges on bills to look after consumers and taxpayers generally, we were absolutely clear that the most vulnerable people would not be affected. The section of the ECO that is dedicated to helping the most vulnerable people remains in place and continues to provide support.

Onshore Oil and Gas Exploration (Scotland)

8. How many licences for onshore oil and gas exploration in Scotland have been granted by his Department in the last five years. (906718)

In the past five years, the number of onshore licences for oil and gas exploration that have been granted in Scotland is zero.

The Minister is aware that the Smith commission has recommended that the powers in relation to unconventional oil and gas be transferred to the Scottish Parliament where planning permission already rests. Will he press for an early transfer of those powers?

As the hon. Gentleman says, the Scottish authorities already have control of planning for onshore oil and gas, and the Smith commission recommends that the licensing of onshore oil and gas underlying Scotland be devolved, whereas the licensing of offshore oil and gas will remain reserved. The proposals to bring this matter forward in a Scotland Bill are ongoing, but as he knows, the Infrastructure Bill is also going through this House as we speak, and we will look at the proposals for how we can make this agreement real.

When my right hon. Friend hands out licences, particularly in Scotland if it remains his power, will he make it clear that those who claim that hydraulic fracturing is a novel and dangerous process are talking nonsense? Far from being novel, 2.5 million wells have been fractured. Far from being dangerous, nobody has been poisoned by contaminated water, and no building has been damaged by the minute tremors, which are one thousandth of the power of natural earthquakes in this country.

My right hon. Friend makes a powerful argument. Of course the regulatory regime for onshore oil and gas extraction in the UK is very strong. Onshore oil and gas extraction has been going on for many, many decades and hydraulic fracturing has been used onshore over many decades in the UK. We will continue to try to make the most of these huge reserves underneath the UK and do so in a careful and cautious way.

The Minister will be aware that the price of oil has come down, which means that there will be a lack of investment in the North sea either side of the Shetland islands and into the Atlantic as well. What will the Government do about the jobs shortages that are starting to come through the system, and how we will maintain the reduced prices for customers?

One of the advantages of onshore oil and gas exploration is that the jobs offshore often require similar skills sets, so there is the potential for crossover. As the hon. Gentleman knows, the Wood review is being implemented to improve the regulatory regime offshore to ensure that it is more flexible and that we can get maximum economic recovery from under the North sea. We are also reviewing the fiscal regime to ensure that we incentivise the production of North sea oil, which is good for the whole of the UK.

As the Minister is aware, planning powers and the permitting regime that takes place through the Scottish Environment Protection Agency, which is responsible to Ministers in Edinburgh, mean that no fracking can happen in Scotland without the approval of the SNP in Holyrood. It is a matter for them and, frankly, they should stop trying to distort that debate by suggesting that it is not. Following submissions made by me and others, the cross-party Smith agreement included commitments not just on licensing but to devolve underground mineral access rights, which are effectively a secondary aspect of the planning process, to Scotland. Labour has tabled an amendment to the Infrastructure Bill, which is now in Committee, to make that commitment good now. Will the Minister commit to supporting that amendment, which will help make clear and consistent, beyond nationalist distortion, where responsibility for such matters lies?

We are absolutely clear about the policy: Scotland will be responsible for onshore oil and gas exploration. That will include not only planning, as is the case now and which is an effective veto, but the positive aspects of licensing. It is a matter for the Scottish Government now, and in the future it will be unambiguously a matter for the Scottish Government. We are carefully considering whether that is done through the Infrastructure Bill or through a future Scotland Bill, but we can put beyond any doubt the clear commitment of the two Front Benches of the major parties in the UK that the onshore exploration of oil and gas is a matter for the Scottish Government in Scotland.

Clean Energy

Since 2010, an average of £7 billion a year has been invested each year in renewable electricity production, double the £3 billion a year in the previous Parliament.

In recent months, the UK has slipped to seventh place in the EY attractiveness index for investment in renewables. EY labelled the Government’s actions as

“policy tinkering and conflicting signals”


“too much for investors to handle.”

Does the Minister recognise that mixed messages are coming from his Government and that that is a major reason for his failure on investment?

I do not think that the hon. Lady listened to my answer. The amount of investment in renewables is more than double that in the previous Parliament, so it is difficult to answer the rest of the question when it is based on a complete misconception of the facts. We have a clear policy to tackle carbon emissions and ensure that we meet the UK’s international obligations on carbon alongside the lowest possible reasonable cost to consumers and ensuring the security of energy supplies. In the past year, 15% of our electricity has come from renewable sources, double the amount under the previous Government. We are making progress, but we must do it in a way that keeps costs down.

