Andrea Leadsom
Main Page: Andrea Leadsom (Conservative - South Northamptonshire)(8 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Andrew Stephenson (Pendle) (Con)
8. What steps she has taken to support the anaerobic digestion and biogas sector.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
First, may I say how delighted I am to see my hon. Friend fully recovered and back in his place?
We support AD and biogas through the feed-in tariff scheme, the renewables obligation and the renewable heat incentive. The Government have provided £124 million of support under the renewables obligation, £53 million under the renewable heat incentive, and enough support under the feed-in tariff scheme to deploy 161 MW since 2010. These technologies can make a valuable contribution to our decarbonisation targets and we will continue to support them.
Andrew Stephenson
I thank my hon. Friend for her kind remarks. I recently met Salterforth resident Peter King, along with representatives of Kirk Environmental, at my Earby advice surgery to discuss anaerobic digestion and biogas. Does my hon. Friend agree that, compared with wind or solar, biogas has significant benefits in delivering predictable and consistent amounts of renewable energy into the network?
Andrea Leadsom
Indeed. There are real benefits for the UK in having a wide range of renewable energy sources, but my hon. Friend is right to point out that as the sector develops in the UK, biogas technologies could bring additional benefits, including providing baseload energy, injection into the gas grid and potential use as transport biofuels.
Dr Alan Whitehead (Southampton, Test) (Lab)
In her letter to other Departments on 29 October the Secretary of State—whom I congratulate on stressing in her letter the importance of reaching EU renewables targets in perhaps more recalcitrant Departments—she indicated that the highest potential for additional renewable heat is from biomethane injection into the grid, but she also said that we will face a shortfall against the part of that target that is related to the heat sector, even if support for her proposed measures was agreed by the Chancellor in the comprehensive spending review. Now that she has a reduced amount of money for the renewable heat incentive up to 2020, does she consider that that amount will enable us to reach our heat targets by 2020 and, if not, what new proposals will she bring forward to make sure that there is investment in this sector that can enable us to reach that target?
Andrea Leadsom
The hon. Gentleman is right to point out that we had a good settlement in the comprehensive spending review. We were very pleased with the commitment to enhancing—increasing—the renewable heat incentive each year between now and 2021, and we are making good progress towards that. He will realise that the fourth carbon budget is for 2023 to 2027. He would not expect us to be meeting it today, but we are putting plans in place and working towards that progress as we speak, and we will continue to set out plans during this year.
Mark Pawsey (Rugby) (Con)
Despite more effective use of packaging, better date labelling and programmes by the supermarkets to distribute and sell food, we still generate substantial quantities of food waste. Does the Minister agree that using this resource to generate electricity is better than sending it to landfill?
Andrea Leadsom
I completely agree. In fact, just recently I went to see a proposed new project in my own county of Northamptonshire that is looking to use landfill to create a renewable heat scheme. Some fantastic new ideas are coming forward, and my officials and I are always very keen to hear about them and support them where we can.
Kevin Hollinrake (Thirsk and Malton) (Con)
9. What steps she is taking to prevent shale gas drilling at the surface in areas of the greatest environmental value.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
First, I commend my hon. Friend for the personal commitment he has shown to researching best practice in this area. I can assure him that the Government are committed to protecting our most valuable spaces from surface drilling of wells for fracking. On 4 November, we set out how we plan to do this via petroleum exploration and development licences. We will issue a response to our industry consultation as soon as possible.
Kevin Hollinrake
I very much welcome the Minister’s comments. The Task Force on Shale Gas has called for a single regulator and increased levels of independent monitoring. Does the Minister agree that this would improve public confidence and provide further protection, particularly for our most sensitive areas?
Andrea Leadsom
The task force’s 2015 report says that the regulatory regime is currently fit for purpose, but my hon. Friend rightly points to its proposal that if the shale gas industry does develop the Government should consider creating a bespoke regulator. I can absolutely assure him that we will keep the regulatory regime under review to make sure that it remains fit for purpose. On his second point about independent monitoring, I entirely agree, and that is why we are already grant-funding baseline monitoring in North Yorkshire and Lancashire.
Mr Dennis Skinner (Bolsover) (Lab)
Does the Minister accept that there is widespread opposition to fracking in all parts of Britain? Will she congratulate, as I have, the residents of Calow in Bolsover for refusing to allow a drilling operation and getting it stopped not only by the local authority but by her own inspectorate?
Andrea Leadsom
It is quite extraordinary that Opposition Members continually talk about the potential for shale gas as if it is some kind of disaster. The hon. Gentleman comes from a very honourable and long-standing mining area. Mining has a legacy that we will be dealing with for many years to come. The shale industry, on the other hand, offers the opportunity to create a new home-grown energy source that is vital for our energy security into the next decades.
