Examination of Witnesses (Questions 360-379)
Ms Eluned Morgan MEP
5 JUNE 2008
Q360 Chairman: We will be asking
him for some written comments.
Ms Morgan: Obviously it is an area which
is crucial to the Energy Package and Climate Change Package that
is going through the European Parliament at the moment. The first
thing to say is there is a real recognition of how tough these
targets are. There is no misunderstanding about that within the
Parliament. Obviously you are going to have people, the Green
lobby, who are always going to be pushing it much further, but
there is an understanding that this is tough. Having said that,
on the renewables specifically, the key thing that I would like
to emphasise is that it is much easier to reach these targets
if we implement energy efficiency first. The more you can deal
with in terms of energy efficiency, the easier it is to reach
these targets, without question. The thing to constantly remember
is this is part of a package where we have made a commitment to
a 20% cut in carbon. If you are looking at that you have to take
it as the whole package. The renewables is part of a package to
reach that 20% target. If we reduce or diminish this target in
some way we will have to make up for it somewhere else. There
are all kinds of things happening in terms of energy efficiency.
We are talking about building regulations being tightened up,
car regulations being tightened up, cleaning up the quality of
oil, for example, or whatever. All of these things are part of
a jigsaw. If you move one it means you have got to make up for
it in another area. It is very difficult because you can imagine
on cars, for example, we are trying to have a target of 120kg
and the German lobby is very, very much against that. If we were
to say, "Right, we will concede to you on that", we
have to understand that we may need to go further with renewables
or whatever else. The energy efficiency part is absolutely central
to it all. It is very interesting in the UK that a lot of politicians
try and parade their green credentials by saying, "I'm going
to do something about the standby buttons on TVs" or whatever,
and the fact is you cannot do that in a UK exclusive area, you
have to understand that is an EU competence and the Commission
is doing all kinds of things looking at how that can be done.
You simply will not be allowed to sell TVs into the EU in future
unless they reach a particular standard when the standby button
is off. That sets a global standard as well. All of this is very
important. Energy efficiency is absolutely central to these targets
and I cannot emphasise that enough. Obviously in the UK we are
way behind a lot of other Member States in terms of our renewable
targets and that is reflected in the target that the Commission
has given us. It is going to be a very, very tough target to meet,
without question, and very costly. I am sure you are aware of
the Pöyry report on how much they are predicting and I am
sure you have had other people telling you how their predictions
are going too far. Certainly people have been telling me that
there is a crunch in terms of steel, which you need to produce
the wind turbines, and in time there will be more production of
steel and already there is an adjustment to that so the price
is likely to come down. The key thing to remember is what our
pathway towards addressing this is, but the issue that is of real
concern to me is how we do this and protect people who are vulnerable
to these price increases. For me, that is absolutely crucial.
You can imagine, I have been campaigning a lot recently and it
is an issue on the streets, the cost of energy is a real issue,
and we do have to address this issue of energy poverty at the
same time. If we are going for these targets that issue has got
to be addressed. It is quite interesting that in the UK at least
there is recognition of the issue of energy poverty and there
is a strategy and that does not exist across a lot of the EU.
We are trying to get that on to the European agenda, not in a
harmonised way but simply saying, "This is an issue that
Member States have to recognise has to be addressed in the future".
Those are key things for me.
Q361 Chairman: Just before I turn
to Lord Powell, could you give us an indication as to when you
expect the Renewables Package to be accepted by the Council and
by the Parliament?
Ms Morgan: We are hoping to have a single
reading on this because we are running out of time, that is the
real issue. Our parliamentary term comes to an end in June next
year but things will be winding down by January/February, so we
simply have not got time to have two readings on it. The other
issue is that the Lisbon Treaty will probably—may—come
into force by then. If we do not get a first reading done by January
we would have an eight week delay because it has to be discussed
within national parliaments as well. There is real pressure on
to get this done very quickly. I think the target is September.
The amendments are going in next week, which is the deadline for
amendments for our committee, and September is the date when we
should be having our first reading in plenary.
Q362 Chairman: And the Council of
Ministers?
Ms Morgan: I know the French want to
do it during their presidency but I do not know the exact dates.
Q363 Chairman: So we could be talking
easily November/December?
Ms Morgan: Yes.
Q364 Chairman: On the record, I am
not breaching any confidence, the Minister was quite clear with
us last week that the British Government was looking at a slightly
longer timetable.
Ms Morgan: My understanding is that the
French are very keen on this Climate Change Package, and you can
imagine that Sarkozy wants to notch up a win during his presidency,
and the Climate Change Package is the win that I understand he
is looking for.
Q365 Chairman: You see the renewables
part of that as absolutely central?
Ms Morgan: I would think so, yes.
