Clause
75
Third
party access to oil processing
facilities
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
I thought that it was time that I ended my silence
and made a short speech to the Committee. I sensed that Members
demanded
it.
The
clause extends the dispute resolution process so that the Secretary of
State can intervene in disputes over third-party access to oil
processing facilities, if requested by a prospective third-party user
of upstream petroleum infrastructure. Legislation in that area does not
currently cover such upstream oil facilities. However, by contrast, the
existing regime covers most upstream gas processing facilities under
the Gas Act 1995. As I mentioned earlier, these powers are meant as a
deterrent against the use of infrastructure owners’ monopoly
powers. A more comprehensive and consistent coverage of upstream
petroleum infrastructure by the third-party access regime will make the
threat of the use of the Secretary of State’s powers more
effective.
The clause
specifies the steps that the prospective third-party user needs to take
before they can apply to the Secretary of State for directions. For
example, the clause sets out the process that a third party will need
to have followed to agree access with the existing owner of the oil
processing facility, before they can ask the Secretary of State to
intervene on their
behalf.
The clause
also sets out the issues that the Secretary of State must consider when
deciding whether to intervene. For example, he must decide whether the
application needs to be adjourned in order to give the
parties more time to negotiate. The Secretary of State may give
directions, if he is satisfied that they will not prejudice the
efficient operation of the oil processing facility or its use by the
owner, his associates, or anyone else with a right to use it. The
content of these directions is set out in clause 76, and that clause
should, therefore, be read with this one. I move that this clause stand
part of the
Bill.
Question put
and agreed
to.
Clause 75
ordered to
stand part of the
Bill.
Clause
76
Directions
under section 75:
supplemental
Question
proposed, That the clause stand part of the
Bill.
Malcolm
Wicks:
As I said, clause 76 should be read in conjunction
with, and is supplemental to, clause
75.
The clause
describes the detail of the directions that the Secretary of State may
issue in disputes over third-party access to oil processing facilities,
including directions for the terms of access, the amount of oil to be
processed and the amount to be paid for it. I move that the clause
stand part of the
Bill.
Question put
and agreed
to.
Clause 76
ordered to stand part of the Bill.
Clause 7
7
ordered to stand part of the Bill.
Clause
78
Energy
reports
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to take new
clause 5— Annual report on gas
storage
—
‘The
Secretary of State shall, in each calendar year following that in which
this Act is passed, lay before Parliament a report
on—
(a) his assessment
of the appropriate volume of onshore gas storage to ensure long-term
energy security, and
(b) the
progress that has been made towards reaching that
target.’.
New
clause 25—Energy usage in homes and
businesses
—
‘The
Secretary of State shall, in each calendar year following that in which
this Act is passed, lay before Parliament a report
on—
(a) total energy
consumption in domestic
housing,
(b) total energy
consumption by businesses,
and
(c) the impact of
government measures to assist energy
efficiency.’.
2.30
pm
Martin
Horwood:
It is good to give the Minister a little rest,
even though we are enjoying his numerous speeches on the subject. In
the explanatory notes, we are told that the clause removes prescriptive
and outdated reporting requirements. That is strange. Since those
requirements were introduced only in the Sustainable Energy Act 2003
and barely seem to have
had time to settle in, how can they be outdated? Further, if they
prescribe the provision of accurate information, I do not see how that
is such a bad thing.
The first part of
clause 78 seems to relieve the Government of some of their reporting
duties under the Sustainable Energy Act, including what they have done
to develop renewable and micro-generation energy sources and to ensure
the necessary expertise to develop potential energy sources. That may
not just apply to the energy sources that I am quite fond of, such as
tidal power, biomass, or even biogas; the hon. Member for Copeland
might be interested to know that it could include ways in which we are
developing expertise in nuclear energy, which is quite an issue. The
clause also appears to relieve the Government of reporting duties on
what they have done to achieve the energy efficiency aims set out in
the Sustainable Energy Act.
The clause goes on to remove
the requirement for the Government to report on activities undertaken
during the previous year, although not the requirement to publish a
report each year. However, that means that they could report on any
period that they decided. In other words, the time scales could be
adjusted so that, for example, good things could be re-reported, or
they could miss out particular months so that some things went
under-reported.
Again, we hit
the succession problem for the Minister. We all know that he is an
honourable man and I know that he would never, under any circumstances,
re-present, or re-package good news year after year. Nor would
he—perish the thought—adjust time scales to produce the
best possible spin on statistics. However, I know that he will be
shocked to discover that that sort of thing sometimes goes on in
government. The CO2 and greenhouse gas emissions targets
under the Kyoto protocol spring to mind. We are constantly told that we
are on course to meet those targets, despite the fact that the basket
of greenhouse gases has gone up under this Government and that since
2002 they seem to have been on an upward trend. Yet we are still
apparently on course to meet the greenhouse gas targets. The fact that
we are missing the domestic CO2 targets is rather glossed
over. That offers an example of the kind of trap that Ministers might
inadvertently fall into when they present these
numbers.
Charles
Hendry:
I am interested in the way in which the hon.
Gentleman is introducing the clause. Does he agree that another example
is fuel poverty targets? When the numbers of people suffering fuel
poverty were going down, the Government managed to produce the figures
every year, but now that they are going up, we have not seen the
figures since 2005.
The
Chairman:
Order. I hope that the hon. Gentleman will not
be tempted to respond to that particular
point.
Martin
Horwood:
I think that we may come back to the subject of
reporting on that front later in the Bill, Mr. Amess. We
will obey your instructions.
The risk is
that some statistics will inadvertently be presented in an overly
generous way. It is important that, having set up these specific
requirements for reporting on particular issues and on particular time
scales, we do not change that regime unless there are very good reasons
to do so. It would surely be wise to remove the temptation from the
Minister’s successors—whoever they might be—to
organise the statistics to their own advantage. I question the
necessity for the clause to remove those reporting requirements and
allow the temptation for future Ministers to massage
statistics.
