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24 Feb 2003 : Column 36—continued
Ms Hewitt: I think that it was worth spending some months looking at, in particular, the recommendations of last year's report from the strategy unit, and conducting the largest-ever public consultation on energy policy and doing very extensive and detailed economic modelling to ensure that we have a soundly based policy. Of course, I agree with the hon. Gentleman that we now need to ensure that we implement it. By bringing together all the Departments with an interest in and a responsibility for energy policy under the direction of a new ministerial Committee, which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I will chair together, we shall have the right framework not only to make policy but, above all, to implement it.
Dr. Jack Cunningham (Copeland): I welcome my right hon. Friend's White Paper and hope that its important aspirations for renewable energy can be achieved. I also applaud the clear commitment to retain the option of using nuclear power in the future.
Is it not clear that carbon trading, unlike the climate change levy, will enhance the economic position and thus the potential contribution from nuclear power in future? I am in no doubt that we shall need that contribution. While my right hon. Friend places much emphasis on energy efficiency and energy conservation, does she recognise that experience tells us that all those millions of disaggregated decisions, taken 24 hours a day, seven days a week, will never be changed simply by exhortation? Does she recognise that she will have to legislate to regulate and that, in doing so, she will also have to ensure that fuel poverty issues are carefully taken into account?
Ms Hewitt: I think that I am right in saying that my right hon. Friend was the first ever Minister for energy conservation. He is right: exhortation simply does not work. It certainly does not work in my family when it comes to persuading teenagers to turn the lights off and not to leave the television on standby. We need to build energy efficiency into our homes, offices, factories and appliances. We shall do that through the building regulations, through stricter product regulations in Europe and through voluntary agreements with industry. We shall also do it through this much stronger energy efficiency commitment and through the development of an energy services market. My right hon. Friend is right to say that the new carbon trading system that will apply in 2005 will apply to all sources of electricity.
Sir Sydney Chapman (Chipping Barnet): Can the Secretary of State tell the House what proportion of electricity production is met by renewables at present? If, as I think, the figure is about 3 per cent., will it not be very difficult to increase it by 1 per cent. year on year? As she has already said that she hopes that the whole programme will gather momentum, is that not even more reason for a detailed strategy setting out the contribution that each part of renewables—whether
wind and wave or solar—can make. To get the support of the British people to achieve the policy, we need to capture their imagination.
Ms Hewitt: As we say in the White Paper, renewables account for less than 3 per cent. of Britain's electricity. That is certainly less than a number of other European countries have achieved. It is not for the Government to say that so much must come from onshore wind, so much from offshore wind, so much from waves and so on. That is for investors to decide. We stand ready, with the increased capital grants programme that I announced today, to ensure that there is backing from the taxpayer for renewable energy projects. By working with the regulator, we are also ensuring that we get the distribution infrastructure right so that those renewable generators can get their electricity to market. In the White Paper, we are setting exactly the investment and market framework that the energy companies and their investors are seeking and I am confident that they will respond.
Mr. David Borrow (South Ribble): I want to discuss the poor position of the UK in regard to solar energy. What discussions has my right hon. Friend had with her right hon. Friend the Deputy Prime Minister on improvements to planning regulations and grants towards social housing? We have to promote the use of solar energy in social housing and public buildings.
Ms Hewitt: My hon. Friend raises an important point. I have talked to my right hon. Friend the Deputy Prime Minister about how we can use the early review of building regulations to ensure that, in setting much higher energy efficiency standards for new build and such things as the refurbishment of roofs, we can massively increase investment in solar energy and similarly energy efficient systems. That will require changes to the planning system and, as is said in the White Paper, we will make changes to the planning system for energy. I am glad that, in the new communities programme that my right hon. Friend announced recently, he made it clear that we will set high standards of energy efficiency in new homes.
