Electricity Market Reform
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 5 months ago)
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Lord Marland
It is always a joy to hear my noble friend—as indeed he is. Let me quote him back a figure on prices. Is he not aware that electricity prices went up 18 per cent in one week? Forget 60 per cent in the time span he is talking about; they have gone up 18 per cent in one week. Why? Because we have been reliant on fossil fuels imported from other countries, with no control over security of supply.
With due deference to his great knowledge and to his great achievements as an Energy Minister and in the Treasury, he must be aware that there has been no investment in the energy infrastructure of this country in the past 20 years. The Government of which he was part and the previous Government were part of that. He must at least give credit for the fact that we are about to embark upon a massive investment and that, in order to establish an investment, you have to set out a pathway on which people have clarity for their investment.
My noble friend has quoted various institutions to me, and I would like to make him aware that we have consulted and discussed this with every energy supplier in the country and with a wide range of people. By and large, as much as one can possibly tell, this has been universally applauded by the industry and those who are seeking to invest. We may be proven wrong but, at the moment, it is all looking quite good.
Lord O'Neill of Clackmannan
The Minister has to take some credit for making another stab at market reform. It is not the first one for 20 years; there were two in the late 1990s—the NETA and BETTA reforms—so he is wrong to say that nothing has taken place in this matter. However, those reforms are now out of date. We need reassurance for investors and I think that, to an extent, we will get that from this document. However, I am not sure whether the social dimension and the cost to the consumer will necessarily be given equal weight.
The emission performance standards rely heavily on carbon capture and storage being realised—taken out of the laboratory, on to the factory floor, produced and then adapted for use in power stations with turbines in excess of 400 megawatts—but that seems to be a long way away. I worry that, come 2015 when we have the large plant directive, we will deny ourselves access to coal-fired power stations and will not have CCS available by that time. We could, therefore, well have a dash for gas on the scale that we had in the 1990s, with all the price implications that the Minister has already stated. When does the Minister expect carbon capture and storage to be available to British power generators, and particularly to the coal-fired industries? Unless we get that assurance, this will be, in large measure, a pipe-dream of the Government. I say that more in sorrow than in anger. We need to have a clearer indication of when we are likely to get carbon capture and storage. My inclination is that it will not come before 2020 at the earliest.
Lord Marland
The noble Lord, Lord O’Neill of Clackmannan, is an expert in his field. He also knows that I am responsible at the moment for leading the negotiation on carbon capture and storage. I am delighted to make the Statement in your Lordships’ House because it withdrew me from the negotiation process where we are in something called lock-in at the moment. I will not venture to suggest the outcome of the negotiations. They are extremely determined and it is a very complex programme. At the moment, we have three energy providers and me in one room at different times trying to bottom out where we can get to. I have been set the task of achieving this in operation by 2016. We may or may not get there. I am not going to predict one way or the other because it is a quantum leap. We must not underestimate the extent of that.
The noble Lord is quite right that a number of our energy policies are predicated on carbon capture and storage—but by no means all of it. The fact is that the EPS provides for gas. As my noble friend Lord Lawson would ask me to say, gas is fundamental to the future. I completely support his view on that. It is much less carbon intensive, will be fundamental to our electricity generation going forward and will be a large proportion of it.
Radioactive Waste Management: Science and Technology Committee Report
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I am very grateful to noble Lords who have spoken, particularly to the noble Lord, Lord Broers, who instigated this valuable debate, and to the committee for its work and recommendations. We have covered a number of key areas, and I hope I cover some of the questions raised, if not all of them, in my remarks.
We all recognise that radioactive waste management is complex and probably not the most exciting area in the world. However, it is a very complex and important subject, particularly as we move into the arena of new nuclear, which has not happened for 27 years. I do not want to underplay the fact that we have given the green light for new nuclear where nothing has happened in the past. This is a very big strategic decision, and I am glad it finds favour on all sides of the House. In the past, I have complimented the contribution by the now opposition Benches in changing public attitudes towards new nuclear when they were in government. That gave us a springboard, but we acted upon it, and it is important that that is taken on board. I also want to make it clear that the Government take these issues with great responsibility. Ultimately, we will make the decisions. We welcome reports and advice, and we are very open to them, but ultimately we will decide how to manage radioactive waste safely and fairly using the available evidence and analysis and the contributions that we get from all sides of the House.
The NDA is the UK’s competent body responsible for that, particularly in respect of nuclear waste. The NDA reports to government. I compliment the previous Government, who sorted out a serious problem in the management of the NDA. I believe that the NDA is now a well run organisation. We in government have a great deal of confidence in it. It reports to me personally, I have an excellent working relationship with it, and I want to pay compliment to the work it is doing. As a Government and as Members of this House, we must trust and empower it to operate and act in this extremely difficult area.
I shall refer to the progress we have made on geological disposal. As all noble Lords have said, this is a timeline that most of us cannot associate with. I may be around in 2040; some noble Lords may not be. I am keeping my fingers crossed that I will be. The noble Lord is quite right that, if we look backwards, 1890—when some of the noble Lords opposite were born—seems like an awful long time ago. The noble Lord, Lord Hunt, knows what I am talking about, I think. It is a timeline that is very difficult to associate with and a timeline that we have to improve. It would be irresponsible if we did not. However, it is not entirely dependent on us. It is set by the co-operation of the people of Cumbria, who are critical to this process. Since we have been in Government, we have published an indicative timeline for implementation. As I have said, that is not enough. We want to reduce it. We have agreed to produce an annual report to Parliament on progress and we are committed to improving the timeline, which noble Lords will see as we progress. We have established the Geological Disposal Implementation Board chaired by my colleague the Minister of State for Energy, Charles Hendry, to enhance accountability for delivery.
We have carried out and have published the initial geological screening of the volunteer area in West Cumbria. We have supported the second round of the West Cumbrian MRWS Partnership’s formal public and stakeholder engagement programme and have agreed a strong funding settlement for NDA in the latest spending round to enable it to make progress in this area. However, it is much more important that we send messages to the people of Cumbria that Cumbria can become a nuclear place of excellence. We have indicated that it can be the site for a new nuclear power station.
I shall come to the Mox plant later, but the hopeful signs of such a plant, which have been sitting in the wings for years, will give good encouragement to the community. I hope that the community will feel that we are supporting them and establishing them as a centre of excellence, and that they will respond by supporting us in the geological storage timelines.
On Mox, on Monday, I launched the consultation on the management options for the UK plutonium stocks. We have the largest plutonium stocks in the world, as the noble Lord, Lord O’Neill of Clackmannan, has rightly said. I think we agree that it is time to get to grips with this issue and to develop a coherent, strategic and comprehensive plan for the future. There is no point in having this enormous amount of waste sitting there when we can turn it, we hope, into revenue or less cost. That is what the consultation will look at.
