Mrs.
Gillan: Will he give us a more detailed status report on
Wylfa B and assure us that no subsides will given in support of new
nuclear power stations that will face future lifetime and
decommissioning costs? Carbon capture and storage is important to
Wales. [Interruption.]
The
Chairman: Order. I ask the hon. Lady to make this the last
question.
Mrs.
Gillan: Carbon capture and storage is important to Wales,
and I understand that there is only one sample project. The pilot
scheme has ruled out a whole
technology—pre-combustion—and is relying on an old
technology, closed combustion. Will the Minister update us on the CCS
project and tell us why there is only
one?
Malcolm
Wicks: I hope that the hon. Lady will forgive me if I
reply rather quickly to those questions, but I will touch on all of
them. First, when we combine the Warm Front moneys with those of the
successor to the energy efficiency commitment, known as the carbon
emissions reduction target, there is more money for energy efficiency
programmes than ever before, and rightly so, because they play an
important role.
Secondly,
there are no plans to change planning responsibilities between the UK
Government and Wales or to revisit the devolution settlement on that
issue. Thirdly, yes, lagoon issues around the Severn barrier work will
be addressed and, of course, a full environmental assessment will be
made.
The Port
Talbot project is important and, as the hon. Lady knows, planning
consent has been given for the world’s biggest biomass plant.
That single plant will generate the 350 MW—enough clean
electricity to power the equivalent of half the homes in Wales, so it
is a significant advance in renewables.
On the
Anglesey issue, I shall simply say that wave and tidal power
technologies are still very new, but I am encouraged by the development
of schemes and companies across the UK, and we are backing them fully.
The LNG terminal in Pembrokeshire is about to become a reality. It is a
major project, which will enable us to bring in LNG, from Qatar in
particular, and that will make a crucial contribution to UK energy
supplies. We
looked at nuclear energy very carefully, and rightly so; it is complex
and controversial. We had an energy review, four consultations and a
White Paper before making the decision, and we now have a Bill. If I
wanted to be combative—I do not wish to be with my neighbouring
MP in England—we could swap chapter and verse on the
Conservative Party’s dithering on another occasion. Nuclear is
important to Wylfa, not least because of the importance of Anglesey
Aluminium, which we bore in mind when making our
decision. Finally,
together with only a few nations—Norway and the United
States—we are leading the development of the important new
technology of carbon capture and storage. One demonstration plant will
cost hundreds of millions of pounds. We chose post-combustion
technology, because it will have most application in China, which is
building many coal power stations, and we want to develop a technology
that will help us to make climate change impacts
worldwide.
Nick
Ainger: Does the Minister accept that the latest modelling
indicates that for every energy price increase of 1 per cent., another
40,000 people in the United Kingdom go into fuel poverty? Will he look
at why energy prices are so high and have been rising so quickly over
the past 18 months, and will he look at the US Senate Permanent
Subcommittee on Investigations report,
“The Role of Market Speculation in Rising Oil and Gas
Prices”, published in June 2006? It concluded that
“there is
substantial evidence supporting the conclusion that a large of amount
of speculation in the current market has significantly increased
prices.” Will
he also ask the Financial Services Authority to investigate electronic
trading in oil on the inter-continental exchange futures market in
London?
Malcolm
Wicks: I am conscious that the Business, Enterprise and
Regulatory Reform Committee is undertaking an inquiry into the market
in the UK. Ofgem is also conducting its own inquiry.
Economic
fundamentals are the main issue on global price increases. That relates
to the huge global rise in demand, to which I alluded earlier—it
is about China and India. Many people feel that speculation and
financial markets are playing an unhelpful part in that. I heard that
view in Saudi, where I was a few days ago. At the Jeddah summit on
Sunday, which was called by the King of Saudi Arabia and which will be
attended by our Prime Minister, we have asked three international
organisations—the International Energy Agency, the International
Energy Forum and Organisation of Petroleum Exporting
Countries—to see whether they can come up with a shared analysis
on what is driving the costs of
energy. Mr.
Roger Williams (Brecon and Radnorshire) (LD): I, too,
welcome the Minister to the Welsh Grand Committee and thank him for the
role and responsibility that he has taken on miners’
compensation and clearing up some of the difficult outstanding
cases. The
Minister is right to focus on energy poverty. Customers in south Wales
are paying 10 per cent. more than the rest of England, which we find
very difficult to understand. Will the Minister undertake to ensure
that the regulators look at that
problem? Liquid
petroleum gas has been looked at by the Office of Fair Trading, which
wants to see regulation to ensure proper competition in this market,
but, as I understand it, such regulation has not been put before
Parliament yet because of objections from park home owners who have
difficulties with it.
