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My hon. Friend the Member for Bournemouth, East (Mr. Ellwood), in a very powerful critique, talked about the serious challenge that we face on gas storage. We have just 15 days' storage, and in January we exported through the interconnector 25 million cubic metres of gas a day-the equivalent of 250 Albert Halls of gas every single day being pumped out of this country. Just
as we were approaching a dispute between Russia and Ukraine, during the coldest winter for 18 years, our gas storage was down to just four days. Nevertheless, here we have a Bill, and in it the Government do not have a single word to say about gas storage.
We have also missed, particularly on this day when the Copenhagen summit is starting, the challenge of discussing what more can be done urgently to tackle the problem of CO2 emissions. Nowhere in the Bill does one see a driving sense of urgency. There is a little movement and change, but no sense that this is a crisis that has to be addressed. The hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger)-I am delighted to see him coming in on cue-talked about a lack of the strategic thinking that is needed if we are to see the development of marine technologies such as offshore wind. The Government must take the lead and put in place down the coastline the high-voltage DC cables to connect up those facilities.
In terms of failing to recognise the challenges, most telling of all was the Secretary of State's indication that the Government would come forward with a strategy on fuel poverty in the spring. The numbers of people in fuel poverty have gone up, and they need help now, not proposals after the winter. We need a sense of urgency and a recognition that the Bill must do more than it currently sets out to do.
I turn to the key elements in the Bill. On the CCS levy, there has to be a funding mechanism to make carbon capture and storage happen-we completely support that. However, let me ask the Secretary of State again: where is the money from the third round of the EU emissions trading scheme that was promised? How much is in it, and what has it been allocated to? He says that it has all been spent, so what has been done with it? We recognise that if it is not available, the levy may be a way of trying to support that. However, if the Bill is to go into Committee, we need from Ministers a clear explanation of what has happened to the Government's expected revenue from the third round.
However, the levy is just part of this. We still do not have the leadership that we require if we are to lead the world in CCS. We were leading, but we have been overtaken by America, Canada, Germany, Abu Dhabi, Norway, Australia and China- critically, given that this whole project was designed to develop a technology that we could sell to the Chinese. We must have more strategic leadership. How will the whole process be handled? What aspect of Government will make CCS happen? Who will be responsible for scoping the potential sites? Will there be oversized pipelines to facilitate the development of clusters? Can we not do still more to speed up the pace of this competition, which has been absurdly slow? We need to move towards a conclusion, and to know who is going to be the winner on the pilot project.
The whole aspect of social tariffs and support for consumers brings home how far away we are from achieving the fuel poverty targets set out by the Government, with the legally binding commitments that by 2010 all vulnerable households would be taken out of fuel poverty and that by 22 November 2016 every household in the country would be out of fuel poverty. The Secretary of State may not know if that will happen in the morning or the afternoon of 22 November; nevertheless, it is a clear commitment, and the Government must now recognise that all the movements are in the wrong direction.
As the hon. Member for Brighton, Kemptown said, prices will be rising, and everything that is necessary will be expensive. Of course we support social tariffs, but we want the Bill to go much further. We want much more information on bills so that people can see how much electricity they are using in comparison with their neighbours in similar houses. We want information on bills about CO2 emissions. We want people to be able to see how much less their bill would be if they were on the lowest tariff available from the company, and, perhaps, information on environmental charges. We want those things because they are the ways in which we can help to deal with fuel poverty. In addition, we need a great drive forward on energy efficiency. It is extraordinary that in a Bill that deals with fuel poverty, energy efficiency does not get a mention.
The Bill includes proposals on the remit of Ofgem, which has interpreted its new role well. Project Discovery shows that it has been giving good consideration to the issues that face us. However, we need to understand more clearly who is in charge. The Bill suggests that there are equal powers as between the Government and Ofgem, but it is clear to us that in policy terms Government should have primacy.
We need to do more to secure that investment, and the Bill simply will not do it. Those who are looking to invest in nuclear power need much more certainty on the price of carbon, and the Bill fails to give them any reassurance. If we are to become more reliant on gas imports-many predictions suggest that 80 per cent. of our gas will be imported by 2020-we need much more action on gas storage, and the Bill has not a single word to say about that. If we are to drive forward investment in renewables, the Government have to accept that they have a strategic role in requiring high-voltage DC cables to be put in place, and providing much more support for embryonic marine renewables. They must ensure that we develop a real spirit of partnership, so that when applications for new renewable facilities come to our communities, they know that there is something significant in it for them if they decide to host those facilities.
The Bill is not so much a plan of action as a statement of intent that the Government will think about consulting and having a review of whether they should change their energy policies. We need firm government and decisive action: time is not on our side, and the Bill is not up to the challenge. The Secretary of State is a very ambitious man-so ambitious, we are told, that one day he would even like to be Leader of the Opposition. The Bill is not ambitious, and if it goes to Committee we hope to work with the Government to find consensus and address many of the issues that have been left out of it.
