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Brian White (Milton Keynes, North-East) (Lab): One of the disappointing things about the debate in the Lords and the Chamber today is the way in which different energies have been set up against each other. We have had a rather sterile debate in which energy A is better than energy B. The renewables versus nuclear debate is false and I hope that we move away from it in Committee.

As little time is available, I shall not talk about nuclear energy, energy zones or security of supply. I suppose someone has to welcome part 1, and given that many of its clauses use the original wording of the Sustainable Energy Bill, my private Member's Bill of a year ago, I should probably be the one to do that. If the Government are minded to remove those clauses, and I understand why they might, perhaps I can remind them of the Minister's response in Committee. The issues that the clauses address will not go away, and he needs to have a transparent response to people who advocate their removal. The strategy for dealing with their removal must be clear.

I was a member of the Committee that considered the Utilities Bill; indeed, someone once called me a refugee from that Bill. One issue that arose was how NETA was implemented. Warnings were given about its impact on small companies. I moved amendments that would have allowed us to avoid some of the problems encountered by combined heat and power, but Ministers were sceptical. We need to return to the lesson of how NETA was introduced and ensure that the mistakes made then are not replicated when we introduce BETTA.
 
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We also need to recognise that we have lived in an era of overcapacity and low prices and that that era is over. We need to consider how the issues apply in an era of rising prices. There is also an issue to do with how we deal with CHP in that scenario.

We have been promised a review of the renewables obligation in 2005, but I think that we ought to use the opportunity of the Bill to address the problems of the CHP industry now, rather than waiting until 2006. Ministers are well aware, from representations from companies such as Conoco Philips, of the problems that the industry is having. It is important that we address some of those serious concerns when we come to discuss clause 120.

I understand that the DTI has several objections to CHP, but many of those stem from the scale of new CHP technology that is likely to be introduced. My concern is that the Cambridge model that the Department has used is fundamentally flawed. I question the robustness of that economic modelling, which predicts that 284 MW of new build is likely to result from the renewables exemption. Even the Department accepts that there is uncertainty about that. There is a lot of discussion about the impact on renewables, but many renewables companies say that removing the obligation on CHP will not affect their investment decisions. We need to discuss those issues in Committee because they, rather than the clause, point the way forward. If Ministers do not it rule out, removing the obligation would be a better way forward than removing the clause.

The operation of Ofgem under the new arrangements is critical, particularly to the role of smaller companies. In the short time available to me, I want to welcome clause 129 on microgeneration; it is very important and has not been highlighted enough tonight.

The measures in the Government's statement following the energy efficiency review need to be implemented as quickly as possible. I urge the Minister to use not only this Bill but the spending review to do that.

Opposition Members were absolutely right to talk about bioethanol. We could blend biofuels into petrol, which would solve the problems caused by Customs and Excise requiring 100 per cent. duty on the use of biofuels, which requires new build, rather than allowing the use of 70 or 60 per cent. biofuels and charging duty pro rata. I will go into the issues concerning bioethanol in more detail if I am lucky enough to be on the Committee.

My hon. Friend the Member for Brighton, Kemptown (Dr. Turner) referred to fuel poverty, which in an era of rising prices will not go away; it needs to be addressed. We will touch on that issue again tomorrow when we discuss the Housing Bill. As the lead Department on the matter, the DTI has played its role very well so far, but in future its commitment to eradicating fuel poverty will be critical.

The investment climate has not really been discussed tonight. The Bill highlights the question of how we give the City certainty without long-term investment in energy needs, particularly in renewables and CHP but also as new arrangements are introduced. It is important that we stimulate the markets. Points were made earlier
 
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about how a market can come to maturity. The Bill does not cover that, but again I am sure that the debates in Committee will.

In conclusion, we are at a critical stage in developing our energy policy. The role of Finland has been mentioned a couple of times tonight. Given that the President of Finland is visiting the UK tomorrow, I am sure that she would be interested to hear some of the comments that have been made about how well the country has dealt with its energy policy, and how it had a mature debate about whether to return to nuclear energy. We can learn a lot from what Finland has been through.

The concerns that have been expressed today, particularly about CHP, the industry renewables and the regulatory barriers for small companies, need to be addressed, and I look forward to doing that in Committee if I am lucky enough to be a member.

9.29 pm

Mr. Laurence Robertson (Tewkesbury) (Con): This has been an interesting debate. I have counted 24 speakers so far, and I hope to be forgiven for not mentioning each and every contribution. The debate has ranged widely. When one speaks with the various interests in the power industry, one hears many different views expressed, so it does credit to the House of Commons that different views have been expressed by hon. Members during this good debate on an extremely important issue.

When people wake up in the morning, they might not think about the energy supply until they flick the light switch and the light does not come on; then, it becomes an very important matter. Of course, it is important, because the first thing people do when starting their day is use one form of energy or another. I am grateful to all who have participated in the debate, but I shall be forgiven for mentioning in particular my right hon. and hon. Friends.

