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Greg Clark:
I am delighted to do that. Our party is strongly pro the development of offshore wind and marine and tidal energy. Given the renewables resources that we have in this country, with one of the longest coastlines in Europe and some of the best conditions to allow the harnessing of the power of the wind and the tides, it is a source of great regret that we have made so little progress on that. Only Malta and Luxembourg generate less of their energy from renewables than we do. We need to accelerate that process. The announcement
made the other day by the Secretary of State and the Prime Minister is a step in the right direction. However, it is regrettable that many of the jobs that could be generated, not least in constituencies such as those of the hon. Gentleman, are less certain than they might have been had we been further ahead and had not other countries established a lead.
Mr. Mike Weir (Angus) (SNP): One of the problems with renewables, especially in Scotland, involves the transmission charges for bringing the energy into the grid. What would be the hon. Gentleman's policy on that? Would he take action to reduce transmission charges or introduce a postage stamp scheme whereby transmission charges would be equal across the UK?
Greg Clark: I cannot give a commitment that charges should be equal, but I recognise the point that the hon. Gentleman makes. It is no good developing plants that generate significant capacity offshore if we cannot then bring that energy onshore. We have suggested that the National Grid-it is keen to do this-should build its onshore network offshore so that it is easier for promoters of renewable energy offshore, whether wind, wave or tidal, to get it to where the customers are.
Greg Clark: I want to make progress now, because lots of Members want to speak. If I have time, I will take the hon. Gentleman's intervention later.
On carbon capture and storage, I am afraid that the Government have dithered; I take no pleasure in pointing that out. In 2007, there was the announcement of a token competition for just one demonstration plant. Last year, there was a much more encouraging sign from the Secretary of State, after he took over, when he stood up in this House and made a bold announcement on CCS. There is to be an expanded demonstration plant programme-
The Secretary of State for Energy and Climate Change (Edward Miliband): There will be four.
Greg Clark: Indeed. There will presumably be a second competition to embrace a wider range of CCS technology, for which Conservative Members have been calling for some time. However, despite the first competition having been announced in 2007, the winner has yet to be announced. The indications are that it will not be until 2011 at the earliest. As for the second competition, it is not even open yet. If I am wrong I shall be delighted to be corrected by the Secretary of State, because I would welcome greater progress.
I should mention a third competition, of course. As the Secretary of State knows, the one taking place in several countries and run by the European Union managed to announce the winners by autumn last year. I would simply observe that any organisation that can be outpaced by the European Commission has major problems. Unfortunately, foot dragging and bureaucracy is what we have come to expect from this Administration. The chaotic history of their policy on CCS has turned what could be a leading position for Britain into one in which we now lag behind China, Canada, Germany and Belgium.
Martin Horwood (Cheltenham) (LD): Will the hon. Gentleman give way?
Greg Clark: I want to make a bit of progress, and then I will give way.
Nuclear, which the hon. Member for Wolverhampton, South-West (Rob Marris) mentioned, is another example of Government foot dragging. For years we have known when each of Britain's nuclear power stations would be retired. When the Government came to power, nuclear provided 26 per cent. of our electricity. Today, that contribution stands at just 13 per cent. and is set to fall further as more stations are retired. Ministers were well aware that replacing that lost capacity in good time required an early go-ahead, but it was not until the 2007 energy White Paper that it was given. It was another two years before the necessary changes to the planning regime were put in place. With the exception of Sizewell B, every existing nuclear power station will have reached the end of its planned life before it is even possible to replace it with a new one. Of course, the current timetable assumes that there will be no further delays. Given the track record of recent years, we cannot rely on that.
Mr. Jamie Reed (Copeland) (Lab): Will the hon. Gentleman give way?
Greg Clark: I will, because I know that the nuclear interest is very important in the hon. Gentleman's constituency.
Mr. Reed: I am grateful to the hon. Gentleman. Fans of satire will be listening to his comments with real interest, because the single biggest problem with the nuclear industry in this country can be traced back directly to the last Conservative Government's abysmal failure to deal with radioactive waste management. That is the root of the current reality.
Greg Clark: I have been disappointed by the hon. Gentleman's recent interventions on this matter. I have followed his speeches over the years, and he has recognised the importance that his constituents and people in his region place on certainty and continuity of policy. However, just in the past few debates he has taken a partisan approach to these issues that is against his constituents' interests. In the interests of their employment, he ought to reflect on the signals that he gives.
Greg Clark: I will not give way, because I have given the hon. Gentleman his chance.
Mr. Bernard Jenkin (North Essex) (Con): I just wish to put on record what we all know. There have been Secretaries of State in this Government dealing with matters of nuclear waste who have refused to allow any papers regarding nuclear policy to cross their desk as a matter of principle. It is ideology, such as that from the right hon. Member for Derby, South (Margaret Beckett), that has paralysed the Government.