I have done some cost evaluations with the NDA. We have sought advice from a number of the experts in this field in reviewing it. Through this consultation process, we should be able to deliver clear signals, which is our ambition. But if at the end of the day that ambition cannot be met with reality of cost, of course we will not do it. As I mentioned earlier, it sends clear signals to Sellafield and the people of Cumbria that we are very committed to that part of the world.
The noble Lord, Lord Broers, and other noble Lords rightly mentioned the importance of high hazard. I was deeply concerned when I visited the high hazard sites and saw the lack of progress. As a result, the first thing I did in the spending review was to negotiate with the Treasury, in very difficult times, an increase in spending for the NDA so that we could tackle and confront these issues head on. We have reduced by two years the timescale of dealing with the emptying of silos. We should have completion of that by 2016 to 2018. This fundamental increase in timescale needs to be carried out because it is in the national interest. We are putting real energy and significance into this. The NDA is under no illusions that this is the main priority of this Government.
Lord O'Neill of Clackmannan
The Minister made reference earlier to the ambition of creating a centre of excellence in the north-west and Sellafield. Does he agree that such a centre of excellence at present exists in so far as we have the National Nuclear Laboratory, which is engaged in fantastic work and will greatly facilitate the achievement of the ambitions that I think we all share?
Lord Marland
I am grateful to the noble Lord, Lord O’Neill of Clackmannan, for pulling me up on that point. He is right that a centre of excellence exists. There is no question about what he has just said. The most important point is that we continue to have Cumbria as a centre of excellence and that in times of recession that is put beyond doubt for the people who live there.
CoRWM has provided three formal reports to government since 2008, alongside numerous position papers and regular informal advice. The three formal reports cover the government policy areas of geological disposal, interim storage and associated R&D. I accept the important point that the papers should be clearly marked, placed and presented. CoRWM now explains the nature of its papers, but I take on board the point that was made.
We have responded to the reports and are committed to responding to all CoRWM’s substantive advice. We look forward to further discussions with it and to receiving ongoing advice, as we do from all experts in this area, particularly the committee.
I turn to the committee’s recommendations. We believe that there should be the right mix of personnel, as the noble Lords, Lord Broers and Lord O’Neill of Clackmannan, rightly mentioned. Over time, the precise skill set required may vary. We need to ensure that CoRWM changes correspondingly to confront the various issues arising out of contemporary nuclear needs. Currently, the committee is split between two-year and four-year appointments. We will look to refresh the membership in time for the current two-year terms ending in 2012. The committee may also co-opt additional expertise to support its examination of specific topics and utilise other appropriate means of securing expert input, such as sponsored meetings or seminars.
I return to R&D, which is of fundamental importance and again touches on the matter of a centre of excellence. We have instructed the NDA to reconstitute the R&D board and to co-ordinate an R&D strategy. I say in answer to the noble Lord, Lord Grantchester, that we will look at its recommendations extremely favourably, as we have done so far by increasing our financial support for it.
The noble Lord, Lord Teverson, referred to fusion. As he well knows—he asks me this as a trick question— that is not a subject for my department. I would be happy to go at length into the subject of fusion, but as he is closely associated with BIS, I can with great confidence expect him to discuss it with that department.
The noble Lord, Lord Grantchester, drew my attention to a point that I had made on the subject of nuclear security. We are undertaking a significant review. I thank previous Ministers, including the noble Lord, Lord Hunt of Kings Heath, who kindly gave me advice on the subject. He indicated that we should consider a review of the current and future security of nuclear sites, because the issue is ongoing and we must make sure that they are fit for purpose. I am undertaking that review at the moment. It is throwing up a lot of interesting subjects and we will report on it in the near future. I assure the House that this is a high-priority item for us, and that I will be happy to keep noble Lords involved in any decisions.
In summary, I hope that noble Lords, and in particular the noble Lord, Lord Broers, do not think that we are sitting back and accepting airy-fairy timescales, or that we are not committed to doing things. We have increased the spend on solving our waste problems; we are attacking the incredibly long-term geological timescale for dealing with waste; we are looking at how we can make the best of our plutonium stock and turn it into an asset; and we are taking very seriously the high-hazard problems that we have encountered. I commend my fellow Ministers and officials for the great amount of work that they are doing. I also thank the committee and all those involved in the subject for the great advice that they give us. We have an open-door policy and welcome advice and support. This is not something that can happen today or next year; it is a 10-year programme that transcends governments, and all of us must work together with great energy and commitment.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 10 months ago)
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Lord O'Neill of Clackmannan
I imagine that this will be part of the electricity market review. We cannot keep adding more subsidies provided by often impecunious consumers to the research fantasies of the British generating industry. There has to be some degree of control. One would imagine that the electricity market review, to which the Government are committed, will give proper consideration to this so that we do not have the creeping incrementalism that results in the submerged and disadvantaged groups in the country subsidising such research programmes.
Lord Marland
The noble Lord makes a good point. We have been looking at this matter very carefully for the past month or so. There is a framework in place; we have a deep geothermal challenge fund and have been allocating funds towards research. There is a ROC that is currently cast in stone and we are in a very adequate space to take this issue forward. I invite my noble friend to withdraw his amendment.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 10 months ago)
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Lord Marland
My Lords, I am grateful to my colleague the Energy Minister, Charles Hendry, for coming down with his tablets from the other place to listen to the quality of this debate and indeed, according to the noble Lord, Lord O’Neill, the “claptrap” that I am about to tell him. I am sure that he did not mean that.
Lord Marland
We will wait and see. I am disappointed to hear that from a man who was on the government Benches for 13 years. We all know that smart meters started before we got into government and that consumer protection was not high on the noble Lord’s list then. Maybe he was internally debating with his own party; I hope so.
I am also extremely grateful to the noble Lord, Lord Whitty, and the opposition Front Bench, who telegraphed to us their message on these important issues before this event. It is a fundamental subject for us to address. At its heart, as the noble Lord, Lord Whitty, would say, is unwelcome sales activity on the one hand and interoperability between companies on the other. Those are the two salient points of his amendments.
I begin with a couple of factual issues to set the scene. We estimate that there will be 46 million smart meters. The noble Lord, Lord O’Neill, was right on that, which is excellent. We know that British Gas has rolled out around 250,000 so far; it told me so this morning. We also know that the average cost to British Gas is around £300 over a lifespan of 20 years. I hope that that deals with the comments of the right reverend Prelate.
On the thrust of this argument, it is absolutely fundamental that customers are protected from unwarranted and unwelcome sales activity. However, we must not ignore the fact that at times sales activity may be welcome, which we must bear in mind in legislating on this matter. Thanks to the previous Government, we already have powers available to us for consumer protection in the Energy Act 2008, which stands at the moment. It is fundamental that Ofgem is carrying out what I could not believe was called a “spring package” and will issue recommendations on how interoperability and the various issues that are absolutely fundamental to smart meters will be rolled out this summer. As I said, the Energy Act gives us powers to act on this. I do not believe that, as the noble Lord, Lord O’Neill of Clackmannan, suggests, companies go into smoke-filled rooms for clandestine meetings with Ministers to discuss these things. These matters have been discussed and aired openly because it is to companies’ advantage to work with the customer. After all, it is the customer who will be taking these on board.