Charles
Hendry:
Clause 78 is one of the most important in the
Bill, about which I very much share some of the concerns set out by the
hon. Member for Cheltenham. I am particularly indebted to Andrew
Warren, from the Association for the Conservation of Energy, for
pointing out the possible consequences of the clause, about which we
should be profoundly
concerned.
The hon.
Gentleman implied that we should strike out the clause, under which, as
he pointed out, the Government would not have to report on, for
example, specified energy sources, the expertise to develop potential
energy sources and energy efficiency. As he also pointed out, the
clause will change the time at which the Government will produce their
reports. Currently, they have to produce them for the year in question,
but, as I understand it, that requirement would be removed by the
proposed changes. It would not remove the requirement to produce a
report every year, but it does remove the requirement for that report
to cover the whole year or, as is currently the case, the year ending
on 23 February, which ensures consistency in what is
covered.
Under the
clause, the Government could in theory choose to report on any period
that takes their fancy, including a period of less than a
year—it could be six months or less. It is extremely unlikely
that they would choose to do that, but they could produce pre-dated
reports. We have serious grounds for concern about the implications of
the clause. Indeed, some months could be missed out of a report all
together, if appropriate, or the Government could cover a period longer
than a year. We are very concerned that, under the clause, some of the
requirements on the Government will be
removed.
New clauses 5
and 25 would provide for additional requirements for the Government to
report to Parliament every year. New clause 5 relates to energy
security and gas storage and new clause 25 relates to energy use and,
in particular, energy efficiency. We all accept that good gas reserves
give us energy security. We could have a long debate about whether
there is a risk of our gas supplies being cut off. In a very good
article in the Financial Times this week, Gideon Rachman
explained why he did not think that that was a likely scenario.
However, it is in all of our interests that we take steps to ensure
against that scenario anyway.
There is general agreement that
this country’s gas reserves are too low. Typically, we have 12
days of winter gas storage, which compares to 70 or 80 days in France,
Germany, Italy and other European countries. The situation will, of
course, improve as a result of liquefied natural gas facilities being
built and the
pipelines that are now operating, particularly the Langeled pipeline,
which has made a significant difference. However, I still believe that
more should be done to improve gas storage facilities, which new clause
5 would do. Under it, the Secretary of State would have to make an
annual report to Parliament on his assessment of the appropriate gas
storage levels, which would be taken in days rather than an absolute
amount. It might say that there should be 20 days of average winter
use, for example. That assessment would provide us with details of the
energy security that he believes that we need. He would also have to
set out our progress towards achieving that level, which would give us
an opportunity to have a debate in Parliament every year about the
level of gas storage that we believe is necessary, in the light of
changing circumstances at home and abroad, and about what more needs to
be done to improve the situation if
necessary. I find it
difficult to see a reason why the Government would say no to that
proposal, although I am sure that the Minister will come up with one
any moment now—he normally does. The only one that I can think
of is that he might want to be secretive about how much gas storage he
believes we need to maintain our energy security. In France, and
elsewhere, there is a legal obligation to keep a certain number of days
of gas storage. We are not suggesting that we do that. One of the
reasons for the problems two years ago was that the French could not
legally send us gas through the interconnector, because they would have
fallen short of their legal requirements for gas storage in
their own country.
We are not going that far. We
are trying to get a more informed debate, and to ensure that we make
sensible progress each year and never put ourselves into a situation in
which we do not have the storage necessary to protect our energy
security.
New clause
25 would ensure that we do rather more about energy efficiency than we
have done to date. The UK is lagging behind seriously, and this would
be one of the most important contributions to our energy security. It
is a great shame that the Bill has missed out altogether the issues of
energy security. In a note to me, Andrew Warren
said:
“It is
rather difficult to provide you with a brief upon it, other than as
that it is like that proverbial dog that doesn’t bark in the
night. No part of it is designed to do anything to forward energy
efficiency in any shape or
form.”
Sadly,
the Bill focuses rather more on electricity generation, but fails to
look at energy use and wastage in our homes. We are at a stage when
people want to do more to conserve energy. There is a great thirst for
knowledge, and a thirst to do things, but people are unclear about
exactly what they should be doing. It is worth the Committee spending a
moment looking at some of the
facts.
In 2005, total
UK CO 2 emissions were 554 million tonnes. The energy that we
use to heat, light and power our homes accounted for 153 million
tonnes, or 27 per cent. of those emissions. The shameful fact is that
at the moment only 10 million, or 40 per cent., of our homes are
sufficiently and properly insulated. Around 33 per cent. of the heat
lost from an uninsulated house is lost through the walls, and the
people who live in those homes could typically save £90 a year
on energy bills by insulating their wall cavities. There is not just a
cost to them: this would save £720 million worth of energy
overall, and 9 million tons of carbon. That is enough to power 1.8
million homes for a year. There is very significant wastage here, and
no reason for people not taking this basic step to insulate their
homes. Insulating lofts is another way in which people would save
significant sums of money—typically about £110 a
year. We in this
country are not good at switching things off. We are three times as
likely as the Germans to leave our mobile phone chargers on and our
appliances on standby. Sky is being very innovative in this area, and
will be able by the end of the year to turn off remotely the standby
buttons on every single digibox. Business is doing very significant
work in this area, but in too many other walks of life we rely on the
individual to take action. All too often, they simply do not. According
to the Energy Saving Trust, leaving mobile phone chargers and lights on
results in an extra 43 million tonnes of carbon dioxide being pumped
into the atmosphere every year—that is the estimate for
the period 2006-2010—and a waste of £11 billion worth of
energy.
The UK could
reduce electricity requirements by as much as 3 per cent. if all
non-essential household appliances were turned off when not in use.
That equates to the entire output of one medium-sized coal-fired power
station producing 500 MWe, or 3 million tonnes of carbon a
year. Switching to energy-saving light bulbs could save up to
£60 of electricity over the bulb’s lifetime. Now,
multiply that by the number of bulbs in the typical home. If, as a
nation, we switched to energy-saving light bulbs, the carbon emissions
saved would fill the Albert hall 3,000 times
over.
Malcolm
Wicks:
What would they be
singing?
