Mr.
Weir: In a sense, I am not disagreeing with the hon. Lady.
My point is that, as the national plan is written, no one will get
permission for a gas-fired station because the CCS is not ready. How
can we demonstrate that carbon capture is ready if the technology does
not exist for gas? That is the
point.
Joan
Ruddock: The fact is that enough is known already about
the CCS potential for gas for companies to be able to understand what
CCS readiness is. That was indeed spelled out in what the hon.
Gentleman read into the record, so it is quite clear that carbon
capture readiness is understood, is provided for and can be undertaken,
and that planning inspectors will be in a position to make decisions
based on what is set out in those plans. There is no contradiction. The
issue must surely be whether there is to be experimentation elsewhere.
We know that there is; both the hon. Gentleman and I have cited
examples of
that.
The hon.
Member for Wealden referred yet again to the BP plant. It is completely
incorrect to suggest that the BP plant was lost due to lack of
Government support. Government support for the plant was never directly
offered or sought; it was a question of whether it entered itself into
a competition, and it decided not to participate when all the details
became known. It made commercial decisions that had nothing to do with
lack of direct Government support to that plant. There was never a
question that the Government would simply subsidise one company in one
location dealing with one specific
technology. Mr.
Phil Willis (Harrogate and Knaresborough) (LD): With the
greatest respect to the Minister, she will know that at the BP Miller
field there was encouragement of a single project, together with
Scottish Power, at that time. That was the arrangement. It was only
when the final decision about funding the project came in that
the Government—very disingenuously—invented a
competition. That was what happened, rather than the other way round.
BP was certainly in a position to go ahead with that project as a
demonstrator.
Joan
Ruddock: Neither the hon. Gentleman nor I will know of
private conversations that may have taken place—encouragements
or otherwise—but I am absolutely clear that there could never
have been an intention specifically to subsidise an individual plant.
That is why we have the competition.
The other
thing I want to say, before I get to the meat of the debate on clause
6, is that everyone has spoken as though CCS were already a proven
technology and we could have real certainty about applying CCS to gas
through demonstration projects. The whole purpose of demonstration
projects is to see whether it is possible to bring CCS to scale and to
do it commercially.
At the
moment, we are in a very different place from where we could
conceivably be by 2020, not least through our own demonstrators in this
country. As everyone has acknowledged, they are also taking place in
many other countries, not least with EU funding of 12 projects within
Europe, where I would suggest things are pretty comparable in terms of
their
application.
Mr.
Weir: I think the Minister is missing the point. What do
clauses 1 and 6 mean? The whole of the four or five projects will be
turned on coal. There is no window
for gas, despite its importance to electricity generation in this
country. It seems absurd to close off that avenue altogether, without
even leaving the possibility of it being helped
along.
Joan
Ruddock: Let me address those points in a more
comprehensive way, as opposed to answering questions. Clause 6 sets out
the definitions for a number of terms used in this part of the Bill. In
particular, the clause defines the term “commercial coal-fired
electricity generation” which is used throughout part 1. The
effect of that definition is that financial assistance, which may be
provided by the Secretary of State to CCS demonstration projects and
for the future retrofit of CCS to any unabated capacity at such
projects, is limited to commercial-scale electricity power stations
that are fuelled using coal or coal and biomass. Amendments 16 to 20
would remove all references to coal-fired power stations from the Bill.
As hon. Members have indicated, they would therefore broaden the scope
of the provision to allow CCS demonstration projects to use any type of
fuel, including
gas. 5.30
pm As
I set out at our evidence session last week, there are strong arguments
for prioritising the development and demonstration of CCS technologies
for coal power stations. I need to reiterate them as they have been
entirely lost from the discussion, except in the case of the excellent
contribution from my hon. Friend the Member for Glasgow, North-West,
who outlined the many sound reasons why we should pursue coal rather
than other fuels.
Coal is the
most carbon-intensive fuel and its use is set nearly to double globally
by 2030. CCS for coal is the most technically challenging because coal
is such a dirty fuel, but CCS for coal is cheaper than for gas.
Therefore, for economic reasons, it should be deployed sooner. New
clean coal in the UK will provide diversity and flexibility in the
energy mix and so help to ensure security of
supply.
Mr.