Since we are quoting EU league tables for energy, will the Minister confirm that in 2010 only two EU countries had less renewable energy than us—Malta and Cyprus—and that he has no intention of allowing that situation to occur again?

Absolutely. The previous Labour Government insisted on higher bills and there was very little in the way of renewables. We have tackled the higher bills and bills are falling—they have not been frozen at the high levels at which the Labour party proposed. We have also ensured that we have renewable electricity, because it is secure and it is domestic, and we have done that in a way with as low a cost as is reasonably possible.

Investors in renewable energy will have been very interested in the Minister’s answers but will have been dismayed this week to hear the Prime Minister attack onshore wind, the cheapest large-scale form of renewable energy, in the Liaison Committee. He said

“let’s…put them into the planning system and if they can make their case, they will make their case. I suspect that they won’t”.

With the right hon. Member for Brentwood and Ongar (Mr Pickles) as Secretary of State for Communities and Local Government, I share the Prime Minister’s pessimism. The Secretary of State has intervened in more than 50 onshore wind applications, which could have powered some 275,000 homes. Does the Minister agree that instead of listening to local communities, as they should be, this Government have taken Whitehall intervention in the planning system to unprecedented heights?

The Opposition have an extraordinary contradiction at the heart of their questions. The Prime Minister is clear that onshore wind should not be subsidised because increasingly it is a value-for-money proposition. The idea that we should subsidise more heavily something that is increasingly approaching grid parity seems bizarre, and the idea that that should be done without proper planning consideration is bonkers.

Energy Security

The UK remains the most energy secure country in the European Union and is ranked fourth in the world by the US chamber of commerce. On electricity security of supply, we are successfully implementing short, medium and long-term policies to overcome the legacy of underinvestment that we inherited, so we will keep the lights on. From National Grid’s supplemental balancing reserve to the capacity market auctions this week through to the £45 billion investment in the UK’s electricity generation networks in 2010, this Government have delivered on energy security for the UK.

Meeting our security of supply challenge requires stable investment, and investors need confidence in the long-term direction of Government policy. After 2020, when the levy control framework expires, that confidence evaporates in this Government’s current road map, so will the Secretary of State give the industry a big pre-Christmas present by finally committing this Government to a 2030 decarbonisation plan to give the sector the certainty it needs?

I have done a lot better than that. Through UK leadership in the European Union, we now have European Union 2030 targets, which are among the most ambitious in the world. The UK led that and that gives confidence to the sector not just in the UK, but across the whole European Union.

The Secretary of State was right earlier when he said that to get energy security we need a proper rich energy mix, but is he as disappointed as I am that the most predictable of energy sources, tidal energy, has not progressed beyond the demonstration schemes and into commercial energy projects, including Siemens in my constituency? Will he meet me and a delegation from the Anglesey Energy Island to see how we can progress so that national needs can be met by local sources?

I will always be delighted to meet the hon. Gentleman. Although there have been some setbacks with Marine Current Turbines being put up for sale by Siemens, there are some positive signs—for example, MeyGen in the north of Scotland is the world’s first tidal array, and we are very proud of that. Moreover, I hope the hon. Gentleman will welcome the fact that we are intensifying our negotiations with Tidal Lagoon Power over Swansea bay.

Energy Bills (Low Carbon Energy)

16. What estimate he has made of how much subsidies for low-carbon energy will add to domestic energy bills over the next 20 years. (906728)

The impact of our policies on average household energy bills in 2020 is to cut them by 7%, compared with those energy bills without our policies. That is equivalent to an average saving of £92. The impact estimated for 2030 is to cut bills by 4% or £62 per annum.

The Committee on Climate Change has said that households already pay an average of £45 a year to support low-carbon power, and that will rise to £100 in 2020 and £175 in 2030. Can the Secretary of State confirm that those figures are true? Does he agree that there is nothing more nauseating than hearing people in this House on the one hand calling for lower energy prices, and on the other hand calling for more climate change policies and renewable energy, which are the one thing that increases prices? Is it not time that we had more cheaper energy and less greener energy?

I expect any figures from the Committee on Climate Change to be correct, but of course the ones my hon. Friend quotes do not tell the full story of our policies, which was told by my response to him. My hon. Friend just does not get the green energy opportunity, but in the spirit of Christmas let me cheer him up by telling him that the green energy savings I mentioned come partly from regulations—the type of Government intervention he dislikes so much. Worse still for my hon. Friend, his constituents are saving money, thanks to green regulations from the European Union.