Mr. Robert Key (Salisbury): It is disappointing that the White Paper contains just six sentences on future research needs. There are no announcements that the Chancellor of the Exchequer intends to put any new money into research. Does the Secretary of State agree that, if we are to get optimum performance from existing nuclear plant, we will need more research into nuclear fission and we will certainly need more research into nuclear fusion? At Culham and elsewhere we should ensure that we at least match the investment in research of the rest of the European Union. If we are to take advantage of the hydrogen revolution, we will need a great deal more research across the board. I hope that the Government will address that issue.
Ms Hewitt: In the White Paper, we set out clearly our support for the energy research group's research priorities. I refer the hon. Gentleman to paragraph 7.32, in which we set out that the research priorities include energy efficiency, nuclear power, hydrogen production and storage, carbon dioxide sequestration, solar
photovoltaic energy, and wave and tidal power. The funding for those priorities is available from the enormous increase in the research council's budget that we announced last year as a direct result of the spending review. I hope that the hon. Gentleman will welcome not only that commitment but the fact that the EPSRC is already calling for bids for its new programme of renewable energy research.
Mr. Michael Clapham (Barnsley, West and Penistone): I welcome the White Paper, with its emphasis on renewables and its focus on reducing greenhouse gases. I listened with interest to what my right hon. Friend said about investment in clean coal technology. Will she review the investment into that technology with a view to considering how clean coal technology—such as that of the integrated gasification combine cycle unit—could boost British manufacturing and help in the transfer of technology to tackle pollution worldwide?
Ms Hewitt: As my hon. Friend will be aware, we are already working on that. We are talking to the industry about how we can help to develop that particular clean coal technology. I know that he will welcome the fact that we are investing some £25 million over three years in the cleaner coal technology programme.
Mr. Michael Weir (Angus): In her statement, the Secretary of State made a commitment to cut UK carbon dioxide emissions by 60 per cent. by about 2050, with real progress by 2020. How does she define "real progress"? Would it not be better to have a specific target for 2020?
Ms Hewitt: As I said in my statement, we have set out very clearly that, by 2020, we hope to double the contribution that we have set from renewable energy sources, compared with the target of 10 per cent. by 2010. That is one of the ways in which we will measure the progress that we need to reach the overall 2050 target. As I said earlier, we are on course to meet our 2010 Kyoto targets and, we believe, our more challenging domestic targets. However, in about 2005, we will enter the discussions for Kyoto 2, which will expire in about 2012. At that point, we will be able to see what further commitments we need to make internationally for the period ahead. That, too, will be part of the benchmark that we use to assess whether we are staying on track for the commitment that we are making today of 60 per cent. by 2050.
Mr. Gareth Thomas (Harrow, West): I, too, warmly welcome the White Paper, particularly its accelerated focus on renewables, but does my right hon. Friend accept that many people in the energy industry think that 25 per cent., or even 30 per cent., of our energy needs is perfectly achievable from renewable sources by 2020? Does she also recognise that, given the way that Ofgem has introduced the new electricity trading arrangements, it is possible that there might be concern about whether it has understood the White Paper and, indeed, is capable of delivering in a helpful way the objectives for Ofgem that are contained in it?
Ms Hewitt: My hon. Friend is right to say that some people, particularly in the green movement, believe that
a 25 to 30 per cent. share of electricity from renewable sources is perfectly achievable. We considered whether that should be our policy aim, but, on present information, the costs of achieving that would be very substantial indeed, and if we go above 20 per cent., the costs to the consumer increase much faster. I believe that it is important to get on the right course with the practical policies that I have outlined, including the renewables obligation.My hon. Friend refers to Ofgem. Let me stress again that we will put Ofgem under a duty to conduct and publish an environmental impact assessment of all its regulatory proposals. We will also revise and strengthen the environmental guidance that we give to Ofgem under the Utilities Act 2000, in the light of the White Paper, but Ofgem is already consulting on the proposals for the British electricity trading system—the Electricity (Trading and Transmission) Bill—and that will give it a further chance to ensure that the regulatory framework meets the emphasis on renewables that we have set out in the White Paper.
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