Energy: Onshore Wind

Baroness Worthington Excerpts

Tuesday 23rd June 2015 Lords Chamber

Asked by

[Baroness Worthington]

To ask Her Majesty’s Government what assessment they have made of the impact on investment in renewable energy of their decision to end the subsidy for onshore wind farms.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, onshore wind has made a valuable contribution to the United Kingdom energy mix in recent years, but there is now enough capacity in the pipeline for the United Kingdom to meet its 2020 renewable commitments. We will consider carefully the level of investment that developers are likely to bring forward under the proposals announced by the Secretary of State on 18 June.

[Baroness Worthington (Lab)]

My Lords, I thank the Minister for his response. However, would he agree with me that we are not in fact on track to meet our renewables targets because they apply to all energy, and the targets for heat and transport are not on track? Therefore, this is an imprudent blanket ban on one of our cheapest and fastest-to-deploy technologies. Will he not reconsider?

Energy: Onshore Wind

Baroness Worthington Excerpts

Monday 22nd June 2015 Lords Chamber

[Baroness Worthington (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement received in the House of Commons today on ending new subsidies for onshore wind. This is quite a regrettable outcome from the election—but I would say that, wouldn’t I? But I say that for a number of reasons in this context.

It seems to me that this policy demonstrates quite how out of touch this Government are with the UK as a country. Onshore wind must be viewed as predominantly a Scottish and Welsh industry. On any metric, Scotland dominates it, yet here we have a Government with a wafer-slim majority trying to push through some dog-whistle policies to appease a very small, but very vocal, number of Back-Bench MPs. The net effect of that is to destabilise investor confidence in the UK’s renewables industry. It is not just the onshore industry that is now understandably upset by the Government’s moves in this direction. The deputy director-general of the CBI has said:

“Cutting the Renewables Obligation scheme early sends a worrying signal about the stability of the UK’s energy policy framework. This is a blow, not just to the industry, and could damage our reputation as a good place to invest in energy infrastructure”.

Those are serious allegations, and I am afraid that this policy, no matter how you try to dress it up as being in favour of consumer cost-cutting or enabling us to meet targets in more cost-effective ways, is simply a response to a very political problem which could and should be sorted out at local level.

The announcement about cutting the subsidies was accompanied by changes in planning laws which are incredibly restrictive. There is absolutely no need to go further and destabilise investor confidence in the way the Government have done. The new planning policies require that local plans identify sites suitable for wind farms and planning can go ahead only on those sites. This will severely limit projects coming forward and is sufficient on its own to ensure that people who want to rule out onshore wind in their local areas can do so. There is no need to introduce such a blanket, nationwide policy which will have serious repercussions for energy policy across the UK.

I have mentioned Scotland, and I am grateful that the Statement said that consultation is ongoing, but what is likely to happen as a result of this policy is the splitting apart of UK energy policy, as I am sure that Scotland and stakeholders within Scotland will not accept that the Government have authority to dictate that no more support can be given to this growth industry.

One of the defences is cost-effectiveness. It is simply not true that if you rule out one of the most cost-effective sources of renewable power you will save customers money. In fact, a hint about why that is not true is in the ministerial Statement. By ruling out onshore wind, we will be spending more money on less cheap technologies to meet our targets. In fact, the Government are encouraging this by saying that they need to protect offshore wind. In the latest auctions for contracts for difference—which we will come on to in a second, as there are implications in this measure for them too—it was clear that onshore wind came in at around £80 per megawatt hour and offshore wind at £120 per megawatt hour. That is not an insignificant difference. By ensuring that we rule out onshore wind, we will naturally see more money spent on offshore wind as we move to meet our targets.

On the subject of targets, I think that the Statement is breathtaking in its complacency. We are not on track to meet our targets. The target is that 20% of our energy should come from renewable sources by 2020. We are now approaching 5% of energy coming from renewable sources. It is important to note that there are three distinct policies that help us to meet that target. There is the electricity market reform package, which introduces a new system of support and which shut down the renewables obligations. That is the subject of this Statement. Two other polices are needed to get us to our target: the renewable heat incentive and the renewable transport fuel obligation. Both those policies are failing. They are not on track to get us to the target we need to reach. Electricity is the one area where we can say that we have seen success, yet here we are cutting off at the knees one of the most important contributors to success in that policy. Will the Minister please give me an undertaking that he will go back to ask his officials what will occur in the event that the renewable heat sector and the renewable transport sector fail to deliver? How will we compensate? Can we look again at the need for more electricity sources to help us meet those targets? In those circumstances, should we not look again at the most cost-effective sources of renewable electricity, which definitely include onshore wind?

