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Low-carbon Energy Sources

Volume 594: debated on Thursday 19 March 2015

2. What recent assessment he has made of trends in levels of investment in low-carbon energy sources. (908194)

6. What recent assessment he has made of trends in levels of investment in low-carbon energy sources. (908198)

13. What recent assessment he has made of trends in levels of investment in low-carbon energy sources. (908206)

On 24 March, we will be publishing a detailed report on the progress this coalition is making on investment in low-carbon energy, but let me now share two findings from that report ahead of next week’s publication. First, for the second year running the UK has invested more in clean energy than any other country in Europe, Secondly, Bloomberg new energy finance data show that last year was the UK’s best ever year for new-build renewable energy finance, placing the UK in the global top five. I promise, Mr Speaker, to give each Member in turn a new statistic showing how the UK is doing so well on low-carbon energy investment.

More than 50 companies called on the Secretary of State to implement a 2030 decarbonisation target. They warned that the absence of a specific carbon-intensity target was undermining investment. Does he regret not joining the 16 Members from his own party who rebelled against the Government and voted for this target?

The hon. Gentleman knows that my party and I are in favour of this target, which is why we legislated in the Energy Act 2013 to put one in and it will be in our manifesto. But he is wrong if he thinks this target is some sort of panacea for low-carbon energy investment. We were told by the Labour party that if we did not do this, we would not see the supply chain growing. But here is a statistic for him: the supply chain in the UK for low-carbon energy investment is booming. We have had the massive investment from Siemens and Associated British Ports in Hull, transforming that city, and we have seen what MHI Vestas has been doing in the Isle of Wight. Under this Government, low-carbon energy investment and the whole supply chain are booming.

I am sure that the Minister will be pleased to know that Northumbrian Water has an advanced anaerobic digestion plant in my constituency that is not only producing green energy from the sewage treatment process but injecting it into the gas network. However, according to the Environmental Audit Committee, investment in clean energy is running at only half the rate needed if we are to meet our binding carbon emission commitments. Will the Minister explain why he is failing to generate the investment that we need?

Let me give a statistic to the hon. Lady: the annual rate of renewable energy investment in this Parliament is more than double the rate that it was in the previous Parliament. From 2010 to 2014, low-carbon investment has amounted to more than £40 billion. That is a record of which we are very proud.

What assessment has the Secretary of State made of the impact on employment in the onshore wind industry from the effective moratorium on onshore wind? He will probably know that my right hon. Friend the Member for Don Valley (Caroline Flint) and I recently visited West Coast Energy in my constituency, which employs many people developing onshore wind. The organisation is now threatened by the Secretary of State for Communities and Local Government, who is blocking wind farms. Surely the right hon. Gentleman does not support him in that.

The right hon. Gentleman will know that onshore wind has boomed under this Government. There is no moratorium, so what he said was wrong, but it is true that there are Conservative colleagues who do not share my enthusiasm for onshore wind. I recently opened the largest onshore wind farm in England, at Keadby, and I was able to grant, after the recent very successful first auction of contracts for difference, 15 out of 27 contracts to new onshore wind farms. That sounds to me like we are going ahead fast.

When the Government cut the feed-in tariff for solar, we were promised a scheme that would “serve the many, not the few”. Will the Minister help us to understand why the number of households getting solar halved between 2012 and 2014?

I simply do not recognise the hon. Lady’s statistics. Let me give the House one statistic: 99% of the UK’s solar installations were put in under this Government. We have seen more than £11 billion invested in solar, which is a fantastic record.

Without doubt, investment in low-carbon energy is booming, thanks to the bold reforms of this coalition Government and our long-term economic plan. But one of the unsung success stories of this Government has been the renewable heat incentive. Will the Secretary of State update us on just how many thousands of commercial, industrial and residential installations there now are?

In answering my right hon. Friend’s question, may I pay tribute to him for the role he played in this boom, particularly in the renewable heat incentive? We have seen more than 25,000 domestic installations. I cannot give him the figure for non-domestic installations, but we are seeing a big increase. Now that this renewable heat scheme has really got going, the next Parliament will need to build on our success.

Every few months, the consultancy firm EY publishes its renewable energy attractiveness index. This month, the UK fell yet again. In November 2013, we were fourth in the world. In February 2014, we fell to fifth; in May 2014, to sixth; and in September 2014, to seventh. This month, the UK fell to eighth, which is a 12-year low. The Secretary of State’s sole solution to our broken energy market is telling people to switch. In order to reverse that appalling record, is it not time we switched to a Labour Government so that we can drive the investment, create the skilled jobs and produce the clean energy that our country needs to succeed?

The hon. Lady has scored a massive own goal. She trailed us going down the attractiveness index for future investment, but she should realise that the closer we get to the election, the more worried investors are. Members do not have to believe me about the potential threat of a Labour Government to investment; they can believe the Secretary-General of the OECD, Angel Gurria, who said that Labour’s energy price freeze could bankrupt investors. That is why the index is going in the wrong direction. The hon. Lady might also want to know that that index was prepared as a snapshot before the recent successful contracts for difference auction, which saw 27 new renewable energy plant contracts issued. This Government are seeing huge investment. The only thing that can stop that investment is the election of a Labour Government.

Energy Supply Market

We have made it quicker and easier for consumers to switch supplier. Now 10% of dual-fuel customers use one of the 21 independent suppliers in the domestic retail market, which provides more competition and more choice for consumers.

It really saddens me that Labour’s misunderstanding of markets meant that it backed the big energy businesses and drove the smaller ones out of operation. If we are to have a healthy energy market, it seems to me that what we need is more competition and faster switching so that consumers can enjoy lower prices and better quality services. Does my right hon. Friend agree?

My hon. Friend is completely right. We have halved the time it takes to switch. Our Power to Switch campaign is now up and running. I myself am going to switch energy supplier today as part of that campaign, and I look forward to saving serious amounts of money as a result. I urge all Members, and indeed all consumers, to consider switching, because the power of competition is one of the best ways to get energy bills down. Instead of the big six that Labour created, we now have 21 new independent suppliers.

It might be better if the right hon. Gentleman switched party, rather than energy supplier. Is not part of the problem with cost down to the fact that we have companies that generate electricity selling it to themselves, which allows them to hike the prices paid by consumers? People need those prices to come down in order to heat their homes. Why not just split those roles completely to ensure that we get an honest broker in the middle?

First, we got the Competition and Markets Authority to look into that matter, because it had not been investigated under the previous Government. The CMA’s initial conclusion was that we have a competitive market at that level, so the precise detail that the hon. Gentleman sets out is not the problem. The remaining problem in the UK’s energy market is that it needs to be more competitive in order to get a better deal for customers. The last thing anybody needs is for prices to be frozen at the high levels at which Labour proposed to freeze them.