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It would have been more sensible had the Government at that time looked at their supply chain and realised that they did not have one. For putting up one pylon, you need at least one jack-up boat, which has to have a crane height of 75 metres, a lifting capacity of 72 tonnes, and a hammer capacity of 47,000 pounds a square inch. Just think about that for a moment. That then has to hammer each foundation into the seabed with a tolerance of half a centimetre for the accuracy with which the thing is lined up to be put in the fixing ring which has been put down there first, while it is held by two very brave marine divers. The Royal Marine divers are the best in the world. I remember saying to one of them once, "Aren't you frightened down there when you have to hold these things straight while the hammer hits at 47,000 pounds?". "No, governor, of course not, it is no worse than the effect we have on any girl we stand next to, is it?". Very modest and charming people, the Marines.

As it stands, we have not got one jack-up boat available to or operating for the Government. When we made the report there was one available which they could have had, but they missed their opportunity. Every jack-up boat in Europe is now booked out solidly for nearly four years ahead, at a cost of $160,000 dollars a day. We do not have one. Instead of spending £75 billion on a pipedream, why did the Government not take £1 million, go to Korea and buy four jack-up boats for about $240,000 each, and we would have had four that would at least have given us a chance of doing it? And what about the gearboxes? You cannot buy them. The only gearbox available in Europe comes

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from Siemens, and very unsportingly it will not supply any because it has presold its entire output for the next four years.

One would have expected that the Department of Trade and Industry, or whatever we call it these days, would have done something about going out into the world and finding somebody who could get a licence to manufacture them and bring some industry to Britain. It would have been a very good macroeconomic thing to do. China and India both have excellent gearboxes for which we could probably have got a licence, but no one has moved to get a licence which could be installed in one of the British companies that could do it. So we have lost out on that too and have no supply chain. Forget wind.

What else is there that we can do? Fortunately, there is a salvation, and your Lordships have tiptoed round it all evening without actually getting to it. The answer is certainly carbon capture and storage, but not on a post-combustion basis. It is on a pre-combustion basis; and that is the promised land. It is three times more effective at carbon capture than post-combustion, and it has another huge benefit, in that you can link it to a cleaning process to clean petrol at the same time, and you can drive all the carbon out of oil, by the same process, by simply flowing the extracted carbon from the coal straight through the oil. You get an enormous amount of carbon capture very cheaply.

The Government would be at a huge advantage if they thought constructively about this. I once put this suggestion to the Minister, who said the Treasury would never wear it. If that is the case, the Treasury is even dafter than we thought, because it could give a tax credit for each tonne of coal that is washed. This would be almost exactly equal to the cost of cleaning a tonne of coal. It would have a zero sum budget to produce a vast amount of clean coal from the whole process, and an enormous amount of clean oil to go with it, that would put back into production an immense amount of the high-carbon-content oil that is left in the North Sea and which people now think is not effective. We have the way to big solutions.

One American operation has set this up in an absolutely brilliant form at Great Plains in North Dakota. The whole thing happens in one continuous sequence. Pre-combustion, the coal is cleaned and the oil is cleaned at the same time. The whole thing comes down to an immensely profitable and cost-effective operation. We are talking about competition at the moment, but the Bill says grudgingly that the competition will be applied to both pre-combustion and post-combustion. Forget post-combustion; just get on with pre-combustion cleaning and you will get to the promised land. It really is the answer.

I saw something recently that came very close to one of those moments in one's life, which do not occur too often, when you think, "God, I've just seen the holy grail". This happened in Dublin. The noble Lord, Lord Oxburgh, mentioned it in passing without actually naming it when he talked about tidal streaming in Ireland. It is very nearly ready to go, and it is fantastic. Ireland's concept is that it has a constant shifting tidal base around the whole island. It is the nearest land mass to us anyway. It can harness the energy with a

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complete ring of turbines embedded in the seabed to soak up the benefit of the tide as it moves around the whole coast, build a grid around the coastline to capture it, and transmit it by ship to Holyhead for us more cheaply than any other method going.

There are other available options, too. No one has said anything tonight about geothermal energy, yet it was said at the European Community's Renewable Energy Policy Conference at Budapest, which I had the honour to attend on behalf of your Lordships' House last year, that the wonders of geothermal energy are simply there for the world to take if we can get them. You can get geothermal energy anywhere where you can get through the surface of the earth. The easiest place to do this is currently Norway, but there would be a big degradation of it in transmission to us from Norway. On the other hand, Norway could convert it into hydrogen. If we converted some tankers into hydrogen carriers, could we not develop a station that was driven by hydrogen on a very cheap basis out of Norway, because we could do it very cheaply from Norway with its consent? Bit by bit, we would reach our 2020 with 5 per cent here and 5 per cent there on each on these methods, but we are fooling ourselves if we think that we can do it with wind alone, and we will make ourselves look like the stupid boys of 2020 because we will be out of line with everyone.