We have touched upon the fact that another policy support beyond the renewables obligation offers support for onshore wind: the contracts for difference. Can the Minister confirm that there will be further auctions for contracts for difference between this Statement and the passing of the Bill, which will be needed to enact these new policies? Primary legislation and all the changes that it involves takes time. Will we see continued granting of contracts to onshore wind in that period, and can the Minister please endeavour to provide clear information to the industry should companies wish to switch from the RO to the CfD process to continue with their projects?

As today’s Statement says, around 250 projects which might have gone ahead under the RO are now unlikely to happen. It seems evident that a large number of those will already have had a significant amount of investment in them to get them to the stage of being ready to be built. We owe it to those developers who have done so in good faith to enable them to transition to a new support system before we rush to cut away the support that they were given not many years ago. In fact, we all debated the transition to cleaner energy in our discussions on the energy market reform proposals in the Energy Bill passed under the previous Government. That was not long ago and yet here we are, so soon after an election, radically shaking things up once again, creating uncertainty and dissuading people from seeing the UK as a place for inward investment.

Today it is onshore wind; tomorrow—who knows? Solar energy, offshore wind, biomass—you name it, everything seems to be in question. If there are enough Back-Bench Tory MPs who dislike something, it seems that it will be cut off at the knees. I am greatly disappointed by the Statement today.

Climate Change

Baroness Worthington Excerpts

Wednesday 17th June 2015 Lords Chamber

Asked by

[Baroness Worthington]

To ask Her Majesty’s Government what action they are taking to address the risk of climate change.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, first, I pay tribute to the noble Baroness for her work on the ground-breaking Climate Change Act. We are determined to meet our commitments under this Act and cut emissions by 80% by 2050. I am pleased to affirm that commitment today, particularly given that it is a day of action for the Speak Up For The Love Of campaign. We are also working to secure an ambitious global deal in Paris this year that sends vital signals to communities, businesses, investors and people around the world that Governments are committed to a global low-carbon economy.

[Baroness Worthington (Lab)]

My Lords, I thank the Minister for his comments. On 14 February, the leaders of the three main political parties, prompted by the For The Love Of campaign, which has also organised today’s mass lobby, made three clear pledges on climate change: to win an ambitious deal in Paris, to which the Minister referred; to work together to agree carbon budgets; and to phase out unabated coal in electricity. Much has changed since then, including which parties we might now consider to be the main three, but the need to tackle climate change remains. Can the Minister confirm that the Conservative Government remain committed to these three pledges, and can he provide details of what his department is doing to implement the other two that he has not mentioned?

[Lord Bourne of Aberystwyth]

I thank the noble Baroness for that. As she will know, unabated coal is likely to represent just 1% of emissions by 2025. The Prime Minister and the Secretary of State, Amber Rudd, are very committed to the whole agenda, and we are certainly fully committed to those three goals.

Electricity Supply: Decarbonisation

Baroness Worthington Excerpts

Monday 15th June 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

I thank the noble Lord for his kind comments. The ambitions for, and commitment of the Secretary of State and the Prime Minister to, this agenda are undoubted, and we will continue the work of the last Government in that regard. The targets and aims are ambitious, and we will share those with both Houses so that we can gain the consensus and achieve the momentum to take this agenda forward.

[Baroness Worthington (Lab)]

My Lords, I, too, take this opportunity to welcome the noble Lord to his new post; I look forward to a fruitful relationship. I also take this opportunity to wish my noble friend Whitty a happy birthday. Can the Minister confirm whether the department has assessed the price implications of adopting a decarbonisation target for the electricity sector? That might well be a cheaper way of proceeding than the carbon price support mechanism we are currently using to try to phase out coal and make good on that pre-election pledge.