My hon. Friend the Member for Blaby (Mr. Robathan) spoke of his personal experiences of renewables—

Mr. Timms: Where is he?

Mr. Robertson: I do not know. The winding-up speeches have started a little sooner than anticipated, but perhaps my hon. Friend is on his way. He spoke about his solar panel and his windmill in his back garden. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) made his usual considered and sensible speech, and my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) spoke knowledgeably about biofuels. My hon. Friend the Member for Salisbury (Mr. Key) made a broad-based and interesting speech, and my right hon. Friend the Member for Fylde (Mr. Jack) broadened the debate still further, speaking not only about the security of physical supplies, but about economic security. He did not go so far as to say that the world would be troubled were a gas producers' equivalent of the Organisation of Petroleum Exporting Countries to arise, but I am sure that that is the sort of thing he had in mind. Given the recent increase in oil prices, we have to consider that possibility.
 
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My hon. Friend the Member for Ribble Valley (Mr. Evans) made a passionate speech. He tended to focus on windmills, but he was speaking from experience. It is wrong of Labour Members to accuse some hon. Members and members of the public of being nimbies. There is little wrong with being a nimby if it means that one defends the area in which one lives and wants to preserve its beauty and economic prosperity, as people in the lake district want to do.

I hope that Members representing other parties will forgive me for not going through every one of their speeches, but some very interesting contributions were made. The right hon. Member for Copeland (Dr. Cunningham) spoke with his customary knowledge. I was in Sellafield fairly recently—I hope that I wrote to him at the time to inform him, but fear that I might have been a day late in doing so, and postal strikes do not help. It must have been in the second delivery, which never arrived. [Laughter.] When I was there, I saw how crucial the nuclear industry is to the area. It was noticeable that support for the industry cut across the political divide—

Dr. Jack Cunningham: Not them.

Mr. Robertson: No, not the Liberals. I shall not name the people I met, but the industry appeared to command great support from the Labour party, from the trade unions whose representatives I met, and of course from the Conservatives.

There were many other interesting speeches, including from hon. Members who are concerned about the coal industry. As the son of a former miner, I can certainly sympathise with the sentiments that they expressed.

This is an interesting time to be having this debate, an   interesting time for the Minister for Energy, E-Commerce and Postal Services to be holding his portfolio, and an interesting time for me to shadow him. We in this country have enjoyed 30 years of security of power, which has benefited not only those who use power, but the Exchequer. That, of course, is now changing, and we must recognise that. Indigenous gas and oil supplies are running down, there are strong—nobody should underestimate them—environmental challenges to the coal industry, and renewables are struggling to keep pace. It will be a challenge, in which I hope that the Government will succeed, to meet the targets set for renewables. As my hon. Friend the Member for Eddisbury (Mr. O'Brien) said in an outstanding opening speech, in less than 20 years' time, unless nuclear power plants are extended, nuclear will be reduced to providing just 2 per cent. of electricity in this country. Some Labour Members—not all by any means—might welcome that, but those who do must explain how the remaining 20 per cent. will be made up. As has been explained, if it is made up from renewables, we may replace that capacity, but in terms of carbon emissions, we will have gone nowhere. We must bear that in mind.

In terms of financing of new generation and the direction of energy policy in this country, we are at a crossroads. As has been said, we want to avoid an over-
 
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dependence on any one form of energy, including nuclear, coal and gas, if that gas must come not only from Norway but all the way from Russia. As has been said, we are at the end of a very long pipeline, with all the implications that go with it. We might ask the people, "Would you like to be dependent on imported gas from countries such as Russia?" As for honouring commitments, by and large, it does so, but Lithuania and Belarus might not agree, because both have recently had their supplies cut off by Russia for political reasons. Let us bear that in mind. Were we to ask people whether they wanted to be in that situation, in which the vast bulk of our gas was imported, they would say no. We must think again.

The White Paper, on the back of which this Bill has been introduced, raises some commendable objectives: security of supply, reduction in carbon and reduction in the numbers of fuel-poor consumers. We would all say that those three are worthy objectives. The problem is that they are conflicting. They are made more difficult by the changing atmosphere and circumstances in this country. I have been in the Chamber for the whole debate apart from one speech, and I apologise to the hon. Member for Bolton, South-East (Dr. Iddon) for missing his. When I nipped out, however, I caught a news item in which the chief executive of Powergen, Paul Golby, said that a 20 per cent. rise in prices of electricity over the next decade is possible, and that a massive amount of investment is needed in the industry—between £50 billion and £70 billion—to secure supply. That is an awful lot of money, and the suggestion is not from someone who is ignorant of the facts.

Given the White Paper, and the difficulties to which the White Paper has perhaps drawn attention without pointing the way to a solution, we generally welcome the Bill, especially as it has been greatly improved, as my hon. Friend the Member for Eddisbury said, by the sterling work carried out in the other place, principally by Conservative peers, although occasionally—I am sure it was a mental aberration—they were supported by the Liberal Democrats.

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