Alun Cairns (Vale of Glamorgan) (Con)
1. What steps he is taking to mitigate the effects of high oil prices on energy consumers.
Stuart Andrew (Pudsey) (Con)
7. What steps he is taking to mitigate the effects of high oil prices on energy consumers.
Henry Smith (Crawley) (Con)
12. What steps he is taking to mitigate the effects of high oil prices on energy consumers.
Nadhim Zahawi (Stratford-on-Avon) (Con)
13. What steps he is taking to mitigate the effects of high oil prices on energy consumers.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Oil is an internationally traded commodity with prices derived from the global market and, as such, the Government cannot control fuel prices. Within the UK, we have an open market for oil, which we believe provides the best long-term guarantee of competitive prices for the consumer. We are encouraging more energy-efficient cars and homes, and we have asked the Office of Fair Trading to report on the heating oil market. Internationally we are working to improve the functioning of the global oil market, and we are reinforcing the work of the international energy forum, especially by increasing transparency. The key is speeding up the shift to the low-carbon economy by getting us off the oil price hook.
Alun Cairns
On 17 November, one of my constituents paid £490 for 1,000 litres of kerosene heating oil. By 18 December, they were forced to pay £745 for 1,000 litres of heating oil. Although fuel price is an issue for everyone across the UK, does the Secretary of State recognise the particular plight of people who live in rural areas and who do not have the option of mains gas and other sources of energy?
Chris Huhne
My hon. Friend is absolutely right; this is a key issue in rural areas to which the ministerial team have given a lot of attention. The Energy Minister, my hon. Friend the Member for Wealden (Charles Hendry), has suffered the effects of this in his own home and feels strongly, as we all do, that we need to get a grip on this. That is precisely why we asked the Office of Fair Trading to look at the heating oil market. We want to be absolutely assured that there is no exploitation and that the market is open and fair, which in the long run is the best guarantee. But we are also concerned about these off-gas-grid homes, and in the longer term we want to ensure that they have the best benefits from the green deal.
Stuart Andrew
Back in December, Age UK expressed concern about the rise in heating fuel cost. What response has my right hon. Friend had to his announcement on the investigation into the heating oil and liquefied petroleum gas market?
Chris Huhne
There has been cross-party support for the investigation and we await the outcome with interest. There is a genuine concern throughout the House that we need to be confident that people in this position can secure the best possible deal in the marketplace.
Henry Smith
Tomorrow is suggested as national fuel poverty awareness day. What steps are the Government taking to ensure that people have access to better environmental enhancements, particularly to their homes, for the sake of the environment and the economy?
Chris Huhne
The key part of the green deal, which is the centrepiece of the Energy Bill making its way through the Lords at the moment and shortly to come here, is an emphasis on being able to tackle fuel poverty. If we get to the roots of fuel poverty, which is often not low income per se, but people relying immensely on energy because they have poorly insulated homes, we can tackle the problem at its core, rather than merely stick on plasters.
Nadhim Zahawi
The renewable heat incentive is one way to mitigate this. My constituents, who are early adopters of ground-source heat pumps and other renewable sources, are disappointed that it appears they will not be able to access the RHI as they will not have installed their equipment before the launch of the incentive. Will the Secretary of State therefore please clarify the position on RHI in relation to individuals who have not installed equipment before the initiative is launched, as it appears that not only is the current uncertainty about new installations confusing constituents, but it is affecting the renewables industry?
Chris Huhne
Obviously, we are trying to eliminate uncertainty as rapidly as we can and trying to be as clear as possible about the policy framework. As can be seen from the announcement of the review of feed-in tariffs, it is important to get these policy details right. We cannot have a situation in which the budgeting is so badly miscalculated that there simply will not be the money to support it. We are determined to go ahead with this. Individuals will be supported under the renewable heat incentive and the details will be forthcoming.
Mr Speaker
May I ask the Secretary of State to face the House when speaking and not look behind him with his back to the Chair?
Albert Owen (Ynys Môn) (Lab)
The Secretary of State mentioned that the Office of Fair Trading was looking at off-grid gas customers who have been ripped off in the way the hon. Member for Vale of Glamorgan (Alun Cairns) explained. Will the Secretary of State consider extending the scope of Ofgem to look at both on-grid and off-grid energy supplies so that there is a level playing field? The OFT takes an awfully long time and looks only at competition, whereas Ofgem has a wider responsibility.
Chris Huhne
Ofgem of course keeps the market under review and is looking at it at the moment, and there would be a possibility of referral if it decided that that was appropriate. Clearly, it is crucial that we have competitive markets, because that is the best guarantee that consumers will get the best possible deal.
Mr Chuka Umunna (Streatham) (Lab)
It has been mentioned that these issues affect those living in rural areas, but of course they also hit people living in urban areas. One in five homes are now affected by fuel poverty, which is the highest rate in 15 years. Will the Secretary of State tell us how the various other measures that the Government have introduced, such as the housing benefit changes and the VAT rise, will help those living in urban areas such as my constituency to deal with high and rising energy prices?
Chris Huhne
The hon. Gentleman will be aware that we have announced the Warm Homes discount, which will ensure, through legislation, that the particularly high fuel bills suffered by those in fuel poverty are tackled, which is a considerable advance on the voluntary arrangements that we have had until now. I come back to the point I made in response to my hon. Friend the Member for Crawley (Henry Smith), which is that we must tackle the roots of the problem. The energy bills of people on low incomes can vary by a factor of six. If they are lucky enough to be in decent home standard social housing, they will have low energy bills, but if they are in private rented housing they may have very high energy bills. That is what we have to tackle and that is what we will do with the green deal.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I am delighted about the investigation into domestic fuel prices, which my hon. Friend the Member for North West Durham (Pat Glass) and the official Opposition have been calling for, and glad that the Government have finally acted. Rising oil prices, as my hon. Friend the Member for Streatham (Mr Umunna) and others have indicated, are only part of the problem. The Government’s record on standing up for consumers is, frankly, very poor. In recent months, we have seen price rises of between 2% and more than 9% from all the main energy suppliers, yet Ministers sit back and refuse to intervene. We have seen Consumer Focus abolished, with insouciance from the Secretary of State on what that means for consumers. At the same time, we have seen mis-billing and doorstep selling investigations showing that not all is well with the big six energy companies. The Government’s response is that we must leave them alone or they will not invest. Does he understand that that investment is customers’ money? Can he tell the House that he is entirely confident that customers are getting a fair deal?
