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Energy: Renewables

Volume 706: debated on Tuesday 13 January 2009

Question

Asked By

To ask Her Majesty’s Government what measures they will take to encourage the Export Credits Guarantee Department to support the United Kingdom renewables industry.

My Lords, the ECGD aims to support UK renewables exports through a wide portfolio of products. It has introduced a number of changes to its procedures, including a relaxation of its foreign content rules, to provide cover for more foreign/local content and a willingness to consider longer credit terms, thus giving improved availability of its support for renewables. The ECGD continues to work with DBERR, UK Trade and Investment and renewables trade associations to raise awareness of the support available from the ECGD.

My Lords, I thank the Minister for that reply. I remind him that in the debates over the Climate Change Bill and various other things the Government have said that the UK renewables industry should be one of our big growth areas, and yet, as I understand it, the ECGD has not had one application for its £50 million annual underwriting fund. How will he fix that? I suggest that one way, which is used for other sectors, is to put a member of that body on the industry group for renewables.

My Lords, the answer to that question comes in three parts. First, it is true that there has not been a take-up of the £50 million set aside in 2002, and research by the ECGD along with feedback from within the sector shows that the majority of the UK renewables industry is either concentrating itself on the home market or exporting to more mature economies. Very few companies are venturing into the emerging markets where the ECGD can give support. I remind the noble Lord that it is the role of the ECGD not to create but to facilitate opportunities. On the last part of the question, on the membership, I shall take it on board and write to the noble Lord.

My Lords, is country cover being impeded by historical bad debt? If so, what is being done about a solution? Could there be a case for privatisation of the ECGD?

My Lords, in the present climate of the economic credit crunch, I cannot imagine the proposal of a privatised ECGD would get a great deal of support within the City. It also seems to me a long way away from the original Question. In my decade in the House, I have always been interested by Members’ ingenuity in building a bridge between the original Question and the supplementaries. This, I believe, is a bridge too far.

My Lords, on a bridge that may be rather closer, the Minister referred just now to the home market for the renewables industry, which will clearly be extremely important not least during the recession. Can he explain why there will be a hiatus in support for small-scale domestic microgeneration over the next few months? Will there not be severe damage to the whole industry if the programme is hit by the closure of the low-carbon building scheme in June of this year and then a long gap before the feed-in tariff comes into place in 2010? Given that other EU countries seem to have filled that gap rather more effectively, does he agree that the comment made yesterday by the New Economics Foundation—

“The Government couldn’t organise a windmill to spin in a gale”—

might be true?

My Lords, I am always in favour of quotes from journalists and others that have a high degree of hyperbole; but while “spinning in a gale” is obviously very topical, it is not true. Effectively £48 million is available, only £24 million of which has been bid for. This week, in responding to that quote, the Department for Energy and Climate Change called on voluntary organisations and others to bid for the half of the money that is still available.

My Lords, is the noble Lord convinced that the ECGD terms are competitive with those of European credit agencies such as Coface and Hermes?

My Lords, I have not closely studied that but will happily take it away and ask officials to do so. We seem to have a problem at the moment in that British industry, presumably on the basis of less risk, is concentrating on the home renewables market and on mature economies. If our industry can establish a reputation in those economies then it believes that it will be time to move into the developing world. At the moment, it is not a lack of willingness by government to encourage and support; it is some of our renewables companies’ unwillingness to go into what might seem to them a more risky market.

My Lords, can the Minister confirm that the guarantees issued under the temporary guarantee scheme announced in the Pre-Budget Report will be subject to the ECGD’s case-impact-analysis procedures?

My Lords, one should never forecast. We know what the Pre-Budget Report outlined and expect further development of that. I can only invite the noble Lord to await statements.

My Lords, perhaps I may help the Minister in building a bridge between the question and the necessary answer—because it is bridge building and other civil engineering projects in which Britain excels around the world and for which the ECGD is so desperately needed. Is not the lack of take-up of this fund due to the United Kingdom business community having no confidence in the ECGD? Do not many chief executives of multinational British businesses use it to market test, so that if the ECGD ultimately says that it will do a project, the project will not need insurance? Can the Minister please provide a comparative between the credit agencies of Europe and the ECGD so that, when the pick-up comes, this country will be ready to take advantage of it around the world?

My Lords, I listen to the noble Lord with great interest and acknowledge his expertise from previous positions in both government and British industry. I cannot say that I heard him spell out those views quite so clearly in either of his previous positions. However, I take on board the question and will respond to it.

My Lords, did Her Majesty’s Government notice that there was not much wind during the recent cold spell of weather? If so, has that done anything to diminish their enthusiasm for wind power?

My Lords, I can only say that the wind is where it is. Where I was for the past two weeks, there were gales of force 6 and force 7. So I can only congratulate the noble Lord on his position in Europe, where obviously it was not quite so windy.

My Lords, the Minister must have been in a very windy place. Where I was, in Reading, there was no wind. There was also no wind in many other places in this country. The problem with wind turbines is that, in very cold and frosty weather, when there is no wind, they do not turn. They are therefore useless in making any contribution to meeting the need for energy.

My Lords, the noble Lord ignores the fact that we are creating storage facilities. More importantly, it is a question of where you are. I happened to be on the high seas, which is why I was getting a force 6 gale. We have again strayed far from the Question. I shall therefore leave it at that.