Lord Lilley
Main Page: Lord Lilley (Conservative - Life peer)
Gregory Barker
We are absolutely committed to giving consumers a good deal, which involves a high range of competition, new entrants and more choice. This is not some Stalinist five-year plan; this is a brand new market. It is perfectly valid to suggest that there should be subsidised interest rates, but let us hear how the Labour party is going to pay for that and how much Labour is going to put on consumer bills. We have a proposal for targeted support from the green investment bank, but the hon. Lady’s blanket approach, which does not understand economics, would be very costly for everybody and force up bills for families.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
8. What comparison he has made of the potential capital cost of meeting the Government’s 2020 renewable target using wind power backed up by open-cycle gas plants and meeting the same level of electricity demand using combined-cycle gas plants.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The capital costs of gas plant are slightly lower than those of onshore wind, although the operating costs are much higher and more unpredictable. An electricity supply reliant on gas would therefore be cheaper to build at present, but it would not offer the security of supply that the country needs. A responsible energy policy requires a diverse energy mix, combining gas, renewables, nuclear and fossil fuels with carbon capture.
Mr Lilley
I am grateful to my hon. Friend for his answer. Can I take it from the fact that he does not give specific figures that he agrees with the figures in the report by Professor Gordon Hughes, the professor of energy economics at Edinburgh university, “Why Is Wind Power So Expensive?”? The cost of providing a given amount of power by wind plus open-cycle gas turbines is greater than the cost of using efficient combined-cycle gas turbines by a factor of 10. Is that really something that the consumer can afford, if it saves only £500 million a year in operating costs?
Charles Hendry
I do not agree with Professor Hughes, and neither does the Committee on Climate Change or the Centre for Energy Policy and Technology at Imperial college. One of the main differences is the assessment of how much wind might be necessary, and we believe that the professor has overestimated that by a third, which automatically reduces the cost by £30 billion. Furthermore, he has not looked at the range of alternative back-up provisions, including interconnectors, or at the likely price of gas in the future.