Scottish Energy in the 21st Century

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David Hamilton (Midlothian): Coming from my background, he would expect me to speak about the coal industry. We have talked about the 21st century, but not one mention has been made about the future of the coal industry. I know about the tremendous amount of work that has been done by the Department in supporting the coal industry. Having talked about wave and wind power and about renewables—as well as the comments made on the vision shown on hydroelectricity—we are in a good position to take them forward. We require that mix and we should work towards self-sufficiency. We should not be caught out, as we were in 1974, by external factors, and coal must play a part in achieving that aim. Will the Minister expand on his discussions with my hon. Friend the Member for Western Isles (Mr. MacDonald) when he talked about planning applications, which are extremely important when it comes to opencast and so on? If we talk about renewables and a mix for the future, should we not talk about coal as part of that?

Mr. Wilson: I take my hon. Friend's point. It is true that I did not mention coal—he will be relieved to note that I did not mention nuclear power either—but we can remedy that. As he rightly recognises, an enormous amount has been done to maintain a deep-mined coal industry in Scotland. There is a medium-term future for coal, but whether there is a long-term future depends the coal industry's ability to adopt cleaner technologies. As I am sure that he and everyone in the industry recognises, the future must be in clean coal technology. If that can be introduced, coal can continue to play an important part in the mix. For this Government, everything in our bones tells us to do what we can to support the mining industry, and that is exactly how we have behaved.

Mr. Alistair Carmichael (Orkney and Shetland): I welcome the Minister's news this morning that he will publish the feasibility study into the interconnector cable. I commend him for his approach to the matter and for having progressed with it so quickly. I also welcome the part of his statement in which he said that whatever is done will extend to the north and west of Scotland, including the islands. I presume that that includes my constituency.

Will the Minister tell us whether the comprehensive study that he is now commissioning into the interconnector cable will include links to the northern isles, or will it just cover the west coast? He will be aware of a wind farm that is operated in my constituency by Shetland Aerogenerators, which has expressed to me an interest in expanding. The company made the point that unless the infrastructure is in place for exporting power from the isles, it will not be in a position to make the necessary investment to increase its generating capacity.

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Mr. Wilson: The hon. Gentleman makes a fair point. He has made it before, and I assure him that the wording of the statement was deliberate. If we are examining a combination of cable and land-based technology, there is no reason why his constituency should not feature.

Mr. Alex Salmond (Banff and Buchan): I welcome the Minister's comments about renewables. I do not think that it is a problem that the energy review is to be published during the week's recess, as it will give everyone time to read it. The report by the Select Committee on Trade and Industry points to a continuing differential between the cost of nuclear power generation and other available forms of generation. Does the Minister accept that view and, if so, what subsidy would be required per nuclear station if the Government were to decide to restart the nuclear programme?

Mr. Wilson: There were a couple of misconceptions in the hon. Gentleman's comments. It will not be the Government who decide to restart the nuclear programme. The decision on whether to build new nuclear power stations or apply for permission to build them will come from the companies, and it will be a commercial decision. It is worth noting that there has never been a nuclear moratorium in this country. For commercial reasons, the companies simply have not come forward for a long time with proposals to build. They will formulate their own views from what flows from the energy review on whether it is economically attractive to seek the investment to build new stations or to make proposals. There will be inquiries, and things will take their course in the nuclear industry.

The hon. Gentleman is mistaken that the Government will build nuclear power stations or provide the trigger for power stations to be built. We will create a climate in which decisions will be taken. Part of that climate will involve consideration of what we did without nuclear power stations. In Scotland, 50 per cent. of the population depend on nuclear energy. In the United Kingdom, 25 per cent. of the population depend on it for their electricity. Those decisions will be taken while we also have serious obligations to meet our Kyoto commitments.

Mr. Alan Reid (Argyll and Bute): The Minister referred to the sub-sea interconnector along the western seaboard, and correctly made the point that there is no point in generating electricity from any source unless there is somewhere to send it. However, his statement that we must be realistic about the costs and difficulties was rather ominous and is not positive. As we all know, the cost of developing wave and tidal power involves not only the cost of the wave and tidal power generation stations. In remote areas, such as the Western Isles and the Inner Hebrides, costs are incurred connecting the power generator to the grid. Developers will not invest if they have to pay for the connection costs. Will the Minister confirm that the Government will make a financial commitment towards the cost of the sub-sea connector along the western seaboard?