Chris Huhne
The hon. Lady will know that it is precisely because we are not confident that customers are getting a fair deal that we have, for example, asked the OFT to look at the heating oil market and why procedures are under way to investigate doorstep selling. In all markets we must be ever-vigilant, which is precisely what the Government have been. We have put the consumer’s interests first.
Nick de Bois (Enfield North) (Con)
2. What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.
Nigel Mills (Amber Valley) (Con)
11. What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Egypt accounts for 2.1% of the world’s oil production. We do not expect that disruption to Egyptian oil production and oil transiting the Suez canal is likely. The secretary-general of OPEC and the Saudi oil Minister Ali al-Naimi have both stated that, in the event of disruption to the Suez canal, OPEC would increase production to provide market-calming measures. About 5% of overall crude and petroleum products goes through the Suez canal.
Nick de Bois
I thank the Secretary of State for that answer. Will he outline what measures his Department may be planning to affect price stability?
Chris Huhne
My hon. Friend may be referring to the debate that has been going on about the fuel duty stabiliser, but that of course is the responsibility of the Treasury and the Chancellor of the Exchequer. I understand that work is continuing on that. The key for my Department is to ensure that we speed the transition to a low-carbon economy as quickly as possible. We have to get off the oil price hook, and this episode of oil prices rising above $100 a barrel demonstrates the urgent need to make good progress on that, which is precisely why the Government are, for example, bringing forward subsidies for electric vehicles, pushing within the European Union for tougher standards on energy-efficient vehicles, and why we have the green deal. We want to ensure that our population is not vulnerable to precisely those sorts of shocks. Our policies will be—
Nigel Mills
I am grateful to my right hon. Friend for that information, but, given the current high price and the risk of uncertainty increasing it further, does he agree that there is now no need to encourage my constituents and his to change their behaviour through further duties, and that if we do such things we risk driving our constituents out of economic activity completely?
Chris Huhne
As I say, the fuel duty stabiliser is a matter for the Treasury. I merely point out that, over time, all European countries—in fact, all developed countries with the exception of the United States—have taken the policy view that, for all sorts of reasons, including national security, we should encourage energy efficiency in our oil use. Any short-term concession that goes against that will make us more vulnerable in the long term.
Hugh Bayley (York Central) (Lab)
I agree with the Secretary of State that our country needs to reduce its dependence on oil. Does he agree with me that the Government should do all in their power to promote democracy in north Africa and the middle east? Democratic countries are better for the people who live in them, better in terms of human rights and make for better trade partners of countries such as our own.
Mr Speaker
Order. A brief answer that relates to oil prices would be helpful.
Chris Huhne
Mr Speaker asks me to relate oil prices to democracy, which is the sort of A-level question that would test any Member.
Obviously, and crucially, open societies in particular are easier to deal with and easier to understand, and in our experience they tend to be more stable. That is a point we make to our friends right the way around the world.
Mr Philip Hollobone (Kettering) (Con)
3. What estimate he has made of the level of (a) onshore and (b) offshore wind generating capacity in 2020.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Modelling undertaken for the Department in 2009 suggested that the UK could have about 14 GW of onshore wind and 13 GW of offshore wind generating capacity in 2020.
The Government do not set targets for individual technologies; we take a market-based approach to energy generation. The actual amount of capacity that comes forward, and the timing, will depend on a range of factors, including how the market responds to the incentives that we have put in place.
Mr Hollobone
My constituency has at Burton Latimer a successful wind farm that is soon to expand, but my constituents would like to see greater incentives from the coalition Government to encourage offshore wind energy, and rather reduced incentives for onshore wind farms, because we do not want the English countryside despoiled by hundreds of wind farms all over the place.
Charles Hendry
My hon. Friend makes an important point, with which a significant number of colleagues in the House agree. There was a democratic deficit in the way the policy was driven forward in the past, and we want to move on from the hectoring approach that the previous Administration took. There do need to be appropriate incentives; wind farms should be put in place in the appropriate locations; and a banding review of the ROC—renewables obligation certificate—regime is coming forward this year, when we can look at those issues.
Hywel Williams (Arfon) (PC)
Ports are a reserved matter. How are the Government enabling Welsh ports to participate in the offshore industry, and to what extent and in what way are they working with the Welsh Assembly Government?
Charles Hendry
We took a view that the best way for the funding to go forward was through an economic generation programme linked specifically to manufacturing projects, meaning that it ceased to be a ports programme and became an economic development matter. Funding was allocated through the Barnett formula to the Welsh Assembly Government for them to take forward their own programmes in the area, and we have also asked the Crown Estate to work with ports throughout the United Kingdom to see how they can all benefit from the renaissance.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
Given the huge obvious potential in the sector, the Minister will understand the renewable energy sector’s natural impatience to know how the green investment bank is progressing and whether the Department is receiving the necessary support that it looks for from the Treasury. Given that potential, can he update us on how things are progressing towards May? Big sites, such as Nigg and Kishorn in my constituency, are really looking to the Government for a lead.
Charles Hendry
My right hon. Friend picks up on an issue that is of great interest across the House. We are making good progress on the discussions about a green investment bank, and an announcement will be made shortly. We see this as a fundamental building block for bringing new investment into an area which is a massive driver for economic growth and recovery in this country.