As I said earlier, I am so concerned about these two issues that the noble Lord, Lord Whitty, has raised that I had a meeting with the chief executive of Centrica this morning. We went through it line by line. I must say that I was impressed by the way in which that company is determined to roll this out. I am also impressed that it is co-operating in a very difficult technical area with Scottish Power and E.ON and has relationships with RWE and EDF. Understandably, they are looking at how the technology develops, particularly in the use of telephones. British Gas is currently working with Vodafone and we hear now that British Telecom has come in with a product. It is a complicated product that is evolving. As Ministers, we will monitor and make sure that this has the consumer confidence that all of us in this Committee want to see. With that in mind, I hope that the noble Lord will withdraw his amendment.
Lord Marland
The noble Lord has such talent in one body. So we have 20 days’ storage. The noble Lord, Lord Hannay, said quite reasonably that we should compare ourselves to other countries. Obviously, Germany and France have more than that, but they do not have their own gas supply. They are entirely reliant on what used to be called the old Iron Curtain countries for their supply. I would be concerned about the security of supply in the light of some of the endeavours that they have been through. We in this country still produce 50 per cent of our own gas and we are still finding more gas, which will not, admittedly, stop the supply being eroded, but will decelerate the erosion. We have a secure contract. The noble Lord, Lord O’Neill, suggested that we must have good long-term contracts; we probably have as good a long-term contract as any country in the world with Norway, from whom we receive 20 per cent of our supply, managed by Shell, the former company of the noble Lord, Lord Oxburgh—and a marvellous job it does as well. My own view is that we have a very significant secure supply.
Let us look at the matter of storage. Yes, we have given planning permission to various endeavours, but at the moment the cost of storing gas is significantly higher than the price of storing oil, so not unsurprisingly people are giving due consideration to the commercial viability of this project. Of course, part of the thing that we must do in government is to weigh up the pros and cons and absolutely ensure that the nation has security of supply, which is fundamental to all Governments, and to be able to gauge that. We have not had a greater opportunity to gauge that than the unfortunate months of November and December last year, which were beyond record for bad weather, when we came through with flying colours. There were certain countries—and we shall not mention the names—that did not do so. Given the tests that we have had, we have come through with flying colours.
We should not be complacent, of course. That is why we have acted swiftly to engage in planning permission and to make it much easier for big infrastructure projects to be authorised quickly. But we cannot sit in government and insist that certain things are going to be carried out unless they have gone through proper consultation. In many ways, the noble Lord, Lord Jenkin, gave me the answer to the question posed by his excellent amendment. Ofgem is already considering our requirements and carrying out a significant code review consultation, which will be produced at the end of February, on the resilience of our gas energy supply. It would be right for us to take on board what Ofgem has to say, to review it and then carry out what powers are necessary to ensure that, if there are areas that need to be dealt, the Government deal with them.
I hope that that sets the scene for the current gas supply situation. I hope that it answers a number of the excellent questions that noble Lords have asked and allows my noble friend Lord Jenkin to withdraw his amendment.
Lord O'Neill of Clackmannan
Perhaps the Minister could answer two questions. First, could he give us the number of billion cubic metres we have in storage at present? Secondly, am I right in saying that the effect of the amendment would be permissive rather than prescriptive? If it is only permissive, why not include it?
Lord Marland
I thought that I answered the question on the storage available. I do not know precisely what amount is in storage as of today, but we have capacity for 4.6 billion cubic metres with another billion cubic metres of capacity in construction.
As for enablement, it is not for the Government to be too prescriptive. Already, in months, 25 per cent of gas storage is under construction. Already, we have tested that against difficult winter conditions. Already, we have found that it is satisfactory. As I mentioned, Ofgem is carrying out the review, so it would be wrong at this point in proceedings to pronounce on findings that might be different from those of the Government or us in this Room. We should listen to what it has to say, take it on board, and perhaps use powers available to us.
Let us not underestimate the difficulties. The noble Lord referred to Gateway, a company with which I am familiar. Its issue has been one of planning. The problem has been in Lancashire, if my memory serves me right. There is nothing that we in government can do about that if the local authority does not determine that it is the right thing to have.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 10 months ago)
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Lord Marland
My Lords, I am grateful to the noble Baroness for this valuable contribution which should be considered carefully. The idea of a new chapter in this Bill for energy efficiency in the social rented sector is a good one but I suggest that it should be inserted elsewhere in the Bill as a new chapter. However, that is by the by.
The intention of Chapters 2 and 3 of the Bill is to provide powers to improve the energy efficiency of private rented properties, should they be required. It is not the intention to intervene in the same way in the social housing market which we believe has made some of the biggest energy efficiency gains in recent years due to the priority that has been given to the investment in social housing stock. For example, the social housing stock is 10 points higher than the private sector, which answers the point of the noble Baroness, so it is already ahead of the curve.
To pick up on some of the concerns of my noble friend Lady Noakes that we should not regulate unnecessarily, if the social housing sector is leading the market, which it is, we should not start imposing regulation on it now but we should review it at a later stage to see whether it is still ahead of the game.
I am grateful to the noble Lord, Lord Whitty, who as always makes a valuable and learned contribution in this area. Decentralisation is a big issue and is a subject for local authorities as well as the housing authorities but I do not think it is a matter for this Green Deal. We should take it into consideration in the overall scheme of things for some interdepartmental progress and I take on board what he said. I invite the noble Baroness to withdraw her amendment.
Lord O'Neill of Clackmannan
I am disappointed by the Minister’s response. Would he be prepared to assist in the drafting of something that would go in after Clause 2A, as he suggested this is the shortcoming of this amendment? The fact that local authorities and social housing organisations have been in the van of improving their housing stock does not mean that they should be left to take care of themselves. Funding arrangements of an easier kind may well become available. One would have thought that, if we are to continue to encourage them in their good endeavours, it would be desirable to include them in this, and for us to know—if not exactly, then a little better than we do already—the state of the stock and the work that is still to be done. Therefore, a review of energy efficiency would be very helpful. In other parts of the UK, including Scotland for many years, there have been regular housing reviews, which have been extremely helpful in determining the policy of the former Scottish Office and now the devolved Scottish Government. We are able to track over time the changes in the character of the housing stock and the shift in housing standards. Therefore, it would be unfortunate for people in the social rented sector, who tend to have longer-term tenancies than many privately renting tenants. People in the socially rented sector are usually long-term tenants; very often, they have in the past done work for themselves. As they get older they have fewer resources and, in some respects, greater need for energy efficiency and to keep their houses windproof, waterproof and well insulated.
