Enterprise and Regulatory Reform Bill

Debate between Baroness Worthington and Lord Marland

Monday 3rd December 2012 Grand Committee

[Baroness Worthington]

My Lords, we should remind ourselves why these green purposes are so important. This bank has been set up in order to facilitate investment into green projects and to help the UK to move to a low carbon economy. The definitions set out in the Bill will be the guiding principles by which the bank operates. The bank could definitely be sold off in the future; there are provisions in the Bill to enable this to happen, so these governing principles are very important and must pass the test of time.

The amendment would introduce two changes to the Government’s proposed wording in Clause 1(1)(b). First, a test of significance would ensure that projects showed a significant advancement in resource efficiency or energy saving. We believe that this is important not because we do not trust the bank but, as I say, because of how it may change and develop in the future. The test of significance would prevent projects qualifying legally for support from the bank which deliver only a very marginal improvement in any project. It is not beyond the imagination to see that under these definitions of purpose you could secure support and funding for a very marginal improvement in the efficiency of a coal-fired boiler, for example. That is not the sort of investment I think the Government are seeking; therefore, this part of the Bill needs tightening for the avoidance of doubt.

It might be argued that this is illogical and that we will not see a bank that is called the Green Investment Bank investing in coal-fired projects. I have an example of how things can go quite illogically wrong when dealing with climate change and greenhouse gases. The global carbon market has an investment facility called the clean development mechanism, under which it is perfectly legal and possible to invest in slightly more efficient coal-fired power stations in India to allow for European coal-fired power stations to carry on emitting. When we get into the world of sustainability, climate change and emissions reduction, things can get a bit illogical. It is important that a lot of attention is paid to these definitions and that we get them right.

The second change proposed in the amendment is to add a specific reference to energy savings. A very strict interpretation of natural resource efficiency might preclude energy efficiency from electricity. Electricity is not a natural resource, it is manmade. Again, we want to make sure, for the avoidance of doubt, that the bank is set up to focus on electricity and energy saving. We know that this is true because, of the five areas identified in the bank’s objects, two are about energy efficiency—one for commercial entities and one to support the Green Deal. They are very important for electricity efficiency, and we are not convinced that the provision fits well with this definition. So we encourage the Government to reconsider the wording of subsection (1)(b) on natural resource efficiency, because we do not think that it does what the Government want it to do.

Finally, I have two questions for the Minister: what is his definition of,

“efficiency in the use of natural resources”?

Secondly, will he undertake to amend the wording to make sure that energy saving, in particular electricity savings, are included under these purposes?

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)]

My Lords, here we go. We have nine days in Committee— I work it out at 36 hours—and what a way to start. What a pleasant surprise it is for me that the noble Baroness, Lady Worthington, is dealing with this amendment. I moved department to get away from her incisive grilling, but it has come back to haunt me. Nevertheless, I welcome very much seeing her opposite me as she is much better looking than the noble Lord, Lord Adonis.

As always, this Bill will leave this House much better for the great interrogation that this House will give it, and I want to say in advance how grateful I am to all noble Lords for the time that they are about to dedicate to this. I also thank the Opposition for their co-operation throughout this process, the officials who are in serried ranks behind me and of course my noble friend Lord Attlee and others who will be in his place and will have to listen to this response.

The noble Baroness poses an extremely reasonable question and I compliment her on her great knowledge in this field, almost unrivalled in many ways. We have obviously had discussions on this issue with the chairman, the noble Lord, Lord Smith of Kelvin, and I would like to read out his views on it from the Second Reading debate because I think that it sets a framework for what we are going to talk about today. He said:

“We know that we are going to be held to very high standards on green issues in both the investments and our own operations. We welcome the requirement to report on carbon emissions and the positive impact that our investments should have on reducing UK emissions. We will go further than the requirements of quoted companies by reporting in detail on our portfolio. We will also take the long-term view and have regard to the work of the Committee on Climate Change. I ask noble Lords for support for the Government's broad definition of ‘green purposes’. Waste and recycling—for example, anaerobic digestion—can have a positive impact, and it would make the Green Investment Bank’s task more difficult if there were changes in our mandate by a narrowing of the green definition”.—[Official Report, 14/11/12; cols. 1528-29.]

