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Renewable Energy: Subsidies

Volume 602: debated on Thursday 19 November 2015

4. What assessment her Department has made of the likely effect of changes to subsidies on the predicted deployment rates of renewable energy by 2020. (902221)

9. What assessment her Department has made of the likely effect of changes to subsidies on the predicted deployment rates of renewable energy by 2020. (902227)

17. What assessment her Department has made of the likely effect of changes to subsidies on the predicted deployment rates of renewable energy by 2020. (902236)

Even with the actions we are taking to control levy control framework costs and to protect consumer bills, we remain on track to deliver at least 30% of our electricity from renewable sources by 2020. Detailed assessments of the impact of cost control actions were published by my Department alongside each of the measures as they were announced.

Will my right hon. Friend confirm that the Government remain committed to renewables, while being tough on the costs of subsidy?

My hon. Friend is absolutely right. There was a focus on the levy control framework, which was particularly my approach, as soon as we came into government. I was shocked to find the scale of the overspend and have therefore responded to keep consumer bills under control.

In Eastleigh, solar generation has leapt ahead due to the feed-in tariff, and many of my constituents want that to continue. Will the Secretary of State ensure that clean energy is supported and that both large and small solar energy generators in my constituency are not harmed by future changes?

I reassure my hon. Friend that we remain committed to clean energy, but in a way that minimises costs to consumers and maximises the benefits of the renewable industry to the UK. Our support has significantly driven down the cost of renewable energy and led to greater than anticipated levels of deployment.

May I congratulate my right hon. Friend on her speech yesterday and warmly welcome her determination to reach zero subsidy? Does she agree with me that if we eliminated all subsidy for large-scale solar PV—photovoltaics—and concentrated it on domestic and small-scale solar PV, we could actually achieve our renewables target, protect jobs and reach zero subsidy and grid parity within the LCF earlier than 2020?

I share my hon. Friend’s enthusiasm for reaching grid parity and his support for solar in general. Solar has been a great British success story: costs have come down and delivery has far exceeded expectations. He will be aware that we are considering the consultation at the moment. The consultation closed after we received the responses, and I will report back on it. I will take his suggestions under advisement.

Will the Secretary of State now have a go at answering the question asked by my hon. Friend the Member for Wigan (Lisa Nandy) about how many more thousands of jobs will be lost in the renewable energy sector as a result of her Government’s decision to pull the plug on solar and onshore wind? How does she respond to the comments of the United Nations chief environment scientist Jacquie McGlade, who recently said that Britain now, under the Tory Government, is sending a “worrying signal” by

“shifting away from clean energy as the rest of the world rushes towards it”?

Once more, with the right hon. Gentleman’s comment, we hear an Opposition Member fail to mention the fact, as announced yesterday, that we have put a date on the end of coal. I have received huge congratulations from international commentators. The situation is completely different from the one he tries to paint. The Government are committed to growing the renewable industry, are proud of the amount by which it has grown and will continue to support it, including through job creation.

Progress in renewable electricity generation has been put in jeopardy, particularly in rural communities, with the ending of renewables obligation certificates for wind turbines for farm generation of electricity. Will the Secretary of State provide a response that brings hope to those in rural communities?

The hon. Lady will be aware that Northern Ireland has the option to fund that itself. We made a decision, which was set out in our manifesto, to provide no additional support for onshore wind and we will stick to that.

Onshore wind is demonstrably the cheapest form of renewable energy, yet its route to market has been constrained. The Government’s no new subsidy commitment in their manifesto is clearly being implemented. Would the Secretary of State support the concept of subsidy-free onshore wind? If so, does she agree with the assessment of the Committee on Climate Change of what would constitute subsidy-free onshore wind?

That is a very interesting question. I said last time I was in the Chamber that we would look at that idea and we will continue to do so. I remind the hon. Gentleman that we have said that there will be no new subsidy and that such schemes must be supported by the local community. We are happy to engage with developers and have that discussion if they have a proposal.

Renewable energy is vital to the local economy in my constituency. It is encouraging that one of the big investors, DONG Energy, welcomed the announcement by my right hon. Friend yesterday. It is important that we develop an energy cluster on the Humber to reduce costs and maximise benefits. Will she assure me that she will do all she can to achieve that?

My hon. Friend is absolutely right. I received a message of support from DONG Energy, which is a big investor in offshore wind. The UK is rightly proud of its offshore wind sector. We have more offshore wind than the rest of the world put together. There is a lot of interest in that internationally and it has great export potential. We will continue to support it.

I applaud the Secretary of State’s announcement yesterday in her reset speech that coal will be phased out by 2025 on the grounds of its unacceptably high carbon emissions. In the same speech, she indicated that temporary subsidies to assist the deployment of renewables, which are the lowest-carbon alternative energy source, would come to an end, while permanent subsidies for the deployment of gas, which is a far higher carbon alternative, would be maintained. On reflection, does she find those positions at all contradictory?

I congratulate the hon. Gentleman on his new role. Our position is that subsidies are supposed to be temporary. That is why I set out a plan yesterday to reduce the subsidy for offshore wind. The industry is happy to engage with us on that basis. We will set caps with it and, I hope, deliver offshore wind with it at a lower price than has been achieved before. On the other subsidies that he mentioned, we are making sure that we deliver a balance. There has been woeful underinvestment in infrastructure over recent decades. Under Labour, no nuclear power station was commissioned, which was a disgrace. We will move forward with a secure supply of electricity.