Huw Irranca-Davies (Ogmore) (Lab)
The Government have very warm intentions for community engagement through the Localism Bill, although The Daily Telegraph has today rather cruelly portrayed it as “bribes for windfarms”. Mike Landy, who is very well respected and has 25 years of experience of renewables internationally, says:
“It is hard to see how the UK’s target of 15% renewable energy by 2020 can be achieved without a significant contribution from onshore wind. The localism bill has all the makings of a NIMBY Charter...there is a distinct danger we could be heading towards BANANA—Build Absolutely Nothing Anywhere Near Anything”.
So I have a straightforward question: what will be the average time taken for an onshore wind farm application by the end of this Government?
Charles Hendry
We are determined to stop the top-down approach that was taken by the previous Administration. We believe it is imperative that local communities should have an active engagement in the siting of big facilities in their communities, and the changes we are making will give them greater discretion. We will stop the regional spatial targets and strategies, but put in place significant benefits so that communities can see how they benefit from hosting a facility on behalf of the national interest instead of seeing it as something that is imposed on them, as at present.
John Pugh (Southport) (LD)
4. What assessment he has made of the potential role of liquefied petroleum gas in reducing carbon emissions.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
In the heating sector, the carbon emissions associated with LPG are slightly higher than those for natural gas. It does, however, have the potential to reduce carbon emissions for those not on the gas grid, as it has a smaller carbon footprint than alternatives such as heating oil and electric heating, though higher than that of renewable energy technologies such as efficient ground-source heating pumps.
Karl Turner (Kingston upon Hull East) (Lab)
5. What recent discussions he has had with ministerial colleagues on attracting private sector investment into low-carbon technologies.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Ministers in DECC have regular discussions with ministerial colleagues right across the coalition on new ways in which Government can attract private sector investment in low-carbon technologies. This includes discussions on the potential form and functions of Europe’s first green investment bank as part of the coalition Government’s comprehensive commitment to an ambitious green growth agenda.
Karl Turner
I am sure that the Minister will join me in congratulating the previous Labour Government on the work that they did to encourage E.ON and Siemens to invest in my constituency. Will he ensure that the Government continue that support and build on Labour’s success?
Gregory Barker
We are determined to transform the level of green growth in this country, and certainly on the level that we inherited from the last Labour Government. It is instructive that in the offshore wind industry, 80% of those huge installations, on average, were contracted and manufactured abroad under Labour. That has to change; we need the investment and supply chain here in Great Britain.
Tony Baldry (Banbury) (Con)
Will Ministers make time in their diaries to visit the Bicester eco-town project, which is a private sector-led initiative intended to be an international exemplar of how to build large-scale, low or no-carbon housing and develop large numbers of green-collar jobs?
Gregory Barker
That is a real recommendation coming from my hon. Friend, who has considerable expertise and a long-standing interest in these matters. The place he mentions sounds extremely interesting, and I hope that perhaps one day he will think of proffering an invitation to me to come and visit.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
We heard from the Secretary of State about speeding the transition to the low-carbon economy, and his Minister has reiterated the Government’s commitment. If we were to measure the Secretary of State’s success by headlines, as I am sure he is often keen to do, then we, like him, would say “A good job done.” However, we judge on actions, not words, and we have seen nothing but confusion, dither and indecision. There is no detail on the renewable heat incentive, and change is afoot on feed-in tariffs and the green investment bank. Today we hear again that there will be discussions on the green investment bank, but when will the Minister decide on it, or is the Department simply being hobbled by the Treasury?
Gregory Barker
It really is a bit rich to have lessons on banking from Labour Members, who brought the British banking sector to the very brink of ruin and the country’s finances into utter disaster. Their handling of the City was utterly catastrophic. We will bring forward, in good time, a robust new institution that will be a key part of the financial architecture of green growth, and we will take no lectures on any of this from Labour.
Meg Hillier
Well, all sound and fury signifying, so far, nothing. Let us be clear: there is talk about the new green investment bank, but no new money, and no detail, and different dates for when we will hear about it. Why? Because the announcement was made by the Secretary of State at the time of the comprehensive spending review without a deal having been pinned down with the Treasury. We are still waiting. When will we have the detail on the green investment bank and when will businesses get the certainty about investment that they need for green growth?
Gregory Barker
I tell you what—it will not take us 13 years to come up with a plan for a green investment bank. It was this Chancellor of the Exchequer who announced plans for a green investment bank, this coalition that is working on plans for it and this coalition that will bring it forward. The hon. Lady will just have to contain her excitement. She would do better to dwell on the Opposition’s abysmal record on green investment, instead of asking fatuous questions from the Dispatch Box.
Mr John Baron (Basildon and Billericay) (Con)
6. What plans he has for the inclusion of provisions on cheapest tariff information in the forthcoming Energy Bill.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
We are taking powers in the Energy Bill to require energy suppliers to provide their domestic customers with clear information about their lowest tariff. Initially, we are seeking the suppliers’ agreement to provide that information voluntarily. However, if there is no satisfactory agreement to do so by the end of the summer, we will use this power.
Mr Baron
The Minister will recognise the importance of this issue, given the recent price increases and the confusion caused by the hundreds of different tariffs. He will be aware that I submitted detailed proposals about how cheapest tariff information could be displayed on domestic bills, in consultation with the consumer magazine Which?. Will he meet me to discuss this issue further?
Gregory Barker
My hon. Friend is one of the House’s leading experts on this issue. It is complex and the answers are not easy. He has submitted information to my Department, which has been extremely valuable. We are determined to get this right and I would be delighted to meet him in the Department.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
We welcome the Government’s proposals requiring energy suppliers to display the cheapest tariff information on their bills. It is a positive first step, but more needs to be done to ensure that consumers get a fair deal from their energy companies. Given that the Government are scrapping the energy watchdog Consumer Focus, which last year uncovered that one energy supplier had overcharged about 1.8 million customers, it is fair to say that the Government have a lot of work to do to be considered a champion of the consumer.
