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5.38 pm

Baroness Carnegy of Lour: My Lords, the noble Lord has just referred to a post-oil economy. When, in anticipation of a strike, the Grangemouth refinery was shut down recently, motorists in my part of the world realised for a brief moment the importance of security of fuel supply. People on the whole did not panic, but it took only three days of a bit of extra topping-up for there to be no diesel at all left in our town, while a number of petrol pumps were empty. The situation was relieved only by tankers arriving in the River Forth from elsewhere. We realised, momentarily, that security of supply is crucial to our lives and not to be taken for granted. The Bill is partly about that. It may be limited to only a few aspects of our energy future but it is nevertheless necessary and is, as most noble Lords have said, very urgently needed. Taken together with the Climate Change Bill and the Planning Bill, it is the outcome of the Government at long last beginning to make up their mind and give a lead on the many practical changes that have to be made in the energy field.

Airy discussion of global warming and the charm of renewables is comparatively easy, as we have seen over a number of years, but the reality of what has to be done, and done in time and paid for, if we are to have security of supply in the United Kingdom, is much more difficult.

Some noble Lords may remember that not long ago two French politicians from opposing parties came to speak to an all-party group here on how France set about persuading its electorate several decades ago that their future lay in building a large number of nuclear power stations. This was achieved by different political parties coming together in a campaign to educate the public about nuclear power generation and about why it was the best way. France has no oil of its own. The people had to be persuaded, and they were. There are now 59 nuclear power stations in France generating more than 78 per cent of its electricity. That was necessary leadership. Albeit there were few alternatives for France, needs must when the devil drives, as they say.

It is only now, as the hitherto oil-rich UK begins to realise the implications of oil and gas dependency coming to us and the likely timetable ahead, that the Government are getting down to the detail. From now on leadership will be of the essence. Great urgency is needed in developing the matters dealt with in the Bill and those not in the Bill. I shall not reiterate them as we have heard about them several times. My main point is that leadership is now

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needed not just at Westminster but in the devolved Administrations as well. What is happening in Scotland is not encouraging. Under the Scotland Act, energy is reserved to Westminster, which is sensible. Nowadays, Scotland’s energy generation is an integral part of the United Kingdom system, so the Bill applies to Scotland, apart from chapter 1 of Part 3, to which I shall return in a moment.

The problem is that the populist minority Scottish National Party Administration, in their desire always to please and never to ask for difficult decisions, are trying to lead in two opposite directions at once. They want a much stronger economy and a Scotland better able to stand on its own feet, which is wholly laudable, but they also want a nuclear-free Scotland and aim to use existing planning powers to block any proposal for a new nuclear power station in Scotland. Incidentally, those powers will not be affected by the Planning Bill now in another place as it does not extend to Scotland—I suspect, disastrously. At the same time the Administration have just called in, and blocked, planning permission for a vast 181 turbine wind farm on the Isle of Lewis which would have made a major contribution to Glasgow’s electricity and would have created 400 new jobs. However, there was a row about the effect on the island’s ecology so Ministers blocked it.

Other significant wind farm developments are alarmingly slow to materialise. Clyde wind farm, promoted by Airtricity, is five years behind schedule, the local planning authority having taken three years to refer it to a public inquiry in 2006. Also stuck in a public inquiry—the noble Lord, Lord Oxburgh, referred to this kind of thing—is a huge line of giant pylons cutting through the beautiful countryside between Beauly, near Inverness, and Denny, near Glasgow. It is essential for transmitting electricity from a large number of intended wind farms to the centres where most people live, but vast pylons conflict with tourism; and tourism is crucial where the line is planned, so there is a public inquiry. It seems that, across Scotland, projects spend two or three times as long in the planning system as in England, and in the end only 56 per cent are approved, compared to 65 per cent in England, 77 per cent in Wales and 93 per cent in Northern Ireland.

To replace outdated electricity generation in a clean, green way, in sufficient quantity and in time, is in fact probably impossible without nuclear power. Far from planning, as it might, to export electricity, Scotland is going to depend on England for supply. By the same token, Scotland in its Cairngorm Mountains has the right sort of rock for the deep down, permanent disposal of nuclear waste. However, the SNP boasts, “No nuclear dumping in Scotland”. It could well, given safe, proven techniques, be missing out on a lucrative new industry offering many jobs, provided by natural resources.