Q366 Lord Powell of Bayswater: Many
thanks for that interesting introduction. Just focusing for a
moment on the targets. We have been wrestling with how the 20%
by 2020 was arrived at. From what you have said one might deduce
that it all stems from the 20% reduction in emissions and this
was, therefore, set scientifically in relation to that. But there
is a suspicion, however, that it is a good deal more political
target and, indeed, it has been cruelly said that it might have
been devised on the back of a cigarette packet. How do you think
the target was arrived at?
Ms Morgan: It is very interesting. In
the European Parliament, the position in the past has always been
25%, so we have had a higher target. We always go for a slightly
higher target because we know the Council of Ministers are likely
to dilute it in some way. The Greens generally try and go for
a 30% target, the PPE go for 20% and we have finished up somewhere
in the middle, and that is the typical European compromise you
would expect. It is not figures plucked out of the air. It is
partly because it is based on what happened with the Electricity
Directive in the past, the Renewables Electricity Directive, and
the fact that did drive the renewables progress that there has
been because there were examples in the past where there has been
encouragement but nothing happened. Unless you provide binding
targets then people are less likely to hit them. You can see that
in the biofuels targets, they are nice indicative targets but
everybody misses them. We looked at that. The European Parliament
has also been very anxious to do a lot more with heating and cooling,
and for years we have been asking for a Heating and Cooling Directive.
There is generally a little bit of disappointment that we have
not got a specific Directive for heating and cooling, but there
was an understanding that these are tough targets so we should
allow flexibility for Member States to determine how they are
going to reach those targets. There have also been all kinds of
impact assessments by the Commission. It is interesting because
in all this energy area it is very political and when people do
not like things people do question impact assessments. We have
had this with the liberalisation agenda where the impact assessment
was very vigorously challenged. That was not the case in the same
way with renewables so, to me, that means people felt that it
did stand up to scrutiny.
Q367 Lord Powell of Bayswater: Do
you think the Commission proposal has sufficient flexibility?
As I understand it, it has regular two-yearly reviews, sanctions,
penalties. Is that really going to run?
Ms Morgan: You have got to remember that
this is the beginning of a negotiation process as well. Who knows
where it will end up. I do not know if you have seen a copy of
Claude Turmes' report?
Q368 Lord Powell of Bayswater: Yes.
Ms Morgan: He is trying to push it even
further.
Q369 Lord Powell of Bayswater: That
was what worried me.
Ms Morgan: You expect that from a Green
politician, frankly. There is an understanding that the target
is already very ambitious within the other political groups. From
the debate we had recently, the one exchange of views we have
had on biofuels, because Claude has suggested that we should take
away the biofuels target, it looks like the three main political
groups will continue to ask for the biofuels target to be mandatory.
Q370 Lord Powell of Bayswater: Still
on the flexibility issue, there is bound to be a bit of fudging,
is there not, and I see that already our Energy Minister is saying
we can only reach the target if there is renewables trading and
if exceptions are made for pending large projects. Do you think
that is realistic?
Ms Morgan: Again, Claude has suggested
that large projects should not be. I live near where the Severn
Barrage may or may not be built. It is pretty clear to me if we
are going to reach this target you do need a degree of flexibility.
I think there is an understanding by other groups that there will
need to be some flexibility, but you expect people who are purists
to be as tough as they possibly can.
Q371 Lord Powell of Bayswater: Perhaps
a last question on the targets. Do you think there is a danger
they are distorting in the sense that had the target been set
for 2030 it would have left more time for other technologies and
things to come into play which would have made it possible to
realise the goals at less economic cost?
Ms Morgan: Do not forget, that what is
driving this is the two degree target. If we are going to meet
the two degree target then you need to peak by about 2015, so
2030 is just too late. Although that might be a nice idea, there
are other imperatives working here.
Q372 Lord Paul: If already in 2008
you think it is an ambitious plan, what are the chances of exceeding
it to any level or will it fizzle out?
Ms Morgan: As far as I can see, this
is about political commitment. The bottom line is that other countries
which are similar to us have done it and we have not. That fundamentally
comes down to whether you want to do it or not and where do you
prioritise this. You have got to remember the Stern report that
said you either do it now or you pay later, so we are going to
have to pay at some point, and it makes more sense to pay now.
When you see the price of oil going up, all these different factors
come into play. The security of supply issue is huge, it is very,
very important. You have got to see it in a much broader context
than one of, "We are just doing this for the sake of it",
we are certainly not. This is about security of supply, sustainability
and competitiveness. If we start this then we are setting a standard
globally. Europe's competitiveness is under threat, but if we
can be the market leaders in this area—you have seen how
much Germany is making in terms of exports, it is enormous—there
is real potential for it.
Q373 Lord Walpole: What I want to
discuss with you is the topic of the relevance of the renewable
targets to the EU Energy Policy. The first question is to do with
efficiency. We must be more efficient in our use of energy. Have
you got any interesting ideas other than getting better motorcars?
Have you got any other bright ideas for saving energy? My second
question is on security of supply. I have a third question when
you have answered those two.
