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Mr. Gordon Prentice: Will my hon. Friend give way?
Dr. Ladyman: No, I cannot. I accept that that was a disaster, but compare it with the WHO’s estimates of how many people die every year as a result of carbon being put into the atmosphere. I am not talking about climate change, but about respiratory diseases related to carbon. Three million people die from them every year, but colleagues in the House are telling me that it is green to oppose a technology that in 50 years has led to the deaths of fewer than 100 people. Are we instead to rely on an energy source that kills that many people every 20 minutes of every single day of the year? That is nonsense. All low-carbon technologies need to be put on the table.
Like my hon. Friend the Member for Ynys Môn, I am also a firm supporter of renewables. Indeed, I would be mad not to be—London Array, the biggest wind farm currently planned, is to be constructed off my constituency. Conservative Members were saying that they opposed onshore wind farms and wanted them all to be offshore. I remind them that a Conservative council in Kent delayed the start of London Array’s construction—by objecting not to the offshore wind farm, but to planning permission for the onshore substation for the wind farm. That is the extent of their opposition to any building of renewables plants.
If we can go ahead with the development of the London Array and of the Warwick Energy wind farm, the other field off my part of the coast, and have them constructed from the port of Ramsgate—if the manufacturing of the wind farms can be done in east Kent, as I think possible and economic—we can become a centre of expertise around the world for wind farm construction. We could help everywhere else in the country with the construction of wind farms; perhaps we could get a little close to hitting the 15 per cent. target that people speculate we will have to achieve in the short term. However, all that does not mean that we should overlook the benefits that nuclear energy can deliver. We should consider all the low-carbon technologies.
Yes, we should also carry out the study into the Severn barrage but, I say to Members on both sides of the House who are obviously excited about its possibilities, let us wait and see the science and see what the environmental impact will be before we make our decision. Taking energy out of water changes the environment in the water. If one takes energy out of rough water, one gets smooth water; if one takes energy out of the tide, one gets flat water. The sediment in the water settles and the things that used to live in that ecosystem cannot live there any more. Recently developed new technologies can help with that, because they do not take out all the energy and can use different types of construction rather than the old barrage system that we used to talk about, and which, if the Liberal Democrats had had their way, we might have started to build 10 years ago. We have gone beyond that. Perhaps there are solutions to building the Severn barrage that will not have those environmental consequences, but we cannot rely on them and we have to wait for the science. In the meantime, we must plan an energy mix that guarantees our energy security into the future and ensures that we focus on the key enemy that we face today—carbon.
Let me relay one further story. A few years ago, I had a conversation with a senior official from the Russian embassy. I said, “What is your energy policy?” He replied, “Our energy policy is that we’re going to produce our energy from nuclear power and hold on to the gas until we control it and control the price, and then we’re going to sell it to you.”
6.41 pm
Mr. Michael Jack (Fylde) (Con): I enjoyed listening to the hon. Member for South Thanet (Dr. Ladyman) when he was a Minister, but I welcome him back to his Back-Bench position because he always brings sound science to our debates. I agree with the line that he has taken. Like the hon. Member for Ynys Môn (Albert Owen), I find myself in the category of a supporter of the nuclear power industry as well as of renewables and energy efficiency.
I looked to the Bill to give me a sense of direction and a sense of policy, but the long shopping list that it represents did not provide me with that, so I thought that I would try to find some words that summed up what an energy Bill at this stage in our Parliament should be about, and decided that it should be described as a Bill to secure low-carbon sources of power and heat bolstered by an efficient energy efficiency policy. That illustrates one important drawback to debating energy in a climate change vacuum. It is a pity that we could not be debating one piece of legislation combining energy and climate change. The various White Papers that the Government have produced in the past 12 months did not achieve that objective so it is important that we do, and the contributions by all right hon. and hon. Members have brought together all aspects of energy policy.