That leads me to ask the Minister one question. Chapter 1 of Part 3 of the Bill, which includes the clauses dealing with decommissioning and clean-up of future new nuclear installations, does not apply to Scotland. I understand that that is because the Scottish Executive want no nuclear power. If, as

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seems inevitable, the present or a future Scottish Executive find new nuclear build unavoidable, do they have the power under Head D4 in Schedule 5 to the Scotland Act to legislate for themselves? If not, would it not be better, with a view to the future, to apply Chapter 1 of Part 3 to Scotland now? That is a serious question, which the Government should perhaps look at. If the Minister is able to answer now, that would be excellent; but if not could he perhaps write to me about it? It matters very much.

To summarise, the French have shown what leadership can do in the difficult business of changing energy policy. It involves political parties taking responsibility courageously and together. In this country, that involves the devolved Administrations as well as Westminster. I hope that will soon be better understood in Scotland. For our part, I hope that this House, while improving the Bill where necessary, will give it a fair wind today.

5.49 pm

Lord Hunt of Chesterton: My Lords, it is a pleasure to follow the noble Baroness, Lady Carnegy of Lour, most of whose points I agree with strongly. I declare an interest as a professor of climate modelling at University College and a member of the EDF energy stakeholder advisory group.

The Government have moved a long way since the energy White Paper of 2003, which set unrealistic objectives for reducing carbon emissions solely through conservation and renewables. Now the Government have developed a sensible portfolio of energy plans, which I am pleased to hear the Liberal Democrat Front Bench now supports. Despite the views of various nationalist parties, which we have just been hearing about, my first question to the Minister is: will nuclear policy apply throughout the UK?

I am pleased to see that there is now greater consensus about the portfolio approach in all the major industrial and emerging countries. I am a vice-president of GLOBE—Global Legislators Organisation for a Balanced Environment. I agree with the noble Lord, Lord Oxburgh, that it has been very useful to hear the views of other countries. That consensus now includes the United States, which has become much more aware of the need to adapt its energy policy to deal with global warming.

One should realise that certain elements of the energy portfolio will or could develop much faster than others. Hence the concept of the so-called wedge approach is a little misleading—I refer to the sausage approach, because some areas will grow very rapidly and others much more slowly. For example, energy conservation, wind power, small-scale river power, carbon sequestration and very high efficiency coal/gas power stations may emerge quickly, while areas, such as nuclear power and wave power, will take longer.

As the Minister implied, the Government now have a more flexible approach through the renewables obligation. That is necessary as we have such different timescales for the new technologies as they emerge. All those technologies present exciting challenges to the UK engineering community and industry at every level, which as other noble Lords have said, should provide a tremendous range of jobs.

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As nuclear power becomes as widespread as it is in France, it will perhaps overtake certain of those technologies. Carbon sequestration may become less significant and we should be able to dispense with large onshore wind farms—a point of view expressed by the American Department of Energy. Onshore wind farms are clearly unpopular and scar much of our landscape, so I look forward to the idea of smaller, cleaner nuclear power stations, which have less impact. However, it should be mentioned that there is no trend in that direction in France, where there is not only continuing nuclear power and the building of a new nuclear power station but the rapid development of onshore wind power in many parts.

As the Minister explained, this welcome Bill has a number of critical elements. They are all necessary if the programme of energy supplies is to be secure and produce much less carbon than we do now. As noble Lords have mentioned, this programme must be urgent as the ice sheets melt and start slipping into the sea faster even than the IPCC estimated in its report last November. The IPCC is a consensus body; if anyone on the committee suggests that things may be happening more rapidly and others object, that is not included in the estimates.

The target of 60 per cent or, perhaps, 80 per cent reduction becomes even more essential as the global temperature averaged over the land areas, not over the land and the sea, continues to rise rapidly—by about 0.2 degrees per decade. That may worsen as the greenhouse gas emissions from the growing economies of India and China continue almost unabated. Furthermore, the earth may be worsening the situation. The long-threatened extra emissions of methane into the atmosphere from the unfreezing of the Arctic tundra is beginning to be as bad as was feared, with the possibility of an extra one or two degrees of global warming by the end of the century. Serious as that effect may be, it is still not included in the rather conservative estimates of the IPCC.

I hope that as part of their energy trading with Russia, the Government will encourage much closer scientific collaboration—which, in the view of the Royal Society here and the Russian Academy of Sciences is currently rather weak. International action will be much more likely to succeed if there is agreement about the scientific measurements on which policy needs to be based.