The Minister of State, Department of Energy and Climate Change (Joan Ruddock):
Combating climate change while maintaining secure and affordable energy
supplies is one the greatest challenges that our Government face. This is a landmark year in the fight against climate change and today, as many contributors have said, is the start of the discussions at Copenhagen. The world has come together in an attempt to reach a new international agreement to tackle climate change. We are going into the negotiations with a clear plan of the ambitious, effective and fair deal that we believe all the world's nations must agree, and confident that the UK has a track record of taking real action at home to tackle our own emissions. The low carbon transition plan, which we launched in July, sets out a clear pathway that will lead us to a low-carbon world with secure energy supplies and protection for the most vulnerable. The Bill puts into place legislation that will implement that plan.
Let me comment on the speeches that have been made today. The hon. Member for Tunbridge Wells (Greg Clark) simply gave an alarmist account of what this country faces, without any positive reference to the measures in the Bill, some of which tackle the need for energy security in future. He constantly referred to matters that were not in the Bill, reciting a huge wish list of things that he believes could be legislated for. He failed to notice that most of the measures of which he spoke are already under way and do not require primary legislation. It was complete nonsense of a speech.
The hon. Gentleman said that there was a possibility of power cuts, which has been repeated by Opposition Members over and over again. [Interruption.] I shall come to what my hon. Friend the Member for Sherwood (Paddy Tipping) said in due course, but at the moment I am dealing with the opening Front-Bench speeches. We challenged the hon. Gentleman on the need for assistance to households to make their homes more energy efficient. We still do not know how the Conservatives plan to fund the provision of £6,500 to households. He challenged us by saying that we have only 500 homes in our pilots, but why do we have pilots? To work out what is the best way of incentivising people and how the public are most likely to respond. That is why the pilots are critical. The hon. Gentleman is not able to tell me tonight how the up-front payments for those energy efficiency measures will be made, and he has never been able to say.
David Taylor: Is it not the case that the sum involved would be £6,500 times 20 million or so, so we are talking about £160 billion-a figure not unadjacent to 10 per cent. of gross domestic product? Surely the official Opposition must have thought in more detail about how they can fund that.
The hon. Member for Tunbridge Wells spoke about how vital an emissions performance standard is and again said that such a measure was not in the Bill. The fact is that it does not need to be in the Bill. We do not need primary legislation and can adopt an emissions performance standard without new legislation if we wish to do so- [ Interruption. ] I will come to that in due course.
The other point on the emissions performance standard is that we think it better to gain a proper understanding of the potential of CCS before considering how the regulatory and financial measures relating to emissions
from power stations will be affected. We will continue to maintain a rolling review of progress, as we have clearly stated, with CCS technologies. By 2018, we will publish a report- [ Interruption. ] It is not far off. By 2018, we will publish a report that considers the case for new measures to drive a move to clean coal.
Mr. Speaker: Order. I apologise for interrupting the hon. Lady, but there is a constant chorus of chuntering from those on the Opposition Front Bench. Mr. Barker, you need to sit quietly and listen to the Minister's speech. Stop chuntering-I do not want to hear it.
The hon. Member for Tunbridge Wells spoke of the UK falling behind in the race to build CCS. That could not be further from the truth. A number of other hon. Members, including the hon. Member for Angus (Mr. Weir), mentioned China, but no project in China is on the scale of any of our projects, and no construction is under way for capture, transportation and storage on the scale that our projects propose. It is therefore complete nonsense to suggest that other countries have overtaken us. We are still in the lead. We are co-operating with other countries, which is the most reasonable thing for us to do.
My hon. Friend the Member for Sherwood, the acting Chairman of the Energy and Climate Change Committee, made a very thoughtful speech and we are glad that he welcomed our CCS proposals. He spoke with passion about the mining communities and the future of coal mining in this country. Of course, it is CCS that can offer a guarantee of a future for those activities.
My hon. Friend spoke in more moderate and reasonable terms about a possible energy supply gap around 2016, but I must tell the House that the evidence does not support that view. It is true that 18 GW of electricity generation is due to close by 2018, but nearly 20 GW is under construction or has planning consent. Industry is responding to the signals of the need for new generation by getting on with the building. The latest analysis issued by the Government has shown that there is no gap. Ofgem's "Project Discovery" presents a wide range of scenarios and shows that electricity supplies would meet demand in almost all foreseeable situations.
Rob Marris: Is my hon. Friend as surprised as I am that Conservative policy on the energy gap still seems to be to sit on the fence about nuclear and say, "If we need a nuclear power station, we'll just pop down to the supermarket and get one"? That is a crazy policy.
