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The short answer to those problems is that you cannot use the stuff that is surplus from the North Sea, because that is a deep diving problem. You go down to a huge depth there. You put your divers down there for six weeks at a time in teams in three, with two days to put them down and two days to bring them back. You do not have a problem there in needing specialist diving vessels, because you will be diving down for only 20 metres maximum. That is easy—half-hour stints will cover all the work that is necessary. The difficulty with the other ships is that you do not have the piledriver, beyond “Jumping Jack”, and you do not have the marine crane lifts. You will have to get them and you cannot really manufacture them in time to get through.

The timetable that I have worked out for the whole exercise, to make 3,000 turbines effective down the east coast of Britain, would work on the basis that planning consents must all be achieved by 2013. If you do that, I have a fairly reliable estimate from professionals in the business that the whole 3,000 turbines needed to achieve the target could be erected in six years, with one year left up your sleeve before reaching the deadline. To do that, you have to get a turn-key operation done on it by some form of contractor, who you will have to cut in on some form of equity participation. I cannot see any other way around that problem.

There are people who can do it. You have to go to somebody who either has the boats or can bring them back from other projects on which they are using similar boats around the world. You need four different types of boat. You need a basic diving support vessel, which does not have to have a moon pool; you can

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dive over the side at that depth—you do not have to have a hole in the middle of the boat. You need two cranes per installation and one piledriver on every installation. You might be able to make economies by doing three farms alongside each other at one time so you can rotate the ships between them and get maximum use of the ships. But you will also need remote control submarines, of which there is a plentiful supply in this country. There are places in Aberdeen and Yarmouth which are well stocked—you will not have a problem with those. At that point, you will be in a position to have the full kit, but you will not get the kit unless you have the turbines ordered well in advance and you have to have the planning consents.

I have calculated that there are 13 agencies whose planning consents you will need. Rather than delay your Lordships this afternoon with them, I shall drop a note to the Minister with a list of the 13 agencies from which you need consent. They are all difficult ones; some of them have already objected to installations which they do not like, so they are used to arguing it out. If you get those consents, you have a reasonable chance to get through this. There is no alternative way of doing it. You have to make it work. You must get the planning consents by 2013, which means that the survey work on their location must be done in the next eight to 10 months or so. That is the first thing. The components have to be ordered now, as without them the whole thing is a failure. You will end up—

Baroness Thornton: My Lords, I am sorry to interrupt the noble Lord, but the guidance in the Companion to the Standing Orders suggests:

“Other speakers are expected to keep within 15 minutes”.

I would like to point that out.

Lord James of Blackheath: My Lords, the time was not on the speaking list today.

Therefore, you will have a very effective series of wind farms which will meet your target by the time involved, but only if you start immediately.

3.35 pm

Lord Rowe-Beddoe: My Lords, first, let me apologise to your Lordships, to the noble Lord, Lord Freeman, and to the Minister for my discourtesy in not being present at the beginning of the debate. I was unavoidably detained elsewhere, to which place I have to return. I crave your Lordships’ indulgence to address the House now. Secondly, I have the pleasure to declare my normal interest for Wales—the geographical place rather than the mammals.

The noble Lord, Lord James, might make one think that our committee is always conducted in a jocular way, but it was refreshing to hear him recount some of his serious experiences at his recent meeting in Budapest.

In a recent newspaper article, Wulf Bernotat, chief executive of the world’s largest quoted energy company, E.ON, asked of the United Kingdom:

“You have old nuclear power plants, old coal, expensive gas, a need to invest in renewables to reach unrealistic targets, and a slow [planning] process. Doesn’t that sound like a problem to you?”.

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As we are all aware, the European Commission’s target “20 20 by 2020” requires the UK to achieve 15 per cent of its energy from renewable sources by 2020. As we also know, this figure comprises energy used for heating, cooling, electricity generation and transport. The European Union sub-committee of your Lordships’ House published a report on this target on 24 October. Our report concluded that the UK’s 15 per cent target should be regarded as a stepping stone, not as an end in itself. In fact, it is probable that it will not be achieved. In these uncertain financial times, can we view this as phase one of a process towards building a low-carbon economy in the UK?

To do so, we shall need the will of our political leaders to look beyond 2020 to ensure that those people and organisations that commit investment and resources for sustainable and cleaner energy projects are not only encouraged to begin that process immediately but also assured of a stable and predictable planning environment in which to carry it out in the short, medium and long terms. Without such certainty, large national and regional projects, such as the Severn barrage and other methodologies to harness tidal power around our long coastline, will not even be worth consideration by those organisations capable of investing in and developing them. Focus and leadership will be needed to take us into a diverse energy programme not only to meet the United Kingdom’s renewables targets but, perhaps even more important, to increase substantially the security of our national supply. We must change our ways of doing business. We must change our ways of living.

