Oral Answers to Questions

Charles Hendry Excerpts

Thursday 16th December 2010 Commons Chamber

[Pat Glass (North West Durham) (Lab)]

4. When he expects to publish the results of his consultation on smart metering.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

There has been an excellent response to the consultation, with more than 300 replies having been received from a wide range of stakeholders, which have broadly welcomed the key proposals in the prospectus. The Government expect to respond formally to the consultation early in the new year.

[Pat Glass]

The Minister will be aware that smart meters, in themselves, are simply pieces of kit; on their own, they will not change behaviour or reduce energy consumption. What are the Government and the energy companies doing to educate consumers, because that is how we will reduce energy consumption?

[Charles Hendry]

The hon. Lady is right that the consumer experience is absolutely at the heart of the success of the smart meter roll-out. We are working very closely with Citizens Advice, Consumer Focus and other groups that represent consumers, including those representing older consumers, because the experience of consumers and making sure that they use smart meters most effectively to their advantage is at the core of what we are trying to achieve.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Crucial to obtaining the benefits of smart meters is ensuring that they are for everyone in this country, no matter where they live—no matter how remote and rural their location—and no matter what the construction of their house, even if it be with walls so thick that most signals will not get through. We need to be mindful that none of the early roll-outs of smart metering lock in a technology that will not be universal. Will the Minister ensure that his response to the consultation gives us a truly universal metering system?

[Charles Hendry]

I congratulate my hon. Friend on his tenacity on this issue and the way in which he continually pushes us to make sure that we keep it very much in our mind. We are involving Ofcom directly in our discussions and our approach to developing this area to ensure that exactly those issues are very much in our mind.

[Kevin Brennan (Cardiff West) (Lab)]

But what about smart meters that are being installed now which might be incompatible with the meters that will be installed in future? I thought that the Government were abolishing Consumer Focus, not working with it, as the Minister said in his earlier answer. What will he do to protect consumers now from those future costs?

[Charles Hendry]

One of the major operators is installing smart meters as we speak. It is installing many thousands every week, so we have to ensure that the regime we put in place for the longer term takes account of those issues. The operator is, to some extent, doing this at its own risk, because if the meters are not compatible with the longer-term solution they will, in time, have to be removed. The hon. Gentleman is right to say that we need to ensure that in all these areas the consumer interest has to be right, because if we do not get that right, this is the sort of programme that could get stuck in its tracks.

[Damian Hinds (East Hampshire) (Con)]

5. What support his Department is providing for community energy schemes; and if he will make a statement.

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[Andrew Percy (Brigg and Goole) (Con)]

7. If he will make it his policy to provide long-term revenue support for renewables obligation certificates for marine renewable technology to ensure that developers and manufacturers locate themselves in the UK.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

We are committed to the establishment of a system of feed-in tariffs in electricity as well as to the maintenance of banded renewables obligation certificates. We have already brought forward the scheduled review of the renewable obligation by a year to give investors greater clarity and confidence. As part of the electricity market reforms, we will set out plans for support for marine and other renewables for the longer term.

[Andrew Percy]

The Minister will be aware that I represent not only the best constituency but one of the most tidal, with several major rivers including the Ayr, the Ouse, the Trent and parts of the Humber. Does he agree that the Humber area generally has huge potential in terms of marine and tidal energy, and will he commit to supporting the pan-Humber vision of making the Humber a centre for renewable energy?

[Charles Hendry]

My hon. Friend raises an issue that applies to many parts of this country. The United Kingdom has some of the highest tidal reaches of anywhere in the world and it is our determination that we should lead in marine technologies rather than follow others. Undoubtedly, the Humber has a significant contribution to make in that respect. Many areas could contribute to that process, which is why we are putting in place a marine energy programme with a view to leading to marine energy parks where those technologies can be taken forward.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Minister aware that about two months ago, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), met company and trade representatives in my constituency to discuss support for the renewable heat initiative, which I know the Secretary of State has also personally supported? We were expecting a statement last month, this month and now, I hope, in January. Will the Minister look into that and bring forward the statement? A lot of new work in Coventry and throughout the private sector depends on it.

[Charles Hendry]

I am not quite sure how renewable heat ties into marine and tidal technologies, Mr Speaker, unless it is very hot water indeed. We are working to bring that to a conclusion; we understand the pressure across the House for that clarity and we will provide it in the very near future.

[Andrew George (St Ives) (LD)]

Now that the wave hub plug is in place off the north coast of my constituency—a very exciting project that scales up for the first time wave energy—what will the Minister do to ensure that it is a great success? In Scotland, ROCs provide a far better return for projects. Will he work with me to ensure that this project is a great success and adds to renewable energy?

[Charles Hendry]

The project in Cornwall is one of two beacon facilities in the country, the other being in Orkney. That is exactly the approach that we want to take forward for marine energy parks, bringing together the relevant technological, academic and engineering skills that can encourage companies to stay in this country. We have been concerned that some companies have looked overseas to take their technologies forward and we have to put in place the right mechanisms to keep them here in the United Kingdom. Cornwall has a fantastic opportunity in that regard.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

8. What recent discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on mandatory carbon reporting for private companies.