In my earlier intervention, I expressed sadness that the Bill does not say anything about a renewables heat obligation. Given the European Union targets for renewable energy that are likely to come out tomorrow, aiming at anything up to 20 per cent. coming from renewables, and with a third of our emissions in this country coming from heat sources, it is disappointing that the Government have yet to resolve their position on a renewable heat obligation, because it will clearly be an important part of our energy policy in future.
As my constituency of Fylde is the home of nuclear fuel production, I am sure that the House will not be surprised to learn that the nearly 1,700 workers in that industry have welcomed the Bill, as I do. However—the Bill is silent on this point, but perhaps the Minister can give me some reassurance—they are worried that in enabling the United Kingdom to use its nuclear expertise, particularly in the field of high-quality, safe production of nuclear fuel, the arrangement that will exist between the Nuclear Decommissioning Agency and Toshiba Westinghouse, which operates the site at Springfield, near Preston, should retain the skills and excellence of our fuel manufacture and capture the benefits of the energy security that indigenous fuel production will give us while making certain that we do not introduce other forces—perhaps other opportunities for people to run the site at Springfield—which would dissipate the enormous gains in productivity and safety in manufacture that have been built up over the years. A reassurance from Ministers would do a great deal to help to secure the retention
and skills of the people in the work force at what could be the home of future nuclear fuel production in the United Kingdom. Clearly, we have to sort out the issue of nuclear waste, but that should not be a showstopper as regards the activities that the Government have started in order to enable bids to go ahead and enable design approval to be given to a new nuclear generation of nuclear power stations.
Bob Spink (Castle Point) (Con): Does my right hon. Friend accept that the Nuclear Industry Association acknowledges that the private sector should pay all the costs of decommissioning nuclear waste from new nuclear plant?
Mr. Jack: I accept it in principle. We touched on the definition of “all” earlier in the debate, and the Government have yet to crystallise precisely what that would mean. It is often forgotten that our existing advanced gas-cooled reactors already have to make provision for their decommissioning costs and are still able to produce competitively priced electricity. Certainly, the public must have confidence that they will not be left with a legacy cost for new nuclear build.
I want to move on to energy efficiency. I am disappointed that the Bill does not contain more about smart metering. I had a meeting with representatives of Scottish and Southern Energy, who came to talk to me about the report by the Select Committee on Environment, Food and Rural Affairs, where, in our climate change citizens’ agenda analysis, we described the benefits that could come from smart metering. They said that proper smart metering, which would provide appropriate tariff management and control of the use of electrical equipment in the domestic situation, would make it possible to save up to the capacity of two power stations-worth of generation. The Bill refers to meter accuracy. I accept that the Government are undertaking trials, but we do not want to miss a golden opportunity to maximise the use of our existing sources of electrical generation without moving forward. Perhaps the Minister might be able to make an announcement on that during the course of the Bill’s progress.
That opens up the question of decentralised power. We have heard a discussion about domestic generation of energy. When the Select Committee visited Freiburg and Stuttgart in Germany, we saw for ourselves the potential of the German feed-in tariff. I wish that Ministers would stop misleading the public to the effect that this is the product of some giant German subsidy or that it is costing Germany energy users an unaffordable amount—it is not, as the average figure is €2 per household per month. If one is prepared to accept that customers currently pay for the existing energy efficiency commitment and for the renewables obligation certificate, it should be possible for customers to pay for a feed-in tariff system in this country.
It is not a question of seeing Britain’s roofs covered by photovoltaic cells. Without the feed-in tariff, decentralised community-based systems are inhibited from being developed. It has been left to the market leader, Woking, to pioneer combined heat and power—a decentralised system that puts money in the coffers of the local authority, as well as providing local authority buildings, a hotel, two blocks of flats and an
entertainment centre in Woking with the ability to produce their own power and electricity. That local authority could do more, but there is nothing in the Bill about private wire capacity and nothing to change the trading arrangements to enable such a local authority to sell on a much wider basis its skill and expertise in decentralised local electricity generation.