Will the Minister commit to going further? Will he examine what can be done to help vulnerable households that pay a poverty premium because they cannot access cheaper payment methods such as direct debit or because they use a pre-payment meter, to ensure that they get the best deal possible from their energy supplier?
Gregory Barker
The hon. Lady makes some valid points in a sensible way. She is right to say that we need to do a lot more to help the poorest. There is a debate about rising block tariffs, but they, too, can have perverse consequences. We are determined to simplify the tariffs system, and I would like to do that on the basis of consensus. If she would like to contribute to the thinking, I invite her to meet me and share her ideas.
David T. C. Davies (Monmouth) (Con)
8. What progress he has made on the feed-in tariff review; and if he will make a statement.
Neil Parish (Tiverton and Honiton) (Con)
14. What recent progress he has made on the feed-in tariff review; and if he will make a statement.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The first comprehensive evidence-based review of the feed-in tariff scheme has started. It will consider all aspects of the scheme, but we will fast-track consideration of large-scale solar projects with a capacity of more than 50 kW and farm-scale anaerobic digestion projects. Above all, we want to provide a sustainable platform for ambitious growth across the range of renewable technologies, and to work collaboratively with industry to achieve that.
David T. C. Davies
I welcome the Minister’s answer. Will he assure the House that the review will ensure that there are no perverse incentives to build smaller schemes operating at a higher capacity? If he has time in his ministerial diary, he is welcome to visit Monmouthshire, where we have three excellent hydroelectric schemes up and running.
Gregory Barker
My hon. Friend makes a good point. The scheme that we inherited from the previous Government was in danger of offering perverse incentives, particularly for micro-hydro. We will use the opportunity of the comprehensive review to iron out those incentives and get the scheme absolutely right. We are keen to see an expansion of hydro, which is a great renewable source. I will certainly look to see whether I can visit my hon. Friend.
Neil Parish
I very much welcome the Minister’s comments on anaerobic digestion, because I think we can get a great deal more of it. Can he assure us that feed-in tariffs will be set at a fair rate? As we push up energy prices to the consumer, we push more people into fuel poverty. When he tapers the tariffs, will he ensure that hospitals and schools get a fair crack of the whip?
Gregory Barker
My hon. Friend makes some excellent points. We will endeavour to ensure that we are very fair in the review, and we certainly want to sustain investment in renewables in schools, hospitals and other community projects that fall above the 40 kW review level. We also need to ensure that we get value for money for consumers and that we do not offer what Labour did—an open cheque book approach to the industry.[Official Report, 1 March 2011, Vol. 524, c. 1MC.]
Dr Alan Whitehead (Southampton, Test) (Lab)
When the Secretary of State made his announcement about the feed-in tariff review on Monday, he included in it the fact that anything over 50 kW would be regarded as large photovoltaic solar, but everybody knows that anything marginally above 50 kW is not large. The effect of the review will be to eliminate a large number of schools, hospitals and other facilities from the feed-in tariff. Does the Minister accept that a mistake has been made in that calibration, and is he prepared to go back and reconsider the number to ensure that the right figure is put in place?
Gregory Barker
I think the hon. Gentleman is unduly concerned. The 50 kW level simply refers to the current legislative definition of microgeneration. It is not our intention to place draconian limits on those above 50 kW, particularly in relation to the school and hospital schemes that he mentions. However, there is a real problem with large solar fields, and that is our primary focus. Going for 50 kW allows us to settle the matter discreetly, quickly and before the summer recess.
Clive Efford (Eltham) (Lab)
Because of the confusion that the 50 kW limit has caused, should not the review be completed swiftly so that community organisations know where they stand?
Gregory Barker
The hon. Gentleman is absolutely right, and that is why we are moving very quickly indeed and expect to publish the consultation in March. There is no reason for anyone involved in the community schemes that he advocates to be unduly concerned. We are very lucky that capital costs, installation costs and financing costs have all fallen quickly, and we must ensure that the taxpayer gets good value for money.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Does my hon. Friend see any inconsistency between the position of the Secretary of State, who earlier claimed that the Government were doing their best to keep oil and energy prices down, and his support for a tariff that, according to his own costings, means that energy costs 20 times as much as when it comes from conventional sources? Will his review consider the experience of the Dutch Government, who have just scrapped a similar scheme, the German Government, who have limited entry to their scheme, and the Spanish Government, who have nearly been bankrupted by theirs?
Gregory Barker
I think I can reassure my right hon. Friend that his concerns are misplaced, and that the ministerial team is absolutely united in supporting an ambitious roll-out of renewables. The current feed-in tariff scheme for microgeneration would add something like £8 to the total energy bill of the average household by 2030, which means that it is not getting out of control in any way, shape or form. However, we have to be prudent.
Huw Irranca-Davies (Ogmore) (Lab)
Labour’s feed-in tariffs have created thousands of green jobs and real growth in the nascent microgeneration power sector, which now hang in the balance because of the Government’s panicked response to the narrow issue of solar parks. They are bringing forward an early review that throws the healthy baby out with the bathwater, jeopardising schemes for community housing, hospitals and schools. When the Secretary of State stood on the doorstep of Sharp in Wrexham a fortnight ago and announced the potential for 300 new jobs in British solar photovoltaics manufacturing, had he already made the decision to cut the legs away from under the emerging solar manufacturing and installation industry? Did he tell the managing director and the work force?
Gregory Barker
We know that the Labour party is a party of deficit deniers, who are in denial about their record. They are obviously also in denial about the potential costs of unchecked solar. We want to create a sustainable framework for long-term investment that is good for the industry. That is why we are fast-tracking the review and will improve the imperfect system that we inherited from Labour to make a much safer and securer platform for long-term green growth.
Mr Speaker
Order. We really must speed up. There is a lot to get through, and I want to serve the interests of Back-Bench Members who want to ask their questions.
