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Westminster Hall

Wednesday 11 January 2006

[Frank Cook in the Chair]

Energy Review and Coal

Motion made, and Question proposed, That the sitting be now adjourned.—[Claire Ward.]

9.30 am

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): I feel extremely fortunate to have been chosen to introduce this debate on future energy needs. Many of my colleagues applied for a similar Adjournment debate, which underlines the importance of energy and our future needs in the United Kingdom. My right hon. Friend the Prime Minister recently said that global warming and the environment was one of the most important issues of our time. I do not want to disagree with the boss, but in my view energy and the environment go hand in hand and are not mutually exclusive.

If anyone were in doubt about the importance of energy, the first few days of 2006 will have created absolute clarity. The dispute between Russia and Ukraine brings the issue of future energy needs into sharp focus and emphasises how important it is for diversity to be at the centre of the UK's energy policy, including domestic supply and the import of energy. A detailed examination of Europe's dependence on Russian gas should instruct our future policies. We should consider the following. France obtains 20 per cent. of its gas from Russia, Italy 30 per cent. and Germany 35 per cent. The figure is 20 per cent. for Poland, 60 per cent. for the Czech Republic and 60 per cent. for Austria.

What is the position in the UK? This year, the UK will no longer be self-sufficient in gas production and will depend on gas imported from Europe. That gas will come from various sources. Some will come from stable democracies such as Norway and some from less politically stable countries and regions. In those circumstances, we must ensure that we are never a hostage to fortune.

The Parliamentary Office of Science and Technology has said:

If in the past few weeks European countries have been shivering, that may well be down to more than the weather. We have witnessed President Putin send a shiver throughout Europe.

Paddy Tipping (Sherwood) (Lab): Has my hon. Friend seen the projections from the Department of Trade and Industry, which suggest that, by 2020, 70 per
 
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cent. of our electricity needs will be met by gas, 90 per cent. of which will be imported? Is that not a perilous situation?

Jim Sheridan : I thank my hon. Friend for his intervention. I have not seen the figures, but I have no reason to doubt them. He is right to say that we are in a perilous position, and action must be taken now.

David Taylor (North-West Leicestershire) (Lab/Co-op): The statistics cited by my hon. Friend the Member for Sherwood (Paddy Tipping) were known five or six years ago, when, sadly, our Government allowed the north-east Leicestershire coalfield around Asfordby, with 800 million tonnes of coal on the Nottinghamshire borders, to be sterilised and not used for the future of the country. Is that not a rather sad position? Should we not be reinvesting in deep mines with clean coal technology and avoiding the scar of open-cast coal, which would be the short-term, easy option that Governments might be tempted to pursue?

Frank Cook (in the Chair): Order. Perhaps I can explain to hon. Members that I am somewhat short of hearing facility and it would be better if the words spoken were addressed directly to the Chair, as is proper.

Jim Sheridan : Thank you, Mr. Cook. My hon. Friend the Member for North-West Leicestershire (David Taylor) makes a valid point, and I will be interested to hear what the Minister has to say. No doubt some of my colleagues, who have a long history of working in the coal industry, will be able to make a contribution later.

If we are to reach a sensible conclusion, any energy analysis or assessment must be free of prejudice and, above all, totally objective and evidence-based. That is a challenge we face in considering our future energy needs.

The starting point of any energy review must be an audit of the contribution of our present energy sources. That assessment needs to consider nuclear, coal, gas, wind, oil, tidal, biomass and hydro. My view is that there is not one answer to our future energy needs. We need an energy mix that rejects dependence on foreign supplies.

In planning our energy needs, a central question will   be the decline of our oil and gas reserves. The prerequisite for any energy review and new policy is that the debate should not be about conventional versus renewables. Both have a valid and relevant contribution to make to our future energy needs.

At the outset, I confirm my standpoint—I would like to see the development of renewables. I want wind, tide and wave to play a greater role in our energy jigsaw, but there appears to be a lack of urgency in the development of renewables in the UK.

On the question of manufacturing and the energy industry, trade unions such as the Transport and General Workers Union are already expressing concern about major gas suppliers moving abroad. That raises genuine concern among many of us.

All forms of renewable energy will create jobs and some manufacturing in the UK. The number of jobs will depend on the type of technology and on how far and
 
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where it develops. The jobs will cover a range of skills, including design, construction, manufacturing, assembly, installation and maintenance. The key is to provide appropriate support from the research and development stage to demonstration projects and fully operational plants.

Mr. Philip Hollobone (Kettering) (Con): I congratulate the hon. Gentleman on securing the debate and on his remarks about the importance of us not being, as we are about to be, over-reliant on imports of energy from overseas.

Drawing upon the hon. Gentleman's last point, the energy review is a wonderful opportunity for Britain to start to become the world leader in some of the new energy technologies. Not least, it is an opportunity for this country to become a leader in clean coal technology, given the huge reserves we still have.

Jim Sheridan : The hon. Gentleman makes a valid and important point. The UK should become a showcase for the world, placing UK companies in a good position to win export orders for new technology. Without UK-based, full-size plants, it becomes much more difficult to prove the technologies and, more importantly, to win export orders.

As I said, many hon. Members present represent mining areas. Britain has some of the largest coal reserves in Europe and that should not be lost on us. At present, many of the UK's coal-fired power stations are planning to implement the large combustion plants directive, which demands a significant reduction in emissions by 1 January 2008. The challenge to the coal-fired stations is to fit flue gas desulphurisation equipment and to guarantee themselves a future. In my own constituency, Mitsui Babcock is at the leading edge of new technology for coal-fired stations, which will assist them in reducing emissions of sulphur, nitrogen oxides and dust. I pay tribute to the management and work force of Mitsui Babcock. Not only can they make a major contribution to our future energy needs, but hopefully they can realise the export potential of their emissions capture technology.

At the beginning of the debate, I expressed the view that our future energy policies need to be a genuine mix, with nothing excluded. For too long, hydropower has been the poor relation in the energy debate. It is often described as relevant in the 1940s and 1950s, but of no consequence today. I, for one, completely reject that analysis. Hydropower is relevant today. If we upgrade the pumping equipment at plants in the UK, we could achieve a 5 to 15 per cent. improvement in output. I also welcome the decision of Scottish and Southern Energy to build a new hydro-station at Glencoe near Fort Augustus, in Inverness-shire, which will generate up to 100 MW of electricity.

I have said that future UK energy policy needs to give validity to every source of energy. The final portfolio needs to recognise our future needs and the protection of the environment against global warming.