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[Andrea Leadsom (South Northamptonshire) (Con)]

13. What assessment he has made of the efficiency and effect on quality of life of onshore wind farms.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The electricity output from a wind farm is a key factor in determining if and where it will be built. The assessment of a planning application includes, among other things, an analysis of visual, landscape and noise impacts. We are constantly looking at ways to ensure that the analysis remains robust and protects the quality of life of people living close to wind turbines. We have already taken action to ensure that the issue of noise is addressed in a standard way across the country.

[Andrea Leadsom]

I thank my hon. Friend for that answer. Can he tell me what assessment he has made of the Danish state energy company’s recent decision to cease building further onshore wind farms, and a similar decision in France in the summer to restrict onshore wind farms, bearing in mind their impact on local communities versus their efficacy? Can he reassure me that in future we will take into account the impact on local communities, and that we will not force them to have wind farms where they do not fit the environment?

[Charles Hendry]

My hon. Friend will be aware that the United Kingdom is third from bottom in Europe on the electricity it gets from renewable sources, so the situation here is in no way comparable to that in most other European countries. We are absolutely committed to giving local communities greater say on the issues—that is at the heart of the Localism Bill. We are also determined that the host communities should realise real benefits.

[Miss Anne Begg (Aberdeen South) (Lab)]

Perhaps a solution to the question the hon. Member for South Northamptonshire (Andrea Leadsom) has just raised is to put the wind farm offshore. Will the Minister join me in congratulating a project in Aberdeen that yesterday secured €40 million of EU funding to build a centre just off the coast of Aberdeen that will develop technologies that can be used to improve the offshore wind sector?

[Charles Hendry]

I am delighted to join the hon. Lady in congratulating the company on that development. It is one of the areas of the country where there is the greatest potential, because the skills are already there in the engineering side of the oil and gas sector and the people who work in the area. We hope to see significant gains for the north-east of Scotland from developing those technologies.

[Nic Dakin (Scunthorpe) (Lab)]

15. What targets he has set for the provision of energy from onshore wind sources in (a) 2011 and (b) 2020.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The Government have not set a specific target for onshore wind energy generation. However, our lead scenario as set out in the national renewable energy action plan indicates that onshore wind capacity could be 15 GW by 2020. We are absolutely committed to deploying onshore wind in a way that takes into account the views of local communities and brings benefits to local people.

[Nic Dakin]

I thank the Minister for his answer. I know he is very committed to onshore wind energy generation and I welcome his passion. When does he expect major announcements to be made by companies as part of the round 3 onshore wind programme?

[Charles Hendry]

I thank the hon. Gentleman for the assiduity with which he advocates the interests of the Humber region and the role it can play in that regard. I was pleased to meet him and some of my hon. Friends and people representing the South Humber gateway last week to enable me to understand the case they are putting forward in that respect. We are delighted that such companies as Siemens, GE and Mitsubishi have committed themselves to major multi-million pound investments in the offshore wind sector, and we understand that some of those announcements are due to be forthcoming early in the new year.

[Andrew Bridgen (North West Leicestershire) (Con)]

16. What assessment he has made of the effects on the electricity grid of the weather of November and December 2010.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Demand for electricity has been met in full by the normal functioning of the market during this cold period, when electricity demand has been approximately 5% to 10% higher than the seasonal norm. As is usual at this time of year, there have been a few localised disruptions. However, network operators have worked hard to ensure that those consumers affected were restored as soon as possible. We will continue to work with industry to monitor the situation over the rest of the winter.

[Andrew Bridgen]

I thank the Minister for that reassuring answer, but could he outline to the House what steps he and his Department are taking to ensure that there is sufficient capacity and supply in the system to cope with the predicted energy gap?

[Charles Hendry]

We are not anticipating an energy gap over this winter in electricity generation. I was at National Grid last week, and we are in daily contact. We are looking at the margins of supply, which remain robust. We are looking at the import capacity for gas. We are looking at the role that all those technologies can play. During these very cold periods, all the energy companies understand the need to keep their plant ready to generate, to ensure that demand can be met by supply.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

In order to maintain capacity margin over the longer period, what investigation is the Minister making of electricity storage as an additional way of ensuring that margins are maintained, and that supply that comes on stream at inconvenient hours is captured and restored at convenient hours?

[Charles Hendry]

We are looking at a whole range of different technologies. We are looking at the role of battery storage, hydrogen storage and pumped water storage which is already making an important contribution at Electric Mountain in Dinorwig in north Wales. We are also looking at the role that interconnectors can play, using perhaps pumped storage in countries such as Norway, to enhance our energy security. This is a way of ensuring that renewable energy can be used in such a way that it is there when the demand is there, and it will greatly enhance our energy security in the process.

[Robert Halfon (Harlow) (Con)]

17. What recent estimate he has made of the number of homes in (a) Harlow constituency and (b) England which could receive assistance from the Government's proposed green deal.

