European Standing Committee B
Wednesday 1 April 1998
[Mr. Peter Atkinson in the Chair]
Commission White Paper on Renewable Sources of Energy and Energy Framework Programme
[Relevant document: European Community Document No. 7831/97, a Commission Communication, An overall view of Energy Policy and Actions.]
10.30 am
The Chairman: I remind Members of the Committee that we now have an hour of questions to the Minister, followed by a maximum of one and a half hours of debate. Hon. Members who are not members of the Committee may take part, but they may not vote.
The Minister for Science, Energy and Industry (Mr. John Battle): The Energy Council will meet under the United Kingdom presidency on 11 May. Our themes for the presidency are jobs, the environment and building a single market. Those three key themes come together in the papers before the Committee, which consider renewable energy and its contribution to the future. The papers consider the potential for jobs, the contribution to tackling environmental challenges and the building of a single market in energy.
The Council of Ministers will hold an open debate on 11 May on energy and the environment, allowing a discussion of the environmental impact of energy supply and use. The debate will also permit a consideration of the contribution that the energy sector could make to the Kyoto agreement, signed by members of the European Union. Greater use of renewable energy will form part of any strategy to reduce greenhouse gas emissions from the energy sector, as will energy efficiency and other measures, including those relating to transport and new forms of vehicle fuel.
The Commission's White Paper provides some useful ideas on how Europe can increase its use of renewables and I expect the Council to adopt the motion before us as the proposed resolution setting out its response.
I also hope that at the Council we shall be able to make significant progress on the energy framework programme--the second of the documents before the Committee. The programme is multiannual and, for the first time, will bring together a number of the Commission's activities in the energy sector. It will streamline management and avoid the duplications and overlaps that currently exist.
The energy framework programme has been developed in response to calls from all the member states to provide a more coherent and transparent management structure. The framework is new, but most of what it contains is not. It brings together existing activities: the SYNERGY programme, which relates to third countries, joining up policies in countries throughout the European Union with those of countries outside the union; the SAVE programme, which relates to energy efficiency; and the ALTENER programme, which is the main element in creating the conditions in which to generate support for renewable energy. They will all come under a single heading. The only new element is the CARNOT programme, which will foster clean coal technologies--I stress the plural.
The Select Committee on European Legislation took a particular interest in the enabling decision that set up the framework programme. That decision is in annex I of the documents; the ALTENER, SAVE and CARNOT programmes are in annexes IV, V and VI.
I commend the enabling decision to the Committee. It will simplify and streamline activities carried out by DGXVII in the Commission. Those were previously separate programmes with separate budget headings; they will now be brought together, which has long been the wish of the Council, and indeed of the UK. That will enable their relative merits to be considered and will avoid duplication. The improved co-ordination, transparency and financial control will also maximise the complementarity of the actions and programmes. It will optimise the use of resources and ensure that they are not scattered by the use of contradictory policies. Officials have been negotiating on those matters and have made good progress. I hope that we can arrive at a decision at the May Council.
The European Parliament has stated that it might need longer to complete its consideration of the documents. It may therefore be unrealistic to expect a final decision next month. However, if there is a decision, I may have to propose to hold a second Energy Council to ensure that those matters are tidied up, signed, sealed and delivered. All the programmes will then be pulled together. That is one of the most important matters that we shall debate today.
One of the most important elements of the framework is ALTENER II--the groundwork, pilot studies and pilot actions that create those conditions. Last December, the Council reached a political agreement on a two-year programme with a financial reference of 22 million ecu over two years. We welcome the current proposal in annex IV to extend the ALTENER programme to the year 2002 because it is a good programme for encouraging renewables into which we want to continue to link.
The SAVE programme will also fall within the framework programme. It seeks to stimulate energy efficiency measures across the whole range of energy users, through a variety of non-technical measures, including support for demonstration projects, energy agencies and research studies on a transnational basis. It is a modest but not insignificant programme in which the United Kingdom has actively participated; the work that we are already doing complements and works with it and we welcome its incorporation in the framework programme.
The new programme, CARNOT, seeks to promote the use of European solid fuel technologies, especially clean coal technologies--I stress ``technologies'' in the plural. There are a range of technologies: conventional pulverised fuel, advanced pulverised, the so-called super-critical, pressurised fluidised bed combustion systems, integrated gasification and the hybrids that blend combustion with gasification. They are not all at the same level of development. Some are already in commercial use and others are at the research stage. We need an enhanced programme but we must also be aware that there is a plurality of approaches on which we must focus.
I will not go into further details but will simply say that the aim of the CARNOT programme is to disseminate best practice and knowledge about the best available technologies throughout the European Union. It proposes measures to create an information network and to foster industrial strategic co-operation to take those technologies through to production.
The White Paper was adopted by the Commission at the end of last year following the earlier Green Paper that was discussed by the previous Administration. It proposes a Community target of 12 per cent gross inland energy consumption to come from renewables by 2010. That is an ambitious target to make greater use of renewable energy, both in the EU as a whole and in the UK. It is vital to have ambitious targets if we are to meet our environmental commitments and also benefit from the world markets in new and renewable technologies. There is a world to be won out there in a worldwide movement.
The Commission's proposals would require an investment of more than £100 billion over the next decade, spread over 15 member states. Mobilising that scale of investment, most of which will have to come from the private sector, is a major challenge that has not been bottomed out and fully addressed in the documentation. We must build that in properly if it is to be a realistic target.
The Government believe that to meet the challenge it is vital for all member states to prepare positive, practical and workable plans suited to their own circumstances, and that that should be done before precise targets are set. We are already reviewing our policy and examining what needs to be done if we are to achieve the aim of supplying 10 per cent. of UK electricity from renewable sources by 2010. A practical work programme is being drawn up to see how to achieve those targets and I hope to announce the conclusions soon to Parliament.
Currently, only 2 per cent. of our electricity comes from renewables so we have some way to go. Our targets in the non-fossil fuel obligation project that we discussed in relation to the Fossil Fuel Levy Bill are realistic and achievable, but it will mean a four to five-fold increase in renewable energy in the UK. We will find a way to do that and it is interesting that other member states are asking us how the NFFO mechanism works, because they want to know whether it can be adopted in Europe.
Mr. Boswell: Yes.
Mr. Battle: The hon. Gentleman says yes. Let me compliment the Opposition by saying that they set up the mechanism. We have discussed it before. It is a germ of an idea; let us carry it forward. It can be a practical proposal to show what can be done if we set our minds to promoting and developing renewables. The White Paper spells out that responsibility for promoting renewables rests principally with member states, not least because all member states are at different stages. Some have huge amounts of hydro power. Others such as France use forestry. There is a different history of the use of renewables according to climactic and agricultural circumstances.
We want to do better in Britain, and we are developing a work programme to achieve that. Although we cannot sign up to the details--because they do not yet exist--of the Commission's aspirations to 12 per cent., I hope that the White Paper can be used as a launch pad for a practical, positive programme for developing renewable energy in the European Union in the next decade.
I hope that the Committee will warmly welcome the proposals that we intend to present to the Council on 11 May.
The Chairman: We have until 11.30 am at the latest for questions to the Minister. I remind hon. Members not to anticipate the debate that follows questions, and to keep their questions brief. There will be an opportunity for everyone to ask a question.
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