I think that I could stand here all night and make a case for this, but I could not do it better than the chairman himself, who has been appointed to run this independent bank. On that basis, I ask the noble Baroness to withdraw her amendment because I think the noble Lord has said everything that needs to be said.

[Baroness Worthington]

I thank the Minister for his response. I am slightly perplexed as I do not think that the quote from the noble Lord, Lord Smith, really address the questions that I have raised. We would agree with his point about not wanting to narrow the definition. It is important that we give ourselves flexibility, not least because we hope that this bank will be around for a long time. Things will change during the time that it is around and we do not want to overly constrain it. We are suggesting not to narrow the definition but to make it slightly more specific in its wording. I hope that that can be taken on board. If it is narrowing, it is only to add a test of significance, which, I think, is a legally important word that we should not dismiss lightly. So I am happy to withdraw the amendment, but on the basis that perhaps we could think about these two questions a bit more carefully. I beg leave to withdraw the amendment.

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[Lord Marland]

My Lords, I have a sense of deja vu, thinking that I am still in the Department for Energy and Climate Change—where, of course, the Green Investment Bank was largely initiated, so I am extremely keen that it gets off on the right footing for that reason alone. I believe that my noble friend Lord Teverson, who always speaks so eloquently on the subject, actually answered the question that he posed himself. We could not have written a better list if we had tried. My concern is that we would get into definition overkill as we take this Bill through the House.

My noble friend mentioned that the reduction of carbon is not relevant on the individual investments, but it is at the top line. I would respectfully—I emphasise that word for the noble Lord—point out that it is the fundamental investments that will reduce carbon emissions. It is only at the top level—I see the noble Lord, Lord Oxburgh, sagely nodding his head—that you will achieve the carbon reduction. The Government are very heavily committed to this. It is no accident that the noble Lord, Lord Stern, was on the advisory board that set up the bank and that was advising at all levels. As a result of that, the noble Lord, Lord Smith, has made it clear that the bank will have a very high regard—as it should—for the Energy and Climate Change Committee because it is fundamental for the Government and for the future of the business. However, I exercise a word of caution, because there are important activities that are clearly green but do not necessarily reduce greenhouse gas emissions—for example, recycling and improvements in water quality. We would want this bank to invest in such activities, I am sure, but that would not necessarily reduce carbon emissions.

I have not mentioned a judicial review in my line of inquiry because I think it is far more important that this Committee gets this into the right shape rather than for it to be directed by a judicial review. However, the bank’s board has agreed—across the board—that the bank will voluntarily report on greenhouse gas impacts on its investments. This is in addition to the requirement for the bank to report on the greenhouse gas emissions associated with its own activities. So it comes as no surprise to all of us, after discussions with the noble Lords, Lord Adonis and Lord Smith of Kelvin, that it is absolutely at the heart of what the bank is doing. I hope that that gives confidence to noble Lords and I therefore respectfully ask them to withdraw their amendment.

[Baroness Worthington]

My Lords, I thank the Minister for his response. We do not doubt that many parts of government are fully on board with the need for investments to deliver low carbon economy to meet our Climate Change Act 2008 targets. However, it will not have gone unnoticed that this certainty is not shared by everyone in the Government. Unfortunately, there is an atmosphere of uncertainty about policy and direction of travel. There is a great deal of difference between taking strategy A or strategy B to meet our targets. We could go through a whole host of investments and incremental technologies or incremental shifts in fuels that we use, or we could go down a different path and take a far more innovative and cleaner route. The trajectory of emissions would be very different as a result.

Choices are available and the body that we have created to advise us on that is the Committee on Climate Change. We believe that there will be a great deal of benefit in having closer ties between the Green Investment Bank, which I hope will be a delivery agent and will start to get pounds spent and concrete poured, and the legal structures that we have in place that help us to determine the path that we shall take. That is the purpose of the amendment and I am happy to withdraw it.

