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Mr. Deputy Speaker (Sir Michael Lord): Order.
5.41 pm
Mr. Peter Duncan (Galloway and Upper Nithsdale): I welcome the debate, which gives us the opportunity to examine in detail the Government's current energy policy, their review and the implications for the future. I question in passing whether 2050 is the right date for the title of the debate. The issues that I shall outline will require Government action much sooner than that time scale would imply. Some decisions need to be taken now to cover our short and medium-term objectives while securing the United Kingdom's long-term future energy needs.
The debate is also appropriate as we contemplate continuing change in the balance of our energy mix. During the 1950s, almost 90 per cent. of fuel used in the UK was coal. By 2000, that had declined to only 15 per cent. There were major increases in the use of natural gas and oil. Over 50 years, the combination of natural gas and nuclear generation grew to account for more than 65 per cent. of power created. The past 50 years have seen huge changes in the mix, and we should not underestimate our opportunity to make significant changes by 2050.
Without change in energy policy, the UK will become increasingly reliant on natural gas imports. We face being dependent on a single fuel to an extent never before experienced. According to industry consultants Wood Mackenzie, in its report to the Department of Trade and Industry in 1998, it expected the UK to become a net importer of gas any time between 2003 and 2009. It reported that by 2020 the UK may need to import between 55 and 90 per cent. of its gas requirements. The major
emerging exporters that will then be keen to exploit the commercial opportunity are Russia, the middle east and north Africa. Put simply, our security of supply will be in question, and supply will certainly be subject to price manipulation in future.The House will be aware that we have the opportunity to change what seems to be a worrying prospect. Expansion of the renewables sector is perhaps the most media-friendly and certainly the most environmentally acceptable alternative together with promoting continued energy efficiency programmes. However, the objective must be a secure, sustainable and deliverable supply that enjoys consumer support, is environmentally friendly and cost-effective. That will not occur automatically. The Government need to make it happen.
I regret that the Government are prone to putting off decision making to such an extent that existing nuclear stations face imminent demise. Renewables will be unable to fill that gap. It is inevitable that the gap will be filled predominantly by imported natural gas. Even the Minister estimates that the UK will become a net importer of gas by 2005, and points out that we already import natural gas during periods of high demand. We face being highly vulnerable to international price variations.
The Government have set a target of securing 10 per cent. of electricity from the renewable sector by 2010. I sincerely hope that that target will be met. I am delighted that Scotland in general, and my constituency in particular, has the potential to make a significant contribution towards its achievement. Galloway's existing wind turbine scheme at Windy Standard has been a huge success. Interestingly, it has enjoyed its most vocal support from the communities closest to it. Proposals are now going forward for its extension, and I compliment those involved on the sympathetic way in which they have developed their scheme. Notwithstanding the Minister's earlier reassurance, I would point out that the Ministry of Defence consistently remains the biggest single obstacle to these new schemes.
My constituency also faces plans to host one of the new offshore wind farms for Scotland, with proposals being put forward by TXU to build on the Solway Firth, some nine kilometres from the Colvend course. This has understandably elicited considerable public interest, and I have suggested that such a scheme, located, as it is, adjacent to a national scenic area, deserves a full public inquiry. That would enable a proper, full and frank debate on the merits of the proposal. On my recent visit to Denmark—the acknowledged world leader in wind energy—people whom I spoke to revealed that they would not have chosen such a location for this kind of offshore scheme. However, I trust the Scottish Executive, as the ultimate arbiter on planning matters north of the border, to make the right decision after proper scrutiny.
There are also questions about the additional costs involved in developing the infrastructure to distribute the wind energy generated. As is common in most renewable projects in Scotland, the ideal sites are rarely in the ideal places for the national grid. Power Systems, for example, has raised with me its concern that adequate incentives are not yet in place for investment in and development of the renewable energy infrastructure. Indeed, its planned investments have often been ruled out of order by the industry regulator.