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Mr. Wilson: The answer is no. We are examining that now. When the hon. Gentleman reads the report, he will recognise that if we committed ourselves to a full network in which every renewable project, however small or remote, was going to be linked to the national grid, the costs would be phenomenal. I would not give such an open-ended commitment. We want to maximise the potential and the benefits for the renewables industry, and we recognise that that requires a substantial revision of the infrastructure. That is the starting point, and we will see how it unfolds. My objective is to link as many remote energy developments to that grid as is economically possible.

The Chairman: Order. We now move to the main debate on Scottish energy in the 21st century. Although the Chairman has no power to impose a time limit on speeches, I appeal to hon. Members to tailor their contributions to ensure that as many hon. Members contribute to the debate as wish to do so.

Scottish Energy in the 21st Century

11.3 pm

Malcolm Bruce (Gordon): I beg to move, That the Committee do now adjourn.

The Committee will agree that the debate is timely, as the energy review is about to be published. The information that emerged recently confirmed that Scotland has enormous potential to make a contribution to the energy that the world needs in the 21st century. I hope that the debate will be a positive attempt to secure consensus among all the parties on what we can do to ensure that Scotland's potential is fully unlocked.

Many of us will be aware of the report that Garrad Hassan produced on the potential for renewable energy in Scotland. It concluded that Scotland has a capacity of 59 GW of renewable energy, and pointed out that the United Kingdom's entire generating capacity is 79 GW. In other words, Scotland has the capacity to produce the equivalent of three quarters of the United Kingdom's entire electricity requirement from renewable energy. It is one thing to have the capacity, but another to unlock and deliver it. Many of us recognise that there are some constraints. I should like to explore what they are and what the Government can do to help to remove them.

One clear point to emerge from the report is the Ministry of Defence's objection to some of the possible developments. The Ministry has opposed both onshore and offshore wind developments in certain areas. I understand that it particularly wanted to reserve onshore areas in the south-west of Scotland and the highlands. I should like to ask the Secretary of State if she is prepared to make representations.

It is important that the Ministry of Defence reviews its long-term low-flying requirements, although the matter is not urgent. It is a matter of balancing public interest; the Ministry has its requirements, but they should not be absolute when there are real commercial and environmental alternatives. Low flying has to take place, but it must be done in a way that does not inhibit

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development too much. The issue is not a problem right now; we have a long way to go in the unaffected areas before we come up against a bar. However, we need to address the issue.

I welcome the Minister's announcement about renewables. I accept that our circumstances are due to the commitment to hydro, but there is every reason to accept that, with the potential now identified, an 18 per cent. obligation is very modest for what Scotland can achieve in the next 10 or 20 years. That is why I think that the obligation should be reviewed upwards.

Mr. Malcolm Savidge (Aberdeen, North): I support the hon. Gentleman's point about making representations to the Ministry of Defence in light of the events of 11 September. Wind power provides excellent security of supply and does not involve the dangers of, in particular, nuclear power. A plane could be flown into a nuclear power station and create a Chernobyl situation, and if nuclear fuel were to be dispersed around the world it could fall into the hands of terrorists.

Malcolm Bruce: I agree. I shall talk about both the commercial aspects and the security risks of the nuclear option later.

The Minister has rightly referred to the encouraging plans to build the biggest wind farm in the world in Lewis, involving 600 MW of development. That kind of development is the way forward, but we need the infrastructure to connect that capacity to the grid. We must also consider ways to ensure that the community of Lewis benefits from its contribution; the hon. Member for Western Isles (Mr. MacDonald) may have views about that. Of course, it will benefit from the construction work and rent paid for locating wind turbines, but perhaps we should consider other ways to ensure community benefit.

We must welcome the fact that the Danish wind turbine manufacturer Vestas is investing in Campbeltown, in the constituency of my hon. Friend the Member for Argyll and Bute (Mr. Reid). He advises me that the work is well under way and that 150 jobs will be created. However, we must all regret that we have to attract inward investment concerning a technology in which the United Kingdom was at the forefront when it was in its infancy.

The Liberal Democrats—I think there is a general consensus on this—favour market-led solutions to the energy problem. However, let us be clear that this is not a free and open market; it is, at best, a managed market, constrained by our international obligations under Kyoto and by imperfect competition. Whether the Government like it or not, the climate, in terms of taxation, regulation and obligation, is critical.