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[Lord Teverson]

I read an estimate somewhere of about £1.3 billion a year. But it all depends on the carbon price. That is the key thing, and we do not know that.

[Lord Marland]

Perhaps I can help. It depends on the market, which is not there at the moment to buy it. We investigated and got a lot lower offer than £6.62 for the price. That is six months ago, and I cannot remember what figures were involved. I am sure that we could invite the Department of Energy and Climate Change to provide some information in the normal course. It depends on a willing buyer and the price at which they are sold.

[Baroness Worthington]

I have done some back of the envelope calculations, and at about 100 million tonnes it will be in the region of £1 billion or £1.5 billion. That is not an insubstantial amount of money, and it will rise in time, which would mean that the bank’s initial deposit was paid back by those auctions in less than three years. That is an important context for the discussion.

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[Lord Marland]

I am very grateful for this probing amendment, which goes back to the creative thinking on how we can get more money into the Green Investment Bank. The point is that we have committed to invest £3 billion up to 2015. That is a set figure and we have set out our stall. It has been agreed by the Commission and any change would require state aid, which is a pretty significant process and which would take time. So the allowance of bonds or ISAs, which are incredibly valuable things, will not, I am afraid, be achievable within the timetable up to 2015. For the purposes of clarity, however, we are interested in exploring this—and why would we not be? We will be looking at this and debating it further. Clearly, we are not going to get investment into this bank unless it starts to get a track record, which most bond and ISA investors would want to see. When the bank has its track record up and running, we will carry on with this.

Of course, we would need another amendment in terms of Bank of England quantitative easing and so forth. We would need an awful lot more than that, let us be fair, because it is way beyond my pay grade to start discussing such figures and such immense subjects of finance. I am grateful for the suggestions. We recognise that they are constructive and we would like to carry on the dialogue over time. With that, I hope that the noble Baroness will withdraw her amendment.

[Baroness Worthington]

I thank the Minister for his response. A consultation would certainly help to flesh out some of these ideas and may bring forward even more. I would encourage the department to really think about how we can start a creative dialogue about such mechanisms. We have had four in front of us today, which are worthy of discussion. They are big topics in themselves, so a formal process would help us to understand some of the issues.

It slightly worries me when I hear that quantitative easing is above the Minister’s pay grade. We are not doing a marginal thing here; we are talking about investment in UK infrastructure. We have seen government announcements about a £40 billion stimulus of investment into infrastructure. If it is £40 billion, why can only £3 billion of that be put into the Green Investment Bank? We should not treat this as marginal. It should be centre stage in our stimulus package and in getting our economy back on track. That is why £3 billion is not enough and why we need to think about ways of getting it to be a much larger sum. A consultation would be very welcome, thank you. I beg leave to withdraw.

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[Baroness Worthington]

I do not have a number in mind. This is a newly created facility, which we have to explore. As there has not been a previous example of a bank like this being created in the UK, there is no precedent on which to draw. Perhaps we could look overseas. We have had examples cited from Germany; there are similar banks in Portugal, Spain and Holland; and the Australians are in the process of setting up their own investment vehicle. I do not have an answer, but I am sure that, with some study, the department could provide us with some guidelines or some examples from overseas.

[Lord Marland]

I am sure that the noble Baroness would agree that 20% would be a reasonable part of the bank’s investment. That is the right number because, as part of this agreement, the bank is permitted to make 20% of its investment in other sectors, a key one being marine energy, which I know is of great interest to the chairman. It was also of great interest to me in my previous department and is of great interest to the noble Baroness. It uses our great attributes of tides and waves. There is a lot of activity going on there. We have created marine parks, and I see this as a key future. As I said, the bank has 20% of its funds allocated to this area.

This is an interesting probing amendment. But where I would resist movement in this direction, other than giving confidence to the noble Baroness, is that if we start using words like proven technologies, I am not sure that we can create the right definition. We all understand what the noble Baroness means. Going back to the core of what the bank is set up to do, it is to demonstrate the ability to make both a positive return and a green impact. All those areas that the noble Baroness and I know well would certainly fit into this exciting new development. With that, I hope that she will withdraw her amendment.