Charles
Hendry:
If one of his colleagues had her way, they would
not be singing anything at all. The Minister of State, Department for
Culture, Media and Sport suggested that the last night of the Proms
should be stopped, because it does not appeal to all parts of the
nation. I am talking about energy efficiency—an issue that does
appeal to all parts of the nation and is relevant in every
home.
The best
high-efficiency condensing boilers convert more than 90 per cent. of
their fuel to heat, compared to 78 per cent. for conventional types. If
every household had one of these, the energy saved would power the west
midlands for a year. Double glazing cuts heat loss through windows by
50 per cent., and could cut the average heating bill by 90 per
cent.
The
Chairman: Order. I am reluctant to interrupt the hon.
Gentleman, but I have been listening very carefully and he is
increasingly talking about things which are not in the Bill. Can I
kindly ask him to draw his remarks a little closer to the new clauses
that he is asking the Committee to
consider?
2.45
pm
Charles
Hendry:
You have been very generous, Mr. Amess.
I hope that we have explained some of the things that we could be doing
and what the new clause
could help to address. We are not very good at energy efficiency in this
country, and we have the bizarre situation that VAT is charged on
energy efficiency measures at the full rate, whereas wasted energy is
charged at only 5 per cent. We have a perverse way of dealing with this
issue.
Clause 78 will
reduce the reporting requirement, whereas we think that the Minister
should be required to report more clearly on some of those issues. New
clause 25 would drive forward energy efficiency. Other measures would
help more, but, as has been pointed out, they could not be included
within the scope of the Bill. There should at least be more information
about what we are achieving. The new clause would require that an
annual report be made to Parliament on the total energy consumption in
domestic housing, the total energy consumption by business and, most
importantly, the impact of Government measures to assess energy
efficiency. That means that every year, we could see what effect those
energy efficiency measures are having and whether we are managing to
reduce demand for energy or simply to stabilise it or reduce its
growth.
The lack of
energy efficiency measures is a major hole in the Bill, and it is
unfortunate that, because of the way in which the Government have
phrased the Bill, it is out of order to talk about energy efficiency.
The new clause would at least help us to address some of those
failings.
Mr.
Swire:
The proposed new clauses are important, and I
support them. I give the Minister the benefit of the doubt, as I think
that there has been a sin of omission rather than of commission.
However, anyone who reads the reports of our deliberations—I am
sure that there will be thousands of people up and down the country
hanging on every word that we utter—will expect information. As
my hon. Friend the Member for Wealden has said, we need some kind of
guideline and incentive to meet the energy reduction targets that we
have been discussing. For whatever reason—no doubt the Minister
will articulate his reasoning—the whole thrust of clause 78 is
an attempt to reduce the amount of information available, and to make
it less incumbent on Government to meet certain targets and to be held
to account for those targets.
New clause 25 is indicative of
my party’s thinking. We have a desire to be open and to have
targets in the public domain to which we will eventually, when we are
in government, be held to account. I should have thought that the
Minister would want to meet that aspiration. Those of us who have
children are very aware of the deliberations that they have at school
on energy conservation, climate change and so on. You are looking at me
in a forbidding way, Mr. Amess, so I shall not stray too far
on this. They will find it very strange that we are introducing an
Energy Bill that covers so many aspects of energy, but does not address
how we use that energy and how we can establish where we are expending
our limited resources. The new clause is uncontentious and positive,
and I very much hope that the Minister will find some way of including
it in the Bill.
New clause 5 is different. I am
not an authority on these matters, and I was interested by my hon.
Friend’s comments about the amount of onshore gas storage on the
continent. I think he said that the law in France obliges it to keep a
certain amount of gas at any time, which is why the French were unable
to help us out when we ran low. I think that my hon. Friend has been
unambitious with his new clause. Paragraph (a) talks about his
assessment of the appropriate volume of onshore gas storage to ensure
long-term energy supply. I would be intrigued to know about mid-term
energy supply. We were down to about 12 days of gas at one point quite
recently. Given the geopolitical situation with some of our suppliers
and the choppy waters of our current relationship with the former
Soviet Union—and we have seen how Russia has behaved in the past
to some of the former Soviet republics in turning off supplies, as a
political tool—I think that there is a real desire in this
country to know what supplies we have. The Minister will remember how
forward-thinking it was of a Conservative Government to stock up on
coal supplies so that they could head off any future disruption in the
coal industry back in the
1980s—
Malcolm
Wicks:
Is the hon. Gentleman going to say more about the
Conservative record on the coal
industry?
The
Chairman:
Order. I hope that the hon. Gentleman will not
be
tempted.
Mr.
Swire:
I certainly will not be tempted by someone who
clearly knows more about nationalisation than denationalisation, as we
have seen with Northern
Rock.
To go back to
what is an important point. People are interested in the security of
our supplies. I take on board the fact that things are going to improve
and that we are increasing our capacity for storage but I think that
most people were very concerned when we were down to 12
days—
Charles
Hendry:
Twelve is our normal amount. That is as much as we
would usually have in gas storage, compared to 70 or 80 days in France.
At the time of the particular gas shortage we were down to much less
than that—just a couple of days.
Mr.
Swire:
That is even more worrying and I would like the
Minister, if he is allowed, to say what his aspiration is for storage.
We have heard that storage capacity is going to increase. Why is it
that by law the French are obliged to have 70 or 80 days and that the
average in this country is apparently 12 days? I was wrong: I said that
it had come down to 12 days and then that it had come down to two or
three days. In fact, that is not a supply at all: it is an emergency if
your supplies are down to 48 or 56 hours. It is completely
unacceptable.
The
Minister does therefore need to include this in the Bill. I do not
think that national security concerns should mean that people do not
know what energy supplies this country, perfidious Albion, has for
survival. I think that it should probably be in the public
domain. The public have a right to know. They have that expectation. I
cannot see why the Minister is shy of putting it in the Bill. The
entire thrust of this clause is to reduce the information that the
Government are obliged to supply to the public whereas the new clauses
submitted by my party would achieve the reverse. In this spirit of
openness, the Minister should rise to the challenge and accept the new
clauses.
