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“Having examined a broad range of studies that offer different scenarios of our energy future, it is clear that there is more than enough renewable resource in the UK to provide a diverse, low carbon electricity supply. All the scenario results suggest that it is possible to meet our energy needs in a carbon constrained economy without nuclear power.”
It is a disgrace that we should languish close to the bottom of the renewable energy league table. It is a disgrace that the Government are still resisting feed-in tariffs, and are promising yet more consultation, thereby delaying their vital implementation, possibly for years. It is pretty much a disgrace that the Government are proud to have overtaken Denmark in offshore wind, as that country has a population of little more than 5 million and far less coastline than the UK. It is a disgrace that, having retreated from their commitment or aspiration to generate 20 per cent. of our energy needs from renewable sources by 2020, even the lower
15 per cent. target is in some doubt. The Minister for Energy has occasionally referred to “15 per cent. or thereabouts” in recent statements, so perhaps we will receive clarification at some stage today.
To end on a positive note, the Government have placed a more substantial focus on renewable energy than we have yet seen. The consultation offers us the opportunity to push the Government further on renewable energy: all that we can hope is that it is not too little, too late.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We do not have very long, so it would be helpful if hon. Members took account of that. Back Benchers have been squeezed by the time taken so far, but I would be grateful for brevity.
6.4 pm
Mr. Eric Illsley (Barnsley, Central) (Lab): I take on board your strictures, Mr. Deputy Speaker. This is a timely debate on energy issues, but there are only about 45 minutes left. When it began, we had only two and a half hours for debate, but the Front-Bench spokesmen took an hour and a quarter. As you suggested, Mr. Deputy Speaker, I shall keep my comments brief.
We have had an interesting debate, and we have had a good tour d’horizon of a number of issues. I do not want to pursue that too much, because I want to make some points about the energy situation, and point out—this has not been referred to very much—the effect on industry of high energy prices, which are absolutely crippling. Energy prices for consumers have increased dramatically. On TV the other day, someone from the gas industry said that domestic consumers could expect price increases of 40 per cent. in the not-too-distant future. Those increases in gas prices and the squeeze on gas affect electricity prices as well, because we made the mistake a good few years ago, in 1988, of generating a lot of our electricity from gas.
I was interested to hear the hon. Member for Rutland and Melton (Alan Duncan) begin his history lesson on the British energy situation in 1997. He should have started in 1988, when we privatised it and liberalised the markets, because that is when many of the problems started. We went into a privatised energy market, and we did away with the coal industry shortly afterwards in 1990. We tried to privatise the nuclear power industry in 1990, but we failed. When the City looked at the books—the former Select Committee on Energy, on which I served, saw those documents and reports by Rothschild, Kleinwort Benson and the other major finance houses—it saw how much the industry cost, and it ran a mile, so the Government could not privatise the nuclear industry. Many of the decisions that we are debating and the issues that we face go back much further than the past 10 years or so.
At the same time as energy prices, including electricity, have increased, commodity prices have increased around the world. The price of everything is beginning to increase, and much of that is down to the increased cost of energy and the increase in demand. The amendment discusses the
“imbalance between supply and demand”.
Presumably that refers to developing countries such as China and India, which have been mentioned, and
whose economies are growing at a remarkable rate. Those countries, particularly China, are drawing in many raw materials and commodities, and demand many energy resources, too. Many of China’s—and, to some extent, India’s—energy resources are based on coal. Those countries are perverting the world supply and demand for gas and oil, because they are building their economy—as we have heard, by a gigawatt every week or so—on coal.
There was a good article in The Guardian last week devoted to carbon capture. It stated that last year, China built about 100 large coal-fired stations, and India built 30. Supply and demand for those countries is therefore based on coal. I am told by the UK’s major energy-intensive companies that supply and demand for energy in Europe are pretty much in equilibrium, so the industry there is not suffering the same high energy prices that industry in this country is suffering. That makes our industry dramatically uncompetitive. The reason why Europe does not have the problems that we face goes back to the fact that we have a liberalised energy industry.