Such a revolution could mean that we could have the best of all worlds—a guarantee of safe base load through nuclear, generation through the exploitation of renewables in the way that the Government want, and a proper decentralised energy-efficient system for the consumer, properly monitored by a smart metering system. That is how we should be looking to have a balanced and secure energy portfolio. Unfortunately, however, the Bill does not provide for that optimal use of the skills, technologies and knowledge that exist in Europe and in the United Kingdom.
Given that challenges are coming from Europe, perhaps in the next few hours, I urge the Government to be more ambitious with the Bill, even at this late stage, and to exploit all the opportunities to develop a true low-carbon and secure source of energy for this country.
6.49 pm
Paddy Tipping (Sherwood) (Lab): The two drivers of energy policy have traditionally been security of supply and the challenge of climate change, but there is a third important pillar, which is affordability.
In reality, the liberalised energy market has served us well. In comparative terms, energy costs in the United Kingdom are still relatively low. But all householders are facing increases in their bills, in some cases by as much as 29 per cent., which has real implications for the Government’s target of eradicating fuel poverty by 2010. There are 4 million households in difficulty at the moment, and every 1 per cent. rise in energy prices adds roughly another 40,000 to the number. There lies a real challenge, and the Government need to think about it. It is not just a question of a commitment; there is a legal requirement to meet that target.
One of the things that could be done is to increase the Warm Front contribution. Secondly, fuel poverty should be treated as a social issue. A great deal of information is held on the number of people who are vulnerable, which needs to be shared with the energy companies. It is also clear that many who are entitled to help are not getting it. With regard to social policy, we need to ensure that we take those fairly simple measures.
In the Chamber today, and in future, there will be a debate about social tariffs. Some energy companies are performing well. Energy companies are offering £56 million in support this year, but the situation is diffuse and confusing, and we need to revisit it. I am glad that the Secretary of State has told us that the idea of legislation on a compulsory tariff is still under review. I say to the Minister for Employment Relations and Postal Affairs that this matter will be pursued vigorously during the passage of the Bill.
It has been made clear, particularly by the right hon. Member for Fylde (Mr. Jack), that smart metering can have an important effect on fuel poverty. There is plenty
in the Bill about meters, but there is no provision at all about smart meters, despite the fact that the Government are committed to introduce them. The last energy White Paper included that commitment, and the Prime Minister has recently reinforced it. It is a big task: 45 million meters have to be changed. A successful pilot scheme is going on now.
Mr. Jack: Does the hon. Gentleman agree that it is amazing that a country such as Italy has rolled out smart meters nationwide? If the Italians can do it, surely we can.
Paddy Tipping: Of course we could, and it is important, as my hon. Friend the Member for Nottingham, South (Alan Simpson) said earlier, to have the right sort of smart meters—those that measure input as well as output—as a move towards microgeneration. Smart meters are relevant not just to electricity, but to gas and water too. I hope that the Government will think hard during the passage of this Bill, not about introducing detailed regulations, but about taking enabling powers under the Bill. The detail can follow later, but we need to move on from a discussion in principle to a discussion about how we will do it. It is an important step for technology, and there is much in the Bill about technology.
Other hon. Members have spoken about carbon capture and storage. I represent a coal-mining constituency; collieries are still operating in Nottinghamshire. Miners in the UK are the most efficient miners in Europe. We can handle the economic challenges, but unless we can burn coal cleanly, the environmental consequences will destroy the coal industry. That is why clean coal technology and carbon capture and storage are so important. Eight replacement coal-fired power stations are being talked about at the moment—or at least, they were being talked about last summer. A number have dropped out, because people do not believe in the Government’s commitment to clean coal technology. It is astonishing that Japan spends more on clean coal technology research than the UK, given that Japan does not have any indigenous coal. It is important for such competition to succeed. It is also important to discuss post-combustion technology as well as pre-combustion technology. We are able to burn coal cleanly—and we need more than one demonstration plant operating by 2015.
