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Renewable Energy

Volume 597: debated on Thursday 25 June 2015

2. What steps she is taking to increase the proportion of energy that is generated from renewable sources. (900537)

As the hon. Lady may know, the most recent step we have taken to support renewable energy deployment is the introduction of contracts for difference, which give companies the certainty they need to make long-term investments. This has helped us to drive down costs and focus on best value for consumers by requiring renewable technologies to compete for support for the first time.

Last week it was revealed that we had missed our interim EU 2020 target for renewable energy generation. How will pulling the plug on the cheapest form of renewable energy help us to achieve it?

We do not accept that we have missed it. Our interim reporting covers the period to the end of 2015, and we believe that we are on track to meet that target.

The important point made by my right hon. Friend the Secretary of State in her announcement last week was that we do not want to over-deploy onshore wind, because only a certain amount of subsidy is available to meet the requirements of decarbonisation while keeping bills down. Any over-deployment of onshore wind could cause other, important, technologies to lose out.

It is pleasing that the Secretary of State recently granted development consent to the Swansea Bay tidal lagoon. Does the Minister agree that tidal lagoons offer the potential of not only reliable, large-scale renewable generation, but a world-beating British industry?

My right hon. Friend is right: this is an exciting new opportunity. It is at a very early stage, but it is a perfect example of the newer technologies that the United Kingdom should support and promote when it has the chance to be a world leader, and we are certainly doing that.

The tidal lagoon project in Swansea will undoubtedly generate renewable energy, but the payment that the Government will guarantee for that energy will be three times the current market price. Does the Minister think that that is a good use of public money, and does she think that it is good for our energy competitiveness?

The hon. Gentleman must recognise that a diverse set of energy sources is vital not just to our energy security but to decarbonisation, and to our ability to keep consumer costs down. The Government are looking into the different opportunities presented by different technologies. The price of the lagoon project is a long way away from being agreed, but we are keen to promote new ideas and new technologies, and we want the United Kingdom to be at the forefront of that.

The announcement that the renewables obligation for onshore wind will be closed early has caused huge uncertainty and anxiety in the renewables sector in Scotland and throughout the United Kingdom. With that in mind, will the Minister tell us when the timetable for the next contracts for difference allocation round will be published?

As the hon. Gentleman knows, we called time on the renewables obligations for onshore wind early as a result of the success of its deployment, and we are now thinking about what to do next. We are considering all our policies, including those relating to CfDs. We have the tools that will enable us to meet our manifesto commitments on onshore wind, and we will present proposals on the new CfD round in the near future.

The Minister’s response suggests that uncertainty still reigns. The Green Investment Bank, whose headquarters are in Edinburgh, is to be privatised by the Government. How will the Minister ensure that the original purpose of the bank, which was to accelerate the transition to a low-carbon economy, will be maintained when it is in private hands?

Conservative Members are delighted to learn that owing to the success of the Green Investment Bank, which was only created under the last Parliament, it is now in a position to expand even further by means of private sector investment and access to capital markets, and to do yet more to support and improve the emergence of a green carbon economy. The hon. Gentleman should join us in welcoming that announcement, rather than expressing concern.

I apologise for the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) is at a hustings in Scotland this morning, and is therefore unable to be present. As this is the first session of Energy and Climate Change questions of the new Parliament, let me take the opportunity to welcome the Secretary of State and the Minister to their positions.

Will the Minister explain how, given a fixed renewables target and a fixed budget, replacing the cheapest renewable electricity technology—which is onshore wind—with more expensive technologies can possibly lead to lower bills for consumers?

I welcome the hon. Lady to her position.

We have explained time and again that the bill payer’s subsidy is there to promote emerging technologies in the low-carbon and renewables sector. It is not there to give long-term support to different projects. Interestingly, representatives of the industry to whom I have spoken in the last few days think that, in the near future, they could envisage contracts for onshore wind with no subsidies at all, and that is exactly where we want to go.

I thank the Minister for that response. She wants to decarbonise at the lowest possible cost but is effectively banning the cheapest renewable technology; she wants to help boost our economy but is thwarting a sector that contributes £1.7 billion in gross value added; and she wants a good relationship with the clean energy sector but could soon find herself being sued by two of its primary industries. Is it not the case that the only conceivable reason for that policy is to placate Conservative Back Benchers?

I really do fail to understand why Opposition Members keep insisting that onshore wind should be the only game in town. Onshore wind employs 19,000 people; offshore wind, 14,000; solar, 34,500; and biomass and bioenergy, 32,000. What about the whole range of energy sources that we want to promote? We cannot simply keep putting up the costs to the bill payer. My Department’s priorities are to keep the bills down while decarbonising at the lowest cost possible, and that is what we will do.