Malcolm
Wicks:
I will certainly rise from my seat. I am still
reflecting on the hon. Member for Wealden’s request about his
amendment. Is it not wonderful that this report is going to be such an
important document because— [Interruption.] I would not
say your ruling was wrong, Mr. Amess though possibly a
little late in the day [Laughter.]. No, it was timely. It was
such a fantastic speech that it made one think that, if only we could
get this report right, we would be well on the way to tackling climate
change and global warming. I am therefore greatly encouraged. The
authors of the report will be greatly encouraged about its importance
because I suppose that the cynic might think that the major
contribution of reports like this would be to lag the odd loft or two.
I thought that it was very interesting and I was waiting for the end of
the lecture because I found it fascinating. I thought that the
punchline might be, “Would the last person to leave the Albert
hall turn off the lights”, but we never quite got there. I am
encouraged by the interest in the
report.
Martin
Horwood:
Will the Minister give
way?
Malcolm
Wicks:
No, I do not think
so.
The purpose of the
clause is twofold. First it introduces flexibility around the timing of
our annual report on the Government’s four energy goals, and
secondly it removes unnecessary or overly prescriptive reporting
requirements.
Martin
Horwood:
I am sure that, like me, the Minister is
nostalgic for the days when Tories were Tories and they thought carbon
reduction was about closing coal mines. I find myself yet again in the
uncomfortable position of supporting Conservative new clauses. I would
not want the Daily Mail to think that it will become habit
forming, but these new clauses are well intentioned and seem to be very
important. They are the result of the rather frustrating situation that
all members of the Committee have found ourselves in: we have been
unable to table more substantial amendments on energy efficiency
because it is outside the scope of the Bill. It is wrong for the
Minister to make light of the fact that we have had to bring the
subject of energy efficiency kicking and screaming into this Bill
through means of reporting. It is an important provision, which I hope
that he will address properly in his
remarks.
Malcolm
Wicks:
I did not follow events in the detail that I should
have done, but as I understand it, the hon. Gentleman did not vote with
his party last night. Now, in an overture to the Conservative party he
is supporting the Conservative new clauses. We will see how the rest of
the narrative develops.
As we said at
the outset of our deliberations, the Bill is very important. It does
things that need to be done, but it is not a kind of Christmas tree on
which we can hang every aspect of our energy or climate change
strategies. We have a good policy on aspects of energy efficiency. A
number of things are being developed that do not require legislative
cover. The purpose of a Bill is to reform the law and introduce new
laws where that is required. It is not an election manifesto. I will
not have anyone say—well I will, of course, but I will not agree
with them—that we are not fully committed to energy efficiency
measures. Outside the Committee I am happy to debate that at
any time, within reason, and in any place.
Anne
Main:
I hope that the Minister will reconsider his
position. During his speech on Second Reading he said that the whole
point of the Bill was to implement the major aspects of the White
Paper. That is why we feel we have to press the bits that are
missing from the White Paper in some way now. Could he
reconsider
that?
Malcolm
Wicks:
I have reconsidered and the answer is no. The
purpose of the Bill is to do what we need to do in amending the law and
providing new regulatory frameworks and all those things that we
have been discussing. For example, we do not need legislative cover to
pursue our energy efficiency commitment into a new phase or to do many
other things that we are doing. It would be absurd if I introduced
proposals for zero-carbon housing by 2016. That is one of our policies
and we will do that, but nothing needs to be said about it in the
Bill.
In respect of
timing—[
Interruption
]
—I am
worried about my timing, because I have manfully struggled through just
four lines of my speech, but of course I will give
way.
Charles
Hendry:
That is because the Minister keeps interrupting
his own speech. I have now completely forgotten what my intervention
was going to
be.
Malcolm
Wicks:
Well, the answer is
no.
Charles
Hendry:
I am most grateful to the Minister for giving way
again so rapidly. Does he not feel that the refusal to address these
issues in the Bill will lead people to feel that the Government are
complacent about these subjects? We have an appalling lack of energy
efficiency in this country. Our homes are massively under-insulated.
There is a real crisis, and overcoming it would make a significant
difference to our ability to meet our carbon challenges, but the
Minister does not want to discuss the
issues.
The
Chairman:
Order. I hope that the Minister will not be
tempted to respond to that; we should discuss things which are
specifically in the
Bill.
3
pm
Malcolm
Wicks:
Thank you, Mr. Amess, for that
ruling—I was trying to resist that temptation. Certainly, we do
not believe currently that we need any additional primary legislation
beyond that set out in
the Climate Change Bill, which is the powerful sister
Bill to the Energy Bill. The Climate Change Bill covers many elements
relating to energy efficiency, as I am sure that the hon. Member for
Wealden would
recognise.
Let us
remember that we are talking about a report—a humble and
important report—and I think that the Chairman is encouraging us
to discuss it. There may be more interesting things to talk
about—Arsenal’s victory over Milan, for
example—but we are debating the clause. I have to be the
borehole and talk about it.
In respect of timing, we are
seeking to remove the requirement in section 1 of the Sustainable
Energy Act 2003 to report by a certain period in a given year.
Our objective in doing that is to ensure that the
information that we produce is current and complements, where possible,
other key reporting requirements. At present, we publish various
reports at different times in the year, driven by timings currently set
out in statute, and sometimes when the most up-to-date data are not
always available. The proposals in the clause will allow us greater
flexibility in choosing the timing of our publication and adapting its
contents to reflect
priorities.
With the
introduction of the Climate Change Bill, it is even more important that
we align the publication of the sustainable energy report with the
carbon budget reporting cycle proposed in that Bill. The idea that we
will choose the month to suit us—one year, it might be February,
and another year, it might be November—is incorrect. We will
still publish the reports annually, and we expect to do so around the
month of May. The reports will specify the period to which they
relate.
The clause
will also enable the Government to include the most up-to-date data on
fuel poverty. When we have up-to-date data on fuel poverty, we publish
them. The data are available generally in about spring, after the
reporting period set out in the legislation has
ended.
Martin
Horwood:
The Minister’s intentions sound good, so
will he confirm that he will maintain, for the sake of consistency and
ease of comparison, the reporting year that is set down by statute in
the Sustainable Energy Act 2003, when these reports are published,
whenever that is? Will he maintain that specific 12-month period in
future
reports?