Willis: I apologise to you, Mr. Bayley, and to
the Minister for missing part of the sitting. I was speaking at a
college reception elsewhere. It was already a commitment when my hon.
Friend the Member for North Southwark and Bermondsey ganged me into
coming on the Committee.
Emily
Thornberry (Islington, South and Finsbury) (Lab):
Press-ganged?
Mr.
Willis: He did not press me because I do not allow him to
touch me at all, in any shape or form.
There is an
important point of principle. There is an assumption, and the hon.
Member for Glasgow, North-West made this point, that the Bill will lead
to the development of clean coal technologies in the UK and that carbon
sequestration in the form proposed—and I agree with all the
arguments that the Minister has just made—will lead to the
resurgence of the UK coal industry.
We have 200
years’ worth of coal beneath our feet, particularly in an area
such as mine in Yorkshire, with some of the largest coal seams going
right up to the
north-east. The reality is that when the previous Government privatised
the electricity industry, the industry became free to buy coal from
wherever it liked, as it does now under a Labour Government. It does
not buy it in the UK. The
Chairman: Order. Interventions are supposed to be short.
This is not a speech, but an intervention on the Minister’s
speech.
Mr.
Willis: Oh, is it? I am sorry. I hope that the Committee
will agree that it is an important point. I take your guidance because
you are a very wise Chairman, Mr. Bayley. I ask the
Minister, where in the Bill is there any comfort for the UK coal
industry? How can it assume that there will be a reason for the
electricity companies to use British coal when carbon sequestration is
in place?
Joan
Ruddock: I accept the hon. Gentleman’s apology for
not being here. If he had been here throughout all the sittings, he
would have heard me say why I think that there is encouragement to
those who might invest in coal supplies in this country. If there was
no CCS project funding or framework, there would be no investment in
new coal or new coal plants. If we give assurances that there is
support and that new coal-fired plant will be built in this country,
that will encourage those who mine coal in whatever way in Britain, as
they will have a ready market for their product. That is the connection
and there is nothing more in a privatised market that anyone would
expect a Government to do with
legislation.
Mr.
Willis: It is too dear. It is too
expensive.
Joan
Ruddock: The hon. Gentleman makes comments that are not
relevant to how a Government legislate. I think that I have explained
the connections. We are in a free market when it comes to producing the
raw fuel.
I was
speaking about why coal should be prioritised and I would add the
important role that coal-powered stations perform, which is to respond
to changing supply and demand—for example, as back-up to
intermittent renewables such as wind, or when there are unexpected
problems with other power stations. Coal generation can also provide a
useful back-up when gas needs to be prioritised for heating for
domestic consumers in very cold weather, such as we have at the present
time. For us, therefore, coal has many important roles and that is why
we seek to include it in our energy mix.
Simon
Hughes: Nobody doubts the primacy of coal as a current UK
base energy source—that primacy is obvious. What I do not
understand is why the Minister, through her resistance to these
amendments, is obliging Parliament to legislate again if it should wish
to come back to this issue to broaden CCS to other energy sources. That
seems to be nonsense.
We are trying
to reduce legislation, so it is surely better to give an option. These
amendments would not oblige anybody to do anything; they give an
option. In a minute, we will debate fuel poverty schemes, where the
Government have a “may” provision and not a
“must” provision. Why cannot we have a
“may” provision here, just as we have in the rest of the
Bill?
Joan
Ruddock: I shall deal with the hon. Gentleman’s
points in due course. I just want to continue my train of thought about
why coal is so important. We have a demonstration programme as part of
our wider framework for the development of clean coal, which we
published last November. It includes the requirement for any new coal
power station to demonstrate commercially the full CCS chain.
If companies are to invest in
the new coal power stations over the next decade, we all agree that
they will need to have financial assistance to help with the
requirements of this regulatory framework. Widening the scope of the
demonstration programme to include gas could jeopardise that investment
in new coal power stations, as there would be no certainty that all
four projects to which the Government are committed would be in coal
power stations. I say that advisedly, because the amendments that seek
to remove the reference to coal would mean that there could be CCS
support for power stations that are fuelled in any way
whatever.
We are
determined that we will have coal in the mix. Therefore it is obvious
that we must have a certain critical number of coal-fired power
stations; it is not acceptable to us that there should be a completely
open provision in the Bill.