Scotland faces a new devolved landscape in energy policy. Plans for fossil fuel and nuclear power generation are set by the UK Government, while those for renewables, the environment, and, crucially, consents for power stations are set by the Scottish Executive. There is clear potential for conflicts of interest and confusion, which was considerably added to by our debate in the House on 5 March 2002. On that occasion, the Secretary of State for Scotland and the Minister who is with us today failed to resolve the issue over which Parliament would make the final decision if a nuclear plant was welcomed in Westminster, but planning consent was withheld by Holyrood.
At present, Scotland has a relatively balanced mix of fossil fuel, nuclear, and renewable power sources, together with oil and gas reserves from the North sea. We are currently a net exporter of electricity, although planned plant closures on nuclear sites such as Chapelcross in Dumfries and Galloway indicate that that position could be reversed before the end of the next decade unless new builds on old sites such as Chapelcross can be Government-led.
Scotland has the potential to exploit its geography and become a centre of excellence in all existing and emerging forms of renewable energy. Even the Danes look at the Scottish coastline with envy when contemplating wind and wave developments. The Scottish Executive have recently announced their programme to develop the market, but action is required from central Government to make that happen.
Taxation is reserved, and, as a result, the main mechanisms for encouraging the development of these new technologies remain in the control of Westminster. It is a matter of regret that, in the Chancellor's April budget, he announced a 10 per cent. supplementary charge on the UK's oil and gas production. However, this presents us with an opportunity. The Danish Government saw the strategic advantage of investing in wind power development and research in the late 1960s and 1970s. They created an industry in which they became world-beaters, and now, some 30 years later, it employs 40,000 people in that country.
Surely, by directing a small proportion of the supplementary charge on oil towards renewables research, we too could become world leaders by exploiting fully the economic and environmental potential of the next generation of renewable energy. Wave and tidal power, along with the biogas and biomass industries, are still in the early stages of development. Further Government commitment to investment in research could reap huge rewards for employment in our most vulnerable rural communities.
Nuclear plants remain the backbone of our electricity production, and urgent decisions need to be taken by the Government to encourage their replacement as successive plants approach decommissioning. Failure to do so will further expose the UK consumer to the vagaries of the international natural gas market—a risk that Ministers are duty-bound to address urgently.
This has been an important and balanced debate.
Mr. Wilson: In answer to the hon. Gentleman's point, there is no ambiguity about where planning powers for nuclear new build in Scotland would lie. They would lie with the devolved Parliament.
Mr. Duncan: I thank the Minister. I simply observe that, if he reads the debate on 5 March, he will see that it was far from clear.
We must remain focused on a balanced future for UK energy production. Anything less would leave us all in the dark.
5.50 pm
Mr. Patrick Hall (Bedford): I am pleased to contribute to a debate in which hon. Members from both sides have revealed great enthusiasm for and expertise in a crucial subject with far-reaching implications. I acknowledge the respect that the Minister has shown for the House by remaining in his place for almost all the debate. He has made his point by remaining for so long.
In thinking about energy policy towards 2050, we are also invited to think about the world that we would like to see in 50 years' time, or, as I would be in my 99th year by then, the world that we would like to hand on to our children and to future generations.
The Minister set out the context of the debate. Clearly, there is no shortage of information, reports, interest or research. The record shows that there have been a number of well-informed debates in the House on these matters. That is as it should be and it is understandable because the production and use of energy is fundamental to human activity.
Energy is a crucial and highly political issue. It is central to the economy, and has a significant impact on the environment. It affects every one of us, and has the potential to affect all living things for good or for ill. Energy policy helps to shape society and the world in which we live. Access to energy raises questions of social justice and social equity. Civil nuclear power also has a bearing on the secrecy that Governments want to impose on society, and on the nature and activities of security and surveillance services.