The need for storage is made clear in the Bill. We should make use of the oil companies' past expertise in pumping carbon dioxide for secondary oil recovery. My question for the Minister is: what kinds of European and international collaboration will there be on that technology? The implication of what we were just hearing about was a UK approach. It is important that there is widespread collaboration on this technology. Since the possibility of the gases coming out from the underground reservoirs has been raised, accurate monitoring of the sites is extremely important. Which body will be responsible for that?

Nuclear is a secure and well tried method for producing electricity with minimum carbon emissions. It is interesting to note that the EDF nuclear power station being built in Flamanville in Normandy is on time and on budget.

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It is always commented that nuclear power is impossible economically; that is not the experience in France. The size of the site needed is much smaller than that for any other non-carbon-emitting method. That is generally welcomed by the communities where they are located, as I have seen on visits to the north-east of the UK. We see this in France, the UK and the United States. There are many supporters of nuclear even in Germany, especially for importing electricity produced by nuclear power stations in France.

The two main technical issues which concern many members of the public are decommissioning of sites and dealing with nuclear waste. The UK demonstrated decommissioning of a small plant in the 1960s, and as the noble Lord, Lord Jenkin, said, there are companies in the United States which are greatly familiar with this. The costs are reasonable, and I understand that the industry is quite satisfied with the provisions in the Bill for its contribution to the costs. It sees a plan with solid political support going forward in the UK, and the economic case is quite satisfactory to it. Its only reservation is that the Minister may intervene in determining the decommission process. That is quite reasonable, but there should perhaps be some system for appealing the Minister’s decision.

The Bill does not deal with nuclear wastes, but I am informed that new plant will store wastes on site for perhaps 20 or 30 years before either the deep-storage facilities have been introduced, which is the policy of CORWM and the Government, or the research being funded by Euratom and around the world—in which UK scientists are involved—leads to new technologies for enabling nuclear wastes to be turned into other materials and elements via the so-called transmutation technology. As a result of it, wastes, instead of lasting 10,000 years in the ground, will last perhaps 100 years. Noble Lords should be reminded from time to time that storing material in the ground for 10,000 years is neither necessary nor, in the usual definition of the word, sustainable.

The renewables obligation will encourage more renewable energy production, be it from large offshore, or small river-water, turbines. However, there is concern among the smallest operators, as I have found in speaking to some of them along the rivers of Somerset, about the rigidity of the banding scheme. An increase from a 50- to 60-kilowatt system can penalise the operator. Is there to be a fair system for such small operators to avoid disincentives? Officials in BERR who have to deal with these tricky matters—I presume that they continue to be tricky under this legislation as boundaries are changed—have been very open to discussion with the operators, but such a system must be introduced. It would be useful to know exactly how it would come about. Will it be by way of private discussions with officials or will there be some more open, transparent method?

At the larger end, offshore wind schemes will as I understand it from those who are planning them benefit from the renewables obligation clause, but they are concerned about the considerable planning hold-ups in the schemes, to which the noble Lord, Lord Oxburgh, referred.

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All the issues in the Bill pose considerable scientific and engineering problems where research is essential for greater efficiency and safety. In the fields with which I am familiar, offshore wind and some nuclear issues, the amount of research sponsored by the UK Government has been very limited in relation to the vast investment that is required. I hope that there will be the kind of expansion in energy research—new organisations exist for that—that will bring it up to levels proportionate with those in the United States. It is essential for the future.

6 pm

The Duke of Montrose: My Lords, it is a great pleasure to follow the noble Lord, Lord Hunt of Chesterton, as I have had to do on other occasions. It is rather daunting to hear his great scope of expertise, everything from icebergs in the north down to small generators in Somerset. I am following on slightly from my noble friend Lady Carnegy who put her finger on what will possibly be the major issue in devolution questions. I will talk more on some of the smaller ones.

The ramifications of the Bill into the fringes of devolution are great. I am glad to see in the Explanatory Notes that the Government have decided to seek a Sewel Motion. The one area stated that first gave me worry is CO2. Is the disposal of waste material from power generation really an energy matter and so reserved for Westminster—particularly if it becomes a separate process—or is it environmental and so first a responsibility of the Scottish Executive? A Sewel Motion is probably the best way to make sure that we are still covering the point from both angles. Presumably by this stage of the Bill, this Motion will already have been passed. Is this so and have there been other issues? Obviously there still remains the problem of obtaining the Scottish local authority of executive’s agreement to planning permission for the construction of any site for that separate process.