Cat Smith (Lancaster and Fleetwood) (Lab)
When will the Secretary of State produce some legally enforceable protection against surface-level fracking in our national parks and sites of special scientific interest?
Andrea Leadsom
I hope that the hon. Lady heard my initial comment, which was that we have been able to put forward our proposal to restrict surface drilling in any of our most protected areas, not limited to national parks but including many other valuable spaces, through licensing. As things stand, we are waiting for our report in response to the industry consultation that closed on 16 December, and we will make our announcements very soon.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
10. What assessment she has made of the effect of increased energy generation on the national grid.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
As more domestic, community and business generators come on stream, the demand for grid connection is increasing, as the hon. Lady rightly points out. Accommodating this is the responsibility of the network companies, overseen by Ofgem. Network companies publish long-term plans setting out how new generation and demand will be managed. She might like to take a look at National Grid’s annual electricity 10-year statement as a good example of this.
Liz Saville Roberts
Let us face it: National Grid is notorious for stifling new energy projects at birth in rural Wales. Given that the draft Wales Bill proposes devolving generating stations up to 350 MW but not transmission, how will the Minister work with the Welsh Government to ensure that that is not an empty promise?
Andrea Leadsom
I can absolutely assure the hon. Lady that the Government are committed to the Welsh devolution Bill, as set out in the Silk commission, and that is going through. Specifically, Ofgem, through the electricity distribution network price control, has approved about £24 billion of investment in the distribution network for between 2015 and 2023, and about £1.7 billion of that is for the distribution company responsible for north Wales, including the hon. Lady’s constituency.
Nic Dakin (Scunthorpe) (Lab)
Does the Minister share my concerns that, in the short to medium term, our energy security may be put at risk if the capacity market that is being put in place to bring forward new gas capacity not only fails to do that, but makes current gas capacity, such as that provided by the Glanford Brigg power station in my constituency, no longer worthwhile and results in it coming off-stream?
Andrea Leadsom
We have just completed the second capacity market auction and achieved a very competitive price for consumers; as the hon. Gentleman will know, it is a top priority for this Government to keep the bills down. At the same time, we have ensured that National Grid has the tools at its disposal to be able to ensure energy security, which is our overriding concern. I do not share his concerns. We are reviewing the capacity market to make sure we bring on new gas, but there are no concerns about energy security.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
11. What recent steps she has taken to support the small-scale solar sector.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
Solar is an enormous UK success story that this Government continue to support. As my right hon. Friend the Prime Minister said yesterday, 98% of all solar deployment has taken place since 2010. In December, we announced that the feed-in tariff scheme would remain open and continue to support small-scale solar up to a value of £35 million of subsidy, potentially delivering an additional 1.2 GW across 220,000 installations by 2019.
Daniel Kawczynski
I thank my hon. Friend for that answer. I had the opportunity recently to meet a company in the solar sector industry in my constituency, ESP Energy in Dorrington, and I was very impressed with its technology, innovation and job creation. Will my hon. Friend assure me that the Government will do everything possible to continue supporting this very important energy source?
Andrea Leadsom
As my hon. Friend will know, it is a key priority to keep consumer bills down, so there must always be a balance between supporting a superb UK industry and making sure that consumer bills remain affordable. We will continue to support the further growth of the sector, but not at any price. The changes we have made to the feed-in tariffs seek to maintain the solar industry, which in the medium term can continue to reduce its costs and therefore move towards a subsidy free deployment.
Mr David Hanson (Delyn) (Lab)
Will the Minister update the House on what steps she is taking to ensure that the rate of VAT on solar installations does not rise, as proposed, from 5% to 20%, which could add £900 to an average solar installation?
Andrea Leadsom
The right hon. Gentleman is exactly right to raise that very important point. He will know that it is the result of proceedings by the European Commission, which believes that our VAT rates on solar installation should be higher. Her Majesty’s Revenue and Customs is looking closely into the issue and consulting on it. Once we have taken into account the outcome of that consultation, we will have to look further at the regime.
Huw Merriman (Bexhill and Battle) (Con)
20. My constituency has a number of thriving solar businesses, some of which I have worked with during the recent changes to feed-in tariffs. As the Government look to the industry to expand, and in response to a query from Solar UK in Battle, will the Minister explain how she will support the development of energy storage solutions for existing and future solar systems?
Andrea Leadsom
My hon. Friend is exactly right to point out the huge potential for energy storage to enhance the value of solar PV installations. My Department has provided more than £18 million of innovation support since 2012, to develop and demonstrate a range of energy storage technologies. We are also investigating the potential barriers to the deployment of energy storage, focusing in the first instance on removing regulatory barriers, and we plan to hold a call for evidence on that specific area this spring.
John Pugh (Southport) (LD)
The Minister is in danger of sounding complacent on this subject. Many small and medium-sized enterprises in my constituency fear the end of solar. Has she had a chance to consider the Solar Trade Association’s £1 rescue scheme, and what is her response to it?
