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Wind can at best, therefore, constitute only an ancillary source of generation. However, in Wales and many other parts of the country, wind appears to be the only form of renewable generation that is being pursued, and
the inherent hazardousness of that is self-evident. During the five coldest days last winter, very few turbines turned, and those days were just the period when we needed as much electricity as possible. The reason why they did not turn is quite simple: a large anticyclone was sitting over the British Isles, and as every schoolboy knows, anticyclones in winter tend to produce cold conditions without wind.
Nevertheless, wind farms continue to be built, and that is a significant phenomenon in Wales, where the Welsh Assembly Government's infamous technical advice note 8 provides a planning presumption in favour of wind farm development in the so-called strategic search areas, which tend to be located, interestingly enough, on Forestry Commission land, the rental income of which passes to the Welsh Assembly Government. Consequently, large areas of Welsh upland are being progressively colonised by wind turbines.
Indeed, the Hiraethog area of my constituency contains numerous small wind farms that have been consented to under town and country planning legislation. RWE npower renewables, however, now has plans to build in the Clocaenog forest a wind farm with an output of more than 50 MW, for which an application will soon be made to the Department of Energy and Climate Change under the provisions of the Electricity Act 1989. If that is consented to, the cumulative impact of development on the Hiraethog area will be to turn a beautiful rural landscape into an industrialised one-for a source of generation that is only 27 per cent. efficient.
Part of the problem is the way in which renewables obligation certificates are structured, a point that the hon. Member for Brighton, Kemptown (Dr. Turner) touched on briefly. ROCs are a very blunt instrument that reward the developers of wind farms at precisely the same rate as the developers of other renewable technologies-with one certificate per megawatt-hour. The Department has proposals for banding ROCs to encourage the development of other forms of renewable technology. However, wind farms would still have the benefit of one ROC per megawatt-hour under the Government's new proposals. That is particularly worrying, because other forms of renewable technology, if exploited, could prove significantly more efficient than wind.
In that respect, I agree entirely with the hon. Gentleman. He mentioned tidal power, which offers the most obvious advantages. The tide, after all, ebbs and flows with absolute predictability twice a day, every day, and Wales has many locations where tidal stream technology and tidal lagoon technology could be developed commercially. Swansea bay and Kinmel bay, which is off the coast of my constituency, offer particularly exciting potential for the development of tidal lagoons.
Indeed, evidence taken by the Select Committee on Welsh Affairs indicated that the Kinmel bay site had a potential generating capacity of 432 MW, which is by any standards a significant power station. However, ROCs have hitherto not differentiated between the various forms of renewable technology, so developers have tended to opt for the low-hanging fruit of wind turbines, with all their inherent unreliability, as opposed to tide. The Department's proposed re-banding will not settle that.
Wind turbines are relatively cheap and easy to construct, so developers will continue to opt for them, but the Government should reconsider their proposal for the banding of renewables obligation certificates as a matter
of some urgency, so as positively to encourage the development of new technologies.
As other Members have said, this Bill is a step in the right direction, but it is a somewhat timid and faltering one. The Government need to be bolder and to act more quickly and decisively. Twelve years have elapsed, and only now are we really getting to grips with a problem that will affect our children very significantly indeed. We need to develop the nuclear power stations and to facilitate development of the reliable renewable technologies that the country needs. I believe that this will be done, but that the Government who achieve it will be a Conservative one.
Nick Ainger (Carmarthen, West and South Pembrokeshire) (Lab): I was interested to hear what the hon. Member for Clwyd, West (Mr. Jones) said about wind energy, in particular. As one who also represents a rural constituency, I understand the concerns that many residents have about the impact of wind turbines on the landscape. However, we have to accept that this is a proven technology and that many other countries have developed their wind industries in areas that are important to their citizens in terms of landscape value. Perhaps the way forward is a policy that states that the wind industry should not develop in national parks and areas of outstanding beauty, but that elsewhere we must accept compromises because ultimately they give us the prize of low-carbon, low-emission generation. I accept what the hon. Gentleman says about its efficiency compared with base-load generation, whether in nuclear, gas or coal, but we must accept that it was never intended as a base-load form of generation.