The Government are missing a trick here by rejecting—out of hand, it would appear—the possibility of a review. If they are not rejecting it out of hand, perhaps they would be prepared to table an amendment on Report so that it could be inserted at an appropriate part of the Bill. It would appear that this is not the best part. I imagine that would be one of the arguments that my noble friend will make when she seeks leave to withdraw the amendment. It would be wrong to set aside a sector of the housing market that has been very successful so far in meeting many of the objectives that this legislation seeks to include.
Lord Marland
I will explain the Government’s thinking behind this to the noble Lord. This is a market-driven opportunity. The Government are not trying to be prescriptive. If two people were running a race, which one was winning easily by quite some margin, as the social rented sector is doing, you would train the runner who was not quick enough and encourage him to compete in the race. Here we have the social rented sector, which is by some margin ahead of the scale. It would be wrong to bring in legislation at this point that said, “Sorry, you’re not far enough ahead, despite beating the others. We intend to make sure that you get even further ahead”. The main aim of the Bill is to let the market drive the situation. At some point—the noble Lord is quite right—we will review the progress that the market has made and use any powers that are necessary.
The social rented sector should be congratulated. The noble Lord, Lord O’Neill of Clackmannan, said as much and I totally agree with him. That sector has led by example; we should encourage, not discourage, it. It is not my intention at this point to redraft part of the Bill to be prescriptive about this sector. I take on board that it is a critical area, which continues to make progress. Through this Bill, we will ensure that it does.
Lord Marland
My Lords, I am grateful for these comments. Obviously I am a new boy and this is my first Bill, so I do not really know what the procedure is; I bow to my noble friend Lady Noakes, who knows more about it than I do, as do many others in this Room. Knowing how you do this should mean that you are a bit careful and recognise what the Government have to do. Here we are, sitting in this Room, while in the Chamber there have been 14 days of Committee. What is that doing? It is preventing the Government bringing forward legislation.
In this legislation, therefore, we are setting out a framework Bill that allows us to add bits of legislation, allows us time to consider carefully what needs to go towards them and, of course, allows us to bring them back to this House, as a revising Chamber, and indeed to the House of Commons for approval through statutory instruments, which the noble Lord, Lord Whitty, kindly recognised has been normal practice and, I fear, will become normal practice if we have to sit for hours when there is a log-jam in the Chamber. Noble Lords should recognise that government is actually about trying to get things done.
Why are we doing the ECO? The noble Baroness, Lady Smith, is right: the answer is that we have a problem with fuel poverty. It has gone up year on year despite CERT, Warm Front, CESP and every other possible and genuinely well intended attempt by the previous Government to reduce fuel poverty. I am not sitting here criticising the endeavours or saying, “You did this or that wrong”, but the fact is that fuel poverty has gone up significantly.
Lord O'Neill of Clackmannan
Before the Minister leaves that point, we should put this in its proper context. When energy prices were low, fuel poverty was falling quite dramatically. When energy prices went up, fuel poverty rocketed. There are three reasons for fuel poverty: inadequate houses that are badly insulated, the poverty and disadvantage of the households and the price of energy. The single most critical factor over the past eight years has been the changes in energy prices, which in large measure are beyond the capabilities and the control of individual companies. Indeed, it can be argued that energy prices in Britain are in fact in the lower part of the European basket. If we are going to change the circumstances of fuel poverty, insulating houses is a major consideration, but not the only one.
Lord Marland
I am grateful to the noble Lord for his intervention because he has just mentioned what I was about to say. There are three criteria. The first is inadequate homes and house insulation, and that is what we are seeking to tackle with the Green Deal in a very strong initiative. That is why it is fundamental that we link the Green Deal and the ECO but that we are sensible and take a measured approach to how we create the ECO, given that CERT and CESP have largely failed in their endeavour.
Secondly, there is the price of energy, which is a separate debate; we will doubtless hit that at various times. This Government are doing everything that we can to deliver energy security. The noble Lord and I would agree that our endeavours to recreate the nuclear industry, which has had no activity for 23 years, and various other endeavours to generate electricity in this country and regenerate our grid system, which has had no investment for many years.
Then, of course, there are the genuine poor. That is what the ECO must be targeted at. Every person in this Room feels desperately concerned about the genuine poor and how we get them out of fuel poverty. As such, we have telegraphed that we will lead a review of fuel poverty to see how we can target them. We are doing several other things in the mean time to eradicate fuel poverty. There are winter fuel discounts and we have come up with the warm home discount; we are now looking for a contribution from energy suppliers to ECO.
The noble Baroness, Lady Noakes, rightly asks, in fine Conservative tradition: who will pay for it? What about value for money? That is at the heart of this Government: who will pay for it and how will people provide for it? It is not as though they are not paying for it at the moment. Energy companies are responsible for delivering CERT and CESP and will be responsible for delivering the ECO. It is up to this Government and future Governments to ensure that there is competitiveness in the market so that companies, in selling their products, try to get a competitive price, which will come largely, we hope, from their profits. Similarly, the noble Baroness, Lady Smith, reasonably quoted my honourable friend Gregory Barker in the other place. He said that £1 billion would be spent on this. In our analysis that is only an initial figure. You would not expect me to go wider than that in this instance until we have developed this further.
The noble Lord, Lord Whitty, rightly says that we are reviewing Ofgem. It is right that we are doing so. I will not come to any conclusions on Ofgem yet because the consultation is taking place. It will conclude in March, which is before the autumn, when we start our consultation on the ECO and so will be able to take the findings into account and link them together, as the noble Lord, Lord Whitty, would expect us to do. Because the result of the Ofgem will be available in March, we hope to be able to take it into account in the passage of this Bill.
Noble Lords should be under no illusion. There is a very good document, which we have put in the Library and should explain clearly what we are trying to do in the ECO and every measure in the Green Deal. It is an excellent summary. It must be good because I can understand it. This is to explain what we are doing. Make no mistake: we are not trying to railroad a new policy through.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 11 months ago)
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Lord O'Neill of Clackmannan
Thank you. I was expecting some of the Government’s Back-Benchers in their varying forms to jump up and to defend this Bill in its present form. There are always criticisms made of Bills but, apart from Ministers who are paid to defend them, there are always people—
Lord O'Neill of Clackmannan
That is fine. Every man has his price. Some are well enough off to be able to do that. Many of the people we are concerned about in this Bill and who are looking to this legislation for assistance would be very happy to be in that position. A lot of them work for nothing on the basis that they are unemployed. That is why they live in fuel poverty.