A mega-project can of course also help to regenerate regional economies. To take south Wales and the south-west of England as an example, recent university research indicates that both areas are at an economic tipping point. Investment to develop the massive tidal resources of the Severn estuary can be raised. This, in turn, would provide us with the basis for a low-carbon economy and a better quality of life for a substantial part of the UK. In addition to the national importance of a proposed barrage, by far the UK’s largest single source of renewable energy thus far identified, may we be assured that the Government are taking full account of the national employment opportunity that will accrue from the scale of the construction and machinery production required, as well as the enormous continuing and diverse scope for employment generation to follow?

We have started the renewable energy process with wind power. We must accelerate diversification. We need to work rapidly to bring other options into the policy and planning process for the long term, both large-scale and small-scale, through new build and by improving the efficiency of what we already have. To return to the barrage for a moment, the project, which extends from the Welsh coast to Hinkley Point, not only could substantially simplify the task of providing cooling water for the next generation of nuclear stations proposed for that location, but would focus the task in establishing connections to the national electrical transmission system and protect both Somerset and south-east Wales from inundation due to a rising mean sea level.

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We have no time to waste. I return without apology to the Severn barrage as an illustration of the indecision that is regrettably so often a feature of our processes to address such substantial investments of this kind. The idea for such an investment was first mooted early in the last century, as I have mentioned on previous occasions in your Lordships’ House. Of course, we have to consider carefully the impacts of such a huge project, both positive and negative, on the physical environment. The feasibility study currently in progress is scheduled to have its interim findings published in the first half of 2010, but we cannot afford to continue our habit of assessing large projects at such a relaxed pace any longer. The world of our grandchildren and great-grandchildren is taking shape here today.

We all have something to contribute—the corporate giant, research laboratories, planning offices, schools, Ofgem and the consumer. The Government’s job is not only to raise awareness of the arguments but to lead and facilitate the way forward; they must show us that we can all contribute and simplify the methods by which we do so.

3.43 pm

Lord Teverson: My Lords, from these Benches I thank the noble Lord, Lord Freeman, for an excellent and comprehensive report on an area of increasing importance. It will be, as the report says, very challenging for the UK, and even for Europe as a whole, to meet the targets, which are quite something. Over the past year we have heard rumours of rebellious civil servants and officials in government departments saying that these targets just cannot be met. Many of us, even though we wish them well, might almost say that that is the case. I shall come to one of those areas in a minute.

At the moment the European Union derives something like 8.5 per cent of its energy production from renewable energy and is aiming for 20 per cent by 2020. In trying to think how far ahead 2020 is, I go back in time to 1996 and the last full year of office of the previous Conservative Government, which seems a long time ago. However, there is little time for investment over the relevant period, and certainly very little time for invention or innovation. The relevant renewables figure for the United Kingdom is about 2 per cent, with only Malta and Luxembourg having a lower figure. Therefore, we shall have to achieve about an eightfold increase over the next 12 years for us to meet the target we are discussing. Although that may seem possible in terms of electricity generation, when we consider that it also includes heat and transport fuel, the task looks staggering.

I thank my noble friend Lord Bradshaw for mentioning the visual aspects of wind farms. I like to look at wind farms. I do not often drive up the M4, but I have noticed that there is a huge wind generator by that motorway at Reading, which I consider a good thing. Wind farms are a very controversial subject in Cornwall. However, if some of them were taken down, I believe that I would not be the only person to protest that some of our greatest landmarks were disappearing. When I was a Member of the European Parliament, some farmers wanted to show me how the landscape

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in a certain location would be despoiled by wind generators. Indeed, I accept that you should not put them in certain locations. The farmers invited me to visit a stunning vista in north Cornwall and asked me to consider what it would look like if wind generators were installed there. However, all I could see was the criss-cross of electricity pylons stretching for miles, which made me think that you do not notice what has been there for years, and that perhaps people feel threatened by change. However, this is a controversial area of which communities are naturally very wary.

One of the most telling pieces of evidence occurs at page 38 of the report. It states:

“Cambridge Econometrics has estimated that on current policies the UK would achieve less than 5% of final energy from renewable sources by 2020”.

I note with interest that the report continues:

“This is a view accepted by BERR”.

That is a stunning statement; namely, that on current policies we will increase our energy generation from renewables from a figure of just under 2 per cent to 5 per cent. However, the challenge is to produce another 10 per cent beyond that.