It is also interesting that under Chapter 2, on the storage of combustible gases, the Government have ensured that land in Scotland is land,

whereas in Chapter 3, on the storage of CO2, Scotland’s authority over the territorial sea adjacent to Scotland is again recognised. This raises another question on Clause 41, on offshore transmission, which I presume has also to be considered under the Sewel convention, both for lines coming from the territorial sea to Scotland and also for any long distance underwater inter-connector. Will these all have to be subject to planning permission in the area in which they occur?

In Part 2, we have a great section amending the Electricity Act 1989 to make more regulation for electricity from renewable resources, though the matters in the Bill are almost entirely to do with renewables obligation certificates. I declare an interest as a farmer and landowner who, like almost anyone else, could have an interest in microgeneration in one form or another. The renewable energy question is now beginning to show up some of the difficulties, as we saw yesterday when discussing the renewable

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transport fuel obligation. The noble Lord, Lord Bassam of Brighton, told us of the current review of the wider economic impacts of global biofuel production and was happy to state that currently 1 per cent of UK road transport fuels are made up of biofuels. This is still a long way short of the 2.5 per cent target for this year in order to reach the much-trumpeted commitment of 5 per cent by 2010. The Minister emphasised the need in this whole field for long-term and sustained decisions but this review coming up is a prime example of the great tendency to have headline announcements and then second thoughts. On the issues that come up throughout the Bill, it is the opposite of what is required for an activity that needs large investments and long-term stability.

On bioethanol, I know of plans for three major production units costing many millions of pounds, which ties in with this question of renewable transport fuels. At last year’s harvest levels, these would use up the equivalent of our total exportable tonnage of wheat. The Renewable Energy Association is currently estimating that much of these could be abandoned. The right reverend Prelate the Bishop of Chester expressed his concern at the effect that this use has on the price of food. I do not know whether I can reassure him by telling him that from a world total of 600 million tonnes of wheat last year, a UN paper I saw yesterday estimates that this year’s harvest will be 660 million tonnes. The outstanding thing about last year was that we had a bad harvest in a great many places, which we should of course be prepared for. We should have the stocks to carry us through. The world still has a capability for producing food to a much greater level than it did last year. If we abandon our efforts to create bioethanol, we then have to buy it to meet our commitments. What is that likely to do to the conservation of tropical forests and world food supplies? It is a great dilemma.

The Government started out on this road with a great sense that we would foster innovation, remain at the forefront of world energy activity and obtain great financial gain by being able to supply our new-found technology to the rest of the world. A main area envisaged in the Bill is carbon capture and storage. We are all in favour of this approach and it would be good to have properly thought-through regulation. In the mean time, it appears that the industry’s attention is much focused on the Government’s carbon capture and storage competition, which will promote one enterprise of their choice. A proposal for developing a carbon-capture facility for a gas-fired power station at Peterhead had recently been abandoned because it has been found that the Government’s attention is much more focused on supporting carbon capture for coal-firing and post-combustion technology. Even this is not the best cutting-edge science. Are they not also prepared to consider parallel pre-combustion projects which can be integrated with post-combustion technologies? Has the Minister’s department received any approaches from the industry for them to look at this technology?

Many noble Lords have expressed disappointment that there is nothing in the Bill allowing for development of a policy which would include a feed-in tariff. We have heard that the Government are frightened of the

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cost to individuals but this afternoon we have had some interesting figures. My noble friend Lord Jenkin of Roding said that the current cost of the incentivisation of renewables per household is £79 per annum. Speaking in another place, a member of the Minister’s own party pointed out that the feed-in tariff costs in Germany—by far the most successful system in incentivising microgeneration as part of the whole renewable world—is around £25 per household. I cannot say whether this is in addition to other costs, but for anyone who can put up a solar panel or microgenerator this cost of £25 might well offset or even give a positive outcome.

As everyone has been pointing out, there are, no doubt, some massive hurdles to be overcome. The noble Lord, Lord Oxburgh, emphasised that the timescale available appears very short. The big task for those of us in Parliament is to keep our people engaged and enthused with the efficient use of energy.

6.08 pm

Lord Palmer: My Lords, I too welcome this Bill but it seems only yesterday that we had before us another Energy Bill. It is shattering how quickly four years can pass by.

I must declare an interest as a farmer and as a member of the Renewable Energy Association. I was a little perturbed by the comments of the noble Lord, Lord Truscott, about biofuels. The price of wheat in real terms was higher back in 1995. A small percentage of 0.6 per cent of the worldwide wheat stocks went into the biofuels sector. I hope that allays some of his fears.

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