As I say, the purpose of this amendment—coming from people who in the past have sought to pin down Governments to make sure that they will meet their requirements whether by international law or by British legislation—is to improve the Bill. We have had people on the Benches opposite cheering in the wings when the previous Government were taken to court because they had not met, in the eyes of some people, the requirements of the legislation of the 1990s and of 2008 to meet some of the fuel poverty targets. One would have thought that they would have been happy to make more explicit the commitment of the Government to these aims and objectives, because there is nothing which we are advocating here that is at variance with government policy.
Lord Marland
My noble friend is learned, but not in the way that I meant. He does not want to be called learned today.
I cannot imagine a department that consults more than ours. We are locked in consultation on virtually every move we make and will continue to do so. We have had a lot of contributions from outside which we have taken on board in getting to this point.
The Green Deal is designed to address the longstanding problem of how to improve energy efficiency of existing building stock. While on paper improving efficiency of buildings makes sense to save money, protect our climate and improve the comfort of our homes, in practice too little has been done too slowly. There are some good reasons for this: people find it hard, or are reluctant, to take out large loans for property they might leave soon; they often do not trust salesmen and installers; and they are busy and simply do not know what to do.
Our solution, the Green Deal, is threefold. First, the Green Deal plan is a contract under which private companies provide finance up front for energy efficiency improvements and individuals then repay through their energy bills. Liability to repay attaches to the energy bill payer for the time being, so that only the person benefiting makes the repayments. The contract transfers to subsequent bill payers.
Secondly, there is the golden rule: the protecting principles which require that repayment costs should not exceed expected energy bill savings. Thirdly, there is the accreditation and redress system, which is the guarantee of quality which consumers need. It is a simple concept, but to make it both simple and secure for consumers, we need to put a robust framework in place. To ensure attractive external simplicity for the customer, we need to ensure that the internal mechanism comprehensively covers all those involved in the scheme—the assessors, installers, Green Deal providers and energy suppliers. This is a market mechanism funded by private capital.
In response to the noble Baroness, Lady Smith of Basildon, our responsibility is to create a robust framework backed up by redress and quality control. The Bill focuses on this enabling framework; we will certainly be consulting on the detail for secondary legislation, and I look forward to the input.
I will now speak to the detail of Clause 1. It provides for the Green Deal plans an arrangement made by an owner or occupier whereby a Green Deal provider makes energy efficiency improvements to that property. As the noble Lord, Lord O’Neill, said, it is important that we define what is an eligible property, but it is also important that we do not define it in a way that restricts properties. Therefore, the broad definition is as far and wide upon domestic and commercial properties as is possible. Of course there will be exceptions which we are starting to develop, such as something that may have been purchased under a compulsory purchase order. As the noble Lord rightly says, we need to define this over the next few weeks.
The clause defines the conditions that must be met in order for an arrangement to make energy efficiency improvements qualify as a Green Deal plan. By setting out these conditions as requirements of the plan, the clause defines the basis of the Green Deal. Subsection (3) sets out the two conditions that must be met. The first is that,
“the energy efficiency improvements are to be paid for wholly or partly in instalments”.
The second condition is that the requirements of subsection (4) are satisfied. These are that there must be “a relevant energy supplier” supplying or about to supply energy to the property. The energy efficiency improvements to be made must fall,
“within a description specified in an order made by the Secretary of State”.
By setting out qualifying improvements, we can ensure that the customer benefits only from recognised and proven technologies.
Subsection (4) also states that the important conditions mentioned in subsections (4) and (5) must be met. These relate to the assessment of the property and the financial terms on which the Green Deal is offered, and a number of other terms that must be included or must not be included in the plan. This is to ensure that only measures that are appropriate for a property are recommended.
Lord O'Neill of Clackmannan
I am grateful to the Minister for giving way. I do not wish to delay the proceedings, but I think he has come upon a point that illustrates the difficulty that some of us have. Consider people who have a solid wall property which is not within the gas network—that is, dependent upon probably oil-fired central heating—and requires, because it is solid wall, very expensive insulation, that will probably never be achieved because of the cost of the job to be done, the nature of the property and the length of time of the repayment. There are quite clearly certain properties which could almost deem themselves to be ineligible to participate in this scheme. Therefore, for us to talk of this great, exciting Green Deal, which is going, among other things, to transform the carbon excess in this country, is at this stage to build up the hopes of a number of people in rural communities outwith the gas grid who live in houses constructed in such a way that to insulate them effectively is going to be so expensive as to make them ineligible to be part of the scheme.
It is that kind of thing that, at the outset of our discussions, we should be clear about because there are some hopeless cases, for want of a better expression, which might never fall into this category. It is for that kind of thing that we want a clearer definition early on. So far, the Minister has not addressed that aspect, which is not beyond the wit and intelligence of the department to make clear at an early stage in our proceedings.
Lord O'Neill of Clackmannan
The noble Lord is putting ideas in the Whips’ and party managers’ heads. We would like to see each of these being given proper weight and being discussed and debated as appropriate. If it takes 53 one-and-a-half hour sessions, so be it. That is the price that we have to pay for the proper scrutiny of legislation that could have been better drafted in the first instance.
Lord Marland
My Lords, it is marvellous to see such harmony in the room at the Government’s expense. Given the force of the arguments, particularly those from the Opposition Benches at which one quakes with fear—although one quakes with fear less at the arguments of noble Lords on our Benches, who are so erudite in these matters—we will obviously consider the amendment and reflect on the recommendations already made by the Delegated Powers and Regulatory Reform Committee on the code of practice.
Lord Marland
My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.
Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.
Lord O'Neill of Clackmannan
The Minister has indicated that competition will be properly regulated and that consumers will be protected. However, the Green Deal will be offered by supermarkets and, in some parts of the country, a single supermarket chain can have a virtual monopoly of retail outlets. While it would certainly be capable of offering the Green Deal, we have to be careful because the nature of the relationship may be that a single company will link up with a supermarket, that the supermarket will leave everything to the company and that the company will then make it quite attractive for supplier A or supplier B to come in.
I am not sure whether the public are confident that the free play of market forces in such near monopolistic situations is sufficient protection. I have some sympathy with the proposition, not because I think that all supermarket chains are potential abusers but because we know that in a number of areas of sourcing—we have only to listen to the farming community about the sourcing of fresh food, fruit, vegetables and the like—these supermarkets act quite ruthlessly. We want stronger assurances than the bland approach taken by the Minister in his reply to the debate. I am not confident that something akin to the status quo operating in these circumstances is enough when people will be entering into substantial financial undertakings. Whether or not they do so on the basis that they will never pay because the bills will be reduced does not enter into it. If people did not have confidence in the company to which they are almost forced to go by circumstances beyond their control—they may happen to live in an area which is dominated by a particular supermarket chain which has a dubious record on the way that it sources its goods—we would be concerned about consumer confidence.