Mr. David Marshall (Glasgow, East) (Lab): Does my hon. Friend agree that as well as ensuring continuity of
 
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energy supply, there needs to be some tighter price control mechanism? Many poor people in constituencies such as mine are struggling very hard to pay ever-increasing, spiralling energy costs, yet the profits of the energy companies increase even quicker than the prices.

Jim Sheridan : My hon. Friend makes an important point. People are struggling to pay the ever-increasing, spiralling energy costs. It is not just consumers; local businesses are struggling to pay as well.

Mr. Jim Devine (Livingston) (Lab): I do not know whether my hon. Friend is aware of the situation in Grangemouth, where every night a lot of energy pours out of the top of the spiral and into the atmosphere. A similar plant in Sweden provides free heating for about 150,000 pensioners. Does he think that such an initiative could be part of the strategy?

Jim Sheridan : My hon. Friend is absolutely right. There is a learning curve that we all have to follow. If we can learn lessons from countries such as Sweden, so be it. We would be the better for it.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Does the hon. Gentleman think that another important lesson that we need to learn from Scandinavia and other countries is that prices of energy will go up and down, as will the cost of heating homes, so the crucial thing for the long-term health of the occupants of homes is to get better quality standards for the conservation of energy and to reduce demand for energy and the need for people to buy it, whatever the price?

Jim Sheridan : The hon. Gentleman is right. I disagree on only one point and that is that I have had no experience of prices going up and down. I know that they go up. They very seldom come down.

I hope that the Minister will confirm that the Government-stated objectives of getting 10 per cent. of electricity from renewables by 2010, 15 per cent. by 2015, and 20 per cent. by 2020 will not be amended or discarded. We collectively need to realise those objectives and we need to formulate our decisions with speed and consideration. Time is not on our side.

Consumers and local businesses depend on us to provide and safeguard energy supplies. They should not, and hopefully, with Government support, will not, be held to ransom by any one supplier or source of energy supply. If we do not act now, future generations will rightly ask why we did not when we had the opportunity to do so. Economies such as China, India and Brazil are expanding and their thirst for energy will mean our competing with that to secure our own supplies. That is why I was delighted to hear that our Government and China have secured an agreement on the development of clean coal technology with carbon dioxide capture and storage, which also aims to reduce significantly the climate change impact from coal-fired electricity generation.

Bob Spink (Castle Point) (Con): I congratulate the hon. Gentleman on securing this important debate. Coal has a part to play in our future energy supply. He   has just mentioned carbon capture and storage—
 
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CCS technology. Carbon is, of course, a bête noir in this. He mentioned previously sulphur and nitrogen but not carbon. Does he believe that this country has an opportunity to lead in that technology, and that the Government must come forward with a regulatory framework for CCS and promote a demonstration plant, so that we can not only use up the coal that we have without damaging the environment, but sell that technology to the world, including China?

Jim Sheridan : I have no reason to disagree with what the hon. Gentleman says. I am sure that the Minister has also listened to what he has said. The hon. Gentleman's proposal will take a great deal of investment, and that is what we need.

There is tangible evidence of willing partners in the agreement reached with China, working together to combat the global challenge of climate change. New technology available today could cut CO 2 emissions from power stations by up to 90 per cent. There are estimates among our energy experts that, within our shores, we have the capacity to store our total carbon emissions for decades to come. Known as carbon sequestration, the technology can be used to separate CO 2 from coal-firing and gas-firing power stations. The CO 2 is then pumped into depleted oilfields via disused pipelines.

There are opportunities forthcoming for Government and private interests to invest in drilling into coal under our shores with a combination of drilling rigs, pipelines, storage facilities and power plants, exploiting an energy resource that has a 300-year future. Underground gasification of coal is an idea whose time has come. It has green credentials, with the potential to pump waste carbon dioxide into the underground holes. Hydrogen could be extracted from the gas for a new generation, emitting nothing but water vapour.

Who knows where that new technology could take us and what other uses it could have. One thing is clear, however: there is a window of opportunity in the review. We must take it and resurrect old king coal from its premature death.

Frank Cook (in the Chair): I have had a formal request for the removal of jackets, and those of you who have had the misfortune to work under my chairmanship in Committee will know that I am normally amenable to such requests. However, in this instance, this is a parallel Chamber to the parent Chamber below, so for that reason and that reason alone, I am afraid that jackets must remain on—not necessarily buttoned, but on.

9.48 am

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate. It is timely because my hon. Friend the Minister has announced the review, and he has the unenviable task of deciding the energy mix for the future.

I want to make three points: first, I want to consider some of the issues that the Minister will have to deal with in the energy review; secondly I want to make the point that all forms of energy have a substantial impact on the environment; and thirdly, I want to refer to the position
 
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of the United Kingdom coal industry, urging the Minister to act to ensure that the industry is around when the review is completed, so that it can play its part in ensuring the security of supply of UK energy.

During the review, the Minister will need to consider the impact of the energy mix on climate change, the retention of a diversity of suppliers, to which my hon. Friend the Member for Paisley and Renfrewshire, North referred, and the security of supply. Having watched events during the past few weeks, I have no doubt that the security of supply issue will loom large for the Minister.

There is also the commercial framework of the energy market to consider. The Minister will be aware that we have gone through a number of phases. We had the pool system, which gave way to the new electricity trading arrangements. Each system has impacted differently on the energy scene. Although at present there is a sparsity of gas, in the next 18 months, much more gas is likely to become available from Norway. Unless we are prepared to consider how the commercial framework of the energy economy has altered, we are likely to see a second dash for gas. In my estimation, five or six years after the start of that dash, the position for the UK could be far worse. I refer to the point that my hon. Friend the Member for Sherwood (Paddy Tipping) made: it is estimated that we could be 80 per cent. dependent on imported gas if we go down that route.

The Minister will have to consider those matters in the review. I take the point that my hon. Friend the Member for Paisley and Renfrewshire, North made in opening the debate: there is a need for diversity and there is room in the energy market for all energy sources. At present, roughly 40 per cent. of electricity is generated by gas, 33 per cent. by coal and about 19 or 20 per cent. by nuclear, with 4 or 5 per cent. from renewable sources. The 40 per cent. reliance on gas should be our limit. We should not allow a second dash for gas to take us into an area where we are 80 per cent. dependent on gas. In future, gas will come from areas of the world that are less stable than Norway and at the same time we have to consider the current phenomenon of terrorism. Terrorism could place us in a very vulnerable position should those gas supplies be interrupted.

During the review, I should like the Minister to think about the limits on gas. In thinking about the commercial framework of the energy economy, he may decide that it should be divided between the current sources. We know that 2020 is the target for 20 per cent. of renewables. That is a commendable target. We should ensure that we reach that target because we need the renewable technology. I must tell the hon. Member for Castle Point (Bob Spink) that, in 1992, a world-leading plant at Grimethorpe in Barnsley, a clean technology plant, which was built and administered by British Coal, was dismantled by the Conservative Government. It certainly put us in a far worse position in catching up on the technologies, which we must do now.