Mary Macleod (Brentford and Isleworth) (Con)
9. What assessment he has made of the potential effects of his proposed electricity market reforms on the ability of the UK to attract investment in low-carbon generation.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
We estimate that by 2020, the cumulative investment needed in electricity generation, transmission and distribution will be in excess of £100 billion. We believe that the policies set out in our consultation on electricity market reform will deliver this investment and the further investment needed to meet our longer-term targets, making the UK a prime location for low-carbon energy development.
Mary Macleod
I am delighted that the Department of Energy and Climate Change and the Treasury have joined forces to launch the electricity market reform project. How will those proposals build the necessary confidence to invest in low-carbon options over the long term and manage the transition period to ensure that stability is maintained?
Charles Hendry
My hon. Friend is absolutely right to pick up one crucial element of our reforms. We must remove uncertainty, because that is one of the biggest threats to investment. We therefore propose that the current regime run alongside the new regime for a period of years, giving people a choice of which system they work to. We believe that that deals with the transitional challenges.
Ian Lucas (Wrexham) (Lab)
Low-carbon generation was hugely incentivised by Labour’s feed-in tariff, which in the last month provided 300 new jobs in my constituency. Those jobs are endangered by Monday’s announcement. Sharp says that the Government’s investment will stop investors—private investment—in their tracks. How can the Government possibly justify their absurd claim to be in favour of growth and green manufacturing when they make an announcement as stupid as the one they made on Monday?
Charles Hendry
I remember well the debates on the introduction of feed-in tariffs. It was the force of Conservative, Liberal Democrat and Labour votes—[Interruption]—Labour Back-Bench votes. That was the combination that forced the then Labour Government to accept feed-in tariffs. This Government are ensuring that that money can be targeted on areas where we can see a massive roll-out. It should not be diverted into big solar farms. We want to ensure that the maximum number of people can benefit, which is why we are undertaking our review.
Jason McCartney (Colne Valley) (Con)
10. What recent assessment he has made of the effectiveness of the feed-in tariff payments system for electricity generated by domestic solar panels.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
We want to drive forward deployment of decentralised renewables, and we are very pleased with the growth to date of solar photovoltaics supported by feed-in tariffs. However, we believe that the system can be improved and placed on a more secure and sustainable financial footing, which will be to the long-term benefit of consumers, industry and investors.
Jason McCartney
One of my constituents has contacted me because he has waited for up to three months for payments for electricity generated by domestic solar panels. Does the Minister agree that the public body that hands out those payments should speed them up?
Gregory Barker
I would be happy to look into that case, but obviously, the energy supplier and not Ofgem, the regulator, is responsible for dishing out those payments, which should be made quarterly. If my hon. Friend is aware of longer delays in Colne Valley—he is a doughty champion for his constituents—I will be happy to look into those specific cases on his behalf.
Mr Mike Weir (Angus) (SNP)
Is the Minister aware of the concerns in Scotland that the take-up of domestic solar panels through the feed-in tariff has been hampered by the unsatisfactory nature of the microgeneration certification scheme? Will he or his officials meet installers’ representatives to discuss why the Department refuses even to engage with their proposals for a scheme to meet specific Scottish needs?
Gregory Barker
I am aware of considerable unease about the MCS, which was set up by the previous Government. A number of complaints have been made to the Department, and I take them extremely seriously. I would be happy to look at the issues that the hon. Gentleman raises.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
15. What the net contribution of wind-powered electricity generation to energy supply was in the final quarter of 2010.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Department publishes data on electricity supplied to the UK electricity grid on a monthly basis. Figures for the final quarter of 2010 in full will be published on 24 February. DECC’s latest figures show that for October and November 2010 in total, wind generation by major power producers contributed 3.5% of all electricity supplied to the UK electricity grid.
Chi Onwurah
On Monday I visited Siemens in Byker, just outside my constituency, to see the significant investment it is making to train apprentices in renewable technologies. However, Siemens told me that it would not take on more apprentices until there were more confirmed renewable power projects. The Secretary of State has delayed the green investment bank and the renewable heat incentive and is reviewing the feed-in tariff. When will he give the renewable industry the positive signal it requires?
Charles Hendry
The renewable heat incentive is not actually related to the offshore wind development sector, in which Siemens is looking to operate. We are working closely with Siemens. Yesterday I chaired the offshore wind developers forum to consider the barriers to potential investment. We see this as a massive opportunity for Britain to secure the sort of green jobs that the hon. Lady is talking about in her constituency, and which Siemens is looking at more generally in areas such as Humberside.
Andrew George (St Ives) (LD)
In order to encourage greater wind generation, what assistance can Ministers offer to communities that live very close to large wind farms or turbines? How can they share the benefits of having those on their doorstep?
Charles Hendry
Our evidence shows that community schemes—where there is community ownership of the scheme—get through the planning process much more readily than non-community schemes. As we move forward, we are keen to see schemes that will keep the local business rate within the local community and provide additional benefits through community ownership, so that communities can see exactly what they are getting out of having such a facility in their areas, rather than, as sometimes happens, getting the pain but not the gain.
Elizabeth Truss (South West Norfolk) (Con)
16. What steps he is taking to ensure that electricity consumers in areas with only one supplier are not charged excessive amounts.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Ofgem regulates distribution network operators through price controls that limit the amount that they can charge for connection services. For most connection services, DNOs can recover only expenses that are reasonably incurred. When a customer disputes a connection charge, they can raise the issue with the DNO through its complaints procedure. Ofgem has powers to determine whether a connection charge is reasonable after other avenues are exhausted.
Elizabeth Truss
My constituent David Goulty has been quoted £1,200 for a connection by UK Power Networks. Also, the Snetterton industrial site near the A11 has been quoted £6 million to £8 million for connecting it to the national grid. I am concerned that this company is the sole supplier in this area, and I would like to know what action the Government and Ofgem are taking to ensure that it is not charging over the odds for connections.
