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Colin Challen: Stories are circulating that the EU might announce tomorrow that there will be a renewables trading option, so that, for example, if we have a renewables target of 15 per cent. we may deliver less if we pay credits to over-achieving countries. Will my right hon. Friend set his face against such an
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arrangement? At present, our proportion of total renewable energy stands at 1.75 per cent. as against the EU average of 7 per cent. and we ought to have a better bottom line.

Mr. Hutton: The principal focus is on getting to the point where the EU sources 20 per cent. of its energy from renewable sources. That is the whole thrust behind the Commission’s proposals and the decisions taken at the spring Council. I will not speculate today on the detail of the Commission’s proposals, because that would not serve any helpful purpose as none of us has seen those details. Our focus should be on the position in the EU and here in the UK.

Kali Mountford (Colne Valley) (Lab): I know that my right hon. Friend is aware that communities in my constituency are keen for changes to be made so that they can have energy from renewable sources; they want to have a sustainable community and then to sell energy back to the national grid. However, they feel that they are stymied by current regulations. What comfort can they be given that those obstacles can be removed and they can get on with being a sustainable community?

Mr. Hutton: The banding proposals that I mentioned for microgeneration will help, and the reforms of the renewables obligation process will encourage and stimulate that. We are looking carefully—as we will certainly need to do—at microgeneration as part of our response to tomorrow’s proposals from the European Commission. Personally, I want us to see what more we can do on microgeneration, because I believe that it is an untapped resource and that we can do more to encourage it. We look forward to working with my hon. Friend and others to make sure that we do that.

I have referred on several occasions to the Planning Bill. The Energy Bill will help improve grid connection for offshore renewables by supplementing the current offshore transmission regime. The UK is now the world’s No. 1 location for investment in offshore wind, and I want to ensure it remains so. At the end of last year, I announced proposals for a potential major expansion of UK offshore wind, with a draft plan that could allow companies to develop up to a further 25 GW of offshore wind by 2020. Ensuring that we have the infrastructure in place to transmit offshore renewable electricity effectively to the onshore grid is therefore crucial.

To help enable that, it is important that we establish a cost-effective regulatory regime for offshore transmission. That will involve a wide range of activities over the longer term. In the shorter term, the Energy Bill will add to existing powers so that Ofgem can run cost-effective and efficient competitive tendering exercises for offshore transmission licences. Introducing competition in that area will help avoid unnecessary delays and costs to the development of offshore renewable projects, ultimately reducing risks and therefore supporting investment. We have estimated that the new approach could save between £230 million and £400 million in the overall cost of delivering this crucial new infrastructure.

Dr. Stephen Ladyman (South Thanet) (Lab): Before my right hon. Friend leaves the subject of offshore wind power, may I ask him something? He will know that the
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biggest of the planned wind farms—the London Array—will be located not far from my constituency and that we hope it will be constructed from the port of Ramsgate. If that comes to pass, east Kent, which is an area of high unemployment, could well become the leading centre of expertise in the construction of offshore wind projects. Will he undertake to do everything in his power to ensure that that wind farm is constructed from Ramsgate?

Mr. Hutton: I shall certainly do that, and I am happy to work with my hon. Friend to bring that about. All the analysis and the discussion so far today has been about the energy implications of the things that we are talking about—security, climate change and so on—but we should not overlook the prospect that renewable technology and renewable energy sources hold out a good chance of bringing about the birth of a new generation of green-collar jobs in British manufacturing. We should focus on that, possibly not in this debate, but in the months and years ahead. I shall do all I can to work with him and hon. Members on both sides of the House to ensure that the UK extracts the maximum potential benefit from all such technology for our manufacturing base. We can, should and will do more.

I hope that this opportunity to restate the Government’s ambitions for renewables is also timely for another reason. Today, I am publishing the terms of reference for the Severn tidal power feasibility study, which I announced in September. The Severn estuary has the potential to generate up to 5 per cent. of the UK’s electricity, and the feasibility study is a hugely important project in ensuring that we understand all the environmental, social and economic impacts of a project of such size and scale. It is potentially another important strand of our efforts to increase renewables deployment. Earlier today, I laid a written statement before the House setting out the full details of the terms of reference, and we estimate that the study will cost about £9 million.

Mr. Ian Liddell-Grainger (Bridgwater) (Con) rose—

Mr. Heathcoat-Amory rose—

Mr. Hutton: I shall give way first to the hon. Gentleman and then to the right hon. Gentleman.

Mr. Liddell-Grainger: The reason why we stood up is that my right hon. Friend represents Wells and I represent Bridgwater, and the project will affect our constituencies enormously. I cannot find reference in either the Planning Bill or the Energy Bill to the following point. This massive infrastructure project will cost billions, but have the Government given themselves enough leeway, through the Planning Bill or the Energy Bill, to help force it through to achieve their aims?

