Examination of Witnesses (Questions 60-79)
WEDNESDAY 2 APRIL 2003
MR BRIAN
WILSON, MP, MR
DAVID HAYES,
MR MARK
HUTTON, MR
JOHN THORPE
AND MR
JEREMY EPPEL
60. I appreciate that there are these subtleties
but as a matter of principle, Minister, can you tell us whether
or not you accept the targets in principle?
(Mr Wilson) Given that we are talking about a Private
Member's Bill, I think that should be discussed and negotiated
with him and his advisers before I make a wider statement which
would in any way pre-empt these discussions. I think what you
want to hear and what I am telling you is that we are working
constructively with him and I know that he has paid public tribute
to that fact.
Mrs Clark
61. I am going to talk about targets again and
I am going to talk about the targets which the RCEP and the PIU
have set, overall targets for actual energy efficiency and in
fact a range of targets for some different sectors of the economy.
On domestic energy efficiency the PIU in fact recommends a 20%
increase by 2010 and a further 20% increase by 2020. I think that
is correct, is it not? A box on page 33 of the White Paper sets
out "expected carbon savings in different areas". Again
I would say that this language is very vague. Phrases such as
"where savings might be achieved" or again "further
savings can come from households" might be presented, and
indeed are, as statements of fact but firm targets they are not.
It seems to me again that this is a thread and a strain going
through the whole White Paper. What would you say to that?
(Mr Wilson) My own eye falls on a box on page 33,
if we are talking about the same box, which says: "The following
targets for individual items illustrate where savings might be
achieved."
62. But again you have got this ambiguity with
"expected carbon savings" have you not? I would just
say that wherever you have got something firm there is a sort
of back-track from it.
(Mr Wilson) I think that is an uncharitable interpretation.
Jeremy, do you want to—
(Mr Eppel) You will think this bizarre, I am afraid,
members of the Committee, but actually that is a typo in that
box, which I believe is corrected on the website. What it actually
said in the official text was—and I should clarify this
because we know what the text should have said—"The
following are not targets for individual items." Somehow
the "are not" got missed out in the printers. I thought
that had been corrected. We made that clear in an earlier discussion
which Lord Whitty had with a number of people. I will explain
what the nature of this box is about, if I may. Paragraph 3.7
expresses the ambition of doubling the rate of energy efficiency
improvements seen over the past 30 years. If you then look at
what is in the climate change programme and the level of carbon
savings envisaged in the climate change programme from energy
efficiency, which is of the order of 10 million tonnes of carbon
by 2010, of which about half, about 5 million tonnes, is due to
come from the domestic, the household sector, and then you translate
that into the rate of energy efficiency improvement you get to
a figure very, very close, in fact a little more than what the
PIU were recommending by 2010; you get to something like 21 per
cent.
Mr Savidge
63. I hope that the publishers of this will
not get into as much trouble as the publishers of the Bible who
missed out the word "not" in the Commandment on adultery,
I seem to recall!
(Mr Eppel) I was trying to talk you through the logic
behind this because the words are as they are and they are the
process of inter-Departmental discussion and the text is as it
is. Paragraph 3.7, if you delve down below it, actually takes
you to something very, very similar to, indeed a tiny bit more
than the PIU, but it depends a bit on the energy sources and the
carbonisation of energy sources in 2010. It is going to be very
close to the PIU's proposed 20% improvement by 2010. So if you
are looking to see whether the package in the White Paper is broadly
equivalent to what the PIU was recommending in the household sector
the answer is that it is, it is just not expressed in quite the
same way but the numbers add up in the same way if you do the
arithmetic. That is the first assurance I wanted to give you.
The second one is, why does it not talk about individual targets?
The reason is simply—and I think this is from a sense of
realism and if you look later in this chapter what you see is
a proposal to have an implementation plan for energy efficiency
within a year of the White Paper—this is a recognition that
more work needs to be done, more discussion needs to be had with
the range of key partner organisations and stakeholders to get
the most deliverable practical policy package. The analysis we
did before the White Paper shows that quantities of measures of
the order of those in that box on page 33 can deliver that amount
of carbon but you could have more cavities filled and fewer boilers,
more light bulbs, yet not to tie down the policies to such a level
of specificity without having worked through with the delivery
agencies exactly how that will happen seemed to the Government
to be a more sensible and realistic approach. It is not that the
commitment is not there, it is simply that the exact detail does
need to be talked through in the next ten, eleven, twelve months
with the delivery organisations.
Mrs Clark
64. Thank you very much for talking me through
it and I think we understand more now but it has taken you to
have to come here to talk us through and what about all the other
organisations and individuals who are reading this and will frankly
be quite misled and very confused?
(Mr Eppel) I hope not.
65. You cannot have talked to all of them, can
you?
(Mr Eppel) No, but we are engaging with many, indeed
all of the key delivery agencies and stakeholder groups in a variety
of settings to make sure that they have fully comprehended what
the intention is behind this.
(Mr Wilson) Could I just say, reverting back to Brian
White's Bill, for the reasons that Jeremy has given it has accepted
the quantum of carbon savings which is referred to on page 33
as opposed to setting percentage targets.
Gregory Barker
66. Is it not just the case that you are fighting
shy of the targets because you are not confident of filling them
and it is a "Get out of jail" card for Ministers? It
is all very well to say it is vague and you do not want to be
drawn on specificity but is it not basically that you do not want
to put your feet to the fire so you can be held accountable for
this at a later date when you are not making progress? It just
looks like an unwillingness to make that commitment which everybody
else wants to see you make.