All forms of energy have an impact on the economy and the environment. Some have a worse impact than others, which are detrimental nevertheless. I have a wind farm in Penistone in my constituency. It caused a great deal of concern when it was built because it is a very picturesque area. Many people took the view that it created visual pollution. I agree. Some argue that wind
 
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farms add to the beauty of a scene, but when one sees the wind farm on the hills above Penistone that is certainly not the case.

I understand that experts who have been looking at the nuclear industry will be reporting to my hon. Friend the Minister. Monday's report in The Guardian showed that a new regime of nuclear generation would not result in less waste, as some have argued. According to experts on the matter, it could increase eye-level waste fivefold. The Minister will need to consider that issue.

John Robertson (Glasgow, North-West) (Lab): I have a copy of the article. Is my hon. Friend aware that the points made in the article have not been substantiated? It was just the opinion of the person who wrote it.

Mr. Clapham : The article is based on the report coming to the Minister and when it is available we will know the position. I am not attacking the nuclear industry, but just pointing out that all forms of energy have a substantial impact on the environment, which the Minister will need to consider. Coal has a substantial impact on the environment, which is why we argue for clean coal technology.

My hon. Friend the Member for Paisley and Renfrewshire, North referred to the large combustion plant directive, which will require the fitting of flue gas desulphurisation to power stations that burn coal by 2008. I understand that it is likely that 16 gigawatts of capacity will be fitted with flue gas desulphurisation. That leaves us with CO 2 and how to deal with it. My hon. Friend also referred to clean coal technology, which could be dealt with by developments in his constituency. Mitsui Babcock has a super-critical boiler that is fitted with a facility for carbon capture. Some super-critical boilers are being offered to China, as my hon. Friend said.

What we require is to incentivise the generation industry to take on the retro-fitting of the new technology. Most of the coal-fired stations will be decommissioned by about 2015, so between now and then a new regime of coal-fired power stations will be needed, which means using the new technology and giving the generators incentives to do so.

Mr. Mike Weir (Angus) (SNP): Does the hon. Gentleman agree that generators will invest in the technology to retro-fit the stations if a signal is given to the coal industry that there is a long-term future for coal generation in this country? That is what is lacking at the moment.

Mr. Clapham : I thank the hon. Gentleman for his intervention. We need to send that signal. We need to be able to tell the UK coal industry that there is the potential for long-term contracts, which would give the industry a future.

That brings me to my final point: the UK coal industry is in a perilous state. Three large collieries are in mothballs, two owned by UK Coal and one by RJB.

Mr. Denis Murphy (Wansbeck) (Lab): Is my hon. Friend aware that at a recent meeting between UK Coal
 
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and the National Union of Mineworkers, Mr. Spindler, chief executive of UK Coal, stated on the record that he was not concerned about the coal industry? His concerns lay in the property portfolio. Does my hon. Friend share my view that it is extremely worrying that the nation's coal reserves should be vested in a company whose chief executive has no concern for the coal industry?

Mr. Clapham : I thank my hon. Friend for his intervention. He is right. If we allow a major energy supplier to switch to property, we will lose what could be a major plank of energy security. The Minister should be willing to emphasise that he is prepared to incentivise UK Coal to remain in energy.

Paddy Tipping : My hon. Friend will know, because of his knowledge of the coal industry, that UK Coal has been in discussions with the Department about loan guarantees. The work force at Harworth is listening closely to this debate. It is important that an early decision be made. I believe that UK Coal, with support, can keep the pits open. Is that my hon. Friend's view?

Mr. Clapham : I thank my hon. Friend for that intervention. It is my view, and I hope that the Minister will respond favourably to UK Coal's suggestion for loans to be able to keep the industry going.

As I said, there are three large collieries in mothballs. One of those collieries leads into the last large reserve on the east side of the country; it is an enormous reserve. If the Minister is prepared to respond to UK Coal favourably, we could see those collieries open. There is an opportunity for growth. I understand that applications have been made for a new shaft at Daw Mill in the midlands, and a new colliery at Margam, and I understand that Scottish Coal is talking about the sinking of two drift mines. It is important that the Minister responds favourably to UK Coal, because we need the UK coal industry to be able to provide that security of supply.

Several hon. Members rose—

Frank Cook (in the Chair): Order. There are currently five hon. Members seeking my eye, only three of whom have taken the trouble to send written notification of their intention to intervene. We are left with only 29 minutes, so I look to all hon. Members to make their comments suitably brief and pertinent, and not to accept all interventions. If they do accept interventions, they should make their responses brief.

10.1 am

Mr. Mike Weir (Angus) (SNP): I congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this important debate. The future of coal in the energy review is important to Scotland and the UK generally. I was interested in what he said about an energy audit. He will be aware that, during the previous Parliament, the Select Committee on Scottish Affairs—several members of which I see in the Chamber today—considered the issue. It said:

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That is good advice for the Government, for the UK as a whole and for Scotland. We all agree that we need a mixture of energy resources, although we may disagree about what goes in that mix and what the proportions are. We cannot rely on any one energy resource to provide our energy for the future.

Coal clearly has a potential for producing energy within the UK. It is reckoned that there are some 200 years of coal reserves left, as opposed to perhaps as little as 38 years of gas. However, most of our energy at present is produced from gas-burning stations, which does not make great economic sense. We talk about the security of energy supply, but in the UK—the situation is different in Scotland, which produces much more gas than it uses—we will shortly be reliant on imported gas. We have already seen, as the hon. Member for Paisley and Renfrewshire, North mentioned, what happened between Russia and Ukraine over the new year period, and the potential difficulties in that situation. There is no point in going for coal-burning technology if we do not ensure that there is a coal industry in this country to produce that coal. Otherwise, we will then start to import coal from places that are as remote and unstable as those from which we are importing gas.

On the question of the security of energy supply, we must examine the coal industry. However, there are difficulties in doing so. As the Scottish Affairs Committee pointed out, if coal is to have a viable future, coal stations will have to take on the European directive on large combustion plants. The difficulty is that coal produced in the UK is generally higher in sulphur than elsewhere. Coal from Scotland is less sulphur-intensive than that from England.

Nia Griffith (Llanelli) (Lab): Does the hon. Gentleman agree that in south Wales we have some of the finest anthracite in the world, which produces far fewer side products than many other forms of coal?