Mr. Hutton: I certainly think that the Planning Bill will help. We must improve on the length of time it takes us to approve crucial national infrastructure projects, such as the Severn barrage—potentially. We simply cannot afford years and years of the sort of planning inquiries that we have endured recently. The science of climate change is changing rapidly and policy makers must respond to that. May I assure the hon. Gentleman, the right hon. Gentleman and other hon. Members
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whose constituencies could be affected if the project were given the go-ahead that it is important—this comes back to what the hon. Member for Shipley said—that the fullest possible consultation takes place? With the support of the hon. Member for Bridgwater (Mr. Liddell-Grainger) and others affected by the project, I intend to convene a group of affected Members of Parliament, local authorities and others to ensure that the proper exchange of information takes place, so that we all know exactly what is happening and what progress is being made on the project.

Mr. Heathcoat-Amory: The Secretary of State knows that if the Severn barrage goes ahead, it will start in my constituency. Will he therefore assure me that the study will assess the effects in the Severn estuary on not only the wildlife but the other species affected—homo sapiens, particularly those in the coastal area represented by my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) and me? It will be the biggest civil engineering project ever attempted in this country and it will have enormous effects on our constituencies. Will the study assess those impacts in detail, and not simply address the environment of the estuary and the marine environment?

Mr. Hutton: I can reassure the right hon. Gentleman that a decision has not yet been made about where the project will kick off or where precisely in the Severn estuary it will be located. Such decisions will be made later, so he does not need to worry so much about that right now. The whole point of doing the piece of work that I mentioned is to examine all the implications of such a project; it will include all the things to which he has referred.

I should apologise to the hon. Member for Preseli Pembrokeshire (Mr. Crabb) for confusing him with the hon. Member for Shipley. I am sorry for that, but he looks and sounds very much like the hon. Member for Shipley.

Roger Berry (Kingswood) (Lab): My right hon. Friend has given me a reason to be cheerful, as progress will be made on appraising the possibilities of Severn tidal power. Many local Members of Parliament—including me—Greenpeace, the Severn tidal power group and others will welcome the announcement. On two occasions, my right hon. Friend has referred to a Severn barrage. Will he reassure the House that all feasible technologies for using tidal power will be appraised? I suggest that there is no disagreement among sensible people that tidal power is critical, but the technologies need to be appraised.

Mr. Hutton: I apologise to my hon. Friend and to other hon. Members for not making that point clear. The appraisal will consider, for example, the potential power that we can generate from lagoons. I know that many hon. Members have an interest in that.

Mr. David Heath (Somerton and Frome) (LD): Will the Secretary of State give way?

Mr. Hutton: If I do, I hope that it will be the last time that I shall be asked to give way. I know that many hon. Members want to speak in the debate, and I am taking too much time.

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Mr. Heath: I am grateful to the Secretary of State. I have some form on this matter, as 20 years ago I was on the feasibility group that considered the Severn barrage. I still believe that it must be the right sort of thing to do. Can I take it from the Secretary of State’s comments that the precise location of the development—whether it will be in the upper or lower Severn estuary—and the technology to be employed are still to be decided? Can I take it that the feasibility study will consider not only the environmental and energy benefits and disbenefits but the possibility of providing some protection against flooding in the Somerset levels area through a barrage, or at least some form of barrier, in the lower Severn estuary?

Mr. Hutton: I reassure the hon. Gentleman that no such decisions have yet been made. There would be no point in commissioning such a study if we had already made up our mind about all those issues. No decisions have been made and we need to consider all the issues that have been referred to. The study will be wide enough to consider the potential of other barrage schemes and other forms of tidal power around the UK, including in the Mersey and, closer to my constituency, in Morecombe bay. We should not rule out anything at this point. Our job is to maximise the potential contribution of renewable sources, from wherever they come.

Part 3 of the Bill covers the decommissioning of energy installations.

Mr. David Chaytor (Bury, North) (Lab): Will my right hon. Friend give way?

Mr. Hutton: This really will be the last time.

Mr. Chaytor: There could be reasons to be cheerful in part 3 if the Government can guarantee that the nuclear generators will take on the full costs of decommissioning and waste management. The nuclear White Paper, of course, honestly explains that in extreme circumstances the taxpayer will have to pay the bills for decommissioning and waste management. Will my right hon. Friend say whether the Bill defines those extreme circumstances? If not, will he give us an example of them?