Renewable Heat Incentive Scheme (Amendment) Regulations 2012

Debate between Baroness Worthington and Lord Marland

Monday 23rd July 2012 Grand Committee

[Baroness Worthington]

I thank the Minister for introducing this statutory instrument. This is a policy that we support. We hope that the regulations will be quickly implemented. There has been a slight delay, so the sooner we can get on with it the better. I will start with a general comment on renewable heat. The atmosphere does not care where we make our carbon savings. It is incumbent on us as Governments to realise the most cost-effective savings. We have neglected carbon reductions in the heat sector for too long, so these are very important regulations to help start, from a very low base, an industry in renewable heat.

The noble Lord, Lord Teverson, asked a couple of questions that I will add to. It would be interesting to see what has come forward so far, and to hear from the department why the take-up has been relatively slow. The area has been neglected for many years, so perhaps it is just a question of starting up. However, there are some issues to do with the design of the instrument that may be holding back take-up. The first is the question that my noble friend Lord Whitty raised about the industry perceiving a lack of clarity or certainty. Annual budgets are not ideal. We strongly recommend the introduction of minimum three-year rolling budgets. It is clear in the documents before us that we will not exceed the budget this year. If anything, we will see a shortfall, even of the reduced budget. We are reducing the budget by £38 million and we are not likely even to spend that, and it therefore seems odd that we are focusing on a piece of legislation that is not really needed at the moment. What is needed is a much greater effort by the Government to promote the mechanism, and confidence in it so that we start to see an uptake.

I have a question about where the £38 million that has been saved is to be spent. I suspect that the Treasury will claw it back, but could the money not be used to help promote uptake in this sector? I have no doubt that the sector will contribute to the UK’s return to growth. The CBI’s recent report into the contribution that green energy makes to the UK’s growth was very well received and researched. It estimated that a third of growth is green, and I therefore see no reason for the Government not to put their efforts behind these sectors and new technologies that can help to reduce our trade deficit, boost our economy and employ people.

Although I did not want to go on for too long, there is another question around the future visibility of the budgets. I have spoken to a potential investor in a large energy-from-waste CHP plant who says that for such projects not knowing what the budget would be post-2015 simply means that it would not be possible to get sign-off on that project. The fact that there is no visibility at all of what the budget would be post-2015 will cause delay and prevent that potential investor making that investment. That issue needs to be addressed.

That is all I will say for now. This is an important sector. It is far more efficient to use renewable energy, particularly biomass. With such heat, you do not see two-thirds of the energy wasted up the chimney, as happens in a coal-fired electricity plant. This sector needs to be supported and we would like the Government to do more to make sure that there is a good uptake and that we hit those targets of 12% renewable energy in the heat sector. We support the regulations and look forward to the market developing over time.

[Lord Marland]

My Lords, I am, as always, grateful. It is a common theme among those of us who debate the energy sector that we agree on many things. I am grateful for that.

The noble Lord, Lord Teverson, compliments the Government on their foresight in this issue. He is a man of deep knowledge and insight. We are grateful for his words. He asked what he called a couple of questions that turned out to be three, but mathematics may not be the noble Lord’s strong suit. I should just point that out.

The most important and relevant thing here is that this RHI scheme is the first of its kind. That is just one, I should say to the noble Lord, Lord Teverson. There will therefore be an element of trial and error, and we will have to learn from the FITs situation and make sure that we have escape routes if the situation gets overheated. That is surely and simply good housekeeping in terms of the regulations. The noble Lord asked what the take-up of the scheme has been and what types of businesses have been involved. It was a rhetorical question because the noble Lord is closer to these industries than I am but, as he knows, a lot of people in agriculture are heavily committed. I understand that a company that makes umbrellas has taken up the scheme. A wide cross-section of people has done so. In order for noble Lords to go away with a heart full of hope, the statistics are that by 11 July, Ofgem had received 670 applications, of which it had accredited 128. Ofgem had rejected four—therefore, not too many. The breakdown is: 517 biomass, two biogas, 34 solar/thermal, three biomethane and 53 heat pump schemes. I hope that that adds up to 670.