Greg Clark: I said that I wanted to be constructive, and I welcome the Government's conversion to a more sensible policy.
Mr. Tobias Ellwood (Bournemouth, East) (Con):
In the spirit of being constructive, may I urge my hon. Friend to urge the Secretary of State to include gas in carbon capture and storage? We are currently debating that issue in Committee. We are talking about CCS for
coal, which is absolutely right, but the Government are adamant that they will not include gas in the levy that will shortly be rolled out. Why are we not looking to the future and ensuring that the coal-fired power stations, which will all close in 2020, are replaced with gas-fired power stations? We should be thinking about CCS for gas as well.
Greg Clark: I am grateful to my hon. Friend for making that point. If we want to establish leadership on that, it is important that for demonstration purposes we examine all the technologies that are available. If, as I believe, we will not reduce our dependence on gas, it will be important in meeting our emissions target that we can capture carbon dioxide emissions from gas in due course. The Secretary of State is a reasonable man, and often when amendments are tabled he undertakes to consider them carefully. I hope that he will do so on this occasion and reflect on whether the matter can be included in the competition. That would be a good thing to do.
Martin Horwood: Will the hon. Gentleman give way?
Greg Clark: I will not, but I might later if I make better progress through the points that I want to make than I am at the moment.
I mentioned renewables and the importance of ensuring diversity of supply. However, there is another important point that comes from renewables: if we do not address some of the technical factors of renewables, such as intermittency, we could exacerbate the problem of energy security rather than solve it. For example, I am not confident that we have the policies to build the back-up capacity that we will need if we are to have a greater contribution from intermittent renewables. The conclusion of a comparative study commission by National Grid and a number of other organisations stated:
"While the Irish market is able to continually incentivise new peaking plant with increasing wind penetration, we are concerned that there is a real challenge in delivering very low load factor plant in the British market."
Shona McIsaac (Cleethorpes) (Lab) rose-
Greg Clark (Tunbridge Wells) (Con): No; I want to make some progress.
That brings me to the subject of gas, which has occupied our attention in recent days. Gas is a crucial fuel. As well as providing heat, it is our most important source of electricity, in terms of both quantity and the flexibility with which gas-fired plants can meet fluctuations in supply and demand. Yet despite the pivotal and growing importance of gas in supplying our energy needs, the rapid decline of North sea production and proven threats to the security of our pipeline supplies, we are still unable to store enough gas to see us safely through the coldest months. The consequences of that failure to plan ahead have been exposed in the past 10 days.
Shona McIsaac: Will the hon. Gentleman give way?
In that period, National Grid issued no fewer than four gas balancing alerts and supplies came under strain from the record level of demand. That boils down to four basic flaws in the current system. First, there is
simply not enough storage capacity-no one apart from the Liberal Democrats doubts that. I mentioned that we have, at best, about 16 days' worth, compared to 100 in Germany and 122 in France. Ministers have dismissed that.
Shona McIsaac: Will the hon. Gentleman give way?
Greg Clark: I have been generous in taking interventions so I now want to make progress.
Ministers dismissed that comparison, saying that our declining North sea supply means that everything is still supplied, but that is dangerously complacent, because the Netherlands, which relies much less than us on imports, has three times as much storage relative to consumption- [ Interruption. ] I think hon. Members are pointing out that I have not taken any interventions from a woman. If that is a deficiency, I am happy to remedy it by taking one from the hon. Member for Cleethorpes (Shona McIsaac).
Shona McIsaac: I thank the hon. Gentleman for his generosity. Is he aware that my constituency is probably the one with the highest number of gas power stations in the country? Today, the local authority is giving its seal of approval to a biomass power station, which is going to create enough renewable energy to supply more than 500,000 homes. I therefore know quite a lot about the energy issue in this country. The hon. Gentleman must stop scaring the British public. There is far more gas in storage than he says there is, and far more gas that is easily available from the North sea and other sources. Will he stop scaring people about the lack of gas, because it is simply not true?
Greg Clark: The hon. Lady's first point was constructive, and I share her welcome for the biomass plant-as I said, diversity is important, and the plant will help to create British jobs-but she is wrong to choose to ignore the problem of inadequate gas storage. We do not often get to talk about such things and people are not aware of them but, at times like this, when we see how little we have, it is important to galvanise support for action.
Let us take the Engineering Employers Federation and the Energy Intensive Users Group. In a letter today, they say:
"The bottom line is that the UK energy system was unable"
"to meet the needs of all consumers...To dismiss",
"last week's interruption as a one-off also ignores the growing risks associated with increasing dependence on gas from overseas. The long-standing vulnerability in our energy system has been exposed-the UK has significantly lower storage capacity relative to demand than most other major gas-consuming economies."