Ms Morgan: First of all, there is an
Energy Efficiency Action Plan that the Commission has already
produced and there are about 80 or so recommendations in that.
There are lots and lots of ideas on the table. Some of them are
about eco-design and building design in right from the beginning,
so building energy efficiency into your product, but also about
buildings. The main problem we have with energy efficiency very
often is implementation. Britain was late, for example, in implementing
the Buildings Directive. We have to be very careful. It is very
interesting when you go round trying to promote Europe, the first
thing people say is "We all obey the rules and all these
other foreigners don't", this is what you get every time,
but on environmental legislation we are not as good as we should
be. Energy efficiency is an area where we have a lot to learn
from our neighbours. Designing things in is crucial. There is
an Eco-design Directive and everything will be measured against
that. That is a huge step in the right direction. There are other
issues. It is about planning bus routes, public transport, it
is so broad. It is about eco-cities, and we are trying to get
the largest cities in Europe to work together to learn best practice
from each other. There are all kinds of ideas there. You should
have a look at the detail of the Energy Efficiency Directive because
there are 80 recommendations there.
Q374 Lord Walpole: Security of supply
was my second point.
Ms Morgan: I think it is fundamental.
If we carry on the trajectory we are on at the moment then we
are going to increase our dependence on gas from three external
sources from 30% to 70%. That is not clever by any stretch of
the imagination. This is definitely part of addressing that issue
of security of supply. We have to take that very, very seriously.
Also, the oil situation, there is a link between oil and gas prices.
Goldman Sachs are saying it is going to go up to $200 a barrel.
If you get into those kinds of figures then suddenly the renewables
economics really take off. I met with lots of UK electricity generators
the other day and you can imagine they are slightly spooked by
what this target will mean for them. By the way, I think one of
the crucial issues with this is that we have to encourage small
and medium-sized enterprises, that is absolutely crucial as far
as I am concerned, but at the moment it is dominated by the big
six players. The Renewables Obligation has almost set that in
stone and we need to get away from that. We need to start encouraging
much more micro projects, but there are huge problems with that
as well. I have had solar thermal put in on my roof and I was
very proud of it but, my goodness, it was very, very difficult
because the skills were not there, the plumbers had no idea what
they were doing.
Q375 Lord Mitchell: Was that here?
Ms Morgan: No, in the UK. You have to
build in training, a massive training package with this target
because unless you do that we have got no hope of reaching this.
At the moment I could not recommend to people to do what I have
done because it was a huge problem and until we have sorted out
those things and made it much easier I think it is going to put
people off rather than encourage them.
Q376 Lord Walpole: My last question
requires a one word answer. What year do you think the EU's consumption
of energy will start to go down?
Ms Morgan: That is very difficult because
you cannot blame Eastern European countries for having a huge
growth. That is a very difficult question because there is no
question that it will be increasing.
Q377 Lord Walpole: It cannot increase
forever, can it?
Ms Morgan: No. I do not know. I would
not want to put a figure on it.
Q378 Lord James of Blackheath: Ms
Morgan, you started by saying energy efficiency first and I would
like you to think for a moment in terms of the efficiency of the
production processes for renewable energy and whether you feel
that we are running too fast at the moment with the timetables
that have been set insofar as we are running with technologies
which are short of perfection yet which will go through a lot
more development. We could well look back in ten years from now
and think that we had been left with something pretty antiquated
by the standards of what will happen then. Do you see any opportunities
within the EU to stimulate and centralise the overall technological
developments of wind, sun and water in a way that could shortcut
that process and bring us to the point where we have a better
technology with which to go so that we get the efficiency at the
production end rather than at the utilisation end first?
Ms Morgan: You are absolutely right,
but we have not got time on our side on this one, that is the
real problem. We do have to get on with it.
Q379 Lord James of Blackheath: But
we can buy the time if we are prepared to utilise some of the
additional resources which are available of traditional fuels
to win us the time. We might be better off to use those reserves
for a period of time under controlled conditions to buy ourselves
a few extra years to get better technology going forward. We are
talking about posterity and looking into the future, but we might
be selling the future very short if we jump the gun to this extent
now.
Ms Morgan: That is okay, but it is quite
high risk. For example, if you take the ITER project that they
have been trying to develop on nuclear, it has always been 40
years off. We have kept saying, "Let's do this. This is going
to be the answer to all our energy problems", but it is still
40 years off. We are spending billions and billions and billions
on this and it is still 40 years off and it has been 40 years
off for as long as I can remember. That is a nice idea, having
faith in the future, but I do not think we can afford the time
to take that risk. What the EU is already doing is there are billions
being spent on research and development through the FP7 programme
and energy is highlighted very, very strongly within that programme.
There is work already being done on fossil fuels and for example
hydrogen. There are millions and millions going into this. I am
sure you could get the exact figures from the European Commission
on what is already being done to push this. This is an area where
we do need to co-operate and the states need to co-operate.
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