I was somewhat concerned by the references to security of supply made by Conservative Front Benchers and several Conservative Back Benchers. What is missing from their equation is what is already happening in relation to the building of new generation facilities. In my constituency, the construction of a 2,000 MW gas-fired power station is under way. There is Staythorpe, a large gas-fired power station in Nottingham, and another such facility in Plymouth. Some Conservative Members gave the impression that the Government have done nothing, not recognising that the large combustion plant directive means that several coal-fired power stations will have to close because they have reached their decommissioning date, and several nuclear power stations will be phased out as well. Several projects are already in the pipeline and under construction. There is also a substantial expansion in wind generation, particularly offshore, which the Government were right to encourage. The offshore wind industry will start to deal with the problem of renewables development, which we must accept has been too slow in this country. It also presents many opportunities, not only for CO2 reductions in our own economy, but through the expertise that Britain has developed, particularly in our offshore oil industry. There are real opportunities for British companies to develop offshore wind farms around the world.
Another aspect of security of supply, which was not mentioned by Conservative Front Benchers or anyone else, is what has happened in the new market that has developed for liquefied natural gas. At Milford Haven, there are now two large LNG terminals which together can supply 30 per cent. of the UK market for gas-just
from one part of Wales. The development of a new LNG terminal at the Isle of Grain provides further opportunities for substantial imports from-in terms of the middle east-relatively stable regions. We also import gas in LNG form from the Caribbean. There are already several developments taking place that will provide us with security of supply in the gas industry. Unlike continental Europe, which has very little indigenous gas supply, we have had North sea gas. Basically, the industry grew on the back of that and used those gas fields as a storage facility. We are now moving on: supply from the North sea is declining and we must depend on imports. I emphasise that we import our LNG from stable areas, unlike continental Europe, which has depended on a Russian gas supply that, sadly, has been unpredictable, let us say, in recent times. That is why continental Europe has such substantial storage capacity-it is aware of that instability in its source of supply.
I welcome the Bill. The fact that we are now legislating for essential new technology indicates that the market has not worked. The science and technology behind carbon capture and storage is not new, but ways of converting it to a practical form, so that it can work in large coal or even gas-fired power stations, have yet to be developed and proved. It is clear that the market was not prepared to take the risk of such a development on its own, and given those circumstances it is right that the Government have said that this is an absolutely essential technological development, and we have to support it.
A number of Members asked whether it was fair to expect those who are on a green electricity tariff to make a contribution in their bills to the development of CCS. As the hon. Member for Clwyd, West said, the green tariff source of energy is not available to some people. Whether electricity is from a coal, nuclear or gas-fired station or a wind turbine, it all comes down the same cable at the end, so the idea that the contribution should be across the board is a relatively fair and reasonable compromise.
We should be saying to the industry now that we are going to set carbon emission targets for future new generation. As I am sure many Members did, I received a briefing from a number of organisations, including the Royal Society for the Protection of Birds, arguing that the Bill should include a mandatory emissions performance standard for any new applications for fossil fuel power stations. That is a reasonable concept, because at the moment the large combustion plant directive means that generators know that they have to meet certain standards on emissions of sulphur dioxide, nitrous oxide and so on to prevent acid rain and other pollution. We should say to them now, "If you build any fossil fuel power station, we will set a mandatory emissions standard that you will have to meet." We should give them notice of that.
In my constituency, RWE npower has started building a large, 2,000 MW power station. During the planning process, the Countryside Council for Wales expressed concern that the waste cooling water that would be taken from Milford Haven, then returned there having gone through the plant, could cause environmental problems. The solution that it suggested would have required the construction of cooling towers. Although
they would have been electric-powered, rather than the traditional very large ones that give off a plume of steam, the power station would have been significantly less efficient and its CO2 emissions would actually have increased. In trying to address one environmental problem, we create another.
If, right from the word go, an emission performance standard had been set for the amount of CO2 per kilowatt-hour generated, perhaps the company could have come up with an alternative use for the excess heat from the waste water. To be fair to the company, it is now trying to deal with the problem. It is considering developing, with another partner, large glasshouses for the production of fruit and vegetables or flowers. That interesting suggestion could perhaps be explored in Committee.
I intervened on my right hon. Friend the Secretary of State to ask about social tariffs. I welcome the fact that we are now moving to mandatory schemes. The arrangements that have been made with some companies are welcome, but the identification of those who should, in my view, be eligible for social tariffs, is a major problem. Many such people are on benefits, and when it comes to identifying them, there are data protection issues. The fact that there will now be a mandatory scheme will hopefully encourage the Department for Work and Pensions to become involved in the decisions about who qualifies.