Joan Ruddock: My hon. Friend is absolutely right, but perhaps the most remarkable thing the hon. Member for Tunbridge Wells said was that he was entirely relaxed about the shadow Business Secretary's comments about wind turbines. It is quite clear that the Conservatives do not want the new generation capacity that we believe is so vital.
My hon. Friend the Member for Sherwood asked about the consideration of clusters. We understand that co-location of CCS demonstration projects could reduce the overall costs of the demonstration programme, but the competition process could be weakened if that is a
requirement. It is not a requirement, but clearly those who come forward in the competition might propose that making a cluster is an attractive feature of the offer.
The hon. Member for North Southwark and Bermondsey (Simon Hughes) said that he wanted to see more ambition in the Bill, although he welcomed many aspects of it, and we are grateful for that. He challenged us to say whether there would be new coal that did not have some sort of constraint on emissions. We have made it clear that all new coal will have to have a degree of carbon capture, and that if the technology is proven, there will be retrofitting. As he knows, other old stations will go out of use, so it is clear-
Joan Ruddock: I am not giving way on this point. It is clear that under our proposal, if the technology works, we will end up where we want to be. To suggest that it should be in place from the beginning would be to defeat the progress of the technology completely.
The hon. Member for North Southwark and Bermondsey also asked about CCS and intellectual property. We want to have the maximum sharing, and that is why we are working with China. We want to see the sharing and development of technology. It will be necessary, of course, to have some intellectual property rights, but we do not envisage those standing in the way of the kind of co-operation that we need.
The hon. Gentleman, and other hon. Members, asked about fuel poverty and argued that those off the gas grid are not protected. One way to deal with the situation would be to put the social price support on electricity bills. In that way, we could assist everyone who had an electricity supply, which is virtually everyone in the country. That would mean that we did not disadvantage those who are off the gas grid.
Sir Robert Smith: That is an interesting proposition. Does it mean that those who are off the gas grid would get a greater reduction in the electricity social tariff to make up for the fact that their heating comes from oil or LPG?
Joan Ruddock: What will be done is a matter for extensive consultation, when the hon. Gentleman will have an opportunity to make those points. I offer that suggestion as a way out of the dilemma that hon. Members mentioned.
I was asked about clause 14 by the hon. Member for North Southwark and Bermondsey. The Secretary of State already has the power to amend the fuel poverty definition under the Warm Homes and Energy Conservation Act 2000. We are not, however, looking to change that definition. The hon. Gentleman also asked what we could do those customers already suffering harm, but whose cases had been timed out. The legislation will not apply retrospectively, as I think he understood,
and that is why we are extending the provision to enable breaches of licence going back more than 12 months-indeed, up to five years-to be tackled.
My hon. Friend the Member for Southampton, Test (Dr. Whitehead) said that the Bill might be modest, but it represents a real step forward. He is so right. He recognises that this limited Bill will do a lot that is complementary to the huge programme of change that is already under way. He demonstrated his deep understanding of the relationship between the three elements of fuel poverty-prices, energy efficiency and incomes-and I am grateful for his welcome of the investment and regulatory approach that we are taking in the Bill.
The hon. Member for Bournemouth, East (Mr. Ellwood), in an alarmist speech, spoke a great deal about gas storage. He accused us of coming late to new nuclear, but it was his party that said that it was a policy of last resort. We are getting on with the job while his party has been dithering. He spoke about Vestas, which is producing blades not for the UK market, but for the US market. He said that there is nothing in the Bill to incentivise wind turbines-that is incredible, because we have the renewables obligation certificates-and nothing for local communities, when of course there are jobs and investment.
The hon. Gentleman asked what we would do if this winter was as harsh as last winter. National Grid, which is most closely involved in protecting security of supply, tells us that although unforeseen events could occur, overall supply and demand in gas and electricity look relatively comfortable. We have the highest generation margin for many years and gas import infrastructure has increased by 500 per cent. over the past decade.
My hon. Friend the Member for Brighton, Kemptown (Dr. Turner) spoke about the carbon price and suggested that there should be a mechanism for underpinning it. That is not something that we are going to adopt, at least not at present, because we see significant risks in attempting to manage the carbon price. For example, introducing a price floor would set a precedent for intervening in the market and lead to increased calls for a price ceiling in times of higher economic growth. He also argued that market support is not sufficient for the development of marine technology. We always keep the way to incentivise such development under review. I also point out to him the investments that we are making in the south-west in marine renewables.
The hon. Member for Scarborough and Whitby (Mr. Goodwill) made a strong and constructive speech in favour of nuclear and is obviously a keen advocate of new technology-he made a reference to my old college, Imperial. He can be assured that we will be co-ordinating with others in the various CCS projects, as I have indicated.
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