Mr. Weir : I will take the hon. Lady's word for that. Certainly in Scotland the coal is less sulphur-intensive than that in some areas of England. None the less, flue gas desulphurisation plants will have to be fitted to coal-fired stations if we are to meet the directive and if there is to be a future for coal. I understand that only two stations in the UK at present—Drax and Radcliffe—have that technology fitted, so considerable investment is needed and the cost of fitting the equipment to coal-fired stations will be considerable. The coal and generating industries will do that only if they are given a clear signal that there is a future for coal generation in this country. The nuclear industry is looking for such a signal in the energy review before investing in new stations—I shall not go into whether that is good or bad—and the coal industry is also entitled to look for direction from the Government and perhaps some Government investment in the production of that technology.

Many other countries will invest in coal. China, India and the US all have huge coal reserves and can make a political reality of the situation. Despite international agreements on climate change, their coal is a large economic resource and they will burn it, particularly in
 
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countries such as China and India which have booming economies. We must deal with that reality and we must do so by considering clean-coal technology. In this country, we have developed that technology, as has the United States, and we must work together to ensure that it is available throughout the world. We must take account of climate change and we must ensure first that it is put into our coal stations that generate electricity from coal.

Carbon capture has been mentioned and it is a relatively new technology with huge potential. Large areas in former oilfields under the North sea could be used to store carbon and new developments could help to get more oil out, as well as storing carbon gas. However, that is a relatively new technology and it may be many years before it has a significant impact.

Mr. Clapham : Is the hon. Gentleman aware of the project being run in Scotland, supported by work of the university of Strathclyde, to infuse CO 2 into coal seams and announce gasification? For some reason, CO 2 does not separate at the point of burning.

Mr. Weir : I am aware of that and various other technologies that could help.

The debate has wandered somewhat from coal to other energy resources. When considering energy resources for the future we must accept the necessity for a balance between our energy and environmental needs. The hon. Member for Barnsley, West and Penistone (Mr. Clapham) talked about the wind farm at Penistone and the hon. Member for Paisley and Renfrewshire, North talked about the hydro-station at Glencoe. That hydro-station also faced objections from environmental and other groups that were concerned about its environmental impact despite the fact that it is undeniably a green energy resource.

The sad fact is that whatever energy source we adopt we must meet environmental objections, and that is as true of coal as it is of any other method. Many traditional mining areas were environmentally blighted by the coal industry for many years. Much of the current coal industry is open-cast and any proposal for open-cast mining invariably produces many objections. We must consider those issues and balance the two but, ultimately, the Government must give a clear steer to the coal industry, stating that it has a future and that, if we are to burn coal, we shall not import foreign coal, but use the massive coal reserves in this country. That is the only way to obtain security of energy supply from coal.

When talking about the security of energy supply, perhaps we should consider what is happening with our energy companies. It is only recently that the German company E.ON Energie proposed taking over Scottish Power. I noticed in the weekend press that the Swedish state energy company, Vattenfall, is proposing a bid for Scottish and Southern Energy. If we are to consider the security of our energy supply, we should perhaps consider also the future of our energy companies.

Frank Cook (in the Chair): There are 20 minutes remaining and four hon. Members bidding.
 
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10.10 am

John Robertson (Glasgow, North-West) (Lab): I have two speeches, and I have now created a third to try to shorten my contribution to the debate and allow other Members to get in as well. I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing the debate. I was fortunate to get a similar debate at the beginning of December, in which hon. Members who are present today took part. Would that more Members than the usual suspects take part.

Along with my hon. Friend the Member for Midlothian (Mr. Hamilton), I was a member of the Scottish Affairs Committee that the hon. Member for Angus (Mr. Weir) mentioned. The Committee produced the report on the energy needs for Scotland, and I have no doubt that the report could be easily transferred to the whole of the United Kingdom. We agreed that we should include everything in the energy mix to ensure that the needs of the people of Scotland are met, but a few members of the Committee were against nuclear energy at all costs. The hon. Member for Angus was one, and it was a sad indictment of his party. The Liberal Democrat Member, who is not present today, took the exact same position.

The energy review will come up with a balanced energy policy for our energy needs, and that is the most important thing that it can do. There is also a place for coal. As far as I am aware, we in this country can have only three energy suppliers—gas, nuclear and coal. They are the main producers of energy. Although it is more than acceptable to look for new ways of creating energy, we must consider this country's needs.

The plight of the Ukrainian people and the five-fold price increase imposed by the Russians gives an example of the type of outcome that in previous discussions we were always worried could happen when 70 per cent. of our needs were made dependent on other countries. As my hon. Friend the Member for Paisley and Renfrewshire, North said, we must have a sustainable energy policy that is secure for the needs of the people of this country.

It is correct to mention what happened to the coal industry in the 1980s and 1990s: the industry was dismantled by a short-sighted and vindictive policy from the Conservative party. Tens of thousands of miners were put on the dole, and there were hundreds of thousands of knock-on job losses. The unemployment list, high as it was, increased manifold as a result. Those of us who were active in the trade union movement in those days well remember the collection of food and moneys for the mineworkers and their families.

We should not forget that we would be at the forefront of any new coal technology if it had not been for the then Thatcher Government. I deplore everything that they did, and I have never, ever failed to feel hatred towards that Government. The circumstances that I have mentioned are the main reasons why I feel that hatred.

I should be very pleased if the Conservative Front Bench spokesman took this opportunity to apologise not only to the mineworkers and their families but to the country for what that Government did. It is important that that is put on record.
 
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I suggest to my hon. Friend the Minister that we seriously consider something that, again, the Conservative party did with the Board of Trade when the Department for Energy was got rid of. There is a justification now more than ever to recreate a Department of Energy with a Secretary of State who takes care of our energy needs. There is no doubt from what we have seen in Russia and Ukraine that there is a need for more than one source of energy. We must also consider how we preserve our gas reserves in the North sea and how they can be maximised for the use of the British people.

I believe that many people will take part in the review and put forward their ideas about what should and should not be done, and that is absolutely right. It is important that the review and the Minister consider the needs of the nearly 60 million people in this country and not take on board some of the petty and unsustainable lies and half-truths that some opponents of coal, gas, nuclear or, in many cases, renewables have put about. The review and the Minister must seriously consider planning departments and how planning permission is given to build new energy installations, and come back to us and explain why things were done. I hope to take part in the review—I hope to make a submission—and I hope that other hon. Members will do the same.

Mr. Frank Cook (in the Chair): Fourteen minutes remain, and three hon. Members wish to speak.

10.16 am

Mr. David Hamilton (Midlothian) (Lab): I thank my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) for bringing the debate to the House. Like many hon. Members present, I was part of the debate that took place previously on the Scottish Affairs Committee report. As my hon. Friend the Member for Glasgow, North-West (John Robertson) said, many of the recommendations in that report could be taken forward with regard to a UK position. There are differences in the market in Scotland, but I hope that my hon. Friend the Minister will consider the essence of the report when examining the energy review.

