Andrea Leadsom
Main Page: Andrea Leadsom (Conservative - South Northamptonshire)(8 years, 11 months ago)
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The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
It is a great pleasure to serve under your chairmanship, Mr Bailey. I add my congratulations to the right hon. Member for Don Valley (Caroline Flint), who has done so much. She really does feel passionately about the importance of climate change and a clean energy future. I salute her for that.
Last week the Secretary of State set out a clear new direction for our energy strategy, with security and keeping the lights on at its heart. It recognises the need for investor certainty, but also that security is not possible without action on climate change. The system is not delivering for consumers if energy is unaffordable. So clean energy investment is critical to successfully delivering our strategy.
In the Paris climate change talks, the UK will play a leading role not only in meeting our own ambitions for our decarbonisation targets, which are some of the toughest in the world, but in working to influence other nations in being more ambitious about their need for a clean energy future. It is disappointing that so many Opposition Members are pretending otherwise. I believe we have cross-party agreement on the need for ambitious decarbonisation targets.
A key pillar of our new direction is to consult on a shift from unabated coal to gas. Gas produces half the carbon emissions of coal when used for power generation: it is one of the most cost-effective and significant steps we can take in reducing emissions from our electricity sector and sends a very powerful message to the rest of the world about the level of our commitment.
My hon. Friend the Member for Warrington South (David Mowat) absolutely rightly made the point that in Germany and Austria, in spite of a high level of renewables deployment, emissions are increasing because of their use of coal. One of the biggest decarbonisation efforts we can make is to move from coal to gas.
Andrea Leadsom
I am sorry; I will give way in a minute, but I want to make some progress first.
From day one of this Government, our new nuclear programme has been fundamental to our approach to energy security and our shift to low carbon. Industry has set out proposals to develop 18 GW of new nuclear power for the UK, which could deliver around 30% of the electricity we will need in the 2030s. If built, the power plants will reduce our carbon emissions by more than 50 million tonnes, bringing an estimated £80 billion of private investment into the UK, with about 30,000 people employed across the new nuclear supply chain at the peak of construction.
The hon. Member for Newport West (Paul Flynn) rightly expressed concerns about the security of nuclear. I assure him that both our existing nuclear fleet, which produces around 19% to 20% of our electricity every day, and our new nuclear fleet will benefit from the most stringent regulation from our independent Office for Nuclear Regulation.
Andrea Leadsom
I will not. The hon. Member for Islwyn (Chris Evans) said we should be looking at thorium reactor research, and I assure him that we are doing so.
Mr Adrian Bailey (in the Chair)
Order. It is for the Minister to decide whether she gives way. There are obviously time constraints.
Andrea Leadsom
Mr Bailey, I am trying to respond to Members’ points. If I give way to each Member on their individual point, I will not be able to respond to them all. I do apologise, but there is no time to give way to lots of Members.
I turn to renewables. We have been very clear that they have an important part to play alongside other technologies in our clean energy mix. I am happy to agree to the request from the right hon. Member for Delyn (Mr Hanson) that I welcome the decarbonisation impact of renewables. We are of course all delighted at the enormous success of the industry, but that does not mean that subsidies can continue as they were. The costs of renewables have come down significantly, and as the technologies mature it is right that they stand on their own two feet. That is why we are taking action on subsidies for onshore wind and solar, technologies that will be cost-competitive through the next decade.
The hon. Members for Sunderland Central (Julie Elliott), for Paisley and Renfrewshire North (Gavin Newlands) and for Stalybridge and Hyde (Jonathan Reynolds) all mentioned the important issue of fuel poverty, on which there was a debate in this Chamber only yesterday. All Members must recognise that the subsidies for renewable technologies are paid for by precisely those people who are struggling with fuel poverty, so excess subsidies simply cannot be afforded.
Take onshore wind, a technology that has deployed very successfully to date—so much so that without action there would be a risk that it would deploy beyond the 11 GW to 13 GW range we set out for 2020, which would have added more to consumer bills. That is what our manifesto commitment set out to address. Even with action, we expect to deliver more than 12 GW by 2020, comfortably within our range and enough to meet our ambition to deliver 30% of the UK’s electricity with renewables by 2020.
