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24 Feb 2003 : Column 39—continued
Richard Ottaway (Croydon, South): I welcome the Secretary of State's environmental aspirations, even though I share other hon. Members' scepticism about whether they are achievable. She has made it clear today that there is a future for coal-fired generation, provided that it uses clean coal technology. Given that coal-fired generation, without clean coal technology, is uneconomic and power stations are closing down, how does she propose that clean coal technology should be financed? I refer not to her research programme, but to how the investment in clean coal technology will be paid for at present market levels.
Ms Hewitt: The hon. Gentleman raises an extremely important and interesting issue. The important feature of the White Paper, as I have tried to stress, is that we are giving long-term signals to the market. We have set out very clearly our own assessment, on current information, of what we think will happen to electricity prices. That assessment and the policies that we have announced today set the climate and the framework in which investors will make their decisions on investing in coal and, indeed, other generating plants, but we also know—I reflected on this in my statement—that coal-fired electricity generation has a very important contribution to make because it is so flexible. Of course, that is an important factor, and investors and energy companies will take it into account when they make those decisions.
Paddy Tipping (Sherwood): I welcome the White Paper proposals for improved energy efficiency, the growth in renewables and, of course, clean coal technology and sequestration, but taken together, even if we achieve that more environmentally sensitive energy policy, does the Secretary of State accept her own Department's figures showing that, by 2020 at the outside, 80 per cent. of our energy needs could be met from gas, 90 per cent. of which will be imported? Is that really a secure, reliable and sustainable energy policy? If that is the case, will she keep that matter under review?
Ms Hewitt: I have already outlined to the House why I believe that we can achieve our energy security goals,
as well as our other energy goals, with much greater dependence on imported energy, particularly gas, than we have at the moment, but of course we will keep that under review. As the White Paper says, we will strengthen the arrangements for jointly monitoring, particularly with Ofgem, security of supply considerations, and we will ensure that Ofgem regularly reports on the security of supply and on the implications of its decisions for future security.
Hugh Robertson (Faversham and Mid-Kent): A number of farmers in my constituency are excited by the potential—I put it no more strongly than that—of biofuels. What discussions has the Secretary of State had with the Chancellor about the duty cut necessary to kick-start the industry, and what part does she think biofuels could play in meeting our future energy needs?
Ms Hewitt: Like the hon. Gentleman, I think that bio-energy has a contribution to make to our future energy needs, particularly in light of the need for our agricultural communities to diversify and the need to reform the common agricultural policy, and this is a thoroughly timely opportunity. My right hon. Friend the Chancellor, who has led the way in ensuring that we have an environmentally sensitive tax system, said in the pre-Budget report that he wants to consult further on fiscal incentives and I am sure that that will take into account the need further to encourage the development of biofuels.
Mr. Dennis Skinner (Bolsover): Is the Secretary of State aware that it is not a good idea to rely on so much imported energy in future? The situation is bad enough now. At the last count, the trade deficit was about £34 billion, which is the highest figure that we have experienced. In that context, would it not be a good idea to concentrate on renewables? I accept that they will make little inroad into the problem, but we must concentrate on industries that supply energy. If it is possible for a few hundred miners in south Wales to take over Tower colliery as a co-operative and to keep it going against the odds for seven or eight years, yet the giant UK Coal can close down Selby, would not it make more sense for the Government to take over Selby, as they took over Railtrack, to offset the trade deficit and to ensure that those massive supplies of coal, from a field that we did not start using until 1988, keep coming?
Ms Hewitt: I hate to disappoint my hon. Friend, but I do not propose to renationalise Selby. My hon. Friend the Minister for Energy and Construction and I have been working on an investment aid scheme that will bring hope to hundreds of our miners. It will also help to ensure that the extensive coal reserves that this country still enjoys are properly used for the future.
Mr. Andrew Lansley (South Cambridgeshire): The Secretary of State must be aware that even if we achieved 20 per cent. generation from renewables by 2020, if at the same time the nuclear plant, which is carbon free and provides 20 per cent. of our requirements, closed down, our ability to meet our carbon emissions targets would be severely compromised. In that respect the right hon. Member for Copeland (Dr. Cunningham) is right to say that the
carbon emissions trading scheme is integral to the economics of future nuclear generation and to our meeting our carbon emissions targets. Will the Secretary of State say that in January 2005, when a carbon emissions trading scheme that includes electricity generation is to be introduced, the climate change levy will be disapplied from the electricity generating industry?
Ms Hewitt: As the hon. Gentleman knows, decisions on taxation, and therefore on the climate change levy, are a matter for the Chancellor. However, as the White Paper says, the climate change levy will of course be reviewed in light of the introduction of the carbon emissions trading system.
Mr. Kevin Hughes (Doncaster, North): Although I welcome the announcement of an investment aid scheme for the coal industry, it has to be said that the White Paper goes out of its way to ram home the message that the indigenous coal industry has only a short-term future, despite the fact that this island is built on coal. We know that coal is a reliable fuel and, with modern IGCC technology, not only can we generate electricity with virtually zero toxic emissions, we can capture nitrates, carbon and hydrogen. Instead of seizing an opportunity to plan for our energy needs, however, the Government have left it to be decided by market forces. It beggars belief that they are planning to be a net importer of energy.
Ms Hewitt: As my hon. Friend knows, over the past three years we have put £160 million of coal aid into the British coal mining industry. Indeed, my hon. Friend the Minister for Energy and Construction has done everything possible to help to ensure that the Hatfield colliery in my hon. Friend's constituency has a viable future. My hon. Friend knows the industry well. I am sure he understands and accepts that in a mature coal industry, geology is against us. That, I am afraid, was clear from the near-tragic flooding and closure of Longannet just a year or so ago. We are doing what we can, but we should not delude ourselves that British coal will have the same role in our energy system that it had over the past 100 years.
Mr. Nick Gibb (Bognor Regis and Littlehampton): What is the Secretary of State's estimate of the additional costs of electricity generation as a result of meeting her new 20 per cent. renewables target?
Ms Hewitt: We spell out in the White Paper the best estimates that we can offer of the increase in electricity and gas prices for domestic consumers and industry over the next 15 to 20 years. Let me stress that because electricity prices are at such a low point, prices for most consumers will still be below what they have been paying for the past 20 years or so even if they rise to the highest anticipated level of the estimates. I believe that we have the balance right between setting incentives for energy efficiency and cleaner electricity, and ensuring that our businesses stay competitive and our vulnerable consumers are protected.
Mr. Tom Levitt (High Peak): I welcome my right hon. Friend's statement, in particular her reference to the
contribution that energy conservation and the reduction of energy use can make. May I make a modest suggestion about the warm front scheme? It is my constituents' experience that warm front grants for central heating boilers are only available to replace on a like-for-like basis. I am sure she will agree that it would make more sense for the best available technology to be used in the warm front scheme because new boilers for domestic use are cleaner, cheaper and greener in every respect, both to install and to run, than the old-fashioned systems. Will she support a review of the warm front grant in that respect?
Ms Hewitt: My hon. Friend raises an important point. The review of building regulations will consider the need to move towards condensing boilers so that they become the standard for replacements and new installations. I was not aware of that problem with the warm front grant and shall draw it to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.
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