I consider that the renewables energy policy concerns principally three things. It involves reducing carbon dioxide emissions, and the European Union’s 20 per cent—possibly 30 per cent—reduction target by 2020. Importantly, not just for us but for Europe also, it concerns energy security. The report on Russia of the EU committee chaired by my noble friend Lord Roper shows that Europe is dependent on Russia for 40 per cent of its gas supplies. I think that seven of the 27 EU states are completely dependent on Russia for their gas supplies. Therefore, renewables are important in that regard, but also because renewable energy is sustainable and so we do not eat up the planet as our economies motor forward.

One sad thing about the United Kingdom, as was shown in the report, is that we are near the bottom of the league table; as the classic head teacher’s report says, we have to do not just better but hugely better. That means that we have missed out in a number of areas which will make it very difficult for us to catch up in terms of capacity, producing the technology ourselves, expertise, and our experience in applying the technologies—in all of which many of our EU partners are well ahead.

I was interested in what has been said on technology. It is clear that we cannot and should not depend, as we are, largely on wind power. It is important for reaching the 20 per cent target and the intermittency problems are not huge, but we need diversification beyond that. I was delighted that geothermal power was mentioned. In fact, the granite batholiths in the south-west are a larger potential resource than the Severn barrage. I am not aware at all of a problem with sulphur. In fact, much geothermal power is generated mainly in volcanic areas, where there may be some sulphur output naturally; but even in the UK and other parts of Europe there is potential. An experimental station in Soultz, Alsace, started operating earlier this year, but, unfortunately, the technology is unlikely to be on-stream until about 2020, along with a number of other technologies that we have talked around.

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The Government’s commendable move to including heat in the Energy Bill and lay down a framework for the equivalent of renewable obligations or freedom tariffs for heat One area that makes me more positive about the targets, is. Heat accounts for some 47 per cent of carbon emissions and a large proportion of our energy consumption in the UK and Europe. It is an area that we need to tackle; and there is a lot more scope for renewables—certainly in biogas, whose industry has a great potential to increase, and in biomass in terms of timber and timber-related heating. I cannot understand, given that we realise the urgency of this issue, why in any new house or building we do not insist on heat pump technology or something equivalent being installed, as to retro-fit any of these types of technology is incredibly expensive.

I would be interested to hear the Government’s latest view on biofuels. The 10 per cent target has already been mentioned, but this is an important part of meeting Europe’s target for 20 per cent of renewables. Biofuels have gone from being a saviour to something that is seen as a threat to our ecology and the environment. Where do the Government now stand and what is their understanding of where Europe stands? There has been a fair degree of disagreement within the Commission about whether the targets should remain and how we ensure that energy resources are sustainable.

I was not aware of the issue of guarantees of origin before I read the report. I understand my noble friend’s scepticism in terms of previous forestry badges. The EU ETS has certainly shown that certification in terms of emissions and generation can be strong. However, in the United Kingdom, renewables obligation certificates are effectively a guarantee of origin already, and I would like to understand whether the two systems conflict in terms of registering renewable output, or whether they come together quite well.

However, because I still do not understand this and I do not believe that the Energy Bill, which is about to become law, really deals with it, my basic question to the Minister is: exactly how is Cambridge Econometrics wrong and how will policies in the future ensure that we bridge the gap between the predicted 5 per cent and the 15 per cent that I am sure everyone in this House wishes to achieve?

3.55 pm

Lord Dixon-Smith: My Lords, this has been a very interesting afternoon for me. I was delighted to hear the opening remarks of my noble friend Lord Freeman, who rightly pointed out that the 15 per cent renewables target that we are looking at is the target after we achieve a 20 per cent reduction in our carbon emissions by 2020—that is, 20 per cent of our energy requirements not today but in 2020. The difference is fundamental, and my noble friend was absolutely right to draw attention to it.

In this country, ultimately we are looking at an 80 per cent reduction in our carbon emissions. That is not yet written into law but it is a recommendation that will, as I understand it, be made to the Government by the Committee on Climate Change following its consideration of evidence that has accrued since the Government decided on the 60 per cent target three or

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four years ago when they were planning the Climate Change Bill. That is, of itself, fundamental because it probably means that by 2020 we will require a renewables target higher than 15 per cent if we are to get our emissions down to 20 per cent below where they were in 1992—or, in the case of Europe, probably today. However, getting our emissions down to that level will be very difficult.

I also sympathise with my noble friend Lord Freeman, as anyone who writes a report looking at the future is immediately in difficulties because what you expect to happen in the future never does happen. I merely draw the House’s attention to page 37 of the report, which refers to the cost to the domestic consumer of generating 37 per cent of electricity from renewable sources. The report sets out assumptions based on oil prices at $70 a barrel and $150 a barrel, which they nearly were earlier this year, although today they are at $55 a barrel. That suggests that under the present regime the price for the consumer will be much higher than anything generated in this report.