(Mr Wilson) No, I do not think that is right. I go
back to my original point that there is definitely a resistance
and I think a proper caution against peppering a White Paper like
this with a new series of targets. I do not think that in any
way undermines either the sincerity of the attainability of the
goals that we have set ourselves.
67. In attempting to attain those goals, particularly
on energy efficiency, can you cite examples you have drawn on
to substantiate that statement of absolute reductions which have
actually been achieved elsewhere?
(Mr Eppel) Which statement are you speaking of in
particular?
68. Your overall target of reducing energy consumption
through greater energy efficiency. Where is your evidence that
that can actually be achieved?
(Mr Eppel) There is both evidence in general historically
for energy efficiency having contributed to a dampening of the
overall demand for energy which is absolutely real and can be
illustrated graphically—
69. But are there particular countries or specific
sectors that you can—
(Mr Wilson) There is a very good chart on page 32
which gives you the performance of everyone from Switzerland to
the United States with very significant differences, chart 3(1).
70. Yes, but is that showing it has actually
reduced year on year?
(Mr Eppel) Japan, for instance, where they have always
had a very big shortage of domestic indigenous energy resources
and therefore for many years have had a very aggressive policy
towards energy efficiency across the economy simply because of
the cost of imports.
71. Have they actually reduced their consumption?
(Mr Eppel) Well, they have reduced what their consumption
would otherwise have been—
72. That is not the same thing, is it?
(Mr Eppel) Not necessarily.
73. It is one thing to slow the rate of growth;
it is quite another to actually reduce it in absolute terms. That
is the question I am asking, how can you actually reduce the absolute
consumption?
(Mr Wilson) By doing more. The figure there is that
over the last 30 years our own economy's energy intensity, which
is the relationship between consumption and GDP, has improved
by around 1.8% for each year so it means that over that period
there has been about a 15% increase in energy consumption. What
that reflects is the very substantial achievements which have
been made by industry and to some extent the service sector and
the area where there has been very disappointing progress has
been in the domestic sector and that now has to be targeted much
more effectively.
(Mr Hayes) Without the improvements that use of energy
consumption would have been much higher.
(Mr Eppel) There is a chart on page 26 which shows
the decoupling which now has taken place between growth and GDP
and primary energy consumption. Not all of that is energy efficiency,
let us be honest.
74. You are still talking about trends or rate
of increase in use. You cannot actually point to any examples
where you have had absolute decrease in energy use, can you?
(Mr Eppel) In carbon emissions, as a result of energy
efficiency measures, yes.
75. You can?
(Mr Eppel) In terms of activities under the Energy
Efficiency Commitment and its predecessors where specific savings
were made.
76. Where were they?
(Mr Eppel) The Energy Efficiency Commitment, which
came in just a year ago, April 2002, where energy suppliers have
to make energy savings in domestic properties. Those are very
specific targets on the individual energy suppliers which Ofgem
monitors and validates and they have to make those energy savings
through schemes of offering insulation, boilers, and so on at
a discounted rate to their customers. Ofgem monitors this on a
quarterly basis for us and these have produced specific savings.
77. In layman's terms they are showing a fall
in absolute demand for energy?
(Mr Eppel) No, I am not saying that because the forces
driving demand upwards are many and varied and include all sorts
of things in the home.
Mr Challen
78. I just want to follow up this point. We
have in paragraph 3.12 on page 34 an example of how a detached
house built to the latest standards in England and Wales still
consumes nearly 20% more energy than the equivalent home in Denmark
so we clearly have another example of something that works and
yet in our case we are now talking of 2003. We are taking another
ten years to raise our standards. Why does it take so long? This
is the kind of statement which I think makes people feel a bit
wary when we are talking about targets and so on, that there is
not the urgency, there is not that sense of culture change.
(Mr Wilson) I do not think we are disagreeing on this.
Obviously departmentally this is not my territory but these are
exactly my comments if you read across to renewables. What we
do in practice in the short term is more of a guide to our credibility
than simply setting targets and I think that the timescales in
all of these things should be pushed forward.
79. A question I was going to ask earlier was
in relation to the nuclear option, which still remains an option
clearly in the White Paper. Do you anticipate in a few years'
time a new strategy document to deal with nuclear power and if
that is the case does it really mean that when we are talking
about culture change within a department, within the Government,
that nuclear power still offers a sort of comfort blanket, a comfort
zone, so that if these targets or these aspirations fail we still
have that to cling on to and that actually is in people's minds
when they are talking and thinking about the renewables strategy?
(Mr Wilson) I can only repeat, there is no hidden
agenda. There is no conspiracy not to succeed on the objectives
which we have set for ourselves and then, hey presto, nuclear
appears out of the cupboard again. That is not any part of the
thinking. Nobody will be happier than I will be if and when our
clearly stated aspirations for renewables and energy efficiency
look like being delivered and I will do everything within my power
while I am doing this job to ensure that they are. What we have
not done is to say there will never ever be a nuclear power station
built in this country again, but even if in five years' time somebody
thought it was a good idea there are all sorts of checks and balances
described in the White Paper which would have to be overcome,
including the issuing of another White Paper on the subject. I
do not think there is any ambition anywhere in Government to build
new nuclear power stations. The case for nuclear is entirely dependent
upon whether the strategy we have set out is going to deliver
on climate change. I am well aware I am always addressing different
audiences and I always say the same things but another select
committee, which will report tomorrow, will criticise the White
Paper precisely because it does not go down the nuclear road.
So hopefully I am not going to lose both ways.
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