Simon
Hughes: We are all keen that we should have CCS in
coal-fired power stations. My party is keen on that—as much, if
not more, than other parties here today. However, the Minister could
deal with her concern by coming back with a counter-proposal that at
least three of the developments must be in relation to coal. We are
seeking to open the opportunity for CCS in relation to other options,
not to drive CCS completely in the other direction. I have given a
counter-proposal that the Minister could make. Alternatively, we could
make it and she might be able to respond more
positively.
Joan
Ruddock: The answer to that suggestion is that I clearly
would not seek to do that. The hon. Gentleman has just illustrated what
is wrong with these amendments—indeed, what would be wrong,
given the priorities that I have clearly outlined, with any other type
of amendment that created a situation in which we could get fewer than
four coal-fired stations receiving financial support under the levy
system.
Of course,
hon. Members, including those on the Conservative Front Bench, might
like to propose doubling the levy and the number of the projects.
However, the fact is that we think that it is a sustainable proposal to
have four coal-fired power stations that can adopt CCS under the
provision, given the amount of money that we think is reasonable to
raise and consumers can reasonably bear. If we think that four is the
right number, and that the sum of money is of the right order, it is
essential that those four power stations are coal-fired ones, because
coal is the priority for the reasons that I have indicated. It is also
a critical priority to keep a significant amount of coal in the mix.
Even with four CCS coal-fired stations, which would be capable of
running into the ’20s and beyond, we would still have a much
reduced coal capacity compared with what we have
today.
Mr.
Ellwood: The Minister continues to make a powerful
argument as to why we should have carbon capture and storage for coal,
but she is not making the case as to why we should not have it for gas.
She is repeating the same message that we received a couple of days
ago. I
think that the Minister wants to protect the coal industry. If we were
cynical, we would see that we are importing more coal than we are
digging up in the UK. As that continues, we are supporting the import
of even more coal. By denying the opportunity to include gas, the
Minister is protecting the coal industry, with the effect of denying
the opportunity for gas to catch up with carbon capture and storage.
That is what is happening, and that is underlying the message that we
are
getting.
Joan
Ruddock: I have to tell the hon. Gentleman that nothing is
further from the truth. If he is against imports, he must be against
gas, because half the gas that we use in this country is
imported.
What I have
said clearly is that for energy security needs, global needs and a
whole range of reasons, we want to see coal in our energy mix, and we
want to have it with CCS fitted if possible. If we are to have four
projects and raise the money that we have proposed, we need to ensure
that those projects are coal. Therefore, it is not enough to suggest
that it would be okay to have three. We believe that in the future we
will need that amount of coal-fired generation with CCS. The programme
will do exactly that. There is no way that we will seek to have fewer
projects to bring gas
in. May
I say something about gas? There is no question of our accepting
amendments that would diminish our commitment to coal. We seek not to
protect any aspect of the energy industry—we have a free and
privatised market—but to get the energy mix right. The issue is
about the energy
mix.
Mr.
Ellwood: I do not understand how the Minister can say that
we would diminish the efforts that we are placing on coal. At the end
of the day, she and the office of carbon capture and storage will
decide where the money will go, regardless of what bids are proposed.
The question that I posed to her is the same as the one that I posed to
the hon. Member for Glasgow, North-West. When does the Minister think
that a Bill will come through that will allow the introduction of
demonstration projects on carbon capture and storage for
gas?
Joan
Ruddock: I find myself in some difficulty, because I am
becoming repetitive.
Mr.
Ellwood: It is a simple question. When will a such a Bill
come
forward?
The
Chairman: Order. The Minister is
responding. 5.45
pm
Joan
Ruddock: Let me be absolutely clear: we want four coal
projects. If we removed references to coal, it would open the field to
projects that are not coal. That is the simple logic. I imagine that it
could even be the subject of a legal challenge if the Government then
said that any field could be included, but we had chosen only coal. The
hon. Member for Bournemouth, East would
then say that we were favouring the coal industry over every other
industry. We are being honest, straightforward and saying exactly what
we seek to achieve with the Bill. That is why I am resisting the
amendments. Judy
Mallaber (Amber Valley) (Lab): Is there anything in law to
prevent a demonstration project for gas from taking place if it did not
require the levy? How much would it cost to have a fifth project that
involved gas with a
levy?
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