Revised Draft National Policy Statement for Nuclear Power Generation, volumes I and II (EN-6)
Debate between Lord O'Neill of Clackmannan and Lord Marland(13 years, 11 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I am pleased to open this debate on the revised draft national policy statement for nuclear power generation. National policy statements are key documents with which the Infrastructure Planning Commission, and later the Major Infrastructure Planning Unit, will determine applications for development consents. In conjunction with the overarching national policy statement, the revised draft nuclear national policy statement will offer guidance on how to assess potential impacts of new nuclear power stations. Associated major transmission lines would be assessed using the electricity networks national policy statement, which was part of our discussion on 11 January.
The revised draft nuclear national policy statement will finish consultation on 24 January. It has been through some changes since noble Lords last considered it in this Committee in March last year. I will highlight some that may be of interest.
In the revised draft nuclear national policy statement, eight sites that the Government consider potentially suitable for new nuclear power stations are identified. This has changed from the original draft, which listed 10 sites. After lengthy consideration of all consultation responses, the sites at Kirksanton and Braystones in Cumbria were deemed unsuitable. I know that the noble Lord, Lord Chorley, was concerned about the cumulative effect of these sites on Cumbria. They were in fact removed due to concerns over the visual impact on the Lake District National Park and deployability by the Government’s target date of 2025.
The noble Lord, Lord Cope of Berkeley, was concerned about the potential for extremely tall natural draft cooling towers at Oldbury in south Gloucestershire. We have altered the overarching national policy statement to ensure that applications for natural draft cooling towers can be brought forward only when the much shorter hybrid mechanical towers are not reasonably practicable. This greatly reduces the likelihood of 200-metre-high cooling towers coming forward.
A number of points were also made regarding Dungeness, not least by the noble Lord, Lord Jenkin, and the noble Baroness, Lady Young of Old Scone. After very careful consideration of the evidence received in the consultation and points made during parliamentary scrutiny, Dungeness remains off the nuclear national policy statement due to concerns about the adverse effect that the site could have on the Dungeness special area of conservation, an ecological site that is protected by European legislation.
In Committee last March, the noble Lord, Lord Teverson, was concerned that, in setting out the Government’s conclusions on the potential suitability of sites, the national policy statement left the Infrastructure Planning Commission unable to refuse an application. We have clarified that this is not the case and, further, that the imperative reasons of overriding public interest that are a requirement of the European habitats directive, and set out within the national policy statement, are ones that the Government have considered in putting sites on the list, not reasons to force through an application for development consent.
The noble Lord, Lord Jenkin, asked us to clarify how sites that were not on the list would be treated, which we have done in the new draft. The national policy statement does not prohibit such an application coming forward; it would be considered by the Infrastructure Planning Commission or its successor and decided by the Secretary of State. However, those sites that are on the list have the clear advantages that scrutiny, consultation and engagement have so far brought.
Lord O'Neill of Clackmannan
Before the Minister leaves that point, can he confirm that, were there not to be any changes in the planning arrangements, the application would still not go to the Secretary of State but remain with the Infrastructure Planning Commission? A comma was probably missing from his statement. I just wanted clarification.
Lord Marland
I do not normally read out the commas, but I shall go back and do that. Yes, the IPC will continue to manage applications until the changeover. As we said in the debate on the national policy statements earlier in the week, we are incredibly grateful for the co-operation that we have received in this changeover period.
We consider that all the remaining sites are needed to contribute towards the Government’s carbon reduction objectives. That is not to say that all sites listed will have a power station built on them. Eight sites are listed to ensure that sufficient sites are available, even if a number of sites are not developed or they fail to secure development consent.
A topic of interest was also the waste that is produced by nuclear power stations and how it will be managed and disposed of. The Government are satisfied that effective arrangements will exist to manage and dispose of the waste that will be produced from new nuclear power stations. This is reflected in the national policy statement. These arrangements include safe and secure interim storage of radioactive waste onsite, followed by long-term disposal in a geological disposal facility. The revised draft national policy statement reflects that we currently expect the geological disposal facility to be ready to take new-build waste in 2130.
A second public consultation on the energy national policy statements is under way and is due to end on 24 January. However, this is not the last opportunity for people to have their say should a site be taken forward. Developers must consult communities before submitting an application, and people will also have the chance to input at the application stage. However, this consultation has provided people with a chance to shape the guidance which the planning bodies will use to inform their decisions.
Like the other energy national policy statements, the nuclear national policy statement is critical in bringing forward infrastructure developments and ensuring that the right framework is used in the consideration of development consents. I strongly believe that the revised draft nuclear national policy statement is fit for purpose, but I welcome today’s debate and look forward to hearing the points raised by noble Lords. I commend the national policy statement to the Committee. I beg to move.
Lord Marland
It can be resolved easily within this year—I hope within the first half of it. A huge amount of work is going on. You do not do a Cabinet write-round, as far as I understand, unless you are fairly committed to making something happen. I am giving your Lordships this information because it is something that I initiated before Christmas.
Lord O'Neill of Clackmannan
Before the Minister leaves his point, it should be stressed that at least some of the constituent members of the nuclear management partnership which is currently responsible for a large part of the waste management at Sellafield have considerable experience of running successful Mox plants elsewhere in the world. One of our problems was that we wanted to have a plant with a Union Jack wrapped round it when we built it. We did not quite get it right and it never operated, but there are people close at hand who can do the job if they get the right deal.
Lord Marland
As the noble Lord will know, I have enjoyed the fine wines of the south of France while visiting the Mox plant down there to make sure that we do this properly. Of course, part of our discussions involved meeting the Areva board to do that.
A number of noble Lords raised the subject of the geological storage facility. Of course, it is ridiculous that it is so far out—and, of course, there is a huge workload, so I have instructed a work stream to ensure that we can get a much closer period. But as the noble Lord, Lord Liddle, knows, this is a voluntary decision made by the community. It will not be the Government jumping in with their jackboots and saying, “We will have it here”. This takes negotiation and long-term development and it takes partnership and working with the local community. We will take a very active role with the Cumbrian community to try to nudge this thing to a much closer timetable to the one that I have given you.
The right reverend Prelate the Bishop of Chester asked about the maximum capacity available. If there was one reactor on each of the eight sites, using the current new reactor—it is not for me to determine which reactor is used—there will be between 10 and 14 gigawatts, which as the noble Lord, Lord O’Neill of Clackmannan, said, is considerably more than what we have at the moment.
As to Scotland, I regret to say that this is outside my control. If we have a Conservative Government in Scotland, I am sure that there will be a great push for nuclear.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Marland
Lord Marland
Well, thank you for those very unnecessarily hostile remarks. Obviously, the noble Lord has been deaf to anything that I said at the start of this wind-up. I notice that he was one of the few who has not attended any of the opportunities to have briefings or discussions on this document, and chooses to take up our time on this particular issue, which is not relevant to this Bill. If he wishes to discuss things outside the context of this Bill—as I said earlier, and I shall repeat it, if he would not mind listening—he is entitled to do so, and he is entitled to ask for a debate on it himself. As I said earlier, we are perfectly happy to do that.