Andrea Leadsom
As my right hon. Friend the Secretary of State and I have made clear on so many occasions, there is a fine balance. As the costs of a new technology come down, as they very much have in the excellent UK solar industry, so we must focus on the need for people in this country to be able to afford their energy bills. Fuel poverty is an enormous problem, but we do not want to over-subsidise, so it is a fine balance. We think that our response to the consultation in December provides that fine balance: giving a 5% investment return to solar installations is fair to consumers and fair to the industry.
James Heappey (Wells) (Con)
24. EU minimum import prices on Chinese, Taiwanese and Malaysian photovoltaic cells inflate the cost of an average solar installation by £385. The Minister is working to extract the UK from that, but will she update the House on her progress and set a date by which she hopes to end these price controls?
Andrea Leadsom
I certainly agree with my hon. Friend that the MIP is an unwelcome drain on the UK solar industry. My right hon. Friend the Secretary of State made that point in her letter to the Trade Commissioner in November. I also agree that it would be fairer and simpler to remove the MIP while the current expiry review is under way. Unfortunately, however, the decision to launch an expiry review is one for the Commission, not for member states. Anti-dumping and anti-subsidy regulations require the Commission to maintain existing trade defence measures while the expiry review takes place, so it could be some months yet.
Clive Lewis (Norwich South) (Lab)
Last year, the Solar Trade Association estimated that 27,000 workers would lose their jobs as a result of the Government’s proposed 87% cut to the feed-in tariff. Following a public outcry, including from Members on both sides of this House, the Department reduced the cut to 64%, saving about 8,000 jobs. I am sure the Minister would like to take the credit for that, but what is her message to the remaining 19,000 solar workers who face redundancy this coming year as a result of the tariff cut?
Andrea Leadsom
UK solar is a huge success story. It has grown rapidly since 2010, with enormous support from energy consumers in the UK. As we have said time and again, there is a balance. We absolutely welcome the jobs and growth that have been provided in the sector, but we cannot continue to support jobs just through bill payer subsidies. That would not be fair. Our measures will ensure that there is good potential for the industry to continue to grow and for jobs to continue to be supported, while at the same time making sure bills remain affordable.
Sir Oliver Heald (North East Hertfordshire) (Con)
12. What steps the Government are taking to ensure that energy consumers are on the best-value tariffs.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
As my right hon. Friend the Secretary of State announced in her November speech, we are committed to the continued growth of UK offshore wind. Britain is already the world leader. This industry is a huge potential source of jobs and growth, and we will always focus on maximising UK content in the supply chain. The hon. Gentleman will appreciate that the decision on where one company’s operations will be based is a commercial decision for that company. However, my officials are working closely with the developer and the Scottish Government to maximise the use of UK content in this wind farm.
Andrea Leadsom
I absolutely agree with the hon. Gentleman. I am extremely keen on that. Recently, I visited one port in Scotland, Aberdeen port, to hear how it is trying to expand to accommodate not just the growth of offshore wind, but potential decommissioning in the future. It is vital that whatever our energy policy is, we focus as far as possible on maximising the UK content in the supply chain.
Hannah Bardell (Livingston) (SNP)
19. What her policy is on the future level of Government support for the oil and gas industry.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The oil and gas industry is vital to our economy and provides more than 350,000 jobs. The Government are committed to supporting it. Our latest projections show that in 2030, oil and gas will still be a core part of our energy mix, providing nearly 70% of the UK’s primary energy requirements. Our commitment to the industry is the precise reason why we have established the Oil and Gas Authority, which is charged with working with the industry to maximise the economic recovery of the UK’s oil and gas resources.
Hannah Bardell
The oil and gas industry has asked the Government for further tax reliefs to incentivise exploration activity. Professor Alex Kemp of the University of Aberdeen has described them as
“clearly necessary to exploit the remaining physical potential”
of the North sea. What consideration has the Minister given to a refundable tax credit for exploration?
Andrea Leadsom
The hon. Lady will be aware that the Chancellor has already improved the fiscal regime significantly to encourage further exploration in the North sea basin. Just before Christmas, we had a series of meetings with North sea basin participants, the Oil and Gas Authority and others to discuss what other measures could be taken. Further fiscal measures are certainly on the table, but so too are vital measures such as getting production costs down, making more efficiencies and sharing infrastructure. The OGA is absolutely focused on doing those things.
Peter Aldous (Waveney) (Con)
I am grateful to the hon. Member for Livingston (Hannah Bardell) for raising this question and to the Minister for her reply. I acknowledge the work that the Government have done in the sector, but will the Minister give me her assurance that in the lead-up to the Budget in March, she will leave no stone unturned in ensuring that this vital industry secures the support that it needs at this difficult time?