The point is that it is not about money. It is not about whether the cost is £17 million, £38 million or £50 million, but about the number of schemes that are taken up. They could be small schemes, but I think that the figure of 670 represents a pretty good stab at things. We are hoping that 2,000 might be taken up.

I am sorry if the noble Lord, Lord Whitty, is forlorn, although he is also wise. He is quite right: carbon savings are critical and we must be committed to them. I applaud his comments about making use of heat wastage and coming up with plans that maximise heat so that we can convert. That is fundamental good housekeeping and we are committed to that.

He says that we should have a lacuna suite of measures, which is a bit lost on me, but we have room for explanation later. He makes the point that we can turn the tap off with a week’s notice. In fact, it is a month’s notice. We will advise people a month ahead that we are getting to the end of the spending year and that they should be prepared. That does not mean that they cannot apply for the following year, which is entirely acceptable.

I do not disagree with the noble Baroness, Lady Worthington, and the noble Lord, Lord Whitty, when they talk about having perhaps a rolling budget or a rolling figure, but before committing to that I would like to introduce them to some Ministers and officials at the Treasury. A day spent there will help them realise that that is not the type of thing towards which they will be disposed.

I thank the noble Baroness, Lady Worthington, for offering her support. It is important for government and for the energy industry that both parties are seen to be supporting the right things. I agree with her that what we do must be done with confidence and that we must send a clear message to the sector about we are doing. Learning from past mistakes and acting upon them send a clear message that we are listening and learning, and that we have seen how things go wrong and are acting upon them. That is what we are doing with this legislation.

[Baroness Worthington]

I understand the need to learn from mistakes. I take very seriously the Minister’s comments about the Treasury. It is apparent today in the newspapers that there is a divide within the coalition Government over the right way forward. When we think about how we hit our carbon targets, let us think about least cost but also look at what is happening and what is being supported by the market. These budgets are very small. Seventy million pounds is not a lot of money in the grand scheme of things. Growth potential is actually great. Instead of being rigidly attached to these budgets, let us have a rational discussion: if something is going well and carbon is being reduced, we should not be counting pennies and penny-pinching at the expense of an industry that has great growth potential. I urge that we do not get too obsessed by these small-scale budgets, but think about the bigger picture. If things here are succeeding that is good. We do not want to cut things off just because they are becoming successful.

[Lord Marland]

I am grateful to the noble Baroness, Lady Worthington. The reality is that in times of greater largesse these things would be considered, but we are not in such a time. We are in a very tight fiscal time. In such financial circumstances, the Treasury has to be careful and clear about what we spend annually. There is no conflict between the Treasury and our department about this. We understand the fiscal rigour that needs to be put into this mechanism. We are giving plenty of support to this take-up. As I indicated earlier, we are satisfied with the number of people who have taken this up, but in financial terms we have not had the take-up that we would have liked. In an ideal world we would have liked that. Unfortunately, at the moment the world is not ideal, but we continue to press on.

Energy: Nuclear Power

Debate between Baroness Worthington and Lord Marland

Tuesday 29th May 2012 Lords Chamber

[Lord Marland]

Yes, representations. I thank my noble friend the Leader. It is marvellous to have so many educated people in the room. I have lost my way now, but my noble friend has the gist.

[Baroness Worthington]

My Lords, the Government’s daft—I am sorry, I mean draft—energy Bill has been described as a potential train wreck and a deterrent to investment. Can the Minister please explain why the Government have chosen to ignore the considerable expertise and experience on energy issues available in this House by giving noble Lords just two weeks, one of them in the recess, to submit written comments to the pre-legislative scrutiny process? Do the Government not wish noble Lords to help stave off another contribution to the omni-shambles?