I am mindful of your comments about the time remaining, Mr. Cook. The debate is about both the energy review and coal, and I would like to talk about some of the other issues relating to coal. When the comment was made about "old king coal", I felt myself sliding down in my seat, because I am sometimes referred to as old king coal.

With regard to the security of energy for the United Kingdom, alternative energy sources must be considered. In Scotland, hydro is about 6 per cent. of the market. Hon. Members have referred to nuclear, to renewables, including wind—wave power has not been referred to—to gas and coal and to security of energy. There was the problem that we faced at the beginning of the year. Every national newspaper carried the same headline, which was "Russia turns off the gas to Europe". The issue was not just about the UK. Politicians throughout Europe did not really care about Ukraine; they were much more concerned about the pipe coming through into Europe. Many of us have been saying for many years—I do not say that with any glee—that the most important issue that we must face is
 
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Britain's dependence on sources of energy coming from abroad. That debate must take place in much more detail, and I am glad to see that there will be a debate on Thursday, although there is only a one-line Whip.

As politicians, we must decide on the principle of whether we leave ourselves being dictated to by other countries or, indeed, whether we leave ourselves to market forces. I do not believe that either situation is acceptable to us. Or do we rely on our own resources, knowing that there will be a cost to that decision? That is important. It has been alluded to on a couple of occasions that whatever decision is made, there will be a cost factor. If we make a decision about self-reliance in the UK, there will be a cost to that, and we must bear that in mind, not only for consumers but for business and so on.

We need to consider what is happening throughout the world and especially in China, which has become the engine house of the world. According to the 2002 statistics—not the latest ones—1,393 billion tonnes of coal were produced in China. Germany is the biggest European producer, producing 207 million tonnes. The UK is right down the line again, producing only 30 million tonnes.

It is also important to realise that several European countries produce coal, about one or two of which I was surprised. They produce coal on a greater scale than the United Kingdom does—not just Germany, but also Poland, with 161 million tonnes, Greece, with 71 million tonnes, and the Czech Republic, with 63 million tonnes. We are therefore in a market within the European network. Recognising that that is important. Britain, which has used only 15 per cent. of its coal resources, has some of the biggest reserves within Europe. At the end of the day, that we have not improved on our position is a tragedy.

In many instances we are at the cutting edge of developing new coal technology, but at the same time the coal industry is on its knees. That that is happening is a contradiction in terms and, to me, ironic. We have the transport and the expertise, which we have developed along with other European countries, but at the same time we are not paying heed to our own coal industry.

There are a number of issues that I will come on to, and one is about the Glencoe station. The hon. Member for Angus (Mr. Weir) said that there were objections when it went ahead. There will be. There are objections to every single thing that is proposed in relation to energy, whether that be open-cast, wind farms or tidal. There will be objections to hydro, which is very attractive in Scotland. The decision was made many years ago about hydro. Indeed, the organisation that represents renewables within Scotland has indicated that hydro could take up at least 20 per cent. of Scotland's needs, and in the renewable market it is talking in terms of 40 per cent. of Scotland's needs being met by renewables.

The wider base brings in not only energy, but the Department of Trade and Industry. What about when planned applications go forward for housing and so on? Industrial units are being built to specifications with the worst common denominator. They are not built with a specification that includes ensuring that there is heat retention, for example.
 
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I will give some examples. Midlothian council is a good example, with a housing stock of 7,500 council houses. Every such house in Midlothian has wall cavity filling, insulation in its attic and double glazing. Each house had to have all such things installed after the houses were built. Could the planning process not have been better? Building contractors agree with us. When we talk to them about planned applications, their argument is that they want a fair crack of the whip, a fair playing field, when they make applications to build houses.

If every housing contractor across the UK was told that when they build a house they must have cavity filling, attic insulation and double glazing—to make sure that heat is retained, which in turn reduces the demand on energy—that would be very positive. We must look more at how we save energy, as much as how much we can produce energy. That issue has to be addressed much more than at present.

A report from a debate in the Select Committee on Scottish Affairs has another good example from Midlothian. Please excuse me for the argument, but Midlothian boasts an area including Monkton Hall colliery, where I worked for 20-odd years. Although closed, the colliery, 3,000 ft deep as it was, is producing substantial amounts of hot water—geothermal water. An experiment in Midlothian, with £3.5 million allocated from Europe, is considering how to use the geothermal water coming up from Monkton Hall to heat some 230 houses—to start with—industrial units and a primary school. There is a possibility of expanding the use of that geothermal water to some 4,000 new-build houses. I ask the Minister to come along for a meeting, and, with the council, to discuss these matters.

There are 230 ex-collieries within Scotland, two-thirds of which have the potential of using geothermal heating coming up from them. Therefore, using old collieries can take us up to the 21st century, which in turn can develop a strategy for us.

I am mindful of what the Chair said and will cut short everything, because other speakers took far too long.

Several hon. Members rose—

Frank Cook (in the Chair): Order. I remind the Chamber that the Chair is required to call the first of the three Front Bench wind-ups at 10.30 am.

10.24 am

Dr. Roberta Blackman-Woods (City of Durham) (Lab): I am grateful to my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) for securing the debate. Our prime consideration must be to argue that coal should not only feature in the energy review, but be given a degree of prominence. Like many other Members, I am pleased that the debate about using coal has moved on and we no longer have to argue about renewables versus coal. Because of developments in clean coal technology, we can argue strongly for both. I stress that the Government should continue to press forward with their target to reduce CO2 emissions by 60 per cent. by 2050, but hopefully that can be achieved by investing in coal as well.

I press the Minister to look at developments in clean coal technology and how they can be used in the UK. A number of us in this Room were at a seminar just before
 
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Christmas where the more recent developments in clean coal technology and carbon capture were outlined. It is gratifying that many UK universities are at the forefront of developing that technology. We clearly want to invest in that.

We know that coal can be part of the environmental solution, instead of being part of the problem. We know that processes exist to remove SO 2 , nitrous oxide and CO2 during the electricity generation process. Coupled with modern mining methods and high energy prices worldwide, that means that we can make a powerful case for investing in a new generation of coal-fired stations, providing that the technology is in place. The National Union of Mineworkers and others make a strong case that Britain's coal reserves could contribute to our energy supply for a number of years, hence the need for long-term investment.