Andrea Leadsom
I am grateful to my hon. Friend, who has focused so much on this important sector. I assure him that we are totally focused on looking at what more can be done in all areas to support this vital UK sector.
John Mann (Bassetlaw) (Lab)
T1. If she will make a statement on her departmental responsibilities.
David Warburton (Somerton and Frome) (Con)
T2. Given the revisions to the feed-in tariffs that will shortly come into force, has the Minister made any assessment of the likely effects on the solar industry, particularly in the south-west, where the sun nearly always shines?
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
Of course, my hon. Friend is absolutely right—the sun nearly always shines there. It is a great place for solar, which has been a spectacular success there. The tariffs aim to give generators with well-sited projects appropriate rates of return, so around 5% for solar. We believe that that will save bill payers between £380 million and £430 million a year by 2021, while at the same time enabling up to 220,000 new installations to be subsidised under the new feed-in tariff.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
T3. What steps are the Government taking to address the increasing shortage of skills in the nuclear industry?
Andrea Leadsom
We have already taken a lot of action to tackle the skills problem at all levels, from programmes to attract more schoolchildren to science, technology, engineering and maths careers to apprenticeships and training at all levels, as well as setting in train work to determine the scope for transfers of skills from wider sectors. My hon. Friend is right to highlight the need for more nuclear skills. Hinkley C alone will provide up to 25,000 jobs and 1,000 apprenticeships.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
T4. The Department’s impact assessment suggests that 18,700 jobs could be lost as a result of the 65% reduction to the solar feed-in tariff. That affects jobs in my constituency. What loss in national insurance contributions and income tax will that mean for the Government, particularly in light of the £16 billion shortfall in tax receipts last year? What assessment has been made of the combined effect if Her Majesty’s Revenue and Customs presses ahead with the increase in VAT to 20% on domestic solar installations?
Andrea Leadsom
I can assure the hon. Gentleman that the Government remain committed to the ongoing success of the solar industry. As I explained in an earlier reply, we cannot simply keep jobs going as a result of subsidy, but our best guess is that our new feed-in tariff will support up to around 23,000 jobs in the solar sector. Of course, it is for the sector to bring down the costs as far as possible to reach a subsidy-free stage by 2020. We will do everything that we can and, as I have also said, if the VAT rate has to go up, we will look at what more we can do within the tariff to ensure that we do not penalise the sector.
Mr Douglas Carswell (Clacton) (UKIP)
T5. I was absolutely delighted when the Minister said in June, at a renewable energy summit, that we were going to remove subsidies. When does she expect onshore and offshore wind subsidies to have disappeared completely?
Andrea Leadsom
Projects such as Gunfleet Sands, just off the coast of the hon. Gentleman’s constituency, provide enough clean electricity for over 100,000 homes following hundreds of millions of pounds invested by the developer, much of which was spent locally. I am sure he will have welcomed that. As we have made clear, however, we have to get the right balance between supporting newer technologies such as offshore wind and being tough on subsidies to keep bills as low as possible. We will always be working towards making technologies subsidy-free.
David Mowat (Warrington South) (Con)
By far and away the dominant source globally of low-carbon electricity is nuclear power. In the EU, a third of electricity comes from that source and China has approximately 50 stations under construction. We also need small modular reactors. Will the Minister set out what her plans are in that regard and how the UK can provide leadership?
Mike Weir (Angus) (SNP)
T7. The Minister will be aware that just before Christmas the European Commission announced new import tariffs, backdated to May last year, on Taiwanese and Malaysian solar panels. That could result in many solar companies having an unwanted and potentially devastating tax bill. Will she take action to assure that that will not happen?
Andrea Leadsom
The hon. Gentleman is right to raise this matter. It is a real concern that, in spite of the fact that the cost of solar panels has dropped so dramatically, the cost in Europe remains higher than elsewhere in the world as a result of the import tariffs. As I mentioned earlier, my right hon. Friend the Secretary of State wrote to the Trade Commissioner explaining how very bad this is for the ongoing success of the UK industry. We will do everything we can to try to ensure the tariffs are removed as soon as possible.
Diana Johnson (Kingston upon Hull North) (Lab)
T8. We were disappointed in the Humber last year not to be granted the national college for wind energy, especially in light of the fact that renewables are so important to the future of the area. Will Ministers agree to meet me and representatives of the local enterprise partnership to discuss what more can be done to promote a national wind college that might attract local funding?
Andrea Leadsom
Yes, I would certainly be delighted to meet the hon. Lady and colleagues. I can tell her that I recently had the huge pleasure of seeing the new Siemens turbine blade site in Hull, which is fantastic and so impressive. It is a real injection of enthusiasm, new jobs and apprenticeships in her area. We should do everything we can to promote the northern energy powerhouse that is taking off and doing so well.
Several hon. Members rose—