When wind turbine technology was being developed, the UK was not prepared to provide a home market that we could have developed, which would have allowed us to test that technology, bring it to perfection and become major world exporters. Denmark gave its manufacturers a home market, and the rest is history. That is regrettable. If wind

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technology is to expand at the rate that many hope it will, it may not be too late for British manufacturers to come into the market. I certainly hope that they will be able to do so.

I am particularly pleased about two developments in renewable technology in my constituency, which are indicative of the progress that is being made. A 21 MW wind farm has been given the full go-ahead at the Glens of Foudland between Inverurie and Huntly on the A96. There was remarkably little opposition to that proposal, although about 18 conditions have been attached to the planning obligation to meet the worries of some local objectors. I had not considered them to be a problem.

However, in severe weather conditions, difficulties could be caused by ice thrown from the turbines. Farmers were worried that that could threaten the livelihood and well-being of their sheep; I presume also that the odd shepherd could be in the wrong place. One of the undertakings is that, in heavy ice conditions, the windmills are stopped. Another is that if they are out of use for six months, they should be removed. That sort of learning curve has proved necessary. Objections can be handled and accommodated, and I hope that most people will regard the feature that is about to appear between Aberdeen and Inverness as an interesting diversion from what is a bleak stretch of road.

The other development is in Insch. The Scottish Executive have funded a feasibility study into a district heating and electricity scheme, which is, in effect, a combined heat and power system for the village, using waste timber. Insch is in the middle of a timber area; obviously, there is much waste and off-cuts, which have no commercial value and create a disposal problem. Local business people, councillors and the community deserve credit for developing the system. There was much resistance to it in the beginning, but it now has almost total support.

People came round to the idea when they were reassured that their worries about traffic and potential pollution could be dealt with, none of which was as serious as they thought. People realised that the system would enable them to participate in new, environmentally friendly technology and—in a small village in rural Aberdeenshire—to make a direct and specific contribution towards a more benign form of electricity generation, contributing to dealing with climate change problems. That should be replicated in communities throughout Scotland.

I agree that the wave technology in Islay could be extended. We can go from one extreme—a 600 MW wind farm in the Western Isles—to the other, a small district system in Insch or a modest wind farm in rural Aberdeenshire. The great thing about such developments is that they take us away from situations in which we must always think of investment in massive power stations. We shall be less dependent on such large-scale technology systems in the future. The developments to which I have referred come in all shapes and sizes.

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My hon. and noble Friend, if I can call him that, the Member for Caithness, Sutherland and Easter Ross (John Thurso) reminded me about the potential for generating electricity from the Pentland firth. The firth is right outside the front window of the offices of Dounreay, where there is a related capability. That is logical now that Dounreay is becoming a centre of expertise in decommissioning rather than reprocessing nuclear waste. There is great merit in such developments. Caithness and elsewhere will welcome engineering capability being applied to a new renewable benign form of technology, which does not have any problems that are associated with handling nuclear material, as my hon. Friend would be the first to admit. Can the Minister explain what is being done to bring forward such technology?

The world summit takes place in Johannesburg in September. The prime objective of the agenda is to examine sustainability, especially among the poorest countries in the world. A specific aim is to provide electricity to 2 billion people who are currently without it. It is clear to anyone that that electricity will come not from nuclear power stations, or even from oil or coal-fired power stations, but from such technologies as photovoltaic power and wind power. If more economic activity occurs for those activities in Scotland, we will have greater opportunities for home-grown exports and overseas aid. We should want to be part of that.

It has been estimated that the world market for renewable energy will be £400 billion by 2010. That is a huge slice of business for Scotland to aim at. As we have the best profile for renewable electricity in Europe, we should be in the vanguard to take advantage of it.

I shall mention briefly the nuclear industry, although the Minister's answer to the hon. Member for Banff and Buchan (Mr. Salmond) reassured me. If the industry must sell its product in a competitive market without subsidy, I am sure that there will be no new nuclear power stations. We must ensure that the playing field is level for all technologies. If that is the case, nuclear power has no economic justification. It is hugely expensive, and it is a cuckoo in the nest because, for many years, it has taken billions of pounds of subsidies that were denied to other technologies. It has not delivered cheap electricity and the problem of dealing with nuclear waste has not been resolved. However, it has inhibited other technologies in reaching economic viability. Wind power has not received anything like the support of nuclear technology, but it is now commercially viable and it does not require subsidies.

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