It is also worth pointing out that we are not arguing for a return to the mining industry of the past, much as I celebrate that. I represent a constituency where mining has been really important and I would like mining to be part of the future of the industry in that constituency. We no longer have to produce coal tips because waste can be stored underground. Modern ventilation methods are better. Accidents still occur. We know that, tragically, from what has happened in America recently. However, there are fewer incidents. Methane gas, or mine gas, can be captured and used in electricity generation. We can also blend coal with biomass or other renewable sources, including household waste. We should be investing in the production of those renewable coal products. That should be a feature of our energy supply for the future. I am told—I do not profess to know the details—that we should be considering integrated gasification combined cycle power stations. Alongside carbon capture, that is what I press the Minister to consider.

I will conclude in the hope that there is time for another Member to speak, but it is worth emphasising that a number of us are really concerned about what happened in our constituencies during the Thatcher years. It would be very much welcomed if a Labour Government could again invest in our coal mining industry.

Huw Irranca-Davies (Ogmore) (Lab) rose—

Frank Cook (in the Chair): Order. I must counsel the hon. Gentleman that if I call him he will have to relinquish the Floor in one minute.

10.29 am

Huw Irranca-Davies : What a challenge. The Minister will know that I am making my own contribution—I am building my house with a wood-powered boiler, solar panels and a rainwater harvesting system. I am doing my bit. When the Minister looks at the Welsh coal industry, will he return the favour? He knows my support for the UK coal industry is firmly on record. Tower colliery is facing declining reserves in its seams. There are applications for new deep mines in Wales. There is also the issue of keeping skills going in the deep mining industry. It is vital that rapid decisions are made on that.
 
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I also want to flag up one of the issues that was raised earlier in relation to marine and tidal energy. This is not only about south Wales and the Severn estuary, which has the second highest tidal range in the whole world; we also have the Menai straits and the Irish sea. That source of energy is massively underused and we need to do a tremendous amount on that.

There is also a place for wind energy. There is already one wind farm in my constituency. One community has one in front of it and there is an application for another behind it. It has two more on either side of it. I do not want it to be like Custer's last stand surrounded by wind farms. We have a role to play. I have lived opposite a wind farm. I have no problems with them, but they should be in the right place and there should not be too many of them. Thank you, Mr. Cook, and do not forget Welsh coal.

10.30 am

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on introducing today's debate, on raising the wider issues of the energy review and on concentrating on the future of coal. He raised the question of our dependency on the worldwide energy market. Whatever happens and whatever the mix, we are in an interdependent world and we cannot completely hide from market forces and our trade with the rest of the world. We must therefore ensure that we maximise the stability and predictability of that trade.

Can the Minister give us any reassurance about how market liberalisation is getting on in the rest of the European Union? One of the big distortions at present is that our market is connected—and becoming even more connected—to another market that operates under different rules. A larger market becomes a more stable market because people can predict more effectively how it will operate and how the future will pan out. They can make investment decisions based on their judgment of the commercial risks in an open and fair market in which they can have confidence.

I must declare my entry in the Register of Members' Interests: I am a shareholder in Shell. Coal has played a major part in building the UK economy. As many hon. Members have pointed out, there are major reserves of coal, so the potential is there. As has been outlined, however, the environmental impact of coal still holds it back from playing its part as an energy source in this country. I think in particular of climate change. We understand more how our world is affected by the emission of carbon dioxide into the atmosphere, and how we must meet the challenge of reducing our emissions, not only at home but around the world.

Clean coal technology shows how coal can play its part without doing any environmental damage. The ultimate goal must be carbon capture and storage. In previous debates, we have talked about the excitement of the Miller project in the North sea, where we are getting much closer to seeing the full cycle of capturing the carbon, producing the electricity and returning the CO 2 under the North sea, rather than letting it out into the atmosphere, with the added benefit of enhancing oil recovery in the process. There is a virtuous circle in making that process work.
 
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The Government have announced carbon abatement grants and a carbon abatement strategy. Can the Minister give us more details of how those grants will operate and how people will access them? If those grants are available and the details are out there, people can understand how best to make use of them. We could help to take carbon capture and storage forward if carbon credits were allowed under the emission trading system. Again, can the Minister tell us how that is developing and what the potential is?

The Miller project is able to take place because the CO 2 that is put in the North sea is used as an agent to recover more oil. Obviously, in the longer term, the discussion is about possibly storing CO 2 in exhausted and redundant fields. There we have the concern that the OSPAR and London conventions restrict the disposal of CO 2 under the North sea. People have talked about a long time scale for the development of that technology. The reality is that changing arrangements such as OSPAR takes a long time, too. It would be good to hear what initiatives the Government are already taking to ensure that conventions will not stand in the way of disposal of CO 2 under the North sea if we can prove the technology is successful and we want to make full use of it. That major resource, which we have developed through our oil and gas exploration and production, could now provide an added benefit. Using it to dispose of CO 2 could benefit coal and other energy sources.

This debate is part of a wider climate change debate. In response to a debate initiated by the hon. Member for Ogmore (Huw Irranca-Davies), the Minister stated that

That was last year. Perhaps the Minister can update us as to whether the DEFRA report will finally appear at the end of this year or, I hope, earlier in the year. Obviously, people need to know how environmental impacts fit together.

Blending coal with biomass has been raised. Perhaps the Minister could explain why the biomass that can be used in the blending process with coal is restricted to only 15 per cent. Again, a bit more flexibility could reduce the environmental impact.

The hon. Member for Paisley and Renfrewshire, North made an important point about the jobs that will be available in the renewable and marine sectors. This country has engineering skills and experience from working in the marine environment that would be eminently exploitable if we were to allow marine technologies such as wave and tidal to take off. There is great potential to transfer the skills that we have learned through all the other work that we have done in the North sea.

It was somewhat perverse of the Government, who deal with security issues, to turn their back on the resources that we have in this country. There was considerable disappointment with the Chancellor's approach to North sea oil taxation. His pre-Budget report created concern among investors that he is changing the fiscal regime. The big picture is that he is frightening away investment at a time when we seek to maximise the production of gas in the North sea, and that seems a perverse strategy. Has the Minister had a chance to review the studies that show how marginal the
 
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gas-gathering pipeline networks for the west of Shetland are, and to consider whether the tariffs on the use of the pipeline infrastructure will tip them the wrong way?

If we are to make full use of carbon storage in the North sea, the pipelines and infrastructure are important. Obviously, some of us who look at the big picture want the Chancellor to change the tax regime back to a more attractive one for investment. Have the Government considered in detail the impact of the tariffs on the use of infrastructure? Maintaining a core infrastructure of pipelines and production networks in the North sea allows the more marginal and newer discoveries to be exploited and would also allow carbon to be reinjected. It is crucial that full use can be made of them, so putting a tax on something that we want to incentivise seems somewhat perverse. Can the Minister give some assurance that the Government will reconsider that?