Similarly, more than 8 GW of solar is already deployed and even with the cost controls we are proposing, we expect to have around 12 GW in place by 2020. Evidence-gathering on costs and deployment-monitoring suggested that action was needed right across the range in solar, including for below 5 MW. There was a risk of projects being over-compensated and of adding to the overspend that we were already projecting for the levy control framework. We have consulted on proposals to constrain solar further under the renewables obligation and on changes to the feed-in tariff scheme more broadly.
The hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) asked for more liaison with the Welsh Government on how we will meet our EU decarbonisation targets. We speak regularly with the devolved Governments, but I will ensure that those specific points are made. We are looking carefully at the more than 50,000 responses to the feed-in tariff review and will set out our final approach to all schemes by the end of the year.
On the future for renewable electricity, we are continuing to listen to ideas from the renewables sector about how we can best ensure a level playing field for established renewables to compete with other generation technologies. For example, some stakeholders have suggested the concept of a market-stabilising contract for difference. We would certainly welcome further industry views on that. Being tough on subsidies allows us not only to keep downward pressure on consumer bills, but to direct support where it is needed most: among the less established technologies. For example, it is right that we build on our world-leading position on offshore wind, with more than 5 GW already installed and plans for that to double by 2020.
Last week, the Secretary of State gave real certainty to the sector by setting a very clear challenge: continue to reduce costs quickly and we could support up to 10 GW of new offshore wind in the 2020s. If those conditions are met, we will make funding available for three auctions in this Parliament. We will set out more detailed plans in due course, but we plan to hold the first of these auctions, open to less established technologies, by the end of 2016. I acknowledge that the SNP spokesman, the hon. Member for Aberdeen South (Callum McCaig), said that he would like that auction to be sooner rather than later, but I have heard opposing views from industry. Some companies would like the time to get into a position to enter the first auction, so would like it to be delayed. There are always winners and losers.
As well as action on electricity, it is vital that we change how we use heat to warm our homes and buildings, and how it is used for industrial processes. Heat accounts for about 45% of our energy consumption and a third of all carbon emissions, so different approaches need to be tested. There are technologies with great potential—such as district heating, biogas, hydrogen and heat pumps—but it is not yet clear which will work at scale.
We have to develop a long-term plan that will keep down costs for consumers. We will set out our approach next year as part of our strategy to meet our carbon budgets. The hon. Member for Linlithgow and East Falkirk (Martyn Day) mentioned the value of the renewable heat incentive, and I entirely agree that it has been a valuable policy. As he knows, we will be setting out our plans later today in the spending review.
Looking further forward to innovation, we need to keep an eye on the horizon for promising future developments. Some of the solutions to the challenges we face may right now be just an idea on a drawing board or not yet even exist. There are technologies with great potential, such as nuclear, offshore wind, demand response and storage. In some areas, the UK is a world player in the development of technologies; in others, the challenges we face will require technical solutions specific to the UK, so we remain committed to supporting innovation.
Department of Energy and Climate Change funding is already helping to develop exciting new technologies with great potential, in areas such as energy storage, low-carbon transport fuels and more efficient lighting. Those and many more examples point to the creation of new industries and new jobs in the UK, so it is right that we remove the barriers to their development. The hon. Member for Falkirk (John Mc Nally) mentioned the importance of storage, and I completely agree with him that it could transform the intermittency of some renewables.
To conclude, investors need clarity on our strategy for clean energy, and that is what we have now given them. New nuclear, new gas, existing and new renewable technologies will all help us to meet the challenge of decarbonisation in the power sector. We will set out our approach to heat next year as part of our wider strategy on carbon budgets, and we will continue to lead the way on innovation by pioneering the discovery of clean and cheap technologies for the future. We have a plan, and it is to deliver affordable, secure, low carbon energy for today and for generations well into the future.