While we
welcome the increase in expenditure by the energy companies on social
tariffs, will the Minister try to do more for those people on
pre-payment meters who, by definition, are probably on low incomes and
most in danger of fuel poverty, yet find themselves paying a tariff
that is higher than most?
I also want
to ask the Minister about BERR’s role in issuing consent for
major infrastructure projects, such as the pipeline from Milford Haven
to Tirley in Gloucestershire. Will the Department ensure that the
conditions put on those consents are implemented over the period of
time that the reconstruction of the sites takes place? There is a lot
of concern locally in Wales that BERR, after issuing consents, does not
carry out and ensure that the conditions are implemented.
Finally, I
want to turn to the role of the citizen in climate change and ask the
Minister whether he will ensure that home owners have support in
retro-fitting old homes. Yes, we can include energy-saving measures
in new homes, but the majority of homes that will be in use in 2050 have
already been built. Will he do something about that? Along those lines,
many home owners would like to be involved in microgeneration. Will the
Minister see whether the Government can support feed-in tariffs when
the Energy Bill is
discussed? Malcolm
Wicks: I am aware of understandable controversies about
how costs vary from one part of the UK to another, and I understand the
issues in Wales. Obviously, the fundamental costs vary depending on
topography and so on, but I assure the hon. Gentleman that the
regulator considers such matters, and I will bring his comments to the
regulator’s attention.
I
am concerned about the rising cost of liquefied petroleum gas, which
means that people do not have easy choices. We are considering that
matter, which has implications for some of the renewable technologies
that he discussed. For people who are off-grid and who are heavily
dependent on oil, for example, some of the renewable technologies, such
as ground-source heat pumps, have a special application. I welcome the
hon. Gentleman’s interest in the subject. My judgment is that
tackling climate change is about not only big institutions, such as the
UN, the G8 and the EU, Governments and companies, but the ability of
citizens to become not only concerned citizens but empowered citizens.
That is why I am very interested in microgeneration. I have signalled
that we will re-examine whether new financial incentives, feed-in
tariffs or other mechanisms are required to facilitate microgeneration,
which I am keenly aware
of. On
social tariffs, the hon. Gentleman has mentioned pre-payment meters. I
have no doubt that the cost of pre-payment meters has risen in general
to alarming rates. It cannot be right that people such as me and the
hon. Gentleman often pay less per unit than some of our poorest
constituents. That is why we have asked the regulator, Ofgem, to have
an urgent look at the matter, and I expect action to be
taken.
The hon.
Gentleman has urged me to ensure that my Department not only talks
about conditions but monitors them. If there is an issue—the
hon. Gentleman has said that there is—I will look at it and
write to the hon.
Gentleman. Ann
Clwyd (Cynon Valley) (Lab): I sought to intervene on the
Minister earlier to thank him for all the support and assistance that
he has given over the years to the workers at Tower colliery in my
constituency. In both his periods as Energy Minister, he has been
extremely supportive. Does he agree with the conclusion of the Welsh
Affairs Committee report on energy, which states
that “a
long term future for Welsh coal can be guaranteed, if carbon capture
technology is fully exploited and a new generation of skilled Welsh
miners can be assured”?
Does he have policies
in place to support those
conclusions?
Malcolm
Wicks: I thank my right hon. Friend for her kind words.
Tower colliery is a shining example of what can be achieved when people
empower themselves. It is a great example of workers’
empowerment, which encourages many of us.
My right hon.
Friend is right to emphasise the importance of carbon capture and
storage for the simple but hugely important reason that we cannot
proceed on the basis
of windmills, energy efficiency and a woolly jumper in winter, although
some wish that we could. We need to make some tougher decisions,
because the world will be burning fossil fuels—oil, coal and
gas—for another 100 years or more. All projections from the
International Energy Agency show that 80 per cent. of demand will be
met by fossil fuels for several decades. For example, consider
coal-powered power stations in China, which I mentioned
earlier. How
do we square the circle between the stark reality of how the world
fuels itself and the pre-eminent challenge of climate change? The
answer is by developing carbon capture and storage, which is why I pay
the matter a great deal of attention. It is very good news that the
Government are funding the demonstration project. The Conservatives
have indicated that they, too, might fund such a project, and we look
forward to their spending proposals, because such new technologies are
extraordinarily expensive. Every demonstration project costs hundreds
of millions of pounds, so I hope that the Opposition have thought
through the tax implications. We are working closely with Saudi Arabia
and the United Arab Emirates, which I visited recently and which are
both interested, and with the Norwegians—Norway is a leading
nation. We are also following developments in the United States, where
there is much interest—there is even interest in Canada now. I
assure my right hon. Friend that I feel, although this is
controversial, that we need coal as part of the energy mix in the
United Kingdom, for reasons of balance and flexibility. However, we
need to bring on CCS as soon as we can to ensure that new plants that
use fossil fuels are capture ready. Soon, we will consult on what that
means and try to provoke a discussion about capture
readiness. Mr.
Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): It would be
ungracious of me not to thank the Minister and the Wales Office for an
advance copy of the statement, although, as hon. Members have
mentioned, it is not quite the same statement as the one that the
Minister delivered. I have no issue with the Minister on that, because
he made a full statement this
morning. I
spent some weeks in Public Bill Committee dealing with the Planning
Bill. I am not sure why I was sent there, but there we are—I
ended up in Committee and spent a few weeks discussing the relationship
between Ministers in Wales and those in Westminster. On the Severn
barrage scheme, the Environment Minister in Wales has clearly stated on
the record that he favours a tidal lagoon model. If that were the model
that the Welsh Government preferred, but the Westminster Government
thought that a barrage would be preferable, who would prevail? There is
some concern about that. I do not say that from a position of not
wanting to get real: we must get real and there should be a major
infrastructure project—there is no doubt about it—but
would the Minister accept a tidal lagoon if the science in the review
backed up that
option?
Malcolm
Wicks: Yes. If the science, environmental assessments,
economics and costings were to point to a lagoon or lagoons rather than
the Severn barrier, we would, of course, accept it, because we want the
process to be rational and evidence-based. We are working closely with
colleagues in Wales: I will be looking at the area on Friday, and I am
meeting Jane Davidson on the previous evening to discuss these
matters.
The programme
of work, as dictated by the Sustainable Development Commission, looks
not only at a grand barrier—there are issues about where it
might be sited—but at lagoons. I want to reassure the hon.
Gentleman on this matter. I understand that lagoons would produce far
less renewable electricity than a great barrier, which could produce 5
per cent. of the UK’s electricity requirement. I reassure the
Committee and the hon. Gentleman that we take the assessment seriously,
because we are discussing a special ecological area—one can say
that it is unique and use that word properly. We must approach the
scheme with great care. Our current programme of work will ensure that
if, in a year’s time, our initial assessments show that there is
a big showstopper and that the project is not on for environmental or
economic reasons, we will stop it. We are not saying that we are going
to do this and there is no doubt. The environmental assessments need to
be done carefully, and the issue of lagoons is being taken most
seriously.
The
Chairman: Order. I would like to get to all hon. Members
who catch my eye. I ask hon. Members to confine themselves to one
fairly short question and call for short answers from the Minister,
too, if
possible. Ian
Lucas (Wrexham) (Lab): I was pleased to hear my hon.
Friend the Minister mention the feed-in tariff. I recall some years ago
a debate in this Room, during which I raised that issue. In Wrexham,
the photovoltaics and microgeneration sector is a huge employer. When
the Minister considers the possible introduction of a feed-in tariff,
will he look at its employment implications and the fact that many
hundreds of jobs might be created in Wales if the Government were to
have the courage to follow the German model and introduce something
like the 100,000 roofs
project?
Malcolm
Wicks: Yes, of course. In general, as we move forward on
the major project—indeed, revolution—to take the carbon
out of British society and the British economy, which is what we are
doing if hon. Members think through the logic behind the 60 per cent.
or 80 per cent. targets, it is important to make sure that Welsh
industry and British industry benefits. We need more green-collar jobs
in Wales, and I am certainly aware of the photovoltaic industry in
Wrexham, because I have met the company and discussed the
matter.
Let us
remember, however, that the feed-in tariff is simply a mechanism. Some
people talk about it almost theologically, as if it were the answer. It
is a mechanism and a way of incentivising microgeneration. We are
looking at it, but we will also look at other
mechanisms. Mr.
Stephen Crabb (Preseli Pembrokeshire) (Con):
Notwithstanding what the Minister has said about the decline in UK
continental shelf production, which is an important bit of context,
will he confirm that there has been a tax bonanza for the Treasury from
the hugely increasing VAT receipts as a result of the increasing barrel
price of oil and from tax revenue from North sea production? At a time
when inshore fishermen in Pembrokeshire have put boats up for sale
because it is no longer commercial for them to go out fishing, when
hauliers in my constituency are laying off drivers, when businesses
across the board in Wales are feeling sharp pain as a result of the
increase in fuel prices, will he join
the hard-working people of Wales and argue for his colleague, the
Chancellor of the Exchequer, to use some of the increased taxation
revenue he is getting as a direct result of the increasing barrel price
of oil to offset a cut across the board in fuel duty and ease the pain
of the people of
Wales?
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