Future of Energy in Wales

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Huw Irranca-Davies: It has been a genuine pleasure to be here today and to serve under your chairmanship, Mr. Atkinson. I hope that you, too, have enjoyed the debate.
As our discussions have demonstrated, there is massive strength of feeling on these issues, and I welcome the views of colleagues on the short-to-medium-term domestic front, which is grabbing headlines at the moment, and on the long-term issues. One of the reassuring things about today’s debate is that, while there has been much discussion around the immediate challenges—literally on the hearth and in people’s homes—it has also taken time to focus on the real, big issues as well. We cannot escape those in our discussions.
Before we started the main debate, the Minister for Energy mentioned one facet that has been touched on by several hon. Members—the need for more green-collar jobs in Wales. The issue of employment in renewables and other sectors of energy production is critical for Wales, and we should not discount it easily.
The hon. Member for Chesham and Amersham spoke right at the beginning on behalf of Welsh sheep, which, she said, make the best wool for Welsh jumpers. I commend that. On a serious point, she spoke about the traditional respect for energy use that we had when times were tight. Such respect is being pushed in our schools at the moment, with the introduction of eco-councils in Welsh schools. My own children are involved, and the councils involve developing awareness of environmental issues and the need to conserve energy as well as looking at renewable energy.
The hon. Lady asked about continuing dialogue with the Welsh Assembly Government. That has been a hallmark of the last few years in the Wales Office, and it is continuing through the Planning Bill, the Energy Bill, the Climate Change Bill and Legislative Competence Orders. The need for very close dialogue and consistently constructive engagement at official and ministerial level has been a hallmark, and we intend to continue that.
On escalating fuel costs, which I will come back to in a moment, I cannot be expected as a Wales Office Minister to pre-empt any pre-Budget statement, but I have heard the representations. As has been mentioned, I recently met a large delegation of hauliers from south, west and mid-Wales in Bridgend, where we had a frank discussion. Those concerns have been passed on and conveyed, but hon. Members should not expect me to pre-announce any pre-Budget statement.
There has been a lot of discussion on the carbon capture pilots, which were raised by the hon. Member for Chesham and Amersham. There is immense potential within carbon capture and storage, and it has the potential to tie in to other industries, such as oil extraction in the North sea and methane gas extraction, if it is applied in the right way.
The hon. Lady asked about nuclear policy and Wylfa. We expect a full consultation to be published in July or thereabouts, and nominations for new sites should take place at the end of the year, but, again, hon. Members should not expect me to pre-empt where those will be—at the moment the hon. Lady’s guess is as good as mine.
On clean coal technology, carbon capture and storage has huge potential. Earlier, the Minister for Energy pointed out that our choice of which pilot project to invest in with CCS technology is determined not only by the UK domestic market and what we can do here, but the potential—jobs included—of exporting the technology worldwide to places such as China and India. We have allocated £35 million for the demonstration of carbon abatement technologies on top of the £20 million invested in the current technology strategy programme for clean energy technologies.
The hon. Member for Chesham and Amersham discussed the marine renewables deployment fund and questioned whether it is underused. The strict criteria that need to be met before a grant is made include the criterion that the technology must have been demonstrated at full scale for three months continuously or for a total of six months in a 12-month period. To date, no application has met that criterion. The money is there, if the technology can be proven rather than its being just flying a kite.
Mrs. Gillan: When no money has been deployed for four years surely somebody ought to be re-examining the criteria? If nobody is meeting them, perhaps the criteria are too high.
Huw Irranca-Davies: The only thing that I would say in response, not being the lead Minister on this matter, is that we must make sure that public money is not wasted. If there is provable technology that can be used and that has a real potential end use, bearing in mind all the discussion that we have had today, then that is what that fund is for.
The hon. Lady also mentioned what we are doing to foster research and development into energy solutions in Wales. My hon. Friend the Member for Aberavon touched on the Wales Energy Research Centre, which was recently created by the Welsh Assembly Government and which now benefits from £7 million of structural funds. Some of the issues dealt with at the centre include microgeneration, design of truly smart meters, development and installation of tidal stream energy systems, low carbon vehicle fuels, energy crops and conversion processes, coal firing with biomass in power stations and the potential for clean underground coal gasification.
