Energy Bill
Debate between Viscount Ridley and Baroness Liddell of Coatdyke
Viscount Ridley
My Lords, I know that particularly in the case of offshore wind a Royal Academy of Engineering report is forthcoming, which I hope we will see before Report. Rumours are that it is extremely negative about the risks and dangers of the practicalities of installing wind turbines on a large scale, and in particular on their likely lifetime.
If we were to consider giving an offshore wind company a 25-year contract for a technology that is supposed to last 20 years, and many engineers think will not last more than 15 years, we will not have done the consumer and indeed the taxpayer a service. We would have let them down very badly. We have to take into account that a lot of these technologies will turn out not to last as long as we thought and deliver the benefits that we thought they would. In the case of offshore wind, once again, it is becoming clearer by the day that the carbon dioxide savings that offshore wind will deliver will be very disappointing because of the need for backup power, the need for that backup power to be open cycle, as has been mentioned, and because of the cost and carbon cost of some of these technologies.
It would be a mistake on behalf of the consumer to enter into these eye-wateringly high, £155 per megawatt-hour, strike price costs for a quarter of a century when all sorts of things may change over that time.
Baroness Liddell of Coatdyke
I should remind your Lordships of my registered interest as a director of the Offshore Renewable Energy Catapult. I am not going to debate with the noble Lord the benefits or otherwise of offshore wind, other than to say that it is not a brand-new technology. I can remember something like 20 years ago inaugurating the first offshore wind farm at Blyth in Northumberland. The technology in its basic form is tried and tested, and is another bit of our armoury. Those of us who, like me, are in our prime, remember the six-day war and the consequences of not having a wide basket of energy sources available to us.
I am not 100% certain that I agree with my noble friend that we should be talking about contracts of a length of 30 years. However, we are talking here about a probing amendment and the uncertainties. We are coming into a big part of the Bill, where we are going to talk about uncertainty for investors. It is about how you secure a rate of return and mitigate risk. That is what was in my noble friend’s mind when he tabled his amendment, and on Thursday we will come to an amendment from the noble Lord, Lord Roper, which also brings us back to the issue of uncertainty.
I support what my noble friend is trying to do. There is a bit of a debate on the length of time, but the key to this aspect of the debate is to remove uncertainty. When the noble Lord, Lord Jenkin, was speaking, I came across a good analogy. When you get on a plane, after take-off the pilot comes on and says, “Don’t worry, I’ve never flown this plane before, but I’ll have read the manual before it’s time to land”. We have a wee bit of a feeling like that about this Bill.
The Earl of Caithness
I hope that my noble friend will not be lured by the special pleading of the noble Lord, Lord Berkeley, on this issue. I particularly thought that the noble Lord was wrong to say that it was unhelpful for anyone to say that they disliked windmills. I dislike windmills; I happen to be able to count 11 wind farms out of my window, which is probably more than anyone else can in the Committee, and I would be very pleased if they were not there for 25 years. It does not do tourism much good and, as a countryman, I think that it spoils the country. If there were modern, different technologies that could replace wind farms, which I agree are at the moment essential, although perhaps not in that quantity and dispersal that I can see, I would be only too pleased if they were removed.
One of the most interesting bits of evidence that we got in European Sub-Committee D was how wrong everybody has been on energy in the past. I see that the noble Lord, Lord Whitty, is in agreement with me. For those of us who were relatively new to this subject, it is fascinating how wrong the forecasters have been time and again in the past 15 years. So for goodness’ sake let us not fall into the same mistake of tying the Government down to a 25-year timescale when things could change. I have absolutely no doubt that they will—and do not let us give too much security to the producers of electricity. Capitalism is about taking risks. In the past, people have taken enormous risks. Some have fallen flat on their face and some have been hugely successful. However, it should not be for us as the consumer or the taxpayer to featherbed them; they must take a fair share of the risk. It is a very difficult balance that the Government are trying to get right, so please let us not make it more complicated by tying them to a 25-year timescale.
Viscount Ridley
My Lords, I quickly intervene because I failed to declare an interest. The noble Baroness, Lady Liddell, mentioned Blyth, which reminded me that one of the turbines at Blyth turned out to have been built on land on which, although I do not own it, the mineral rights were reserved by my grandfather. Therefore, I discovered that I was unwittingly receiving money from a wind turbine. I shall give that money away so that I do not feel sullied by it—but anyway, I feel that I should declare it.
Baroness Liddell of Coatdyke
I should reassure the noble Viscount that the wind farm that I inaugurated was offshore, so he is to be congratulated if he managed to get some money out of it.