I want to finish by saying again that coal played a great part in the UK's economic development. It is facing the challenge of its environmental impact. If we can tackle that issue, coal will have a role to play in supporting the UK's future energy economy.

10.38 am

Charles Hendry (Wealden) (Con): I also congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate. As he said, it is timely, given what happened during the Christmas and new year period. I also want to thank him for the balanced way in which he introduced the debate. He raised a tremendous number of important issues, and his approach has characterised the whole of the debate this morning. We have had an opportunity to consider the important role that coal can play within the wider policy of the energy review.

I agree with the hon. Gentleman that we need balanced energy provision, and I broadly agree with the mix that he proposed. Of course, we all support greater use of renewables, but, as was made clear by several hon. Members, they are not without environmental consequences as well. As the hon. Member for Barnsley, West and Penistone (Mr. Clapham) said, there are considerable environmental concerns about wind power provision on land. That was brought home to me recently when I went to Switzerland. I drove out through Germany and came back through France. Throughout Germany, there is a tremendous reliance on wind power, but there is none at all in France. What strikes one is the environmental impact of row after row of wind turbines on an otherwise beautiful landscape. As the hon. Member for Angus (Mr. Weir) reminded us, even hydropower, which in the security of the south-east we think of as an extraordinarily valuable means of energy provision in Scotland, is not without its environmental consequences.

We have seen a huge amount of balance in this debate, and I hope that the energy review will focus on that need for balance, and not allow the country to become over-reliant on any single source of energy. The hon. Member for Angus also made a valid point that we must ensure that we do not end up depending on imported energy supplies. The debate has shown the degree of expertise that exists in the House on these matters, and I hope that, during the energy review, the Minister will use that
 
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expertise and not simply rely on external expertise. If all of us can be as brief and concise as the hon. Member for Ogmore (Huw Irranca-Davies), this House would operate in a better way. If, in one and a quarter minutes, hon. Members can make points that are pertinent both to the energy review and to their constituency, that is a lesson for us all.

In recent years, we have seen a dramatic reduction in the use of coal. In 1950, almost all the primary fuel used was coal, but in 2000 only 15 per cent. was used, the majority being oil and gas. We are also seeing a continuing decline in the provision of coal from within the United Kingdom. The hon. Member for Glasgow, North-West (John Robertson) commented about how that decline happened under a Conservative Government. However, he has turned his mind away from how that decline has continued under his own Government. Since 1997, the number of mines in this country has dropped from 22 to 13, and the number of miners has dropped from 14,000 to 5,000. Coal output has halved from just under 50 million tonnes to just over 25 million tonnes.

Mr. Clapham : The hon. Gentleman will know that when the industry was privatised in 1994 it was beyond its critical mass. It was in a failed market and depended on Government support. The industry's decline was inevitable, but it was built into the privatisation.

Charles Hendry : I understand where the hon. Gentleman is coming from. The point that I was seeking to make is that it has been a long-term decline which has not been reversed under this Government. Our reliance on imported coal has doubled over the last eight years, from 19 million tonnes in 1997 to about 36 million tonnes now. It is not a short-term phenomenon that only happened in the 1980s; it has been happening for over 30 years.

Mr. David Hamilton : Is the hon. Gentleman suggesting that we renationalise what is left of the coal industry, so that we can expand it?

Charles Hendry : I am not going down that route. The Conservative party may be going through a process of evolution at the moment, but I am certain that we are not going to go down the route of renationalising the means of production of energy, as the hon. Gentleman suggests.

In introducing the energy review, the Prime Minister said that by around 2020 the UK is likely to have seen decommissioning of coal and nuclear power plants that generate together over 30 per cent. of today's electricity supply. It is clear that if decisions to invest in new coal-powered power stations are not taken soon, the future role of coal will decline further.

It has become evident in today's debate that there is scope for a renaissance of coal as a result of new technological advances. As my hon. Friends the Members for Kettering (Mr. Hollobone) and for Castle Point (Bob Spink) set out, it is a sector in which the United Kingdom can become a world leader. There has been some discussion about carbon capture and storage,
 
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whereby carbon dioxide emissions are captured and can be kept safely. There are creative and imaginative ways in which that can be done. For many years, pure carbon dioxide has been captured and used in the food processing and chemical industries. To make that more effective, we need huge opportunities for storage. About 500 million tonnes of carbon dioxide per year is produced and that requires imaginative new ways of considering the problem.

The approach that the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) has talked about—storage in the North sea—would allow us to do something dramatic and novel. It is encouraging that British companies are in the lead in the use of that global technology. As he explained, additional benefits arise from that, such as improved methane extraction from the oilfields. Enhanced oil recovery, if achievable, will start to make carbon capture more economic.

However, there is the risk that international treaties will make that process more difficult. Will the Minister clarify the legal situation as to whether the injection of carbon dioxide into the sea bed for storage will be permitted, even when it is not linked to enhanced oil recovery? A distinction is drawn in the international treaties between those two approaches, and if we cannot put it there for storage, that approach could be made more difficult.

There is a tremendous, once in a lifetime opportunity to get decisions right in order to have a balanced energy policy that makes use of the natural advantages this country has in energy supply and other provision. We can take the lead in conservation and encourage new technologies where the UK can be a world leader. Without doubt, coal has an important part to play in that process. We wish to work with the Minister during the energy review, on a cross-party basis, to ensure that we take the right decisions. We want to examine what is right in the long term for this country in terms of provision and conservation and we hope to work with the Minister in that process.

Mr. Denis Murphy : Will the hon. Gentleman please clarify a point for me? Is it his party's policy to offer financial support to a privatised mining industry in order to keep the coal reserves there?

Charles Hendry : If one wants to have a balanced energy policy, certain aspects of it will require financial support from the Exchequer. We recognise that in order for renewables to make good progress, public funding will have to be involved. At this stage, we have not reached a conclusion—that is what we shall do during the energy review—but we do not rule out the need for Government investment in those areas to ensure a balanced provision. I hope that we can assure the hon. Gentleman that we are considering the matter in relation to the long-term needs of the country and starting with a fresh sheet of paper to ensure that we take the right decisions. After an interesting debate, we all look forward to hearing what the Minister has to say.

10.47 am

The Minister for Energy (Malcolm Wicks) : I, too, congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing the
 
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debate. It is the latest in what is now a short series of recent debates. For some reason I was not invited to the Scottish debate—I am not sure why—but I remember a serious discussion in Westminster Hall.

I am struck by the fact that, while the prime focus has understandably been coal, we have debated the matter in the wider context of other energy sources and technologies, not least carbon capture and storage. We are examining those international treaties, which were designed to prevent dumping in our seas, and we are confident that we can get satisfactory outcomes. Other nations, including Norway, have an interest in that.

