Electricity Market Reform

Lord Reay Excerpts

Tuesday 12th July 2011 Lords Chamber

[Lord Marland]

As ever, the noble Lord, Lord Jenkin, knows the subject. I am slightly disappointed that he does not believe that there is a nuclear framework. We announced that there are to be six new nuclear power stations and reaffirmed that announcement two weeks ago and the sites where they will be located. Realistically, there are a number of issues in terms of the balance sheets of some of the companies wanting to invest—as we have seen from the fall-out in Germany. Having spoken with EDF, Iberdrola and others this week, I know that they are very committed to the cause of the nuclear framework.

As to when the legislation will happen, we are obviously hoping that it will start at the end of this year. There are some timing issues, even with getting the first Energy Bill back to this House—as we all know. The legislation issue will be difficult because there is a certain logjam in the other place.

On who will operate and regulate the supply, this will largely be Ofgem, which will have greater teeth. As we are running a little bit out of time, I am happy to discuss at a later time with the noble Lord the various component parts of that rather than going into it now—if he is happy for me to do so.

[Lord Reay]

My Lords, this is an extremely important White Paper—

[Earl Attlee]

My Lords, it is the turn of the Labour Benches.

[Lord Marland]

Naturally, we work very closely with the devolved Governments. We are all travelling down the same path. However, HM Treasury, rather than the Scottish Government, will be responsible for the renewable heat incentive funding. That is in the spirit of the union, I think.

[Lord Reay]

My Lords, this extremely important White Paper sets out to introduce the reforms, if one can call them that, which the Government consider are necessary if they are to meet their targets for extremely high-cost, heavily subsidised renewable energy. I hope we will get the chance to debate it.

I have just one question for now. The Statement mentions offshore wind on three occasions but makes no mention of onshore wind. Can we take it that the Government are lowering their sights with regard to onshore wind and, it is to be hoped, abandoning their targets altogether? It is a deeply unpopular form of renewable energy, it bitterly divides local communities and it is destroying some of our finest countryside.

[Lord Marland]

I do not think my noble friend can take that from our Statement. The reality is that onshore wind does divide communities—my noble friend puts his finger on it—and it therefore becomes an issue for local communities to decide through the local planning process whether they want it. A large number of local communities in Scotland are embracing onshore wind whereas a number of communities in this country—I am sure my noble friend Lord Reay’s community is one of them—do not want to embrace it. The reality is that the Government have a target. Two-thirds of that target for onshore wind is either met or is in the process of being met so there is a very limited amount of headroom. Our real push is to get offshore wind up to the target we wish to achieve.