Mr. Bone: I hope that I am not going to anticipate the point that the hon. Gentleman is about to make. The liberalised energy market is a European Union initiative and directive. It is our colleagues in Europe who are not playing fair, not the Government: it is not our side—it is the French and the Germans.
Mr. Illsley: I do not disagree. The question is why we have been left with a liberalised energy market. We have been banging on about Europe liberalising its energy market to level the playing field and so on, but it is simply not happening. Our European partners are not playing ball, but if they look across the channel at what happened to us, they can see the problems that we face. They might therefore think that if they do that to their energy industry, they will go down the same route and be in the same predicament, so their reluctance is understandable.
I remember in 2006 being in the Czech Republic when that country took over the presidency of the European Union. The presidency statement made a commitment to energy liberalisation, mainly because gas prices had gone up that winter, but two years later, nothing seems to be happening. The hon. Member for Reigate (Mr. Blunt), who is not in his place, made the point that we had an energy White Paper as far back as 2003. Since then, we have had another White Paper and a review of nuclear power and, last week, we had the £100 billion renewables review, but we are not doing anything. We are not making the decisions, and nothing is happening; we are simply talking about the same energy gap that we talked about in 2003. We are nowhere nearer bridging it, so we must address the question of why the energy problem affects our industries but not those in the rest of Europe.
In my constituency, there is a glass-producing company that is part of a Europe-wide chain. Compared with the chain’s plants in western Europe, the plant in my constituency is the most unprofitable, because of the energy crisis that it faces. The other day I saw some figures for the projected energy costs of another energy-intensive user. Its costs in 2002 were about £3 million per annum, by 2006 they had increased to £8 million,
and its projected figure for next year is £21 million. It cannot continue in business with such energy costs. Unless the situation changes, we are staring down the barrel of major job losses and factory closures, because we are simply uncompetitive.
Mr. David Hamilton: May I make the point to which I think my hon. Friend is alluding? We need to stabilise the market in the United Kingdom and try to drive it forward while we wait for renewables to come along. We must talk not only about long-term investment in the nuclear industry, but about engineering and mining companies achieving the necessary long-term stability to invest long term in the coal industry while we wait for renewables.
Mr. Illsley: My hon. Friend is right. As I said, we have been talking about the issue since 2003, and we must have stability. However, high energy prices are our short-term problem, and we have no way of addressing it—or it would appear that we do not at the moment. I shall come to the issue of the energy gap, but we also have the long-term problem of how we produce our energy from here on in.
On the issues of oil and gas prices, energy generation and the rest of it, the Government ought to consider whether our supplies are too heavily traded and speculated on because of this country’s market liberalisation. Other countries are not affected by such activity, but I read somewhere the other day that every barrel of oil in this country is traded 12 separate times before it is consumed. Obviously, somebody is going to try to make a profit out of each trade, and that is probably why our prices have been shunted further and further upwards.
I remember speaking two years ago to representatives of a company in my constituency, who told me that one of their concerns about high energy prices was that the biggest gas customer in this country was Barclays bank. The banks were buying all the gas and speculating on it, because of the issues about future supplies. Members have already referred to the countries that supply our gas and to the fact that they are not exactly the most stable countries on which to rely for long-term supplies. The Government have to take urgent steps in the forthcoming months. They must look at what is happening to our industries and at the problems that we will face unless we get our energy prices down.
On the issue of the energy gap, I am opposed to nuclear power and have been for a long time, but we have waited so long and our energy supplies have dwindled so much. Coal-fired stations are closing because of the large combustion plant directive, and the nuclear stations are coming to the end of their useful lives, so we have to do something, and if that something is a nuclear plant, let us get on with it. By the same token, nobody has been stopped from building a nuclear power plant in this country; the market simply has not wanted to do so, because of the disguised costs of nuclear power and the cost of nuclear waste, which we cannot ignore. If we were to examine the cost of the coal industry, we would have to take into account the disposal of all its waste.