Topical Questions

The most significant development for my Department since the last DECC oral questions has been the climate change agreement secured in this year’s talks in Lima last week. British leadership on the European Union’s position on climate change helps to secure an ambitious 2030 target for EU cuts in greenhouse gases. This European leadership has been significant in accelerating political momentum into the Lima talks and beyond, through to the crucial Paris summit on climate change next year.

I congratulate the Secretary of State on what happened in Lima. Let us hope that when we get to Paris we can solidify all the things that were talked about.

Secretary of State, I sent your Department, Ofgem, the chief executive officers of the big six companies and many other interested groups a copy of a report that I did for the Energy and Climate Change Committee on how to help the safety of vulnerable people at times of need. Everyone except your Department and Ofgem has replied: why? All the others have contributed to a voluntary code of practice, and I am happy about that. Why cannot DECC and Ofgem put people before political point-scoring?

I do not have a Department and I have not failed to reply, but if someone has I am sure he or she will take responsibility.

Let me give the hon. Gentleman a Christmas present—I will ask for his report to be put in my Christmas Red Box.

T2. My right hon. Friend will be aware that the marine energy sector has recently had bad news with the proposed sale of Marine Current Turbines by Siemens and Pelamis going into administration. In the light of fierce competition from France, which has signed partnership agreements to develop two schemes off the Brittany coast, what is he going to do keep the UK at the forefront of this, and will he promote opportunities such as those off Lynton and Lynmouth as a way of doing so? (9906710)

My hon. Friend is right to say that we have had some disappointing announcements on Marine Current Turbines and Pelamis, which is unsettling for those companies and the families involved. However, there has been some good news: as I said to the hon. Member for Ynys Môn (Albert Owen), MeyGen is the world’s first tidal array project, and I think that the Lynton and Lynmouth demonstration zones will be able to take forward further tidal arrays. The fact that we are looking very intensively into tidal lagoon power is a real shot in the arm for the tidal industry.

May I take this opportunity to wish you, Mr Speaker, and all hon. Members a very happy Christmas? May I also wish the Secretary of State good luck, as I understand he is appearing in pantomime this Christmas? I am sure that we all want to wish him the best of luck. It is good to know that the Liberal Democrats are beginning to think about their career options after the next election.

I understand that he is playing a drunken monk in “Robin Hood”.

The best way to help households permanently to cut their energy bills is to make their homes more energy-efficient. According to the Government’s own figures, 5 million households would still benefit from cavity wall insulation and over 7 million would benefit from loft insulation. Why, then, has the number of households getting loft and cavity wall insulation fallen by more than half compared with last year?

First, Mr Speaker, may I wish you, the right hon. Lady and all other right hon. and hon. Members a happy Christmas? I am afraid that those who wanted to buy a ticket for the pantomime at the last moment will be disappointed, because I appeared with St Paul’s Players in Chessington two weeks ago; I should have given more notice. It was “Robin Hood”, and some of us originally from Nottingham believe in some of those principles.

The right hon. Lady asked a very important question about energy efficiency. She will know that our approach has been to go after measures not only on loft insulation and cavity wall insulation—which are very important but declining in terms of availability and options because so much has been done—but on solid wall insulation, which is more expensive but vital for tackling fuel poverty and climate change.

The Secretary of State does not want to admit it, but the reason so few households are getting help is that the Government caved in to the energy companies and cut the number of households they have to help. The chaos does not stop there. The latest round of the green deal home improvement fund for solid walls opened last Wednesday and closed the very next day. This is not just incompetent but wasteful. Instead of just giving money away, we could make the funding go further, in a fairer way, if it was used to support zero-interest loans for energy-efficiency, as we have proposed in our green paper.

The right hon. Lady picks an odd day to ask about energy-efficiency when we have announced 1 million energy-efficiency measures through the green deal and the energy companies obligation. The solid wall part of the green deal home improvement fund had to close early because it was so popular and successful, so for the right hon. Lady to criticise that is remarkable. All those people who will benefit from that measure will note her words.

It is good of the hon. Member for Tamworth (Christopher Pincher) to drop in on us. We are grateful to him.