Malcolm
Wicks:
I may need to take advice on that, because I am not
absolutely clear of the precise reporting year, but I will come back to
the hon.
Gentleman.
Martin
Horwood:
Will the Minister give way, because I can tell
him?
Malcolm
Wicks:
No, because I will come back to that, and if I need
the hon. Gentleman to provide clarity later, I will avail myself of it;
but if this helps, our intention is always to ensure that the report
covers progress made in the year since the last report, as well as
looking forward. I do not know whether that is the point that he is
making.
Martin
Horwood:
As I understand it, the current requirement is to
publish a report specifically on a whole year, with the year ending on
23 February. In the interest of all of us being able to compare like
with like and having a consistent pattern of reporting, will the
Minister confirm that, whatever clauses we pass, he will stick to that
specific reporting
year?
Malcolm
Wicks:
Let me make some progress and I will return to
that. I certainly see the need, as someone interested in these things,
for long-term data sets, but I will get some specific advice on
that.
The second
reason for introducing the clause is to remove outdated or unnecessary
statutory reporting requirements. Since 2003, a number of reporting
requirements have been created on a variety of energy-related
issues.
Subsection (1)
will repeal section 81 of the Energy Act 2004, which requires the
Secretary of State to report on specific energy sources and
technologies. Section 81 also includes a requirement to report on
scientific and engineering expertise in the UK, as well as energy
efficiency aims designated under the Sustainable Energy Act 2003. If
hon. Members will bear with me, I will explain why we believe that
those requirements are no longer
needed.
First, the
list of energy sources or technologies provided in section 81 is
over-prescriptive. In the Government’s view, the annual energy
report should focus on the most important issues that affect the energy
sector. Those issues are likely to change as markets develop and as
technologies become more effective and new ones emerge. It would not be
right, therefore, to have a statutory requirement to report on a
specific list of technologies, irrespective of whether their state of
development continued to be a relevant consideration. We need reporting
to be sufficiently flexible to allow us to exclude less relevant
technologies and include more relevant ones, as developments dictate.
Our change will facilitate that.
Secondly, on energy sector
skills, we are already working with the sector skills network to
deliver a report on skills commissioned under the 2007 energy White
Paper. It is not right prescriptively to require the Government to
report annually on energy skills. The development of skills is a medium
to long-term issue, and the picture will not necessarily change
dramatically from year to year. My Department has managed relationships
with key sector skills councils—Cogent and the National Skills
Academy for Nuclear—and has close links with the oil, gas and
power industries. Those relationships will enable the Government to
gather intelligence and work with industry to guide policy action on
energy sector skills.
On energy efficiency, which has
understandably led to a great deal of interest, we aim to remove
duplication and
overlap.
Charles
Hendry:
On the point about the skills base, surely, the
concern is that the Government will liaise with academic establishments
and industry but that information will be private? If we want to ensure
that we have the necessary skills base for a new fleet of nuclear power
stations or for developing renewables or carbon capture and storage,
Members of Parliament
should have access to the Government’s assessment of the skills
base and how any shortage is being met? We will be denied that
information, as a result of the changes that the Government are making
under the clause. Although the Government may have that information and
they will have those conversations, Members of Parliament will be
denied the opportunity to discuss that.
Malcolm
Wicks:
There is clearly great suspicion and cynicism about
our attempt to rationalise the reporting procedure to bring greater
clarity to Parliament and the public. Those suspicions are not
reasonable.
The hon.
Gentleman has not taken account of what I said: we are proposing to
deliver a report on skills that we commissioned under the energy White
Paper. Surely, that shows our keen interest. The launch of the National
Skills Academy for Nuclear also shows our keen interest. The fact that
the sector skills councils also report publicly shows that we have
nothing to hide. We should not be over-prescriptive about the report
that would be most useful to present to the public and
Parliament.
With the
clause, we will remove the requirement imposed by the Sustainable
Energy Act 2003 to report on progress towards energy efficiency aims,
as there is overlap with that report and the requirement on energy
efficiency targets in residential accommodation under the Housing Act
2004. In addition, we produce the UK energy efficiency action plan,
which we will regularly update as required under the energy services
directorate. Therefore, there will be a regular report on energy
efficiency. We would also expect to capture energy efficiency issues as
part of our reporting on carbon emissions in the annual sustainable
energy report.
Subsection
(1) will also remove the requirement under section 172 of the Energy
Act 2004 to report on the short and medium outlook for security of
supply. As for energy efficiency, we are already obliged under
Community legislation to report on issues that relate to the security
of supply of gas and electricity. Those obligations are fulfilled by
our new energy market outlook, which provides an update on the key
drivers of the security of energy supply and provides scenario-based
analysis of the future supply-demand balance. The energy market outlook
will be published annually. We therefore believe that section 172 is
unnecessary.
Before I
discuss the new clauses, I should like to make it clear to hon. Members
that the clause will not remove our duty to report on the four key
energy goals. As part of the annual report, we will include progress on
key targets, such as the energy efficiency of residential
accommodation, the implementation of the microgeneration strategy and
promoting community energy projects. In addition, the annual
publication of the fuel poverty strategy will
continue.
With new
clause 5, the hon. Member for Wealden raises an interesting issue about
the need for increased gas storage capacity by 2020. By that time, it
is estimated that we will be importing between 50 and 80 per
cent. of our annual gas demand, because of declining production from
the UK CS in the North sea. He appears to be seeking to establish the
volume of gas storage that will be needed to secure our long-term
energy security and to ensure that the Government
report annually on progress towards achieving
it. In effect, the new clause states that they should propose
a target. We believe
that new clause 5 would interfere with the developing gas market by
specifying the appropriate volume of gas to be stored onshore within
the UK energy market. It is not for the Government to specify to what
extent one form of gas market flexibility is appropriate to help secure
energy supplies. Given the complexities of the energy system, companies
are far better placed to manage risks and to identify and deliver the
types of investment that are needed. In considering which investments
to make, companies must take account of a range of uncertainties,
including current and future fossil fuel prices, carbon prices and
energy demand. I believe that new clause 5 would send the wrong signal
to industry—that there is an ideal amount of gas to be stored
and that it should be stored
onshore.