[Lord Marland]

Naturally, I should congratulate—

Energy: Gas

Debate between Baroness Worthington and Lord Marland

Tuesday 29th May 2012 Lords Chamber

[Lord Marland]

Storage is important, but one has to remember that we have 16 days of storage and planning permission for a 20% increase on that. Storage is therefore increasing, but the fundamental fact is that 150% of the nation’s supply of LNG is capable of being delivered and processed very quickly. So I do not think that storage is the be all and end all, particularly as we have three dedicated pipelines—one from the Netherlands, one from Norway and one from our own supply—which give us about 80% plus of our supply. I am therefore not as hung up on storage as the noble Lord might expect me to be.

[Baroness Worthington]

My Lords, I thank the Minister for his comments. I am sorry if I caused him to lose his way; perhaps I shall try an easier question. Although gas as well as electricity is used for heating, the excuse given in the electricity market reform Bill for the Government focusing just on electricity is that there will be a greater uptake of electrical heating. What are they doing to promote the uptake of electrical heating and will they regulate to prevent the installation of gas into new buildings?

[Lord Marland]

That is a much easier question, I must admit, although it is not one to which I have a ready answer—I might refer to the Leader again. Gosh, is that the time? I really have now lost my way, again. We are encouraging all forms of heat into homes. It will be price driven and consumer demand driven, and it is fundamentally important that the consumer has the best possible pricing and the cheapest possible electricity and heating, so the Government are doing everything they can to ensure that.

Energy: Voltage Optimisation

Debate between Baroness Worthington and Lord Marland

Monday 12th March 2012 Lords Chamber

[Baroness Worthington]

To ask Her Majesty’s Government what measures they are taking to promote lower electricity bills through the uptake of voltage optimisation, as installed in 10 Downing Street.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, energy efficiency is the cheapest way of cutting emissions and cutting bills for customers. My department launched the Energy Efficiency Deployment Office, EEDO, earlier this year to drive energy efficiency across the UK economy. EEDO will build on our existing policies, which are already encouraging the uptake of energy efficiency measures such as voltage optimisation.

[Baroness Worthington]

My Lords, I thank the Minister for his response. However, is he aware that voltage optimisation is not receiving all the support that it is due because of its exclusion from the energy efficiency rating system of buildings, known as SAP? This effectively excludes it from many policies that support energy efficiency and is an example of how we adopt an extraordinarily bureaucratic approach to energy efficiency, which is hampering innovation in this area. I hope that he will pledge to do all he can to remedy the situation so that voltage optimisation receives the support that it deserves.

Energy: Carbon Capture and Storage

Debate between Baroness Worthington and Lord Marland

Wednesday 2nd November 2011 Lords Chamber

[Lord Marland]

I am delighted to say that on 31 October EDF put its 30,000-page document in for planning for the first new nuclear power station to be launched for 27 years. I can only totally agree with the noble Lord.

[Baroness Worthington]

My Lords, I am very grateful for the Minister’s comments about gas. It is certainly true that if we could be back in time we should have had a much broader approach to the competition. How does the Minister intend to communicate to the Treasury the lessons learnt from this negotiation? This is an important technology and cannot be done on the cheap. We must provide sufficient funds to get this technology out and proven, so that we can become a world leader in it.

[Lord Marland]

I am very grateful for the support of the noble Baroness, Lady Worthington. I can confirm that the Treasury has agreed to £1 billion of support for this, in addition, one hopes, to European money for which we are applying. In my own view, that is a very significant figure in these current times to support this project.

Energy: Feed-in Tariffs

Debate between Baroness Worthington and Lord Marland

Monday 31st October 2011 Lords Chamber

[Baroness Worthington]

My Lords, I am grateful for the Minister’s comments. My concern is that this is merely about the Government’s priorities, which are being set by a modelling of the energy system that is proving to be utterly incapable of modelling what happens in the real world. This is now the second set of changes whereby a successful industry is essentially being cut off at the knees because of an unexpected success rate, when this is something that we should be championing and backing. The Government must accept that if their modelling is incorrect, they must go back to first principles and work out which technologies are going to deliver the step change that they describe. No matter how much money is thrown at some technologies, they may not succeed—I am thinking of CCS and the current generation of nuclear.