Let us not despair. Let us take heart from the fact that there are things that we can do. We just need someone to gather together the threads of all these things and get on with it. We are not getting on with it, so let us please do something a little positive.

8.38 pm

Lord Teverson: What a start, my Lords. One of the things that I was going to note at the beginning of my own remarks was how good this debate has been. Everyone has been relatively concise, and we have had really good ideas and really enjoyed ourselves. The only fly in the ointment for me was that the noble Lord, Lord Palmer, invited the Minister to Scotland because of his attractions as a Minister, and the noble Baroness, Lady Wilcox, clearly because of her attractiveness as the Official Opposition spokesman. I was left out.

Lord Palmer: My Lords, it crossed my mind this morning over breakfast that I ought to invite the noble Lord, Lord Teverson, to come to Scotland. The invitation is there, and he is very much welcome to come whenever he would like.

Lord Teverson: I am uplifted by that, and very grateful. I was also particularly impressed by the right reverend Prelate's speech this evening, which I thought was excellent. I hope that after the election-which I believe is to come fairly soon, though I do not think that he will have to elect himself-he will be back and still on the Front Bench, along with the right reverend Prelate the Bishop of Liverpool, who often speaks on climate change issues as well. I was very pleased to hear that the Conservatives have at last given birth to their energy policy. I think that we have been waiting for this for six months but it has now finally arrived.

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I apologise that, unlike many Members, I have not yet read it, but I will rectify that before we meet again, probably on Monday to discuss national planning issues.

The Bill is part of the big mission of decarbonisation, as the Minister said, and it contains a number of things that noble Lords have generally welcomed. Carbon capture and storage has met with universal approval, though the views perhaps ranged along a spectrum from scepticism to concern about whether it will happen at all. The noble Lord, Lord Oxburgh, who knows well about these issues, fingered the central problem-that this is taking a huge amount of time. It reminds me of the debate that we used to have on nuclear fusion-another area that we did not err on to this evening-which is always held 50 years ahead of time. With CCS, it always seems to be a matter of another four competitions before we can get round to making the technology work. That is a concern.

I also welcome the provisions for social tariffs. It is a good move to say to the six main energy companies that this is now going to be on a much more statutory basis. However, given that we have moved from some 1 million people in fuel poverty in 2003 to at least 4 million now, I would be interested to hear from the Minister what effect he thinks this provision will deliver in bringing down the number. The noble Lord, Lord Palmer, was right to emphasise the importance of the subject, which costs an increasing number of lives each winter. On too many occasions people have to make a genuine choice between buying food and buying energy.

Ofgem has not been discussed at length this evening. We welcome the fact that its remit-though perhaps not its principal objective-very much concerns not just competition but climate change and energy security. Although its prime directive focuses on competition, throughout 2009 we have seen an increasing gap between wholesale energy prices and the prices that we as consumers, even those in fuel poverty, have to pay. We welcome the widened policy but surely this prime directive of competition has not worked at all over the past 12 months. Does the Minister feel that it has not worked? If so, what will be done?

We also talked a great deal about provisions that are missing. One area is increasingly important, but we have not yet talked about it and it is not in the Bill: the issue of smart grids or intelligent networks. The Minister will come back and say that we now have a roll-out of smart meters, which all sides of the House have welcomed. However, that is only one part of getting an intelligent electricity and energy grid in this country. I would like to know how we will move this forward in terms of what are called, sometimes quite alarmingly, "smart appliances". It rather worries me that you might go to your fridge in the evening and discover that it has an intelligence of its own. However, one of the key ways in which we can iron out and flatten energy demand is through intelligent devices.

This will be even more of a challenge because of two other things. First, rightly or wrongly, we in the UK-the noble Lord, Lord O'Neill, talked about this a fair bit-do not have a vertically integrated energy system in terms of corporate ownership. So it is difficult

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to get a commercially co-ordinated approach with energy companies in relation to these grids. The second area is the Climate Change Committee's report, which we debated earlier this year, and which quite astounded me. It quite abruptly described how the number of electric cars will need to increase in the next decade and beyond to meet our energy and carbon targets. These cars will have a huge effect on the grid, on energy demand and in the need for the quick recharging of batteries. We will therefore have to get our act together very quickly in terms of a smart grid.