Mr.
Swire:
So is the Minister sanguine about the fact that
this country was down to two or three days’ gas supply or does
he feel that there is an amount that we should have
stored?
Malcolm
Wicks:
I am not at all sanguine. Historically, since the
mid-1960s, there has been a natural store in the UK CS in the North
sea. Given the decline in that and the need to import more gas, we need
more gas storage. We have made that clear. We believe, and I would have
thought that the hon. Gentleman believes, that it is best left to the
market to store the gas and to determine these matters. We are not
passive bystanders because, for example, we are taking action by
introducing a regulatory framework for gas storage under the Bill. Our
planning reforms will also facilitate the timely arrival of gas storage
facilities. I am not sure if the hon. Gentleman is saying that the
state should set a target or that the state should build such stores.
What is he
saying?
Mr.
Swire:
I am very clear in what I am saying. Of course it
is up to the market to supply the gas. However, I find it extraordinary
that effectively the Minister is saying that the Government of the day
should have no view on how many days’ gas storage should be
available to the country at any one time. Is that what the Minister is
saying? Even in a private capacity as an individual, does he not have a
view whether two days or 20 days is acceptable, or 70 days, as in
France? I am not saying that that should be enshrined in law as it is
on the continent, but it is very worrying that the Minister and the
Government seem to be complacent about having an idea of what is
acceptable.
Malcolm
Wicks:
I do not think that we wish to be prescriptive
about how much gas storage is required. We will clearly need more in
the future. Our regulatory framework will enable that to come on
stream, as will our planning framework. I think that the hon. Gentleman
needs to look at this issue in wider terms. We are all concerned about
energy security and it is an aspect of a nation’s security, but
we can achieve it in different ways. One is by having an appropriate
mix in terms of energy—not all of our eggs in the gas basket, or
any other basket. Much of the Bill is enabling that to happen, with
more renewables and a future generation of nuclear power.
Of course in
terms of the gas that we need to import, the Government have been
active on many fronts with the commercial sector to help to bring on
the Langeled pipeline from Norway, for example, and to help to
facilitate liquefied natural gas capacity at this end; I am referring
to Milford Haven. The hon. Member for East Devon needs to see all of
that in the round. I am confident that the market will provide far
greater amounts of gas storage in
future.
3.15
pm
Malcolm
Wicks:
I think that the hon. Gentleman wants to ask me the
question
again.
Mr.
Swire:
I just want to say that of course I understand that
we are moving towards an energy mix—we all know that—but
increased nuclear capacity is, as I think the Minister would concede,
some way off. Clearly, he is talking about the regulatory and planning
frameworks that the Government are looking at, and of increasing
onshore gas
storage—
The
Chairman:
Order. The debate is going extremely wide now.
We are specifically talking about energy reports, so will the Minister
please direct his response to those
matters?
Malcolm
Wicks:
Yes, tempting though it is. This may help the hon.
Member for East Devon. Companies may decide in some instances that it
is more cost- effective to store gas offshore than onshore. Equally,
they may prefer instead to enter into long-term contracts, as I was
implying, for liquefied natural gas, or to take steps to provide
non-gas back-up fuel, such as distillate, for gas-fired power stations
as a coal substitute. It is also interesting to note that, during that
difficult winter two years ago when gas prices were very high, there
was quite a move to coal by power stations. Whereas on an annual
average coal was accounting for perhaps a third of electricity, in
those few months of that winter, that rose to 50 per cent. I hope that
that makes my point about the need for a range of energy
sources.
Let me assure
the hon. Gentleman that I very much want to ensure our long-term energy
supply, including sufficient supplies of natural gas. However, I
believe that the way to do that is to ensure that we maximise the
options available to companies to import and to store gas for the
British market. We have already discussed the proposals contained in
the Bill for a new licensing regime, which will enable offshore gas
storage and import projects to be built in future. The Energy Bill does
not itself deal with onshore gas storage, which is the subject of the
new clause. However, provisions to modernise and reform the planning
consents required for onshore gas storage are going forward in the
Planning Bill, and will similarly enable the market to respond to the
need for increased gas storage and import
facilities.
Martin
Horwood:
I do not think that any of us are questioning the
direction of travel of Government policy on energy
security—indeed, we welcome it—but how is he to judge the
success of the policy if there is
no sense of what the benchmark is? At least the new clause deals with
the appropriate volume of onshore gas storage. The new clause is
actually fairly modest. It does not even suggest that an exact number
of days of supply should be specified. It simply asks about the volume
of storage capacity. The Minister cannot seriously be suggesting that
that is something that should be left up to the market. What if the
world market—as does not seem entirely unlikely—ends up
being dominated overwhelmingly by one company, such as Gazprom, that
might not be entirely friendly to our national interest? To leave that
entirely to the market is an extraordinary
proposition.
Malcolm
Wicks:
With respect, it is an exaggeration to say that one
company dominating the world gas market is a likely scenario. That is
extremely unlikely in my judgment. I have been trying to make the point
that the new clause relates only to onshore gas storage, and I have
said that companies may well decide that offshore gas storage, partly
because of the provisions of the Bill, might be a more commercially
sensible decision. It seems slightly foolish to be prescriptive about
one approach to energy security, and say that it has to be onshore, not
offshore.
Charles
Hendry:
The Minister misunderstands the issue here. The
clause has been phrased to be as flexible as possible, so that every
year the Minster can say, “Actually, we think that we need a bit
more” or, “Now we need less, because we have more
offshore storage and pipelines and LNG terminals.” It is not
prescriptive at all and simply means that he will have to come to
Parliament every year and say, “Look, taking into account the
offshore storage, the LNG terminals and the pipelines, this is how much
we should be having for onshore storage.” That is not
prescriptive and offers tremendous flexibility, and I think that it is
an incredible abdication of responsibility by the Government to leave
that to the market. The crisis occurred partly two years ago when the
Rough gas storage facility was damaged by fire, because overnight we
lost a huge proportion of our gas storage facility. The market could
not react to that and could not put it right, but this is one way of
trying to ensure that our energy security is
guaranteed.