T3. Energy experts believe that by 2030 we will need an additional 25-30 GW of gas capacity to meet our needs. What does my right hon. Friend have in mind to meet that extra provision? Will it include 15-year contracts for new entrants and not contracts discounted to one year? (906711)

My hon. Friend is right that we need investment in our energy infrastructure, including gas-powered fire stations. The capacity market auction on which many of those investment decisions will be made is under way this week and is continuing today to get the best possible value for money for energy consumers. It would be insidious of me to comment on an auction while it is under way. [Hon. Members: “Invidious!”] It would be invidious of me as well, so I will not comment, but my hon. Friend makes a critical point that it is vital to get new energy generation investment.

If the Minister could provide us in future with the energy efficient version of his reply, that would be extremely beneficial. I think with practice he will get there.

T5. As has been said during these questions and earlier this week, fracking is a hot topic of debate, particularly in Scotland, which is surprising, because the Scottish Government have an effective veto. Will the Minister confirm again that he and his Department are powerless to overturn a Scottish Government decision if they decide to deny planning permission for any fracking project? (9906713)

As I said earlier, there have been no licences in the past five years for onshore oil and gas production in Scotland. Planning is a matter for the Scottish authorities and we are clear in our response to the Smith commission, which all parties signed up to, that licensing will also be a matter for Scotland. Onshore oil and gas exploration is a matter for the Scottish Government. If they do not want it to go ahead, it will not, and if it does go ahead, it will be a matter for them.

It is very good also of the hon. Member for St Ives (Andrew George) to drop in on us. I do not know whether he is aware, but he has a question on the Order Paper and we want to hear him. It is a topical question—anything the hon. Gentleman likes. I will give him a moment or two more to dream something up. Come on, Mr George—let’s hear you!

T4. Thank you, Mr Speaker. I apologise: I was in conversation. On renewable projects, particularly large-scale solar and large-scale onshore wind, is the Secretary of State making sure that community benefit is being assured in terms not just of the energy created, but of the share in the resource? (9906712)

It was a very good question; it was not about the money resolution for the Affordable Homes Bill, either.

I am grateful to my hon. Friend for that question. In our community energy strategy and our work with both the solar and the onshore wind industries, we have stressed the importance of community benefits, and that is having a marked effect. We have enabled that through voluntary protocols, community benefit registers and the like. We have accepted and are taking forward the report of the shared ownership stakeholder group, which has also shown that people can be directly involved and have a stake in local renewable energy projects.

T7. Following the story in The Sun today, may I congratulate the Secretary of State on slapping down his jobsworth official by wishing us all a merry Christmas, and may I reciprocate those wishes? May I also take him back to the reply given to me at the last Energy questions by the Under-Secretary of State for Energy and Climate Change, the hon. Member for Hastings and Rye (Amber Rudd), who claimed:“There will be no blackouts this winter”?—[Official Report, 6 November 2014; Vol. 587, c. 951.]Does the Secretary of State agree with her? (9906715)

T6. May I correct my right hon. Friend the Minister of State on one point? Other than one example, there has been no deep well fracking for shale gas in this country. In Fylde, self-regulation and self-monitoring were proved disastrously wrong. Will he give the House a commitment that there will be no self-monitoring or self-regulation but a very cautious approach, and that the regulatory authorities will monitor seismic and other aspects of fracking at depth for shale gas? (9906714)

There is a very strong regulatory regime for oil and gas extraction onshore, whether through conventional means or hydraulic fracturing. In fact, in the autumn statement just a couple of weeks ago, another £5 million was set aside for independent monitoring, just as my hon. Friend asks. I can give her the assurance that this will be done in a safe and cautious way.

Order. There is now a spontaneous and heavy appetite for topical questions, which I am keen to accommodate.

T8. The green investment bank has been a great success, leveraging in over £5 billion of investment in renewables and other green jobs. Does the Secretary of State not agree that the bank would be an even greater success if it had the power to borrow on the open market, as the Opposition have proposed, and the ability to focus more on energy-efficiency projects? When will he speak to the Business Secretary and the Chancellor to make sure that it gets those powers? (9906717)

I am delighted that the hon. Gentleman agrees with us that the green investment bank has been a huge success. We have seen it develop further, and we are keen to see it develop still further. He will know that my right hon. Friend the Business Secretary and I are in agreement that our manifesto will say that the bank will be given borrowing powers.

May I congratulate my right hon. Friend on the important role he played at Lima, along with our excellent team of negotiating officials, but does he agree that there is much more to do? Perhaps the single most important thing that the UK could do in the coming year, in the run-up to Paris, is to demonstrate to the world that a country can grow its economy strongly—we have strong economic growth—at the same time as reducing emissions.