The noble Lords, Lord Oxburgh and Lord Jenkin, talked about how CERT has operated. I was sorry to see that the Bill does not revise the scheme. It has operated only since 2008. However, as the noble Lord, Lord Oxburgh, said, there is a great gap between how it works and operates, the financial accountability of how it works, and the way in which the energy companies discharge this obligation. They may send out several million light bulbs, but that seems too random, not sufficiently financially accountable, and the effects have not been measured. I have always been highly sceptical about giving energy companies-whose expertise is in making money from producing energy-one of the main energy saving targets. It goes utterly against their DNA. I believe that we need to find another way to achieve that.

The Minister talked about some of the ways in which competition does not work correctly for consumers and in relation to dual fuels. I agree, but I would also remind him that for those living in rural properties-as I do, and as I am sure the noble Lord, Lord Palmer, does as well-there is no chance even of getting dual fuel; that is, gas through pipelines and electricity. I wonder what the Bill provides for rural users who do not have such opportunities.

On energy savings and fuel poverty, I do not see beyond CERT, which is not dealt with here, or see a real roll-out of energy efficiency across cities, town and even streets. That is essential for us to meet our carbon targets, yet there is still no credible government policy to achieve this. I believe that that is financially possible, but we do not see those proposals here. Again, this comes back to fuel poverty and the whole area of having to save carbon, rather than increasing our energy capacity.

Many other areas have been talked about. I will not prolong my comments any further except to mention emission performance standards. It was a tragedy that that provision was not passed by the other House. My noble friend Lord Wallace went through it to some degree. Given the uncertainty about CCS and this sitting on the fence in relation to carbon capture and storage, we need to give the industry some certainty. In any other area, we do that by laying down standards that we expect to be met in the future. Emission performance standards for power stations seems to me to be an obvious way to start this process of emissions standards-we do it for cars, for trucks and for much smaller items of equipment.

We have what always sounds like a cop show: the LCPD, the large combustion power-

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Noble Lords: Plant directive.

Lord Teverson: The plant directive. Thank you. That looks after sulphur dioxide, nitrous oxide and particulates, but it does not look after carbon dioxide in any way, yet that is an example of how emission performance standards can work in another area. The Government always talk about having a range of instruments that they can use for energy policy, and this could be an important one. Other nations manage to combine that with carbon capture and storage technologies and research and also with emissions trading schemes, so I do not see why we should not be able to do that in the United Kingdom.

The very last thing I come back to is a point made by the noble Lord, Lord O'Neill, which I was well persuaded by. Will the social tariffs to be introduced cover particular disadvantaged groups? We saw the statistics on the cancer group, a small-not small enough-but important group which is not covered by the schemes at the moment. I think that the whole House would like the Minister's assurance that such disadvantaged groups will also benefit from this legislation.

8.51 pm

Lord Marland: My Lords, can your Lordships believe that this is the third Energy Bill in three years, and that it comes on the back of several exhausting debates we have had in the past few weeks? Almost everyone's views have been aired, so I will not take up too much of your time.

Lord O'Neill of Clackmannan: I am pleased to hear it.

Lord Marland: Thank you, but the noble Lord may not like what I am going to say. I praise unreservedly the erudite contributions of everybody here, particularly the Minister-I am slightly regretting saying this now-for his grace and patience through all the energy debates we have had, listening to us for hours on end.

We have also had what my headmaster used to call an end-of-term levity about this debate, which has been very attractive, but the Bill, in real terms, is no more than skirting around the edges and, again, misses the chance to provide long-term structural solutions and a pathway for the future. For what it is worth, as my noble friend Lady Wilcox argues, our party largely agrees with it, so I shall not get into the detail, but I agree with many noble Lords that it is rather disappointing. Therefore, in winding up for our Benches and with the end of this Parliament imminent, I want to look at the big picture and the shameful failures of this Government to deliver a pathway in the past 13 years.

The Minister said, on Tuesday 16 March, that the lights will not go out. Why is it, therefore, that his own government statistics show that they will, and that consumer organisations and nearly everybody involved in the energy industry says that they will? Perhaps the Minister was discussing it with his wife and reassuring her about his own home supply.

The reality is that we have had 13 years of wasted opportunity. Targets have not been achieved, and no planning or leadership to deliver a future that is not

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dependant on the North Sea has been forthcoming. The next Government, as many noble Lords have said, will have to grapple with the big issues and the future of energy. To give an example, Labour has been dithering for 10 years over a decision on nuclear and are only now, in the dying embers, trying to get to grips with the future. Perhaps they have listened too long to the oratory of the noble Lord, Lord Wallace of Saltaire, and the persuasive arguments of his party.