Malcolm
Wicks:
I am enough of an amateur political scientist to
note with interest the call for greater statism from the Opposition
Benches and my advocacy of a market approach on these Benches, and I
understand the irony there. I do not want to repeat myself too much,
because we are talking about a report, but I think that the issues
about energy security, which I take extremely seriously, are much wider
than simply those relating to onshore gas storage. I repeat that we
want to see more gas storage in the future, as we have made clear. We
think that the market will bring that about, and we are facilitating
that through changes in this Bill and in planning.
Data are important, and in the
Government’s digest of UK energy statistics, which is of course
published annually, we cover a wide range of important energy
statistics, including energy consumption and oil and gas production.
That report also includes details of the projections and capacity of
existing and planned gas storage facilities, so I hope that the hon.
Gentleman is
reassured that the data are available. It would be pedantic to say that
the data should be somewhere else, rather than there. It is out there
and available for public and parliamentary debate. In addition, we are providing
clear and transparent information on energy supply and demand
generally, and that type of information is published in the energy
market outlook, which I mentioned earlier—it seems a long time
ago because of the number of interventions. That is intended to provide
information and analysis to help potential investors and those with an
interest in the UK energy market to form a comprehensive overview of
the likely supply and demand balance in energy over the next decade or
so. I hope that I have explained why I do not think that the new clause
would be helpful. I might not have convinced everyone entirely and
still detect certain suspicions, but I have also explained the steps
that we are taking to encourage a solution. I hope that the hon.
Gentleman will not seek to press his new clause to a
vote.
I will now turn
to new clause 25, which I will also ask the Committee to resist. The
new clause, which was proposed by the hon. Member for Wealden, relates
to the important issue of energy efficiency. Saving energy is a key
part of the Government’s strategy to tackle climate change and
help ensure secure supplies of energy. For example, energy efficiency
can often be a cost-effective way of reducing carbon emissions.
Equally, saving energy can reduce the need for energy imports and the
level of overall new investment needed in large-scale electricity
generation, thereby reducing security of supply risks.
Once fully
implemented, the measures set out in the 2007 energy White Paper are
projected to deliver an additional 7 million to 12 million tonnes of
carbon savings, so no one can reasonably say that we do not take energy
efficiency seriously. Our policies include helping consumers make more
informed decisions about the energy that they use through improved
awareness, information and services, such as better billing, the
raising of standards for the products that we buy, and increasing the
energy performance of new homes and buildings. We have also increased
the obligation on energy suppliers to deliver carbon savings and energy
efficiency measures in domestic homes, including loft and cavity wall
insulation. For the largest industrial users of energy, the European
Union emissions trading scheme, together with the climate change levy
and climate change agreements, incentivises companies to improve their
energy efficiency and save energy. We will also announce a new
mechanism to drive energy and carbon savings in the large non-energy
intensive sectors such as banks and supermarkets. Although the hon.
Member for Wealden and I agree on the importance of energy efficiency,
I must sadly confirm that I cannot accept the new clause.
We already
compile the information that he suggests under the guise of other
reports. Information on energy consumption in the UK is contained in my
Department’s digest of UK energy statistics which, as I said
earlier, is updated regularly and published annually. Under provisions
in the Climate Change Bill, the Secretary of State will also have a
duty to prepare and lay before Parliament an annual statement on
emissions. Similarly, the Climate Change Bill will mandate the
committee on climate change to assess and report on progress and
delivery of
climate change policies annually, including on energy efficiency
measures. The Government will be required to provide a
response to the report that it will lay before Parliament. I noted that the hon. Gentleman
opposite said that it was a great disappointment that there was nothing
about energy efficiency in the Bill. I have outlined a whole raft of
measures that we are taking on energy efficiency, and the million
tonnes of carbon that will be saved. However, I do not think that I
have yet heard from him any specific proposals or amendments to bring
forward energy efficiency measures in the Bill. He dealt with it in a
more general way, and I am sure that he will be satisfied that, through
the raft of other measures, we have a more than satisfactory strategy.
Perhaps on another occasion he could table a specific
amendment.
Charles
Hendry:
I am astonished by the Minister. He will have read
the opening sentence of the Bill where it says “A Bill
to”. Amendments can be tabled and are in order only if they
relate to the issues in the Bill. I would have thought that the
Minister was aware of that. If he wanted to have a discussion and give
us the opportunity to debate energy efficiency, he should have included
a reference to energy efficiency in the legislation. That is why we
have not been able to table the amendments, and why the Committee has
been denied the opportunity to speak about it—it is due to the
way in which he has phrased the Bill.
Malcolm
Wicks:
If the hon. Gentleman makes a technical point, I
accept that. However, he has been speaking about energy efficiency at
some length on a number of occasions—I may have forgotten the
technical point, but I am not clear why he is not satisfied with the
ambitious energy efficiency strategy that we have in place.
Much as it pains me to bring
the debate and my speech to a conclusion, I hope that the hon.
Gentleman will feel reassured that the Government take these issues and
their duty to report to Parliament seriously, and that he will not
press the new clause to a
vote.
Charles
Hendry:
I am sorry. The Minister has managed to reassure
me on many occasions during the debates that we have had so
far—it has been fairly good natured and worked well. On this
occasion, however, he has not reassured me at all. My concern about the
clause is fundamental. The Government are removing the requirement for
them to report to Parliament on certain factors, and the Minister asks
us to take that on trust. Everything that we see about this Government
shows that when the news is good, they like to announce it, and
reannounce it again and again, and hope that nobody notices that it is
just the same bit of good news. When the news is bad, they like to tuck
it away—“A good day for announcing bad news”, as
one of the ministerial spin doctors told us in the past.
We believe that the Government
are moving away from reasonable reporting requirements without a good
reason for wanting to do so. I am suspicious about their motives
because it will be used in years to come—not by the Minister who
I know is a decent, honourable man—but by someone who could say,
“There’s a general election coming up. I’m not sure
that it will be useful to put those figures into the public domain at
this stage. Let us hold back the report for a little longer.”