Charles Hendry
My hon. Friend raises a very important point, which I hope she will pursue through Ofgem as well. The costs of those mechanisms are calculated by the local area network using a methodology agreed by Ofgem, which means that it can recover only reasonable costs associated with the connection work. If the complaints procedure has been exhausted, Ofgem can then determine whether the costs are reasonable. Consumers can also consider using an independent connection provider that might be able to offer a better deal.
Mr William Bain (Glasgow North East) (Lab)
17. What recent discussions he has had with energy companies on tariff and pricing policies affecting consumers.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Ministers and officials in the Department of Energy and Climate Change meet Ofgem and suppliers on a regular basis to discuss market issues. Ofgem monitors the market closely and reports quarterly on retail prices. Its latest report shows large increases in estimated supplier margins for the year ahead, largely owing to recent price increases. We are disappointed on behalf of consumers by this development, and welcome the announcement of Ofgem’s review of the retail market.
Mr Bain
The Minister will be aware from a written answer to me on 10 January that without further Government action, by 2013 the impact of the Government’s proposed electricity market reforms will be felt by the poorest 10% of households three times more heavily than by the richest 10%. Will he therefore adopt Save the Children’s excellent idea of obliging the energy companies to offer a compulsory rebate to the poorest families?
Charles Hendry
We have indeed introduced a new obligation for energy companies to help the most disadvantaged people. We are determined to take forward that agenda, and to ensure that we do it rather more effectively than it has been done in the past. We also have to ensure that we secure the investment necessary to rebuild our energy infrastructure, which was badly put off under the previous Administration.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
19. What recent steps he is taking to improve the energy efficiency of privately rented housing in rural areas.
The Secretary of State for Energy and Climate Change (Chris Huhne)
I want to see the energy efficiency of privately rented housing improve across the country, including in rural areas. Our green deal, due to be launched in late 2012, will help enable this to happen. It will offer landlords, in both urban and rural areas, a real opportunity to invest in the energy efficiency of their properties at no up-front cost. If they do not, we are taking powers in the Energy Bill to enable tenants to insist on the green deal. Furthermore, we will allow councils to ban rentals in F and G-rated properties. My Department is looking at how best to incentivise renewable heating for those off the gas grid, particularly those in rural areas.
Sir Alan Beith
I welcome what my right hon. Friend is doing on this matter, but I ask him to keep in mind the fact that some of the poorest people in my constituency live in former farm cottages that are stone-built, have landlords who are reluctant to improve them, are not connected to a gas supply and are at the mercy of monopolistic heating oil firms.
Chris Huhne
I entirely sympathise with my right hon. Friend’s point about the problems that often exist in rural areas. Such problems are often overlooked precisely because they are not necessarily concentrated in large numbers, but poverty, including fuel poverty, can be a dramatic problem in rural areas. The green deal will be particularly helpful to the sort of constituent whom he has mentioned, because there will also be support for hard-to-treat homes, which will involve subsidising solid-wall insulation.
Mr Clive Betts (Sheffield South East) (Lab)
I am sure that the Secretary of State is aware that many older privately rented properties do not have cavity walls. Therefore they can benefit from loft insulation, not cavity-wall insulation, and external or internal cladding is often problematic. In those cases, will he consider giving extra priority under the green deal to offering assistance with double glazing?
Chris Huhne
We are looking at exactly what the specifications should be under the green deal. I want us to get in as much as possible. Given that the scheme will be much bigger than any that we have had before, one of the points that we are discussing with the industry is whether those economies of scale can be reflected in the prices of energy-saving products. If we can do that, we can make them susceptible to the green deal to a much greater extent. However, I would also refer the hon. Gentleman to my answer to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) concerning solid-wall insulation. There are technological improvements being made in this area that I would not rule out as a source of comfort for the hon. Gentleman’s constituents.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
20. What recent steps he has taken to facilitate direct passage of the gas generated from anaerobic digestion into the national transmission system.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The coalition is committed to a huge increase in energy from anaerobic digestion. In addition to reviewing tariffs, we are simplifying the regulatory regime for operators of AD installations. The Health and Safety Executive has been asked to assess the quality of gas that can safely be injected into the grid, and Ofgem is consulting on what measures are required to overcome barriers to biomethane injection into the gas grid.
Dr Coffey
I thank the Minister for that answer. Would he be kind enough to meet with me to discuss the case of Adnams Biogas in my constituency? Adnams Biogas was set up by Bio Group and was the first to take methane and put it straight into the grid system. National Grid is happy with that, but Ofgem now seems to have a big issue with it. It seems ridiculous that we should have to add fossil fuel gases to natural gases in order to be greener.
Gregory Barker
My hon. Friend can rightly be proud of the Adnams facility in her constituency, and she is particularly well placed to understand its potential as she has a PhD in chemistry. I would be happy to meet her to discuss how we can make it easier for more companies to connect, because we are talking about a very important technology.
Mr Philip Hollobone (Kettering) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Since the previous departmental Question Time we have published proposals to increase liabilities for nuclear operators under the Paris and Brussels conventions. We have also opened a consultation on the long-term management options for the UK’s civil plutonium stocks, and launched a review of the feed-in tariff scheme to ensure that we have investment certainty at reasonable budgetary cost.
Mr Hollobone
Britain’s electricity system is at its most vulnerable during winter cold snaps when the wind is not blowing and the wind turbines are not moving round. What steps is the Secretary of State taking to ensure that the plant capacity margin is big enough to ensure that we can keep the lights on with power from conventional sources during those periods?
Chris Huhne
My hon. Friend is right to highlight that as an important and ongoing issue, and it is one to which we have devoted a lot of attention in the Department. In the short term, the key is that the capacity margin has increased quite comfortably—sadly for the wrong reasons: because of the impact of the recession—but in the long run we are trying to ensure that we pay for capacity through electricity market reforms. That is in the consultation documents that we have tabled, and I believe that it will provide a long-term solution and ensure that we have an adequate margin.