My right hon. Friend is absolutely right, and I am grateful for his comments. One of the reasons I set up the green growth group in Europe was to push the argument that a country can grow and go green, and that argument has been won in the debate in the European Union. He may be interested to know that in Lima we worked with Latin American countries—particularly Peru, Costa Rica, Colombia and Mexico—because our Latin American friends now want their own green growth group.

The Secretary of State reels off statistics about home insulation, rather like a Soviet-era apparatchik talking about tractor production. Thousands of homes in Jaywick were promised home insulation at the beginning of this year. Why, at the end of the year, have only a handful of homes had that insulation, and why has the promise that more homes would get it evaporated?

I have to say that we have a very good record on energy-efficiency, as today’s announcement of 1 million energy-efficiency measures from the green deal and the ECO demonstrates. I do not know about the particular example in the hon. Gentleman’s constituency. I can tell him that because of some of the changes we made to the ECO this time last year, some energy- efficiency schemes have not gone ahead, but what has gone ahead is a £50 cut, on average, in people’s energy bills.

Does the Secretary of State think it is fair that at the public inquiry into the Navitus Bay offshore wind park, the applicants have in the middle of the inquiry put forward a separate and different application? It is now being considered alongside the original application, which has not been withdrawn. Is that not oppressive and a breach of the principles of the rule of law?

I am surprised that my hon. Friend, who has great experience in the House, should ask a Minister to comment on a live planning inquiry.

Even after the bodged, late and partial mitigation of the carbon floor price, it remains a tax on UK manufacturing that is unilateral to this country. When will the Government come forward with an energy policy to support our UK manufacturing that matches the best in Europe?

I am slightly disappointed by the hon. Gentleman’s tone because he has been supportive of the energy-intensive industries package that we secured at the Budget. It of course has to undergo state aid clearance, but it is pushing as far as is possible within EU rules. We need to ensure that we land that deal in Europe. At the same time, we have frozen the carbon price floor, so progress is being made.

It is disappointing that there has not been a ministerial statement about Lima this week, particularly given the warning from the Union of Concerned Scientists that the negotiators have left too many contentious issues unresolved before the deadline in Paris. Will the Secretary of State advise us why the deal is so good?

In fact, if one follows the details, one finds that we secured more than we expected to on going into the Lima summit. The reason is that there were some good negotiations, particularly on the information that countries will have to supply in what are known as—I am sure that the House will have followed this closely—their intended nationally determined contributions, which will be announced in the first quarter of next year. Nailing that down was the key issue in Lima and we did so.

As the Secretary of State will recall, the Prime Minister said recently that now that 10% of power is supplied by onshore wind, onshore wind should seek its passage through the planning process. I am sure he is aware that in terms of operational schemes and schemes that have planning permission, it makes up far more than 10% of the system already. Does he propose to put the Prime Minister right on this, or does he intend to rescind planning permissions so that the Prime Minister does not look silly?

I am slightly confused by the hon. Gentleman’s question because he misquotes what the Prime Minister said on Tuesday. The fact is that onshore wind supplies just over 5% of our electricity today. By 2020, with the onshore wind farms that are in the planning stage and with the assumption that some will not get through, we expect to get to about 10%.

It is odd that we have nearly got to the end of DECC questions and nobody has mentioned nuclear power. To redress that, will the Secretary of State confirm that Hinkley Point C is going ahead at speed, and that the generation of power stations after Hinkley Point C at Sellafield, Wylfa and Sizewell are doing so as well?

That is certainly our policy. We have managed to agree commercial heads of terms, as my hon. Friend knows. We have received state aid clearance for Hinkley Point C. We are in final negotiations with EDF and it is putting together its consortium of investors. We are not at the point of a final investment decision, but we are getting closer.

What is the Secretary of State’s position on fracking, particularly following the news that New York state has decided to ban it?

I am sure that the hon. Gentleman would like every Government to follow everything that New York state does, but we are an independent country and we make our own decisions. He will know that the Government’s policy on fracking is to support it through a robust and strong regulatory regime to ensure that health and safety and environmental concerns are fully taken into account, but also that we can exploit this important resource.

When people voted for the Climate Change Act 2008 in the last Parliament, we were told that if we passed that legislation, every other country would follow suit. Have not the Lima negotiations proved that to be a complete and utter load of old cobblers, like much of what the Secretary of State says? If what I am saying is wrong, why, in a recent Westminster Hall debate, did Labour MP after Labour MP, many of whom voted for the Climate Change Act, complain that it was doing untold damage to the steel industry?