There will be a row about why the report is being held back—lots
of technical reasons, lots of reasons for why it should not be put
forward at that time, but it means that the Government will be let off
the hook of being held accountable for the decisions that they
make. With regard to
the two new clauses, I am astonished that the Minister does not believe
that the Government have a responsibility to have a view on energy
security and on how many days of gas storage we should have. Yes, he
tells us that the data are available and published in other ways, but
the data do not include an assessment of need and that is what the new
clauses require. They would also enable us to monitor the progress
towards that goal, which the Minister would have set up. I find that
very disappointing, and it is an issue to which we will most certainly
return.
3.30
pm
On
energy efficiency, the Minister enjoyed a bit of knockabout. We would
have truly loved to use the Bill to discuss energy efficiency, and
members of his own party would have been keen to do so, too, as was
evident on Second Reading. However, we have been denied the opportunity
because of the narrow way in which the Bill is phrased. Similarly, we
have been denied the opportunity to discuss fuel poverty, which is
another matter of fundamental concern to people. Through the new
clauses, we are asking not that we try to change the world regarding
energy efficiency, but that we start to monitor our progress. The fact
that 40 per cent. of our homes are effectively insulated is not good
enough. We do not know the Minister’s target by 2010 or 2015; it
is not available to us. However, every year, a report should be made
about energy consumption by business and in domestic homes, and about
the progress that is being made to improve energy efficiency. People
watching this debate would then feel that the Government were taking
the issue seriously.
Malcolm
Wicks:
But the hon. Gentleman would concede that we have
done something far more important, would he not? Namely, we have set a
long-term target that by 2050 we want at least a 60 per cent. reduction
in CO 2 levels when compared with those in 1990. The Prime
Minister said that if we get representations from the new committee
that we are establishing under the chairmanship of Adair Turner, we may
consider a higher target—an 80 per cent. target. That really is
the point—
The
Chairman:
Order. I hate to interrupt the Minister, but we
are being taken far wider and referring to matters that would be more
appropriately discussed under the Climate Change
Bill.
Charles
Hendry:
I am obviously not grateful to the Minister for
that intervention, because it was out of order. However, the principal
objective of the two new clauses is that we want the Minister to have
to come to Parliament to tell us what is happening each year on
gas storage, what his assessment of need is, and the progress that is
being made on energy efficiency. His refusal to do so just means that
we must go away with the impression that he does not want to be
scrutinised properly on those matters. That is very unfortunate, and I
remain profoundly concerned about the inclusion of clause 78 in the
Bill. I hope that the Liberal Democrats will support us in trying to
remove it.
Malcolm
Wicks:
The Liberal Democrat.
Charles
Hendry:
The Liberal Democrat. The hon. Member for
Cheltenham will not be able to vote against himself on this occasion.
We hope that he will give us support, because this is a bad clause. The
clause represents the Government rowing away from their reporting
commitments; it is political rather than managerial, and it was very
misguided to include it.
Martin
Horwood:
Perhaps the hon. Member for Wealden should not
push his luck in assuming my support, or even that of the whole Liberal
Democrat party. My hon. Friend the Member for Northavon and I will both
be present when the new clauses come to a vote, probably next week, but
I might change my mind and choose to abstain, which I gather has been
the increasingly fashionable thing to do this week.
I shall restrict my remarks to
the hon. Gentleman’s new clauses. I am still perfectly
supportive, and the Government have not produced adequate replies to
the question why the new clauses should not be included. In the case of
new clause 5 on energy security, the Government’s replies were
quite alarming. I am more inclined to support the new clause now than I
was when we started.
I, like the hon. Gentleman, was
not reassured by the Minister’s remarks on the clause stand part
debate. The Minister has gone to enormous lengths to assure us that the
Government have a great record on energy efficiency and are absolutely
committed to developing it. However, if that is true, and it is equally
true on renewable energy and microgeneration, I cannot see what
possible justification there is for removing the reporting requirements
from legislation. Surely the Government should leap at the opportunity
to report in a standardised format that none of us can criticise either
for inconsistency or for being presented in an obscure or difficult
way.
The Minister
suggested that we were being suspicious, but his replies rather fuelled
that suspicion. He did not answer my question about how the reporting
requirements can possibly be outdated. What has changed since 2003 to
make them outdated? How could they have been appropriate then and
overly prescriptive only a few years later? If the list of technologies
specified in Sustainable Energy Act might become out of date in due
course—I allow for that possibility—why did the
Government not draft a proposal to allow for amendment of the list,
perhaps by secondary legislation? That would have been a perfectly
acceptable route. However, by not doing that and given his reluctance
to commit to the specific time scales by which he will be reporting in
a substitute format, the Minister has increased the fears of perhaps
more suspicious people than us that the Government
might be tempted to take the opportunity to obscure bad news and
possibly repackage and represent good news to their own advantage. That
would be a shame. For all Governments, it should be right that we can
compare and contrast statistics on a reliable basis. That has been the
direction of much of the presentation of Government statistics during
recent years, and the clause seems a completely retrograde
step.
Charles
Hendry:
Does the hon. Gentleman agree that it is a matter
of frustration that sometimes when we ask a parliamentary question, we
receive the response that the data are not collected centrally? By
removing a requirement to report, there will be more areas about which
the Government say that they have not collected the data. At the
moment, they are required to do so and we know that the data are there.
It actually makes the job of parliamentary scrutiny more effective and
accountable.
Martin
Horwood:
The hon. Gentleman has made an extremely valuable
point. The net effect of the clause will make the whole issue of
reporting on such vital issues as energy efficiency, microgeneration
and the development of necessary expertise in new energy sources from
nuclear to tidal power more contentious and less of a discussion of
objectively presented statistics. I wish to press the clause to a
Division.
Question
put, That the clause stand part of the
Bill.
The
Committee divided: Ayes 9, Noes
6.
Division
No.
4
]
Question
accordingly agreed to.
Clause 78 ordered to stand part of the Bill.
| 
