Select Committee on Environmental Audit Minutes of Evidence

Examination of witnesses (Questions 20 - 39)



  20. Can I ask the Minister for the DETR what their proposal in respect of the environmental implications of open-cast would be on that?
  (Lord Whitty) There is always environmental advice in terms of new open-cast operations, and there are often fairly restrictive planning requirements on that which would be followed. Therefore, any such scheme would have to be subject to that.

  21. It is right that we have a presumption against open-cast on environmental grounds?
  (Lord Whitty) It is a presumption against most forms of open-cast, but there is not an absolute presumption against it. The point Helen is making is that the rules on the aid would have to be, on the face of it, non-discriminatory. Of course, whether it was open-cast or deep mining there would be various other environmental criteria also applying to them that they would have, because any development of existing plant would have to go through planning to the extent where these environmental considerations come into play.

  22. It would technically be possible to have—of that state aid that will be coming in ostensibly to protect the social economic fabric of deep pit coal mining communities—the scenario where we could have virtually 100 per cent of that money coming in to enable the expansion of open-cast?
  (Mrs Liddell) If any application for additional open-cast comes forward, as Larry has been pointing out, it has to fulfil the planning requirements anyway in relation to the environment. It is not a blank cheque to the open-cast industry, just as it is not a blank cheque to the deep mine industry. There are rules that have to be applied, but ECSC aid is non-discriminatory.


  23. It is not just a question of adhering to the planning rules, as you know, particularly Lord Whitty, since this is the DETR, we believe that there should be a proper environmental appraisal of all significant policies, and I think the DETR supports that view?
  (Lord Whitty) Indeed.

  24. The question here is whether there has been a proper environmental appraisal of this proposed £100 million subsidy to the coal industry?
  (Mrs Liddell) I think it is fair to say, Chairman, that at the moment we are consulting with the industry on the nature of any application for aid that will be put forward, so it is too early to say what the end gain will be in terms of any aid that will be available to the open-cast industry. What we have to be absolutely certain of in making any application is that it is non-discriminatory. If we are discriminating in favour of one source of coal against another it will not go through a coal—

  25. What we want to know is that there is no adverse effect on the environment. The point of Mrs Walley's question is; have you looked at this whole policy and the impact it may have on the environment as apposed to not having such a policy, or having a smaller policy, or having a different policy?
  (Lord Whitty) The way we are constructing the package and the way we are consulting with the European Commission will mean that we take environmental considerations into account. We cannot make it a full formal environmental proposal until we know what measures are acceptable to the European Commission and what are not.

  26. Will you publish it at that point?
  (Mrs Liddell) Yes, and in that context it may be useful to the Committee to know that we are one of the countries that is in the forefront of ensuring that European Union policy measures involve an environmental appraisal at the same time.

Mr Chaytor

  27. Would it, for example, be possible to tie elements of the aid package to investment in clean coal technologies to provide for aid flue gas de-sulphurisation products at power stations, because that would be a way in which an improvement in environmental quality could be tied in with the need to support the coal industry?
  (Mrs Liddell) I am not sufficiently well versed in the detail of ECSC rules on state aid, but, of course, we are anxious to ensure that we see a state aid package put together that as well as taking into account the environment also takes into account the long term future of the United Kingdom coal industry. That inevitably means that there is a requirement to look at flue gas de-sulphurisation and, of course, the generators are encouraged to take that into account as well when they are using coal.

Joan Walley

  28. Where you have guidance being given to operators who may have both deep pit and open-cast coal mining operations will it be possible for somebody making a bid ostensibly for deep pit to then switch it over in terms of open-cast?
  (Mrs Liddell) No. Any proposal that comes forward has to be very specific. It is done pit by pit. We do not go in and say, "Look, let's do all of our deep mining coal industry in this package", we have to put forward a proposal that is pit by pit, site by site, and at the moment we are waiting for the industry to come forward with their proposals.

  29. Can I move onto the renewable energy and combined heat and power? We have looked with interest at the 1999 Lords Committee Report on the prospects for encouraging more renewable energy in the UK, and I think that the recommendation there is that the 10 per cent, to say the least, is gloomy. Can I ask each of you to tell the Committee what you see as the main barriers to the success of the recently announced obligation on suppliers?
  (Mrs Liddell) Let me start before passing on to Larry. 10 per cent is a challenge. There is no doubt that the 10 per cent obligation is a challenge, but there is no point in having an obligation unless it is a challenge to the industry. One of the reasons why we are changing to an obligation from the old arrangement is to bring renewable energy into the mainstream. If I can make one point. I am a great supporter of CHP and I think one of the great advantages of the stricter gas consents policy is that it was a sort of coming of age of CHP and it then became headline. We cannot just read across from CHP to renewables. There are certain aspects of CHP that are not necessarily renewable depending on the energy source that is being used for the CHP. So the Chancellor making it clear in the budget that good quality CHP projects will be favoured by the Treasury, I think, is a very important signal. In relation to overall renewables, I am anxious to see, through the obligation, the creation of some economies of scale for the renewables industry. We are consulting at the moment and will be consulting through the autumn in relation to how the obligation is in practice put into play, and I envisage a situation where you will have some generators who concentrate exclusively on renewables. One problem with renewables, because they cannot be stored in the way that other conventional energies can be, is that they start out from a disadvantage. One way of helping that is if you can create economies of scale. That is why I am not as pessimistic about the achievement of the 10 per cent target. We are on target for the 5 per cent by 2003 and I think if we can mainstream renewables I am hopeful that that challenge will be met and it stays in place.