If I may, I shall go back to the substantive issues on the Bill. A lot of time has been taken up in this House in the past few days, and I think that people want to get on to other things in their life. To say that I have been unnecessary and not listening is a most unfair remark.
As I think I said, consumer protection is at the heart of this. The OFT will be fundamental to ensuring that best practice carries on, and through the Committee stage we shall enjoy noble Lords’ support. I was grateful to the noble Lord, Lord Best, and others in what they said on the rented sector, and the encouraging words coming from the associations that he mentioned. The noble Lord, Lord Teverson, and the noble Earl, Lord Cathcart, and the noble Baroness, Lady Noakes, also referred to that matter. Clearly, we want to encourage the rented sector to embark on this and embrace it with open arms. The noble Lord, Lord Best, suggests that it will do; clearly, if it does not want to utilise the market practices, we will have to review the provisions in 12 months and then we will have to use powers to ensure that it does. Cracking that is one of the most difficult areas of the Green Deal.
The local authorities issue mentioned by the noble Baroness, Lady Maddock, the noble Lord, Lord Teverson, and others, is largely a matter for the Localism Bill, which involves authorities going back to the local authorities and enhanced authorities. It is to their benefit to do something like that. They have a number of incentives to do this through carbon-reducing programmes that they have to adopt through government best practice. That in itself should be an incentive.
Fuel poverty, one of the biggest issues with which the Government currently have to grapple, was raised by the noble Lords, Lord McFall and Lord Lawson, and others. It is a critical issue. Clearly, there are a number of measures. Fuel poverty has exponentially increased year on year since 2004. We must reverse that trend. The Green Deal is part of the attempt to do so, along with all the other measures that I mentioned in my opening speech and, of course, the warm home discount, which will provide £250 million, rising to £310 million by 2015, to encourage people out of fuel poverty. As your Lordships know, we are going to conduct a review of fuel poverty to get into the detail and solve this terrible trend for those in great difficulty.
Incentives were mentioned by a number of noble Lords. There are incentive schemes. This is a free-market programme so the incentives will come from within the market. The noble Baroness, Lady Parminter, will know that councils have the opportunity to incentivise programmes through 60 schemes. We will be looking forward to them doing so.
The noble Baroness, Lady Parminter, also mentioned a level playing field, as did the noble Lord, Lord Grantchester. Through all our energy and endeavours, we are trying to get competitiveness into the market so that we can establish a level playing field. That is fundamental to this programme.
The noble Lord, Lord Jenkin, raised, among other things, Warm Front and how it interacts with the Green Deal. I am delighted to say that Warm Front has been fully subscribed early in the current year with the money that was made available. In 2011-12 £110 million will be available and a further £100 million in 2012-13. During that time, the Green Deal will have fed in and been excellent in its support of the Warm Front which, as I have said many times, was a good attempt at combating fuel poverty but has not worked in itself. We must grapple and deal with that.
The noble Lords, Lord Cathcart and Lord Teverson, talked about their energy bills and the reverse cost thereof. I undertake to review this during this process because it is an extremely good, fundamental point.
On specific points, the noble Lord, Lord Grantchester, said that there was a cap of £6,500. There is no cap. The golden rule will in itself impose a restriction on the amount that the house can utilise. He also asked a reasonable question about interest rates. We obviously have no control over interest rates, but are developing a model and will, through Committee, have developed a model into which we can build interest rates.
I am afraid that noble Lords would not expect me to have an answer on the timeframes of the second Energy Bill. Getting a timeframe for any Bills at the moment seems quite difficult. I thank noble Lords for their support in getting us to where we are today.
Lord O'Neill of Clackmannan
The Minister has gone some way to answering our concerns about the cash limits and the amount of money. Can he confirm that boilers can be part of the Green Deal, or are we talking almost exclusively about insulation measures?
Lord Marland
The golden rule is that it generates energy efficiency. It is not intended, as I understand it, that boilers are part of that. Boilers were part of Warm Front, so there has been a lot of activity in that regard.
The noble Lord, Lord Grantchester, refers to deep geothermal, as do, unsurprisingly, the noble Lord, Lord Teverson, and others. We are exploring a licensing scheme as we speak. I hope to return to that subject in Committee. It is a very valuable and useful way forward.
The noble Lord, Lord Teverson, raised the issue of water. We will support the reduction of leaking, provided it can be demonstrated that it reduces the energy cost to the household. He mentioned issues relating to the accreditation framework, as did the noble Lord, Lord Grantchester. I think I dealt with several of those but the devil will be in the detail. With their permission, I hope we will go through that quite extensively in Committee.
The noble Baroness, Lady Finlay of Llandaff, offered the very good suggestion of an alarm system, which I will take away and consider as a valuable issue. I am grateful for her support on that.
My noble friend Lord Jenkin of Roding raised several points. First, who pays for the assessment? This is a market-led endeavour. We would expect a lot of it to fall within the promotional incentive of the people who are going to supply it. The most important thing is that the Government support those who are needy and cannot pay for it themselves. That will be done through an ECO or other function. I am glad my noble friend also mentioned EPCs because I have instigated a review of these. I would like to keep my powder dry until the review is finished. However, by the time we go through the Committee stage, we should have had the full review. I will give further details of that as it goes on. EPCs clearly need a great deal of looking at to make sure that they are fit for purpose. Who bears the cost of a consumer default? A consultation process on that is going on at the moment. It may live with the providers of the Green Deal or the energy companies themselves.
I agree with the noble Lord, Lord O’Neill, that we have not had a big initiative on gas storage due to factors I mentioned previously. To slightly embarrassingly blow my own trumpet, I signed the planning permission for a 15 per cent increase in the nation’s gas storage, which had been sitting around waiting for a new Government. We have taken keen action on that, which we need to increase, although it is not our primary concern because we have the most sophisticated terminals in the country for receiving gas. They are also the most flexible, so we can get gas from various supporting operations. Twenty per cent of our supply still comes from a Norwegian network and we still have a diminishing 50 per cent here in the UK.
The noble Lord, Lord McFall, posed the question of how Rupert Soames would like to be remembered. As he is a friend of mine, I feel he would like to be remembered as the CEO of a business that got into the FTSE 100 and generated great employment not only in Scotland but in England. In fine Churchillian tradition, he has achieved a great deal.
We seek to reform planning, which the noble Lord, Lord Hunt, referred to, by bringing more direct control—and therefore quicker decision-making—over such matters as onshore and offshore wind back into the ministerial department so that they can then be dealt with quickly and efficiently.