Mr. Hutton: I want to come on to that topic in a second. All Governments have a wider responsibility for public health and safety. If any threat to public health and safety should arise from storage or decommissioning it would be front and centre the responsibility of the Government to commit the resources of the emergency services, for example, to protect the public. I want to say something about how we will run the exercise and determine the costs of waste disposal and decommissioning. That is an important point. In such circumstances, Governments would have to intervene and commit public resources to safeguard public health and safety. We know of the toxicity of the materials that we are discussing and the overriding obligation must be on the Government to protect the public. It is our obligation under international law and treaty, anyway.

As I recently confirmed to the House, it is our view that new nuclear power has a role to play in the UK’s energy mix. New nuclear power will contribute to the
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diversity of our energy supplies and help to reduce carbon emissions. It will also reduce the costs of meeting our energy goals. In a world of carbon prices and high fossil fuel prices, we believe that it makes commercial sense. Ultimately, of course, companies will decide whether they wish to invest in new nuclear power, not Ministers.

We have listened to the concerns about new nuclear power, including those about the costs of decommissioning and waste. We have made it clear that the developers and operators, not the Government, will have to fund, build and operate new nuclear power stations. That includes meeting the full costs of decommissioning and each individual operator’s full share of waste management and disposal costs.

Mr. Gordon Prentice (Pendle) (Lab): Will my right hon. Friend give way on that point?

Mr. Hutton: No, as I must make progress.

The new legislative framework in clauses 41 to 63 in part 3 will ensure that all operators have in place a robust financing arrangement, in the form of a funded decommissioning programme, before operation of a power station commences. The Bill will require every operator to have a fully costed technical plan for each new nuclear power station that sets out in detail how the station’s nuclear waste will be dealt with safely, and how the station will eventually be decommissioned. The Bill will also require all operators to have a financial plan that describes how they will provide the necessary funds to meet those costs. Both plans will form a funded decommissioning programme that will be subject to approval by the Secretary of State.

Richard Ottaway (Croydon, South) (Con): Will the Secretary of State give way?

Mr. Hutton: I shall make a little more progress and then give way to the hon. Gentleman and to my hon. Friend the Member for Pendle (Mr. Prentice).

There will be powers to enforce compliance with the funded programme. The Bill will make it a criminal offence to operate new nuclear power stations without having an approved programme in place. Failure to comply with the programme will also be a criminal offence.

As a provision outside the clauses in the Bill, the Government will ensure investor confidence by establishing a fixed price for disposing of new nuclear waste. That will be based on expected costs, with a significant risk premium built in to safeguard the public purse. Further details of how the system will work will be available later this month, but it is wrong to suggest, as some have, that a system based on fixed costs will mean a taxpayer subsidy for new nuclear power. It will mean no such thing: as I have said, we will build a significant contingency into pricing proposals to guard against public subsidies, in a wide range of possible circumstances. The Bill will also ensure that, in a number of situations, including insolvency, the Government will have the power to seek additional funding from parent and other associated companies. In that way, we will be able to ensure that operators meet their financial obligations.

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The regulatory structure that the Bill puts in place, combined with the work to determine waste and decommissioning costs and the other facilitating measures announced in the nuclear White Paper earlier this month, constitute an important package of measures. Those measures will ensure that nuclear power is available as an investment option to companies, alongside other low-carbon technologies. At the same time, however, they will, as I have said, ensure that the Government are free to act to discharge their international responsibilities.

This part of the Bill also strengthens the decommissioning regime for offshore renewables and for oil and gas installations. Developers already have an obligation to ensure that redundant offshore installations are decommissioned properly, to protect the marine environment and to ensure the safety of other industries, such as shipping. New provisions in the Bill will strengthen the regime and put in place suitable protections for the public purse and the environment. They will also ensure that funds put aside for decommissioning are expressly protected for that purpose, even in the event of insolvency.

Richard Ottaway: I am genuinely grateful to the right hon. Gentleman for giving way. I hesitate to intervene on the good relations between the Government and the Scottish National party, but what will happen if the Scottish Executive block proposals to build a nuclear power station in Scotland?

Mr. Hutton: What will happen is that there will be no new nuclear power stations in Scotland. As the hon. Gentleman knows, planning is a devolved matter for Scottish Ministers to determine. I think that the Scottish Executive are making a huge mistake. As I have said before, I think that they are playing politics with the situation, and that is regrettable. In the UK context, it is really important that the various devolved Administrations work together constructively. I am happy to say that that is what happens with Wales and Northern Ireland; sadly, Scottish Ministers have not engaged with the matter sensibly or intelligently.

Several hon. Members rose

Mr. Hutton: I will give way, for the final time, to my hon. Friend the Member for Pendle.

Mr. Prentice: Only one nuclear power station in the world—at Three Mile Island in the US—has been decommissioned and also dismantled. What is the additional cost of dismantling a nuclear power station, as opposed to merely decommissioning it? Is a decommissioned nuclear power station hazardous in any way?

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