Ian Murray (Edinburgh South) (Lab)
T3. The Secretary of State for Business, Innovation and Skills came to the Environmental Audit Committee last week and told us that DECC had been heavily involved in the development of the green investment bank. What input has this Secretary of State had to the formation of the bank? Can he tell the House whether he is in favour of a bank or a fund—and whether the Treasury is pushing him towards a fund in order to keep the scheme off its books?
Chris Huhne
There are ongoing discussions between Ministers—[Hon. Members: “Ah!] I would merely make the point to Opposition Members that it is more important to get this right than to do it quickly and get it wrong. With the green investment bank, let us remember that we are looking at an institution that will be crucial in supporting the transition to a low-carbon economy not over a two or three-year period, but over 40 years. If we look back at our economic history, and at similarly massive changes in the way our economy has been powered—for example, the move to coal and then oil, with the internal combustion engine—we see that these things do not happen in a day. Let us get the green investment bank right. That is what Ministers are going to do, and announcements will be made in due course.
Miss Anne McIntosh (Thirsk and Malton) (Con)
T2. The green deal will bring huge fuel efficiency benefits in heating homes. Will the Secretary of State consider extending it to cover water efficiency, and in particular to educating households to save water, and to save energy by heating only the water that they need to use?
Chris Huhne
I am very sympathetic to my hon. Friend’s points. There is an important agenda for trying to make water use sustainable, as well as the other elements covered by the green deal. The difficulty lies in attaching measures that would affect water to an electricity and gas Bill, and that has so far proved insuperable for the ministerial team. We would like to see real improvements, however, and we have been working across Government on this. I know that the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman) is also concerned about this, and is working hard on proposals.
Ian Lavery (Wansbeck) (Lab)
The Secretary of State will be aware that the Hatfield colliery in South Yorkshire is in administration. It has more than 100 million tonnes of coal. Has he had meetings with the owners or their representatives to try to resolve the situation, and will he agree to meet me and other representatives to discuss it?
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
We had regular contact with the owners prior to the administration. We have not had direct face-to-face contact with them subsequently, because we believe that this is a matter for them to sort out with the administrators. However, we recognise the great potential of that location and of the technology that is being developed there for carbon capture and storage, and as we take forward our plans for CCS, we hope that the plant will still be able to bid into the process.
Robert Halfon (Harlow) (Con)
T5. Is the Minister aware of ECCO, a not-for-profit co-operative in Harlow that recycles textiles and batteries? Will he visit ECCO with me to see this important example of the big society, and to see whether such a contribution to recycling could be rolled out across the country?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
It is important to take a holistic approach to these green and sustainability questions. My hon. Friend is a fantastic champion of the big society in Harlow, and I would be delighted to go there with him to see what is being achieved there.
Lilian Greenwood (Nottingham South) (Lab)
As the Minister knows, the Meadows neighbourhood in Nottingham South is striving to become a low-carbon community. The three local primary schools, the community gardens and 55 local families are now benefiting from the feed-in tariff through their community-owned energy company, MOZES. Can he guarantee that his review of the feed-in tariff will not endanger its continued success?
Gregory Barker
I am delighted to answer this question, not least because I had the privilege of going to the Meadows last autumn and was very impressed with what I saw there. I can absolutely confirm that there is nothing retrospective about the feed-in tariff review. Any community, group or individual claiming the tariff will see no change in their tariff.
Stephen Mosley (City of Chester) (Con)
T6. Has my hon. Friend had any discussions on the future of the treaty of Almelo, particularly in relation to modifying it to allow British and European companies to take full advantage of the opportunities offered by China’s expanding programme of civil nuclear power?
Charles Hendry
May I begin by paying tribute to the important work that URENCO, which is based on the outskirts of my hon. Friend’s constituency, does in this area? The treaty of Almelo was signed in 1970 by the Governments of the UK, the Netherlands and Germany, and covers the operation of the tripartite URENCO uranium enrichment company. It is not a vehicle for the promotion of specific commercial opportunities, and if there were to be any change in its nature there would have to be a new treaty, or an adaptation to the existing one.
Barry Gardiner (Brent North) (Lab)
We have recently begun to see the decoupling of oil and gas prices, and technological innovations enabling us to exploit shale gas might expand that decoupling still further. How is that affecting the Government’s thinking on electricity market reform, and what repercussions do they foresee?
Chris Huhne
That is absolutely right; this is one of the most interesting things happening in energy markets. The last figures that I looked at were very striking, showing that the price per therm in the United States is virtually half what it is in the UK or on the continent of Europe. Any electricity market reform must obviously involve a framework that could accommodate such changes, if this turns out to be a long-run trend. For example, if gas with carbon capture and storage were a particularly attractive technology providing low-carbon electricity for our consumers, the electricity market reform would have to enable it to be produced. It is not our job to pick winners in technology, but it is our job to ensure that we have low-carbon electricity and that the market framework can deliver it.
Claire Perry (Devizes) (Con)
T7. Farmers in my Devizes constituency really welcome the inclusion of anaerobic digestion in the overall tariff and review currently taking place. That is long overdue, and an important way of reducing emissions and cutting waste from the farming industry. However, communities living close to existing or proposed sites are expressing real concerns about the possible impacts—an increase in traffic, unpleasant odours and so forth. What can be done to reassure communities and farmers that those things can co-exist in the countryside?
Gregory Barker
Obviously, the Environment Agency will continue to have oversight of such matters, but the brilliance of farm-based anaerobic digestion is that it is an on-farm solution, so it should diminish the number of road journeys that need to be made. As my hon. Friend the Energy Minister said earlier, at the heart of our proposals for an ambitious roll-out of renewables is the idea of community consent. We want a bottom-up approach, in which everyone has a chance to participate and be incentivised, rather than have things imposed from the top.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The north-east of England has a burgeoning offshore wind sector, supported by the new renewable energy centre in Blyth. What is the Department offering to support the growth of that industry now that the very successful regional development agency, One North East, which provided a lot of vital support, is being wound down?