On Wales being at the cutting edge of research, we are already starting to put in place links with the knowledge industries and universities to drive the process this forward. In order to build on this base of relevant research and development, the Assembly Government recently announced funding of £5 million from the Higher Education Funding Council for Wales. That is linked to the Welsh School of Architecture, Cardiff university, Bangor, Cardiff School of Engineering and Glamorgan Sustainable Environment Research Centre and Swansea School of Engineering, so a lot of good work is currently going on.
I turn briefly to the contribution made by my hon. Friend the Member for Carmarthen, West and South Pembrokeshire. It was a very good contribution, and his expertise on energy issues really showed through. He talked about the Senate Subcommittee and its views on the role of speculation in crude oil prices. Although he is not here for the conclusion of the debate, I urge him to continue articulating that view using his expertise.
The hon. Member for Brecon and Radnorshire discussed the cost of domestic energy and what it means for Wales, and a few other hon. Members touched on that, too. We welcome February’s announcement of the Ofgem review of the energy market, and we are looking forward to its findings, although we cannot pre-empt them. Welsh Assembly Ministers have discussed energy pricing in Wales with Ofgem, which has agreed to include Wales within the review. The Secretary of State also wrote to Ofgem on that matter.
The hon. Member for Brecon and Radnorshire discussed infrastructure. I remember several years back—it must have been eight or nine years ago—as I was driving through the Swansea valley and up through Creunant, there was a huge billboard on the side of the road, and I wondered what it said. The sign stated, “Gas is coming to Creunant”. That is fantastic, but we still have more work to do.
The hon. Member for Brecon and Radnorshire also talked about TAN 8 and its cumulative effect. I am still not quite clear where he is coming from, so perhaps we can discuss it again on another occasion. My constituency and other hon. Members’ constituencies face what could be cumulative development, and we are encouraging local authorities to take that into account when considering a planning application.
My hon. Friend the Member for Aberavon talked about the highly commendable work of the Welsh Affairs Committee on energy in Wales and the 58 recommendations, rather than 57 varieties, that came out of that process. I am glad that he touched on the fairness and justice agenda, with which the Minister for Energy began his contribution. We must certainly take some difficult decisions, but we must ensure that we are delivering for the people on the doorstep.
Other hon. Members touched on coal-bed methane and virgin methane, including, I think, the hon. Member for Carmarthen, East and Dinefwr. A couple of the pilot holes dug for that project, which returned quite successful results, are in my constituency, and I have visited a couple of them. I note that paragraph 32 of the Welsh Affairs Committee report states:
“we recommend that there is a role for Government in working jointly with industry in developing the potential for commercial extraction of coal bed methane, including joint funding for exploration, to establish the likely extent of this resource.”
I personally feel that there is potential there, and I hope that it will be followed through. I can also tell my hon. Friend the Member for Aberavon that I will be happy to visit the research establishments within his constituency in the coming months.
The hon. Member for Carmarthen, East and Dinefwr discussed Wales being a net exporter, which is right. There is an interchange across the Irish sea, and what is going on is exciting. On the Severn barrage, we do not presume that there will be one outcome from the study, and we must look at the environmental impacts. We acknowledge that the barrage potentially has the capacity to provide the 5 per cent. generation needs that have been talked about. There may be other solutions, and we will have to see what the study comes up with.
Frankly, we know where we stand on the 50 MW issue, and I will say nothing else about it. There are currently four proposals for wind farms of over 50 MW on Forestry Commission land, and another proposal is likely to be confirmed shortly. The Welsh Assembly Government are being kept informed of the proposals, but the Department for Business, Enterprise and Regulatory Reform has not yet given consent to any of them, as they have not yet reached the planning stage.
The hon. Member for Llanelli talked about localisation, community generation and the small-is-beautiful approach. She also talked about the importance of the draft Marine Bill in reconciling conflicting uses within the marine environment. It is good to see that Bill coming through.
With those remarks, I will draw my speech to a close. These are vital issues for the short term and the long term, and I commend the motion to the Committee.
Question put and agreed to.
That the Committee has considered the matter of the future of energy in Wales.
Committee adjourned at Four o’clock.
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Prepared 19 June 2008