Energy Bill [Lords]
Debate between Lord Lilley and Philip Boswell
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to follow the right hon. Member for Wokingham (John Redwood). In their manifesto for the 2015 general election, the Conservatives undertook to
“meet our climate change commitments, cutting carbon emissions as cheaply as possible, to save you money.”
Although I welcome action towards achieving this goal, and particularly the introduction of the OGA, recent action seems at odds with the climate change agenda. While I agree with the Secretary of State when she says that this is one of the biggest challenges facing this generation, with the advances in technology, clean renewable energy can be less expensive to the consumer than traditional carbon-based energy.
Philip Boswell
The £92.50 strike price at double the current rate for Hinkley C, guaranteed for 35 years, is a case in point. As for alternatives that might be cheaper in future, one possibility is compressed air energy storage, allied to the admittedly intermittent nature of wind power.
I could also tell the right hon. Gentleman about advances in technology in the context of the carbon capture projects in Scotland and Yorkshire. Before coming to this place, I was fortunate enough to work in the energy sector for 13 years, and for some time I was Shell’s contract leader for the carbon capture project. I moved it from the coal-fired power station at Longannet to the Peterhead gas-fired power station, so I understand all too well what “advances in technology” means.
When we were talking about the amine process—before the rug was pulled from under our collective feet—we likened the technology to that of the mobile phones of the 1980s; the right hon. Gentleman is not young enough not to know about those clunky phones. The process would have captured 90% of emissions. Given the advances in technology, were we to retain and develop that process, the figure could rise to 92%, 94% or 96%, with ever-reducing costs. This was a missed opportunity: that is the point that I was making.
Creating market incentives to achieve the two-pronged goal of cheaper and cleaner energy requires a reworking of the United Kingdom Government’s involvement in the energy sector, and a rethinking of their relationship with energy. In the Bill, the Government propose to close the renewables obligation to new onshore wind projects from April 2016, a year earlier than originally planned. Given that the RO is the only current mechanism that enables large-scale onshore wind to enter the power market, the proposed closure poses a significant threat to the future of the onshore wind sector and the United Kingdom’s growing green manufacturing, export and investment potential, while increasing the difficulty and costs associated with meeting the challenging decarbonisation targets.
In the House of Lords, the Government proposed a number of grace periods designed to allow projects that had already committed significant investment on the basis of an expectation to deliver before April 2017 to proceed. Peers rejected the clauses on the RO closure, calling for the Government to respond more fully to the substantive concerns expressed by industry about the closure and the grace periods. I support that position. Investors and developers need clarity from Parliament on the future of the renewables obligation. Without that certainty, investors will be unable to proceed with projects that were expected to be delivered on the basis of RO grace periods. The Government must also explain how new onshore wind projects will in future be able to access and compete in the market for low-carbon power.