I think that my last answer to the hon. Gentleman, in which I recommended EU product regulations as very effective in reducing his constituents’ bills, must have annoyed him a tad. The UK’s leadership on climate change is acknowledged not just in this country or in Europe but around the world. We are taking forward the climate change negotiations successfully and I look forward to a successful agreement in Paris. The one thing that we have to achieve next year is to ensure that the deal is ambitious enough.

The Secretary of State will be aware that the Energy and Climate Change Committee has produced a report on small nuclear reactors. May we have a quick response from the Government very early in the new year? When we produced a report on fracking in 2010, it took three or four years before it became a flagship policy of the Government. We could go on to lose the opportunity.

As the hon. Gentleman knows, there is ongoing work on the commercial feasibility of SNRs. There was a further small package in the autumn statement to take that work forward, and we are working internationally to see whether the technology can become feasible.

Will the Minister set out what financial benefits will be available for local communities where shale gas sites are situated? Will he confirm that it will be local communities that benefit, and that it will not be possible for councils to pocket the cash and use it elsewhere?

Absolutely. The industry is committed to ensuring that there is a contribution to communities for exploration, but also that a minimum of 1% of production revenues goes to local communities. Some companies have said that they will put more than that minimum into local communities. It is crucial that the communities from under which gas can be extracted benefit from that extraction.

Analysis by climate change scientists of pledges made by Governments at Lima shows that the world is currently at risk of experiencing about 3° C of global warming. What can be done to reduce the global ambition gap on emissions by the time of the Paris summit, so that we do not cross the 2° C threshold?

The hon. Lady is right that there is a real risk that when all the countries make their pledges next year, we will be some way short of what is required to keep global temperatures below the limit of a 2° C rise, which is what scientists say we need to achieve. We are doing a lot of work, not just in this country but in Europe and beyond, to see what can be done. There are pre-2020 measures that we should focus on, because the treaty would not come into effect before then. That is one reason why, when we negotiated the EU 2030 package, the phrase “at least” 40% was important—it gave us a chance to raise our ambition levels in Europe if we can persuade others across the world to do so.

The villagers of Shepherdswell in my constituency are concerned about plans for onshore gas exploration there. They are adjacent to an area of outstanding natural beauty, so will the Minister restate the guidance on that matter?

Absolutely. My first act in this job was to strengthen the planning guidance and rules on the extraction of onshore oil and gas in national parks, AONBs and other places. That is an important reassurance to those who live in the most beautiful parts of our country that planning considerations for onshore oil and gas will be extremely tight.

Many offshore wind developers have expressed concern that owing to the structure of the current contracts for difference allocation round, only one development will be given a CfD, imperilling many of the others. Can the Secretary of State give them any reassurance that there will be greater consideration of offshore wind in future CfD allocations?

First, it is worth putting it on the record, as it is Christmas, that Britain leads the world in offshore wind, with more offshore wind farms installed than in the rest of the world combined. In the current round of CfD allocations—of course, it has not been completed yet, so I cannot talk about the details—we have ensured that we have sufficient allocation for offshore wind, but we have also ensured that the levy control framework includes further allocations for it, so that the consumer can benefit from dropping prices.

The Secretary of State has mentioned the cuts in the energy companies obligation. When those cuts were made, Ministers made it clear that it would not be acceptable if energy companies did not pass them on to consumers. Will the Secretary of State explain why 4 million households have still not received the full saving and what he intends to do about it?

I do not recognise the figures that the hon. Lady gives, and I have to tell her that the energy companies obligation is one of the most successful energy efficiency policies ever implemented. A huge number of steps are being taken, and I hope that any future Government will continue and build upon them. We have given the industry much greater stability—it has never before had three years of reassurance about the future regime, which we gave it last year.

The Government claimed that the green deal would be the largest home improvement programme since the second world war. If that is correct, will the Secretary of State tell the House why fewer than 3,500 homes have had work done?

The hon. Gentleman’s figures are, shall we say, inaccurate. Our analysis shows that large numbers of people—getting on for 350,000—have had green deal assessments, and more than 80% of those have either gone on to have that work done or plan to have it. There are now nearly 8,000 green deal finance plans, and that number is increasing. Although I will happily admit that the green deal has not been as successful as we had hoped, we have learned a lot of lessons and a lot of measures have been taken because of the green deal.