  30. Could you also comment upon the likelihood that we are going to have, by the year 2012, over two thirds of the nuclear capacity closed. I think it is something like 16 per cent of the United Kingdom's current generating capacity. In view of what you have just said, could you not envisage a situation where support for renewables could go hand in hand with that so that you can actually link targets from renewables without the phasing out of that nuclear energy production?
  (Mrs Liddell) I think if you do an either/or situation you limit the prospects for renewables.

  31. I am not saying either/or, I am saying phasing out, because as one gets phased out you actually link the phasing in of renewables to match that phasing out.
  (Mrs Liddell) I think in terms of getting an exact match that would be quite difficult to do given the fact that some aspects of renewables are far from market. At the moment our main priority, and why we are doubling our research fund to the renewables industry and renewables technology is to bring renewables, those that are further from market, closer to market. In terms of our overall energy projections in relation to targets, nuclear is in there, and we also have to take into account where hydro fits into the renewables picture as well. We have taken into account the phase-down in nuclear over the next decade, and beyond, in terms of the targets.

  32. Are you looking to link that more to renewables than to any other?
  (Mrs Liddell) Not as a direct lead, of course. We see the targets for renewables as targets in themselves and ones that we will put the weight of our commitment behind.

  33. When you say that you are going to double the research budget for renewables, can you just remind me what it is that the budget is at the moment?
  (Mrs Liddell) It goes up from £9.7 million in 1998/1999 to £18 million in 2001/2002.

  34. Do you know how that compares with other European countries, Germany or Denmark?
  (Mrs Liddell) I could not tell you off hand, but certain other European countries have different ways of supporting renewables by a cost on electricity prices. I think in Germany they call it the `99 pfennig law'. What we are anxious to do is state a change in our attitude to renewables and moving from NFFO, which was purely technology specific, to something where we are saying, "Look, governments are not good at picking winners. Let's look to the market to help us generate these winners." What we have got to do now is mainstream renewables, and not just government research going into renewables, we also have to see the industries. One of the positive aspects is the extent to which we see the major players in the industry now turning their attention to various aspects of renewable energy. That is a sign that we are moving in the right direction and that the industry itself is getting behind that.

  35. Can I ask, insofar as the Government itself is a major player, whether or not through the Green Ministers' Committee or through any other mechanism you will be looking to mainstream increased targets for renewable energy within and between each government department so that you will actually look to really increase the amount of dependence upon renewable energy, and how are you actually doing that?
  (Mrs Liddell) There is one very important area. I spoke at the photovoltaic conference in Glasgow at the beginning of May and, of course, the Government is pushing our enthusiasm for seeing large building projects looking at, for example, photovoltaics as a means of mainstreaming. I have been meeting with Michael Meacher to discuss a number of these issues. There are a great deal of processes for DETR with the construction hat on and local government hat on. We need to talk to the opinion formers in relation to the commissioning and design of large-scale public buildings, because I think the big push will come there first rather than in domestic usage.

  36. Does that mean that you will seek to establish 10 per cent targets within each government department for renewables?
  (Mrs Liddell) It would be very difficult to say every government department has to have a way of reaching 10 per cent renewables. 10 per cent renewables in what? Does the Treasury, for example, have to have 10 per cent of its energy generated by renewables? They may actually be achieving an awful lot more. There is a district heating system that operates in Whitehall. I do not know off hand what the generation capacity is, but it is not inconceivable that we would be able to move forward using CHP and using district energy in great loops of public buildings, rather than just saying to each government department. Some government departments may be able to do much more than 10 per cent, particularly in the commissioning of new buildings.

  37. My concern is what is going to be the mechanism for achieving that? Would Lord Whitty like to comment on the barriers that there are in getting that 10 per cent achievable renewable energy target?
  (Lord Whitty) You were concentrating very much on public buildings and buildings in general. As far as buildings are concerned, the biggest barrier is that the stock does not get renewed very fast, and, therefore, in terms of improving the energy mix, a lot of existing public buildings will be looking at CHP or district heating in some form rather than direct renewables, although, of course, there is some overlap between the two in that some CHP can be fuel from renewable sources. John Prescott was opening a couple of those in Sheffield and Nottingham a couple of weeks ago. In terms of new public buildings and the new building regulations more generally, they use not only new materials, but different forms of heating. The use the renewable sources, and the use of CHP is very much prioritised there, but how rapidly you can achieve a target figure, whether it is 10 per cent for renewables or a target for district heating, will depend very much on the existing building style.
  (Mrs Liddell) I think there is a simple way to meet Mrs Walley's point about making sure that government departments can meet the 10 per cent renewables; the actual electricity companies and the energy companies who supply government departments must themselves meet the 10 per cent target. So if we are on a district heating loop here in Whitehall and Westminster the company or companies that supply that energy must meet the 10 per cent obligation.


  38. Is that part of the procurement regulation, as it were?
  (Mrs Liddell) It is part of the Utilities Bill that public electricity suppliers must meet a 10 per cent obligation. So, if it is London Electricity here, London Electricity must source 10 per cent of its output from renewable sources.

Joan Walley

  39. My concern is how we can measure that. How are we going to get from here to there? How can we actually measure the progress that individual government departments are making if we do not have a mechanism to chart that?
  (Mrs Liddell) I think in terms of getting the electricity supply, it is given now that the companies that are supplying them must supply 10 per cent because of the obligation. In the longer term, whenever we look at a building, if we ever get to the position where the Government is building new offices in Whitehall, obviously we would be encouraging departments to look at renewable sources of energy.
  (Lord Whitty) It might be easier when we have buildings at 100 per cent CHP. I think that will apply to a lot of the more modern buildings. I am not entirely sure how quickly we can get Whitehall into that process.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 16 March 2001