The Government saying, “This is just too successful, we cannot afford it”, is not a good answer. We must go back to first principles and ensure that our successes continue to be successes. If they are having trouble now with feed-in tariffs, they will have even more trouble when they look at energy market reforms and try to fix prices for the long term on the big generators. That should be settled by the market. I am very concerned that the modelling is incorrect and that trying to fix prices is just the beginning. We should probably look at market-based solutions.

[Lord Marland]

The noble Baroness is completely right. The modelling was incorrect. We inherited it and we have sought to get it right. As I asked earlier when I talked about government priorities, do we think that this is a game changer in electricity supply and that it is in the best interests of the consumer? The answer from Consumer Focus is no. As regards the game change in the electricity supply of 0.1 per cent, even if every house had them the figure would get to only 0.3 per cent. Therefore, this goes down the list of priorities. I am afraid that it is not a government priority, given the massive problem that we will have for electricity in the 2020s.

Energy: Gas Supplies

Debate between Baroness Worthington and Lord Marland

Wednesday 12th October 2011 Lords Chamber

[Lord Marland]

I obviously recognise his strong track record of expertise. It is normally about this time of year that the House has a searching Question from the noble Lord and I am grateful for it. I can also assure him that this Government are deeply committed to storage. We inherited seven storage units for 16 days’ supply, we have four under construction and we have granted planning permission for another nine storage units. We take this matter seriously.

As for the other question about European gas storage compared with ours, we have to remember that 40-50 per cent of our gas supply comes from our own resources, 20 per cent comes from a dedicated pipeline from Norway and we have a good relationship with Qatar, with a guaranteed 10 per cent from there. So we are not in the same position as, perhaps, Germany, which is dependant upon the Eastern bloc for its supply. We get less than a half of one per cent from that source.

[Baroness Worthington]

Does the Minister agree that one way of reducing our dependence on imported gas is to invest in renewable forms of heating fuels? When will the long-awaited renewable heat incentive be open for business? At this rate, it will not be ready for people to invest by next winter, let alone this winter.

[Lord Marland]

I think the noble Baroness touches on the problem of Europe agreeing our tariffs for the renewable heat incentive where we propose aggressive and supportive tariffs for people in biomass and creating biomass boilers. They were rejected by the European Union, which said that they were unfair. We have looked at them again in earnest and certainly by the end of November we shall have responded to the EU with a negotiated position. We are deeply committed to it. As the noble Baroness rightly pointed out, it is fundamental to our energy security supply that we wean ourselves off oil in particular and coal, which are no longer supplied by ourselves.

Nuclear Reactors

Debate between Baroness Worthington and Lord Marland

Thursday 7th July 2011 Lords Chamber

[Lord Marland]

If only my O-level science teacher could see me now. I am very grateful to the noble Baroness for that question because I have learnt a lot about thorium recently. For those who wish to know, it is named after the Norse god Thor. It comes out of monazite sands, which are largely found in India and Norway, and is generated by a sifting process. The noble Baroness will be pleased to know that it is dimorphic, which I am happy to explain means that it changes from face-centred to body-centred. However, other noble Lords are far more qualified than me to inform us about thorium. All I would say is that it requires two neutrons to process it rather than one. The noble Baroness can find all sorts of other facts in Wikipedia, as, indeed, did I.

[Baroness Worthington]

My Lords, does the Minister agree with me that this is a serious topic? We have just seen a disaster in Japan that has reminded us that existing nuclear technology has inherent problems. Thorium is much safer. As my noble friend said, it does not generate waste and cannot lead to the proliferation of weapons and to terrorism. It is a very abundant and available source of fuel, unlike uranium. Given those advantages, does the Minister agree that we should have a programme to develop proof of concept of this technology?

[Lord Marland]

I am very aware of the noble Baroness’s views and read about them in the Guardian a couple of weeks ago. By the way, that was an excellent and most thoughtful article on this subject. However, the reality is that the nuclear accident in Japan to which she referred did not cause loss of life and we have reacted calmly to it. We are committed to the course that I have just amplified. Government funds are not available at the moment to explore new technologies. However, as I said earlier, if the National Nuclear Laboratory comes up with other suggestions at the end of the summer, we will be very happy to listen to those and explore them further.