On what has happened over the past 11 years since 1997, I remember that back in the 1980s, the then Central Electricity Generating Board falsified the figures that were used to compare renewable and nuclear sources in order to make nuclear look more favourable. The
wave energy machine of that time—electricity would be created from wave power—was heavily referred to as Salter’s Duck. The origin of many renewables issues and of the current situation go back a very long time.
We have talked about renewables, coal and nuclear power. The hon. Member for Cheltenham (Martin Horwood) made a good speech about nuclear energy, and I endorse everything that he said in what was quite an interesting contribution. We should have renewable sources of energy, but even if we carpet this country with windmills, we cannot hope that they will meet our energy requirements for the next 30 years. They clearly will not. We need some heavy-duty generating capacity to replace what we are going to lose, and the answer lies with coal. This country and the rest of the world are going to burn coal for a long time, and the coal industry is buoyant: about 600 million tonnes will be needed simply to fuel the power stations that have been built in the past two years. That is a lot of coal, and we have to face the fact that we are going to be reliant on it.
Kingsnorth power station has been opposed because it does not have a carbon capture and storage facility, and it has been suggested that every planning application for a coal-fired power station will be held back unless it includes carbon capture and storage. That is a major problem. If we stop coal-fired generation on that basis, there will still be concerns about nuclear generation, and in the end, we will not have achieved very much.
The answer is of course carbon capture and storage. It is not a proven technology, but the Secretary of State referred to what I understand to be a competition. He was challenged by my hon. Friend the Member for Bolton, South-East (Dr. Iddon) about pre and post-combustion carbon capture, but pre-combustion carbon capture already exists, and it is operating in my constituency in the form of a coke oven. By converting coal to coke, much of the carbon and many of the gases are extracted from the fuel before it is burned, and they are easier to get rid of at that point in the process.
I am too young to remember town gas and the burning of coke to create gas, but my hon. Friend the Member for Midlothian (Mr. Hamilton) will well remember it. The technology removed many pollutants from coal before it was burned and, as that technology is currently under consideration, it should not be too difficult to enhance it. Funnily enough, all the clean coal technology plants in this country, including the coal gasification plant at Point of Ayr and the fluidised bed at Grimethorpe, were closed in 1990 by the previous Conservative Government, who decided not to conduct clean coal technology research. We have to look at all aspects of generation, including renewables and nuclear, but we must get carbon capture and storage under way. We must realise that burning coal will be a major issue, and that we will have to rely on coal for a very long time.
Finally, one line in the Government’s amendment makes me raise my eyebrows. It says that this House
“believes that the Opposition’s failure to show clear leadership on energy could put at risk Great Britain’s energy security.”
Why we are calling on the Opposition to show leadership on energy matters is completely beyond me, and I would worry about voting for that later. Perhaps the Minister will explain that line to us, and then tell us why it is the
Government who need to show a little more leadership—and show it now. Let us make the decisions on new generating capacity.
6.19 pm
Mr. Oliver Heald (North-East Hertfordshire) (Con): As ever, the hon. Member for Barnsley, Central (Mr. Illsley) has brought some Yorkshire common sense to the debate. He made important points about the history of this issue and about our resources as a country. He also touched on energy efficiency, a point ably covered by the hon. Member for Cheltenham (Martin Horwood) as well.
How can a country such as ours—an island that is lapped by the waves, that can have tidal power and that has offshore wind, substantial reserves of coal and oil, and a population who would be happy to try microgeneration—be in the position of worrying about energy security of all things? We have more energy potential than most. It must be a reflection on the Government that they have not done better to ensure that we have the resources that we need for the future. Furthermore, it is an absolute gift to couple microgeneration with energy efficiency. In that way, we can say to people, “Look, do what you can to save energy. You as a citizen can influence things. At the same time, we will help you to produce energy if you can.” That should be right at the heart of the Government’s approach: they should be trying to get people to volunteer and help in this important cause.
Yet what is the history of the past 11 years? Seven years ago, a royal commission looked at the issue and pointed to the coming energy gap. About five years ago, the Geological Society of London produced a major report to which 150 people contributed. It pointed out that in 10 years’ time, we would be able to produce only 80 per cent. of the electricity that we need.