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[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

18. What recent discussions he has had with energy companies on domestic oil pricing.

I declare an interest, as my home is heated by domestic oil.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I declare an interest, as mine is as well. We are in regular contact with energy companies, including the trade associations that represent those who supply domestic oil. Heating oil is a seasonal product, and its prices vary over the course of the year. I have spoken to the Office of Fair Trading about the price of heating oil, as the enforcement of competition and consumer law is a matter for the OFT, and it assures me that it is keeping a very close eye on the situation and is keen to receive evidence from hon. Members about any market abuse that they experience.

[Dr Coffey]

I thank my hon. Friend for that answer. Several constituents have contacted me about the price of oil. Mr Gander, in particular, relies on oil for his heating, but his supply is running low. A month ago the price was 39p a litre; it is now 71p a litre, and as a consequence he has switched off his heating system. Will my hon. Friend take up that issue throughout the Government to ensure that people are not frozen out of their homes this winter?

[Charles Hendry]

My hon. Friend raises an extremely important issue, which is about both pricing and the time that it takes to secure deliveries. People calling today who reckon they will be short of oil over the coming weeks are being told that they will not receive a delivery for three or four weeks. We are monitoring that situation day by day and are extremely aware that, if there is further snow ahead of Christmas, it could become very serious indeed. I ask my hon. Friend to provide evidence on those price increases to the OFT, so that it can investigate them.

[Julian Smith (Skipton and Ripon) (Con)]

19. What steps he plans to take to encourage the establishment of community-led low-carbon energy projects.

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[Pat Glass (North West Durham) (Lab)]

T3. Like the hon. Member for Suffolk Coastal (Dr Coffey), who is no longer in her place, many of my constituents who live in rural areas rely on heating oil, the price of which has more than doubled in the past two months. Companies are now refusing to deliver less than 1,000 litres, which is having a massive impact on families and on schools, colleges and hospitals. What will the Minister do now to deal with that exploitation?

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I would be very grateful if the hon. Lady could give me more details, because we have also heard that some companies are asking people to take lower amounts so that the delivery lorries can get to more homes and more people before Christmas. That is obviously the sensible approach. I would be very concerned if companies were artificially raising the amounts that they expected people to buy at this time.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

As we speak, severe weather is sweeping through the north of the country and heading south. Referring back to the Secretary of State’s remarks about Ofgem, will he stress in all his dealings with that body that for those living in the coldest parts of the country, such as the highlands of Scotland, a fair set of tariffs must be applied that are relevant to their circumstances? There is a real feeling of social injustice, which I believe is entirely justified.

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[Neil Parish (Tiverton and Honiton) (Con)]

Referring again to Ofgem, in the past month crude oil prices have risen by 17% but consumers are paying 70% more. Is it not time that the Government took on the oil companies to ensure that my constituents get a fair deal on oil prices? Many of them have no choice but to have oil.

[Charles Hendry]

There are two aspects to the matter. Clearly it is seasonal, with demand going up at this time of year, which inevitably pushes prices up, as with turkeys, Christmas trees and so on. However, there is a fundamental problem in the oil market, because people are not getting deliveries when they need them, even when they order well ahead. We are therefore asking colleagues to give evidence to the Office of Fair Trading so that it can see whether there is evidence of collusion or inappropriate practices.

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[Tessa Munt (Wells) (LD)]

Will the Secretary of State join me in welcoming the news of National Grid’s announcement yesterday that it will consult residents in the levels and moors in Somerset, Suffolk’s Stour valley and other parts of the country on undergrounding electricity power cables rather than using pylons? Will he congratulate residents on their peaceful and persistent campaign, which will ensure that residents in rural areas benefit from the technology that is taken for granted in urban areas, where undergrounding is standard practice?

[Charles Hendry]

I do indeed congratulate National Grid on undertaking a public consultation on whether the cost of undergrounding is acceptable to the public. I also welcome the research being carried out by the Institution of Engineering and Technology, because people in areas affected by new pylons need to be absolutely convinced of the relative pricing of overgrounding and undergrounding.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T6. My constituents have faced an incredibly difficult winter, and they want to know what action the Government will take now, not in the future, to make energy companies bring down their prices.

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[Malcolm Wicks (Croydon North) (Lab)]

On energy security, will Ministers examine critically the supply obligation that we place on companies, given that the tendency to buy short term rather than long term, and sometimes on the spot market, means that there can be no absolute guarantee that the supply will be in place in critical and extreme times for the world?

[Charles Hendry]

That is an element of the Energy Bill. We will increase the supplier obligation to ensure that suppliers can meet demand at times of greatest demand. I have also spoken with other Governments—Qatar this week and Norway more recently—about how to secure more long-term contracts to provide greater security of supply and greater price predictability.

[Mr Tom Watson (West Bromwich East) (Lab)]

I am very concerned about what I have heard in the Chamber this morning. Hon. Members have said that there is a shortage in the supply of oil, that their constituents are going cold, and that schools and hospitals are losing out. We obviously have an oil supply crisis. The Minister of State, the hon. Member for Wealden (Charles Hendry), says that he wants suppliers to ration their oil, but will the Secretary of State take personal command of this situation, call in the oil supply companies and sort this out?