There are two issues related to social tariffs. First companies currently give social tariffs almost exclusively to pensioners, but Citizens Advice has informed us that not many pensioners remain in fuel poverty because of the effect of the winter fuel allowance. However, significant numbers of younger people, certainly below pensioner age and some who have children, go to citizens advice bureaux with major problems with fuel debt. It is fair to assume that if people have problems with fuel debt, they have problems with fuel poverty. It would therefore appear that a significant number of people who would benefit from a social tariff-perhaps a significant majority-cannot currently access one.
I hope that any mandatory scheme will definitely include those younger people. For example, a single pensioner on pension credit receives £130 and under-80s also qualify for the £250 winter fuel allowance, but a single person aged 50 on long-term incapacity benefit would have a total weekly income of £91.80, no winter fuel allowance and the same sorts of needs. There is also a very strong argument behind the Macmillan campaign for assisting those with cancer, to which hon. Members have referred.
The second issue, which has also been referred to by hon. Members, is that 4,300,000 households are not connected to the mains gas system and depend on heating oil or LPG for their central heating and hot water. A number of figures have been bandied about, but Citizens Advice estimates that someone who is not connected to the mains gas system has an average fuel bill of £1,700, whereas those who are connected to the mains gas system have bills of just under £1,200-approximately £500 difference, or £10 a week, purely because people have no connection to the mains system.
The sale and distribution of LPG and heating oil are not regulated, but they should be. We are talking about a significant number of people-4,300,000 households, almost exclusively in rural areas. It is the oil companies
that are supplying the distributors of LPG and heating oil, so I do not see why they cannot be regulated for that part of their business by Ofgem. The mandatory social tariff should also be available to those people who are dependent on LPG and heating oil. I hope that in Committee we can make that happen. It is essential, as a matter of fairness, that we do so, given that the average consumer in a rural area has to pay at least £10 a week more than the average urban consumer. That is wrong, and we need to address the issue, especially for those families and individuals on low incomes.
I am glad that clauses 16, 17 and 18 will change the responsibilities and duties of Ofgem, and I hope that part of its responsibility will stretch to transmission capacity. Areas such as Wales have a strong electricity distribution system in the north and in the south, but very little in the middle, and wind farm developers are having a real problem-not in finding the funding to invest in building the turbines, but in obtaining a connection to the national grid. The hopes of achieving a significant offshore wind industry, especially down the west coast of both Wales and England-and Scotland, although I do not wish to speak for Scotland-depend on a submarine cable network. I hope that the Bill will provide sufficient powers to ensure that such development takes place as quickly as possible, so that we can take advantage of the major opportunities that it will bring. The regular wind provided by nature down our west coast should be exploited, and the main stumbling block appears to be the connection with the national grid.
I welcome the Bill, and I hope that it can be improved along the lines that I and other hon. Members have suggested. I hope that the Minister of State, who will take the Bill through Committee, will be able to accommodate some of the sensible suggestions that have been made in the debate so far.
Mr. Mike Weir (Angus) (SNP): In this debate, we have had a canter around various parts of energy policy and climate change. It has been said that this is a modest Bill, but it is an important one that covers three distinct areas that impact on us all. Indeed, the Bill impacts on some issues that I have spent many happy hours debating in the Chamber over the years.
Part 1 deals with the framework for establishing carbon capture and storage, which follows the Budget announcement in April of
"a new funding mechanism to support up to four carbon capture and storage demonstration projects, and £90 million to fund detailed preparatory studies."
The original carbon capture and storage project, or contest, seems to have been grinding on for some considerable time. The hon. Member for Sherwood (Paddy Tipping) was on the mark when he said that the rules seemed to keep changing. A shiver ran up my spine when the Secretary of State mentioned a contest for the remaining three projects. I hope that they will be an awful lot quicker than the contest we are going through, although better late than never.
Ministers are keen on telling us about our world leadership in carbon capture and storage technology, although sadly I doubt whether that is entirely correct now. We had an excellent opportunity to be in the lead with the proposed development of the gas station in
Peterhead, but unfortunately that was lost, owing to endless dithering by the Government, and the project is now proceeding in Abu Dhabi. It appears that the reason the Government did not want to proceed with that project was that they wished instead to concentrate on pre-combustion processes, which they hoped would lead to an export industry, particularly to developing nations such as China. Unfortunately, that dithering led to China developing its own industry. Indeed, one of the few commercial projects that is up and running is the one in Beijing. We could end up importing such technology instead of being in the lead, and if we had developed it in the first place, we could well be in the lead.