Yes, the Government have had White Papers, consultations and so on, but what have they actually done? Other countries have been considering the issues. Germany, for example, is doing so much on solar power. Last year, 130,000 photovoltaic panels were installed in Germany, but only 270 were in Britain. Other countries have thought about what their natural solutions should be. Like France, Finland has decided to go with nuclear, and Iceland is doing work with geothermals. Those countries seem to have grasped the nettle. In our country, however, there has been a failure of action. That has been because the Government have not been prepared to take tough decisions; it is another example of dithering. It is not good enough that this country, with the potential that it has, should have been led to the poor situation that we are in today.
Some of the incompetence is appalling. The marine renewables development fund had £50 million but not a single project was backed, as the hon. Member for Cheltenham said. BP was actually developing a carbon capture and storage plant at Peterhead, but did the Government back it? No. Why on earth not? We do not have a trained work force in respect of nuclear power, and we do not have enough transmission infrastructure, so people who have wind farms in Scotland cannot get on the national grid. The Government have been slow on solar power, have had no workers for nuclear power, have been clunking on carbon capture and are off target
when it comes to offshore power generation. We are ending up with the situation described by the hon. Member for Barnsley, Central: we are covering some of our beautiful countryside with onshore wind farms, when the Government could have made decisions that meant that that was not necessary and we could have had a policy that really worked. The Government’s policy has been careless and lazy.
The Beane valley is a chalk river valley in my constituency. It has no pylons and its countryside has been the same for 1,000 years. [Interruption.] The Minister should listen, because I am talking about the effect of his silly policy. Three wind turbines, each the size of the London Eye, have been proposed for that landscape, which comprises small rolling hills, copses and a tracery of fine lanes in the heart of Hertfordshire. The Minister says that that is a good policy for this country. It is not.
The Government have been lazy for 11 years. We do not have what Germany, France and the other major European countries have. The Minister has sold us short, and the price that we are paying is the planning applications in the most heavily populated county of Hertfordshire that would ruin some of the precious landscape to which people throughout the county look for enjoyment and recreation. It is being spoiled because the Minister and his Prime Minister, including when he was Chancellor, were so lazy that they could not do a proper job.
Mr. Jamie Reed: Does the hon. Gentleman share my concern about microgeneration, which is perhaps something of a middle-class conceit? Does he have any idea, for instance, about how much it would cost an average family in the north of England to install a wind turbine on their home?
Mr. Heald: It surprises me that the Labour party has forgotten everything that Tony Blair taught it. There was the “toffs” campaign in Crewe and Nantwich, and now we are told that allowing the citizen to do something to tackle the problem of energy need is not relevant in the north of England. Let us forget the class war—the fact is that we have an energy security problem and everybody should be able to take part in solving it. If people want to do that through microgeneration or some of the other energy-saving schemes, they should be able to. We should not say, “Oh, that is middle class—let’s not do it.”
Mr. Reed: I regret that the hon. Gentleman has sought to misrepresent my views, but I admire the fact that he is facing both ways at once on the issue of renewables. The issue is about not class, but affordability. Class has nothing to do with it. I am simply pointing out that in some of the poorer parts of the country, microgeneration is simply not doable or achievable, and the idea that it should be a principal element of policy is, frankly, for the birds.
Mr. Heald: I was making the point that we can all save energy. We can all influence what happens in our country. If some people want to try microgeneration, that will be an additional help. The Government should be pressing on both fronts: they should be encouraging people to generate and to save energy. Their performance has not been strong.
My first speech at a Conservative party conference, in 1989, was about energy efficiency labelling for white goods—something that the Conservative Government introduced in 1991. Many here will remember Margaret Thatcher’s great speech about our having a leasehold, not a freehold, on the world. She explained the importance of energy efficiency in the modern world. That was all those years ago, and what have the Government really done on energy efficiency in the past few years? I have signed up to the Energy Saving Trust’s plan to make each household more energy-efficient. The Government have not given much of a push to that plan; it has not been a central crusade for them.
Thank you, Mr. Deputy Speaker; I have made the points that I wanted to make.
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