Is it not shameful that we have more people in fuel poverty when the Government's target is to erase it by 2010? To achieve only a 3.6 per cent reduction in emissions when their own Kyoto target was a 20 per cent reduction is an abject failure, surpassed only by their disgraceful example where their own government building emissions have increased. It is not "Do what I say, not what I do", because they have done neither. No wonder Copenhagen was a failure if they cannot take their own emissions targets seriously.

Our own energy security is at risk as our gas reserves are only four days, one-tenth of the Germans'. As one expert asked me the other day, why are the Germans better at planning than we are? It defies belief that the Government's own renewable supply target of 10 per cent has not been achieved, despite littering our green and pleasant land indiscriminately with windmills.

The truth is that the past 13 years have been a vacuum, wasted governance, and it is small wonder that this Government will be known only for spin as they have failed so exaggeratedly to meet any meaningful targets. When the Minister says that the lights will not go out, I, for one, do not believe him.

8.56 pm

Lord Hunt of Kings Heath: My Lords, once again we meet to discuss energy. It is a delight to respond to another lively debate.

I welcome the comments overall from the noble Baroness, Lady Wilcox, in welcoming the Bill, and those of the noble Lords, Lord Teverson and Lord Wallace. If it be that we do not have time to go through all the stages of the Bill, I still appreciate that generally warm welcome. As the noble Lord, Lord Jenkin, has suggested, while the other place is sometimes criticised for its scrutiny of legislation, this Bill has had considerable scrutiny. As I said in my opening remarks, changes were made with amendments brought by the Government in the light of the discussions in Committee.

I say, though, to the noble Baroness, Lady Wilcox, and the noble Lord, Lord Marland, that I wholly reject their criticisms of the Government and our energy policy. There are not going to be these large-scale blackouts that the noble Lord says will occur in the next few years. We have developed a strong and coherent energy policy.

Let us look at the arguments. Yes, plants will close as a result of the large combustion plant directive and the fact that a number of our nuclear power plants are due to go out of commission in the next 10 to 15 years. As I frequently point out to your Lordships, though, we are in the middle of a massive construction programme of new power generation. There is a huge amount-

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20 gigawatts-under construction or with planning consent, ready to replace that which goes out of production, with a further 18.5 gigawatts in the consent process. Our modelling shows that for most of this decade, spare capacity, adjusted according to availability, will be around 15 per cent.

I turn to the issue of gas, because the noble Lord mentioned it. There are 22 storage projects in the process of development. When was the system tested? In the first three weeks of this year, in the very cold weather when demand was at its highest and when Norwegian gas production went down. Yes, four gas-balancing alerts were issued; they were signals to the market of the demand being placed on the system, and the market responded. It showed that we had a very resilient system. I would also point out to the noble Lord and the noble Baroness that import capacity has been increased to 125 per cent of annual usage. As the noble Lord, Lord Oxburgh, suggested we are in a very good position to take advantage of LNG supplies. We do have a robust system. I could not believe that the noble Lord-

Lord Jenkin of Roding: The Minister mentioned the alerts. Can he also tell us how many firms with interruptible supplies had to be interrupted and production stopped during the period he has just referred to?

Lord Hunt of Kings Heath: My Lords, we do not know all the numbers-I think the numbers were in the small hundreds. I notice that some of my former colleagues in the NHS were whingeing about this. People entered into interruptible contracts because they got a lower price. They can hardly start to whinge if the interruptible contract is actually operated. What seemed to have happened is that some organisations did not know that they had an interruptible contract. I do not think that is the Government's fault.

Regarding this Government being accused of delay in relation to nuclear-we came forward with the White Paper in 2008. We have a decisive policy. We have a very exciting prospect of developing new nuclear power stations. I would point out to the noble Lord that it was his leader Mr David Cameron who said:

"I think my policy, green energy first, nuclear as a last resort, is absolutely right".

Then of course during a leadership hustings he called offshore wind farms "bird blenders" and stated that they were not the answer and it was his right honourable friend Mr Kenneth Clarke who said that Britain was unsuitable for wind farms. What we have had from the party opposite over the past few years is a pandering to prejudice and a lack of cohesion. I have not read the full document that the noble Lord's party published on Friday. I have seen enough of it to suggest that it is not the coherent policy that the noble Baroness suggested it was. I do not usually enter into these political issues but I felt I had to respond to it.

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