The noble Baroness, Lady Maddock, referred to HECA, which came from a Bill that she triumphantly took through the Commons in 1995, although she no doubt worked on it for some time before that. HECA was indeed a very good measure that served a great deal of purpose. However, time has moved on dramatically in this area and there has been much consultation on the subject. The consultation carried out in 2007 indicated that a change was very much on the cards. I am grateful for the support of the noble Baroness and for her advice on consulting various people, including ACE. I understand that ACE feels comfortable that our proposals will be a good follow-on to the great work that she carried out, for which we all owe her a great deal.
The noble Lord, Lord Giddens, fed me some interesting stuff. We all learnt about the Jevons paradox—apart from the noble Lord, Lord Lawson, who explained the point to me while sitting beside me, for which I am very grateful—which my officials tell me we take very seriously. However, as I had not heard of the paradox beforehand, noble Lords will not have expected me to know that. We build in a substantial discount for estimated energy savings from energy efficiency in all our impact assessments to account for increased consumption. Nevertheless, significant net savings still occur even with this conservative assumption.
Job creation, new jobs, net jobs and the renaissance of our manufacturing industry, which the noble Lord, Lord Giddens, and the noble Lord, Lord Hunt of Chesterton, raised, are absolutely fundamental. We believe that 100,000 new jobs will be created through the installation industry. That will appeal to the noble Lord, Lord Giddens, as an economist.
Energy: Carbon Capture and Storage
Debate between Lord O'Neill of Clackmannan and Lord Marland
Lord Marland
Obviously, the reduction in fossil fuels must be encouraged in every possible way.
Lord O'Neill of Clackmannan
Is the Minister aware that Doosan Babcock, the British-based company that is most involved in CCS work, estimates that it will be 2022 at the earliest before commercially available products will be on the market? What is the Government’s thinking on this, because at the moment there is a very long lead time before we are likely to see any carbon capture equipment put onto any coal-fired power station?
Lord Marland
The noble Lord is absolutely right and that is why it is important that we accelerate the process and why we are making our first awards at the end of this year.
Energy: Annual Statement
Debate between Lord O'Neill of Clackmannan and Lord Marland
Lord Marland
I shall be brief. I think that the noble Lord’s idea of a chip in a smart meter is a good one, and I shall investigate it. I do not have the answer. I do not recall the smart meter that I have seen having a chip, but it is a very sensible idea.
We are reviewing all the bodies that govern electricity. Ofgem is obviously the primary one, but we have been reviewing all the other bodies to see whether they are fit for purpose and serve the current Government’s requirements.
Lord O'Neill of Clackmannan
My Lords, the Minister has already said that there is going to be no possibility of subsidy, but I suggest that he be very careful about offering some kind of nuclear/ROCs arrangement, because 8 per cent of domestic electricity bills are already accounted for by that form of consumer subsidy and it is therefore very dangerous to put any more on it. If he wants to increase investor confidence in the nuclear industry—I speak as the chair of the nuclear industry—he ought to look speedily at the question of a carbon price and a carbon floor. Could he perhaps provide a paper for us, which would enable us to see the relative merits of the various positions on this? Until this question is resolved, the massive investments which will be required to realise the nuclear ambitions of this country are not going to happen. With that and the Forgemasters decision, we have the kind of climate in which we get the uncertainty that frightens off potential investors, and that mood has to be changed quickly.
Lord Marland
I totally agree with the point made by the noble Lord, Lord O’Neill, on a carbon price floor. As we have committed to in this document, that is something which we will be reviewing with great urgency. We intend to legislate early in 2011 in the energy Bill, having reviewed it during the Recess. The problem with the carbon price, as he quite rightly identifies, is that it has ranged from €30 per tonne in July 1989 to €16 per tonne in July 2009. It is such a volatile price that it makes planning very difficult, particularly in the noble Lord’s sector, so we will be looking at it.
Gulf of Mexico Oil Spill
Debate between Lord O'Neill of Clackmannan and Lord Marland
Lord Marland
As I said earlier, I am very impressed by the calm rhetoric that has been shown from this side of the Atlantic and by the response from President Obama to the conversation that he had with our Prime Minister. At our level, we have been having very constructive and positive dialogue with our respective departments in the US, trying to find a constructive way forward. Clearly, with horrendous disasters on a scale such as this that affect the environment and many people’s lives, there is bound to be volatile and probably over-the-top rhetoric. However, I am glad to say that from the Government’s point of view the matter has been dealt with calmly, and I applaud the fact that that is as the noble Lord would wish to see it.
Lord O'Neill of Clackmannan
My Lords, the Minister’s tone has been very measured and I congratulate him on setting up the OSPREY exercise, which is very useful. However, the learning curve will be travelled up only by the United Kingdom. We have an international business with British associations but it would appear to adhere to different safety standards in different parts of the world. People do what they need to do or what they can get away with, rather than having a gold standard. Once we get OSPREY and look at the picture against the experience of Piper Alpha, would it not be better to try to get international agreement which is binding on all the players so that we do not have the kind of pantomime in which people say, “Oh yes we do, oh no we don’t”, every time there is a disaster? We have learnt a lot from Piper Alpha. Let us hope that we are not too complacent about it but that, as a consequence, we feel emboldened to say to other people, “We’ve tried to get our house in order. Why don’t we try to get all our houses in order at the same time?”.
Lord Marland
The noble Lord makes an incredibly valid point, which I hope I have answered. I should mention that the name is OSPRAG, which is difficult for me, let alone the noble Lord, to say—I have to have it written down in front of me. It stands for Oil Spill Prevention and Response Advisory Group, and I am glad that he welcomes it. As I said earlier, we are communicating at all levels with US government departments to ensure that we achieve this gold standard. As the noble Lord rightly said, the world cannot march out of tune. I think that the early steps by the US Government to separate safety and licensing are a major breakthrough. That separation was started in this country and it delivers a gold standard. I can only assume that everyone will learn a lot from this incident, as they did following Piper Alpha, and that they will adopt the very important safety standards that are now required.
Energy: Nuclear Power
Debate between Lord O'Neill of Clackmannan and Lord Marland
Lord O'Neill of Clackmannan
Will the Minister be a little more specific in his answer to my noble friend’s question relating to Sheffield Forgemasters? As chairman of the Nuclear Industry Association I should tell him that there is widespread concern across the industry not so much about the lack of government commitment but about the fact that they are not sending out the positive signals quickly enough. Evidence of that would be an early statement on the Sheffield Forgemasters’ loan. Will he give us a time by which such a statement will be given? Will it be at the end of this month, will it be before the Summer Recess, or will it be in this grand Statement that he has promised us? This is a specific issue on which action is required very early in order to enhance and reinforce the UK supply chain.
Lord Marland
I am very grateful to such an eminent expert in these areas for his question—which I felt was a little harsh. I thought that I was very clear in what I said about Sheffield Forgemasters. It is a matter for the Treasury, which is giving it due consideration and consultation. No doubt it will opine on the matter in the very near future. It is important that the matter is deliberately debated and that a decision of some consequence is made. This is not something to be frittered in the wind.