We have discussed the matter in that context, and in the context of what the United Kingdom's strategic energy objectives should be, which must be a part of the debate in the energy review. We have considered the matter in a global context. As has been noted, the new year was barely struggling into its early seconds and minutes before we had the serious dispute between Russia and Ukraine, which has now, I hope, been happily resolved. Perhaps we should delete the word "happily": it has now been resolved, at least in the short term. That reminds us of the global context and the important geopolitical and national security dimensions, which have come to the fore not only here but in other nations, and even since the White Paper of 2003.

We have had an important debate. Again, I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North. I shall not refer to every contribution as it would take too long, although I too was struck by the one-minute dash, without gas, by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). It was a model; it was energetic, yet energy efficient. Given his use of both brain and heart, it gave us an example of combined heat and power that we will remember for at least a few more minutes.

The House will be aware that the Prime Minister and the Secretary of State for Trade and Industry have asked me to lead a review of UK energy policy and to bring forward policy proposals by the middle of the year. Things have changed since 2003. North sea gas reserves have declined faster than many experts anticipated, and we know about the projected decline in nuclear power. We became a net importer of gas in 2004, and in a few years we will become a net importer of oil.

There have been other changes beyond our borders. I was asked about the slower than expected liberalisation in the European Union, as it has exposed us to higher, more volatile prices. We made some headway under our presidency at the Energy Council of Ministers in Brussels just before Christmas. The Commission is determined to press forward with that liberalisation, but there is still a long way to go. Even more internationally, China is already the world's second largest consumer of energy, and reports suggest that it has just overtaken the UK to become the world's fourth largest economy. It is truly an international problem.

We must learn from those developments, and from events so far this winter, both here and overseas. At the headline level, we need to answer a number of important questions. How do we ensure affordable energy in the future? How do we deliver a 60 per cent. reduction in carbon? That reduction was mentioned earlier, and we remain committed to it. How do we manage our reliance on imported gas, and what are the implications?
 
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In a nutshell, how can we create and maintain a fully functioning market that provides secure, affordable and clean energy? I take the point about affordable energy for the poorest and eldest in our communities. Those are big questions. They raise vital and complex issues, and there are important and intricate links between the decisions that we make on coal and other fuel sources.

Some assumptions have been made about the outcome of the review, but it is not about finding one solution to all those challenges—a theme that was echoed today. Hon. Members recognise that, despite the fact that enthusiasts from various quarters think the whole answer is this or that, we are talking not about where 20 per cent. or 30 per cent. of our energy supply will come from but about 100 per cent. of our energy supply. We recognise the need for diversity. There is no one solution. There is no silver bullet. There is no uranium bullet. With respect, there is no coal bullet.

Renewables has been a theme of the debate, as has strategic support for renewables—although not necessarily in one's own constituency. That, of course, is one of the dilemmas when considering the investment that is needed. Renewables are important. We have a renewables obligation, with a 10 per cent. target of our electricity coming from renewables by 2010, and the aspiration that it will be doubled to 20 per cent. by 2020. I do not come to the review renewables-neutral; I am an enthusiast for renewables.

Huw Irranca-Davies : On that point, does the Minister accept that, with his Department's support, MPs could be a useful tool during the energy review, becoming involved in confronting the renewables issues with their constituents? I am very pro-renewables, but one has to deal with them in the full light of day, putting the hard facts before one's constituents. The Minister and his Department could be a great help in putting forward those arguments.

Malcolm Wicks : That is an important point. It is not that the whole answer is blowing in the wind; but some of it is, and we are also developing other technologies. MPs can play a role. Indeed, I would go further: when we publish the consultation document on the energy review, which I expect to be later this month, I hope that hon. Members on both sides of the House will help to lead a well-informed debate in their constituencies. There has to be a public debate, and renewables are a part of it.

I can promise that the medium and long-term role of coal and its potential contribution to secure energy supplies is an important consideration in the review. For coal to have a future, it must be used much more cleanly than it is now, with significantly lower emissions of carbon dioxide and other harmful gases.

We have therefore developed the carbon abatement technology strategy to develop mechanisms such as research and development support, which will encourage the development of more efficient coal-fired plants, the use of coal with biomass and eventually the deployment of carbon capture and storage technologies. The latter technology has the potential to eliminate up to 95 per cent. of CO 2 emissions from coal use, not only in power generation but in other industrial processes. However, the review will be investigating ways we might encourage generators to deploy all these important technologies.
 
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The Chancellor has set aside £35 million of Government grant aid for the demonstration of carbon abatement technologies, which will be made available from April 2006 and will last about four years. My officials are working up a scheme for supporting those demonstrations and we plan to announce it by March, with a call for proposals to follow. I hope that my hon. Friends can see that we are providing serious support to enable coal to have a future in a sustainable world.

On coal production in the UK, the Government has paid out almost £37 million in coal investment aid and expects mine operators to draw down most of the balance of their awards during the first half of 2006. That investment aid, and about £160 million of UK coal operating aid, helped mines such as Thoresby, Kellingley and Daw Mill to maintain the investment they needed to keep them in production through the difficult early years of this decade. It was a relief to see the latest output figures, which show production at the remaining deep mines up almost 5 per cent. in the three months to the end of November compared to the same period last year. The outcome reflects the commitment of Government, management and, of course, the work force alike. However, as we know, there has been an overall decline in home production and an increase in imports—up 16 per cent. in the first nine months of 2005 compared to the same period a year previously. That compares with the latest figures of just under 18 million tonnes of UK production.

The continuing rise in imports highlights the availability of coal on world markets. The UK has unworked reserves of coal, in shallows and at depth, but with reliable, competitively priced supplies from South Africa, Colombia, Poland and elsewhere, many coal customers are choosing to import, which is the reality that we have to grapple with.

I said in a debate in Westminster Hall—back in those historic days when it was functioning as a modern debating chamber—that the time was right to take a new look at the UK coal industry and to consider how best to create a climate in which to attract the long-term investment needed to secure its future. The future of coal in meeting our energy policy goals in the medium and long term will be an important part of our review of energy policy. That is the right context in which to consider the matter. We are considering the proposal on Haworth colliery and I will respond to the company in the very near future.

The work on the energy review has now started, and I assure hon. Members that the views they expressed today and, indeed, the views I want them to discuss in the coming months with their constituents, will be taken into account as it continues over the coming months.

Again, I thank my hon. Friend the Member for Paisley and Renfrewshire, North for securing what has been a lively and energetic debate—pun intended—and hon. Members for their considered contributions to it. I wish you, Mr. Cook, albeit late, a very happy new year.


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