Peterhead could also have helped to develop a method that would have been of particular benefit to the UK, as it would have allowed gas stations to de-carbonise and the carbon to be stored in the North sea's depleted oil and gas reserves. Sadly, it appears that the prejudice against gas continues, as I note that clause 6 defines a CCS demonstration project as
"a project to demonstrate and assess carbon capture and storage technology through its use in commercial coal-fired electricity generation".
Gas seems to be specifically excluded by that definition. I wonder whether the Minister could explain in summing up why gas is excluded and why only coal is to be helped by the scheme. That point was also raised with the Secretary of State, who said that gas could come in further downstream, but we already have a lot of gas-fired stations and we still have a lot of gas in the UK continental shelf, although obviously it is diminishing. It therefore seems crazy not at least to look at the prospects of carbon capture and storage for gas, and instead of putting all our eggs in the basket of coal, important though that is.
That said, CCS provides an important opportunity. I strongly support the claim of the Longannet project, which is being developed in Fife, as a strong candidate for help from the scheme, especially given its proximity to the North sea and the ability, therefore, to enable the current infrastructure of the North sea oil and gas industry to be utilised in the development of CCS. The hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) made the good point that the oil and gas industry could develop to include aspects of CCS. There is a huge opportunity to ensure the transfer of those skills to new industries after the run-down of oil and gas, as many of them will be useful in CCS, particularly if it is developed by storing the carbon under the North sea.
The Scottish CO2 study has concluded that there is a possibility that the North sea could store up to 200 years of CO2 emissions, bringing in a huge amount of work and billions of pounds to the economy over a long time. Indeed, the EU is interested in a North sea grid to help to develop CCS and seize the potential for development in the old oil and gas fields and the saline aquifers. However, that brings up another issue that is not covered in the Bill and that the Government will need to address: how do we ensure that the North sea infrastructure is in place to enable that development to happen?
Much of the existing infrastructure of the oil and gas industry is now becoming fairly elderly. As the main fields in the North sea begin to wind down, there is a danger of losing that essential infrastructure unless
action is taken to ensure that it is retained. Many of the new discoveries in the North sea are of much smaller fields, where the oil and gas industry perhaps needs a different set of infrastructure, but what is now in place for the depleted fields could be important for CCS. Given that we are probably still a decade away from the technology becoming commercially viable, will the Minister tell us whether either the Department of Energy and Climate Change or the Treasury have been in discussions with the oil and gas industries to try to agree on a regime that would ensure that that infrastructure is maintained and available for CCS?
Part 2 deals with fuel poverty, an issue in which I have taken a great interest over the years. I hope that many of these measures will be entirely non-controversial. I warmly welcome the efforts to replace the existing voluntary schemes operated by the energy companies with a mandatory scheme. That is welcome and long overdue. One of the great problems with the existing system has been the bewildering variety of schemes that have been marketed by the energy companies. It is sometimes difficult for people to find out what the best social scheme for them might be. The new system should be much simpler for consumers, and will be a huge improvement.
Like many other Members, however, I regret that a vital element among the fuel poor has once again been omitted from the statutory regime-namely, those who rely on liquefied petroleum gas or home fuel oil to heat their homes. The Bill specifically defines the suppliers as electricity and mains gas suppliers. I appreciate that there are difficulties with the LPG and home oil market. There has been a Competition Commission inquiry into this matter, which ran for years and came to no real conclusions. The market is much more complex than that for electricity and gas supplies, which contains only a limited number of large companies, but this is none the less a serious issue for its customers. Many of them live in rural areas, where the gas mains will never reach, and their choices are very limited indeed.
The hon. Member for Carmarthen, West and South Pembrokeshire mentioned the difference in cost between the average mains gas bill and the average home fuel or LPG bill, but another factor that works against consumers in this market is that the problem is exacerbated by the fact that many face minimum delivery amounts. This means that they sometimes have to pay substantial sums up front in order to get a delivery of fuel. Those on low incomes-many of whom live in rural areas, and suffer disguised rural poverty-suffer particularly badly because of this. They simply do not have the funds to pay up front for large amounts of fuel oil. This can lead to their being unable to get the fuel, and unable to heat their homes. That is unacceptable in this day and age.
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