That leads me on to a different aspect of this issue. It seems to me that in the end it all comes down to economics and the climate in which everyone has to undertake these actions. I draw attention to something that appears on page 75 of today’s Times. It may not be too significant but it is, none the less, indicative. It is a report that the world’s biggest wind farm, which, curiously, was to be in Texas, has just been put on hold because the economic conditions have worsened so much in the past two or three months. Years ago, I was responsible for the whole built estate run by Essex County Council—that is, maintenance, energy use and everything else. Even in those days, we worked very hard on energy economy. Economic viability drove the programme, and projects went in and out of viability depending on the fluctuating interest rate. I say that to make the point that, ultimately, we really need to get this moving. I agree with the noble Lord, Lord Teverson, about the headmaster’s report, but the comment that I consider to be appropriate for the Government at the moment is, “Could do better if they tried”. I am not wholly convinced that the Government are really trying to tackle this; at least they give no appearance of having an absolute conviction to get to grips with the problem.

I use another illustration of the difficulties that we face. A friend of mine has a wind turbine which supplies most, if not all, his electricity and he supplies some to the grid. Until the electricity prices rose, he was on a 60-year payback period. That would not encourage people to go into this business.

Finally, we need to consider another problem. I refer to the second report of the Science and Technology Committee, 2005-06, to this House on energy efficiency. At page 27 of the report we find a graph which illustrates yet another aspect of this problem of which little has so far been said today. That report illustrates the performance of our country's economy over the past 30 years. Interestingly, it shows that GDP grew by about 110 per cent over that time. For our own sakes and for the sake of everyone in our communities, we expect to keep our economy growing. It also shows the units of energy required to produce a unit of GDP

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falling from 100 to 50, so effectively it halved. Energy efficiency has been ongoing for a long time. It would have accelerated had the price of oil stayed where it was, but now I am not sure what will happen.

We need to bear that in mind because the real problem revealed by that graph, and which we need to consider very seriously, is that over the same 30 years the effect of those two movements was to keep our energy use virtually flat—it grew about 5 per cent. If we are to rely on increasing energy efficiency to try to get our emissions down, in my view, it will not happen. If we become more efficient in our use of energy, it will be held up as the economy grows. We have a deep problem and the nature of change required in our energy supplies is greater than most of us are at present contemplating.

As my noble friend Lord James was saying, this question of economy applies across the board: not only do we have these problems in the United Kingdom, but every other country across Europe has a similar, parallel problem and will want to invest in this area. The noble Lord, Lord Rowe-Beddoe, who I see has temporarily had to leave the Chamber, talked about the need for stability in the economic climate in order to encourage investors in the construction and installation of all the specialist equipment to deal with the installations and then the installations themselves. Given that this is now a trans-European problem, investors ought to be able to have considerable confidence, but the brutal truth is that, looking at the economy today, there is no confidence at all. No one in manufacturing industry, and no one in the construction industry, dares to plan more than about a week ahead. Until we get that foundation laid, we shall find it extremely difficult to achieve anything. There is an urgent need to give this field and the wider economy that stability.

The Minister will undoubtedly argue that the Government are already doing what they can and that we shall hear more next week with the Pre-Budget Report and so on. I do not expect him to answer this this afternoon, but we all need to recognise that we will get nowhere without certainty in giving the people who are going to have to put their money into the construction that is necessary to bring this change about the confidence to begin doing so.

I should refer to the Planning Bill. It has been much mentioned, and I played some part in it in this House in the past few weeks. It will help, but it is not a solution. For a start, it deals with national-scale infrastructure projects only. It will take care of power stations, but a lot of other things are required. That is the first thing, but let us also consider the timescales. The Bill will be passed by the end of this Session. The planning commission will probably be in place by next April. It will, perhaps, have settled its procedures by autumn 2009. At that point, applicants will know what they have to do in order to make a valid application. It will take them a year to produce a valid application; certainly, it will take a year for an application for a power station. That takes us to the end of 2010. It will then take another year for the commission to consider it. Therefore, we should not think that we have produced a tremendous acceleration. Of course, after that, matters will be much easier and there will begin to be some

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benefit, but we have a two or three-year hiatus before the Act will be operating. We have to face the fact that that is so. It will help with planning problems at national level on large-scale projects, but in due course, we may have to turn our attention—dare I say it?—to the rest of the planning system, which for many people in the construction industry is still a confusing obstacle to pass.

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