Charles Hendry
As the hon. Lady will know, the £60 million for the building of the manufacturing facility on the ports could be of massive benefit to the north-east and to other parts of the country. Companies such as Gamesa, Siemens, Mitsubishi and General Electric are already looking at the United Kingdom because of the massive opportunities that they see here. We are determined to have the jobs coming to this country, whereas historically too many of them have gone overseas.
Richard Graham (Gloucester) (Con)
T9. Solar power offers a great opportunity to reduce both our carbon footprint and our household costs. Will the Minister say what his Department is doing to encourage its use in cities such as mine of Gloucester?
Gregory Barker
We recently launched “Community Energy Online”, which demonstrates to communities and local authorities the easy steps that can be taken to benefit from the range of schemes and initiatives that DECC has already launched and will launch in the future. I encourage people to look at this online initiative, which is easy to access. If my hon. Friend has any feedback about it, I would be delighted to hear it.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
How does the Secretary of State intend to help the chemical and steel industries and other manufacturers of energy-intensive products, which will be less able to compete globally or even within the EU in response to his proposals for electricity market reforms and CO2 floor prices?
Charles Hendry
The hon. Gentleman raises an extremely important issue. We have to be careful not to have carbon leakage and to ensure that the measures put in place in this country do not drive British manufacturing jobs abroad. That is why there is cross-co-ordination between DECC, the Department for Business, Innovation and Skills and the Treasury to make sure that we fully understand any knock-on implications and avoid any such unintended consequences: it is critical to keep those manufacturing jobs in Britain.
Duncan Hames (Chippenham) (LD)
We have heard how households such as those off the gas grid, of which there are many in my constituency, would benefit from the new green deal. If demand for it initially outstrips supply, how will the Secretary of State determine who should have access to it first?
Chris Huhne
My hon. Friend raises an interesting point; it is a high-class problem. Up until now the main difficulty Governments have faced is in encouraging consumers to go for energy efficiency measures, which are enormously beneficial economically. For example, the payback period for both cavity-wall insulation and loft insulation is less than 18 months, yet there are still millions of homes outstanding. I look forward to having to deal with the problem of high demand, but it is not one that has detained us greatly as yet. We want to make sure that the market takes off, and that is where we have been focusing our attention.
Dame Anne Begg (Aberdeen South) (Lab)
The all-party offshore oil and gas industry group heard this week of the difficulties faced by developers of small oil and gas fields in accessing infrastructure at a reasonable tariff. They say that the existing mechanisms do not work, and that the legal process for determining resolution has never worked either. Will the Minister turn his attention to that and ensure that they have proper access at reasonable tariffs, because it is these small developers that will be the future of the offshore oil and gas industry in the North sea?
Charles Hendry
We want a different relationship between Government and the offshore developers. We are considering restructuring PILOT, the organisation that deals with such matters. One of the most important aspects of its work will be access to infrastructure, alongside decommissioning and other issues that have been intractable for a long time. I am grateful for the work that the all-party group is doing in the House.
Sarah Newton (Truro and Falmouth) (Con)
I welcome the Minister’s recent meetings with private sector organisations in Cornwall that are working on deep geothermal and marine energy. Can the Secretary of State confirm that both those exciting technologies will be included in the review of the banding regime for renewables obligation certificates?
Gregory Barker
I am grateful for my hon. Friend’s ongoing enthusiasm and determination to fight for geothermal energy. She has made some excellent points. The ROCs banding review will examine those issues and others to ensure that the right incentives are there to drive forward the whole green economy.
Nia Griffith (Llanelli) (Lab)
May I return the Secretary of State to the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)? Will he agree to meet a delegation from the all-party parliamentary group for the steel and metal-related industry to discuss the effects of the carbon floor pricing proposals on high energy users such as the steel and ceramics industries?
Chris Huhne
The hon. Lady will know that we have been in close contact with high energy users. We are happy to continue to meet them to discuss their concerns.
Laura Sandys (South Thanet) (Con)
Is the Department still considering the marine energy parks project, which was proposed before the election? What is its perspective on opportunities for the marine energy sector?
Gregory Barker
We think that there is huge potential for growth in the sector, which now needs to be gripped and driven forward. There has been about a decade of talking about the issue, but no real growth. I was delighted to go to the south-west to convene the new marine energy programme board and to announce that the south-west would host the first marine energy park, consisting of a cluster of marine energy firms. I hope that that will be replicated all round the coast of Great Britain.
Albert Owen (Ynys Môn) (Lab)
Much of the new low-carbon capacity plan will require either enhanced or new transmission lines. Will the Department encourage National Grid to consider installing underground and submarine cables as well as enhancing existing pylons?
Charles Hendry
The hon. Gentleman has raised a particularly important issue, which I know is of great significance to his constituency because of the possible building of a nuclear plant there. I am pleased about the work being done by the Institution of Engineering and Technology, which is trying to establish in detail what the costs of undergrounding will be. Additional work is being done by National Grid to ensure that we fully understand the relative costs of the various approaches, which will be one of the most contentious issues.
Naomi Long (Belfast East) (Alliance)
The Minister will be aware that the development and expansion of wind and wave technology are having a very positive impact on research and development and manufacturing in my constituency. What discussions is he having with his counterparts in the Northern Ireland Assembly to ensure that the economic as well as the environmental benefit is harnessed?
Charles Hendry
The hon. Lady will be pleased to know that we have regular contacts with members of the Northern Ireland Government, as well as with devolved Governments elsewhere in the United Kingdom. We are keen to adopt an all-islands approach. We intend to assess the potential throughout the British Isles, including the channel islands and the Irish Republic, to establish where the resources are greatest and how they can be harnessed for the greatest overall good.