In thinking about the world in 50 years' time, it is uncontentious to look to a world in which energy is produced in a sustainable and efficient manner with the minimum of pollution, in which supplies are secure, accessible and affordable to all, and in which innovation is welcome. In thinking about the next 50 years, I am drawn to reflect about the past 50. That period saw the dramatic demise of coal, which was our major, historic, commercial energy source even though we still have well over 300 years of supplies in the ground untouched. We have seen the rise and the peaking of North sea oil and gas, and we have witnessed the rise and, it would seem, the fall of nuclear power. The energy utilities have changed from the might of the publicly owned Central Electricity Generating Board, and to many private and foreign-owned companies that provide our electricity. We have seen the privatisation of British Petroleum, and the end of the National Coal Board. We have seen the relentless and massive increase in road transport, which is now the major user of oil and the major producer of pollution and greenhouse gases. We have had the Gulf war over oil supplies, the shocks produced by the 1973 OPEC-forced oil price rise, and the widespread panic buying that was triggered by a small group of people who sought to bring down the Government by blockading petrol supplies in September 2000. We have also witnessed incidents at Three Mile Island and Chernobyl, which helped to bring down nuclear power.
Significantly, our modern economy has broken the historic link between gross domestic product growth and energy growth, as we have changed from having a heavy industrial base to there being a greater role for service industry, together with greater energy efficiency. Now, by sharp contrast with 50 years ago, we are members of the European Union, and I have every confidence that we will remain members of the EU in 50 years' time.
Three key elements of the proposed long-term EU energy policy provide a framework for the future: security of supply, environmental protection and competitiveness. The lessons of the past suggest that we should be cautious about simplistic campaigns on future energy policy. At different times in the past 50 or 60 years, we have been told that the future is coal; the future is oil; the future is nuclear; the future is gas. Now it is tempting to say the future is renewables.
Renewables have a huge role to play in fulfilling a range of desirable objectives. I would like to believe that the future is renewables, but to get there we cannot just switch off nuclear power stations. There is a big gap between the run-down of the old nuclear capacity and the point at which renewables could take over. We should not seek to close off the possibility, which the European Union is exploring, that future innovation might deliver nuclear fusion. However we look at it, renewables, together with greater efficiency and conservation, must play a significant role. Until now, British Governments have been reluctant to get going. Even now, there is a long way to go.
However, provided that there is leadership from Government, much will be delivered locally. Bedford and Kempston, which I have the honour of representing, need to play their part as does every other area of the country. Bedford was wisely selected by BP as the first place where solar photovoltaic systems were installed on two new petrol stations. At Little Barford on the Bedfordshire-Cambridgeshire border, Innogy has built Britain's first industrial-scale megawatt regenerative battery, which represents a breakthrough in electricity storage and opens exciting possibilities for the more efficient and widespread use of renewables such as wind power.
In the middle of the county, the considerable landfill capacity in worked-out clay pits, which supply the local brick-manufacturing industry, produces a great deal of methane gas which is used to generate 29 MW—enough electricity to meet the needs of 30,000 people. That fits in neatly with plans to build a new settlement for 10,000 people at Elstow in Bedfordshire which will incorporate high energy standards—higher than those required by current building regulations—as well as combined heat and power fuelled by landfilled methane and, in future, by biomass based on forestry waste from the adjoining new national forest. There is a great deal of enthusiasm locally for those initiatives, which in turn have given impetus to the search for local opportunities for sustainable energy measures driven by the local Agenda 21 process.
In looking ahead to 2050, many complex issues are involved. A key requirement is the reduction of carbon dioxide and other greenhouse gases. When making investment decisions, we are all familiar with the concept of economic payback time. In assessing future energy policy, we should enhance our ability to decide the best way to proceed by exploring the idea of energy payback
time. The relative savings of carbon dioxide associated with different types of electricity generator are clearly of great importance. Renewables and nuclear fuel do not produce carbon dioxide. Indeed, the nuclear power industry has gone on the offensive to point out that it does not contribute to global warming—a point that I made to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) earlier.However, we cannot make a proper calculation unless we account for the carbon dioxide produced in making a generator, building it, running it, decommissioning it and dealing with the waste. Research on those matters suggests, for example, that photovoltaic panels have an energy payback time of two years or a little more. A new nuclear energy plant needs to produce energy for at least 10 years before it has paid back the CO 2 produced in its manufacture and construction. That is an important concept, and it could be a useful tool. I urge my hon. Friend the Minister and the Government to explore and to develop it, so that we are better informed and better able to make rational decisions about the best systems for the future.
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