That came from the Engineering Employers Federation and the Energy Intensive Users Group; it is what British employers say is necessary for them to continue in business and to continue to expand their businesses.
Greg Clark: I want to be fair and to make progress. Many Members wish to speak and there is a time limit on speeches.
I said that we need more storage. Secondly, there are limits to how quickly that gas in storage can be extracted. At the start of December 2009, Britain's biggest storage site, the offshore Rough facility, was 99 per cent. full. Throughout the cold snap, Rough has been pumping out gas at its maximum capacity, but that has still not been enough to prevent the need for gas balancing alerts.
Thirdly, we have an insufficient margin for error. Our small stocks should be just enough to get us through a long cold snap. However, as I mentioned earlier, if just one other thing goes wrong, the knock-on impact will be enough to tip us over the edge into a system whereby it might be much more difficult to cope. Fourthly and finally, we should not confuse a system that prioritises who gets cut off with one that minimises cut-offs. Businesses, many of which have interruptible contracts, were the first to have their gas supplies stopped. That helps to maintain the supply of gas into people's homes, but it is bad news for the businesses that are struggling to emerge from the recession and remain open in these difficult times. As the Energy Intensive Users Group says, there is a real risk that disruptions could become more frequent. That would hit manufacturing hard and risk damaging the UK's reputation, as well as future inward investment.
The realisation that Britain needs more gas storage is not new. As I mentioned, the Business and Enterprise Committee, chaired by my hon. Friend the Member for Mid-Worcestershire (Peter Luff), first highlighted the issue in 2002 and it has highlighted it repeatedly since then. According to-
Ms Dari Taylor (Stockton, South) (Lab) rose-
Greg Clark: No, I will not give way.
According to a recent written answer, the Government expect to build another 500 million cubic metres of capacity by 2012-another two days' worth of additional storage. Will the Secretary of State stand up in the House and claim that that is an adequate rate of increase? Perhaps we should all cross our fingers and hope that we will not have another winter like this one.
I want to give time for my hon. Friends and hon. Members from all parties to contribute to this debate. Making up for the lost opportunities of a wasted decade will take some time. However, we must move forward with a sense of urgency. The issue is about not only catching up with the past but getting ready for a future in which the global production of fossil fuels-especially oil production, on which our transport systems are almost entirely dependent-will come under increasing strain.
Mainstream voices, including oil industry chief executives, and even Ministers from nations belonging to the Organisation of Petroleum Exporting Countries, have already warned that the age of easy oil is over. The International Energy Agency has said that it expects crude oil production to level off by 2030. In Britain, the UK Energy Research Centre, a joint initiative of the leading research councils, with which the Secretary of State will be familiar, has said that we could hit that limit by 2020.
When asked what contingency plans they had for such an eventuality, the UK Government said that they did not have any because they did not think the situation was that urgent. That answer should fill us with dread, but it is one that we have heard time after time. It is symptomatic of an attitude that in the past has been complacent and has not involved the action that we could have foreseen was needed. It explains, among other things, why we do not have enough gas storage capacity. It also explains why we do not have an adequate margin of generating capacity for electricity in this country and why we have not made sufficient progress on carbon capture and storage, nuclear and renewable energy. It is why we are wasting the chance to insulate our homes and stop wasting energy; we may discuss that issue later in the debate.
We need a policy for generating energy, not excuses. We need to rebuild the security of our energy systems and infrastructure with significantly higher levels of gas storage. On electricity generation, the Government must make it crystal clear that a collapsing margin of supply over demand is in no way acceptable. If current trading arrangements cannot guarantee that the lights will stay on, those arrangements must be reformed. That means unblocking progress across the broadest possible spectrum of energy uses. That is why we welcome the Government's national planning statements on nuclear, renewables and other key technologies, but it is also why we believe that they should be ratified by a vote of Parliament, to protect them against the threat of judicial review, which could delay progress for even more years.
We also, of course, need to build the enabling infrastructure for those technologies-for instance, the smart meters in our homes, an offshore grid for renewables and pipelines for carbon capture and storage. Continued delay and uncertainty on these vital networks will cost us dear as investors turn to other countries while Britain is left behind.
Finally, if we are serious about reducing demand, we must act to make sure that, as we go further into a winter during which fuel poverty is rising, we make it easy for people to find ways to make fuel consumption in their homes more modest and efficient. In place of unwanted light bulbs, we need a green deal to make a real difference to our energy bills and a real contribution to our energy security. The solutions to our energy crisis are within our reach. All that we need is a Government with the vision, the will and, dare I say it, the energy to make things happen.
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