Mr. Clapham: Does my hon. Friend agree that another technology needs to be exploited—underground gasification? As he will be aware, since the industrial revolution—going back to 1760—we have used about 9 per cent. of our coal reserves. Most of those reserves are deep, and if we were able to instigate the burning of those seams, we could pump out methane that would replace much of the gas that we use.
Paddy Tipping:
My hon. Friend is a distinguished commentator on the coal industry, and he is clearly correct. Coal offers us flexibility and an opportunity for security of supply. It is one of the most flexible ways of providing electricity, so we clearly need to consider gasification. All I say to the Minister is this: if we believe that coal—including indigenous coal—has a future, we should not argue about the economics of the
matter, but find solutions that involve burning coal cleanly in an environmentally sensitive way.
That brings me to carbon pricing. The carbon market is all over the shop at the moment. The European Union’s emissions trading scheme is in its infancy, and until investors in future planning have clarity about the price of carbon—a high and stable price, into the future—we will not see investment. I have nothing against nuclear power in principle. There is a case for replacing nuclear with nuclear, but I have worries about the practicalities and whether it will happen. Energy companies have had the opportunity and the ability to make new nuclear proposals for many years. We could do more with planning and licensing, and ensure that the nuclear installations inspectorate has a sufficient number of people working for it, but unless the economics of nuclear power are right, we will not see the certainty necessary for investors to invest in the new nuclear industry.
I think that the Government accept that. I was particularly struck by the conclusions after paragraph 2.66 in the nuclear White Paper:
“The Government is committed to working to strengthen the EU’s Emissions Trading Scheme...and to building investor confidence in a long-term multilateral carbon price signal.”
We can all agree with that, but the following sentence is revealing:
“We will keep open the option of introducing further measures to reinforce the operation of the EU ETS in the UK should this be necessary to provide greater certainty for investors.”
What does that mean? I think that it means that if the ETS does not work out, the Government are prepared to offer a guarantee for carbon, to ensure that there is a hedge price for it. That does not sound to me like a market operating in traditional terms. I hope that we will have the opportunity to examine that issue in Committee.
Dr. Ladyman: It is right that the Bill makes the nuclear industry internalise all the costs of nuclear energy. However, does it not follow that the carbon price should be such that carbon producers, too, pay the full costs? That would make not only nuclear but carbon capture—and, therefore, coal mines—more economic.
Paddy Tipping: Of course, I agree. However, the White Paper is uncertain on that point. We need a high and stable price for carbon. The White Paper acknowledges that we do not currently have that, and suggests that the UK should introduce it. It is also clear that the costs of decommissioning have not yet been worked out. As the White Paper acknowledges, unless there is certainty about that, investment will probably not be made in further nuclear plant.
There is much to be done. We face an energy crisis in a decade. The time for talking is finished, and the time for producing a framework for investment is now.
7 pm
Anne Main (St. Albans) (Con): I declare an interest, in that my husband has undertaken some IT consultancy work for Utilita, a small energy company.
I am delighted to follow the hon. Member for Sherwood (Paddy Tipping), who focused on smart
metering and fuel poverty. As we are supposed to be mindful of fuel consumption and waste, and the Government have expressed a keen desire to alleviate fuel poverty, I am especially concerned because the Bill misses an opportunity to eradicate fuel poverty and increase our national energy efficiency. The Secretary of State mentioned such concerns, and said that how we use energy and tackle climate change is vital. That is why the Bill represents a missed opportunity.
It has been acknowledged that production from the UK continental shelf is declining, and it is anticipated that we will rely on imported gas by 2020. Higher gas prices mean that it is even more vital for poorer households to be helped to become energy-efficient.
Energywatch has been mentioned many times during the debate. It has drawn attention to the Bill’s shortcomings, stating that it represents a missed opportunity to introduce important provisions. That is especially true at a time of high fuel prices. Why is the Government’s laudable aim of alleviating fuel poverty absent from the Bill? I do not believe that that was their intention. That aim should be added to the Bill in Committee.
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