Renewable Energy (The Humber)

Charles Hendry Excerpts

Wednesday 16th February 2011 Westminster Hall

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

It is a privilege to serve under your chairmanship, Mrs Main, particularly on a subject that I know is dear to your heart. I congratulate my hon. Friend the Member for Brigg and Goole (Andrew Percy) on securing this debate and on returning to a theme that he has become accomplished in discussing in this House. He and my hon. Friend the Member for Cleethorpes (Martin Vickers) make a powerful duo, and they are eloquent and dedicated advocates for the interests of their constituencies. They have worked hard to create a broad coalition on both sides of the House and of the Humber, and to bring together the interests of the local authority, the business community and the political representation in the Greater Humber area. That will ensure that we take maximum advantage of the benefits that undoubtedly exist. Contributions from other hon. Friends concerning how such opportunities can benefit their constituencies have also been encouraging, and we have heard from my hon. Friend the Member for Colne Valley (Jason McCartney), and about the interest in bioethanol from my hon. Friends the Members for Hove (Mike Weatherley) and for York Outer (Julian Sturdy).

This is a timely debate because we are looking at the potential for a huge regeneration in parts of the country that have been badly affected by economic decline over many years. One of the most exciting aspects of the renewable sector is the potential that it brings for economic prosperity in areas that have suffered badly. We must put this debate in the national context. The Government are committed to a major roll-out of renewables, because we believe that it will help to secure our long-term energy interests, help tackle climate change and meet our renewable energy targets for 2020 and beyond. It will also deliver many green jobs across the United Kingdom, revitalising our manufacturing sector.

The 15% target for renewable energy by 2020 is challenging, but we are sure it is achievable. We are on track for the first interim target of 4% renewable energy by 2011-12, and we have 25 GW in the renewable electricity pipeline. We should look at the resources around us—we have heard about how such resources play out for the Humber. Around these islands we have 40% of Europe’s wind and some of the highest tidal reaches in the world. We are already global leaders in the offshore wind sector, with 1.3 GW of installed capacity.

This debate takes place against the background of the Government’s commitment to localism, and we expect communities that accept renewable energy developments to receive distinct and specific benefits. We have mentioned the localisation of business rates, and we are looking at other ways in which communities can benefit from hosting facilities on behalf of the wider national interest.

My hon. Friend the Member for Cleethorpes discussed offshore wind. The Carbon Trust has estimated that the offshore wind sector could create 70,000 jobs by 2020. Last week, I was delighted to announce the grant of consent for the Humber gateway offshore wind farm, which will generate enough clean electricity for 150,000 homes. We put in place the offshore wind developers forum specifically to identify barriers. We are determined to drive that process forward as fast as possible, identify potential barriers to investment and do what we can to ensure that they are dealt with and do not become insuperable. We still need an acceleration in deployment and technical advances to realise the potential of offshore wind.

UK manufacturing activity will be key to realising the economic potential offered by offshore wind across the whole supply chain, and I am confident that the offshore wind sector will grow substantially in the coming years. We are determined to avoid mistakes that we have seen in the past, where although our waters contain some of the largest offshore wind farms in the world, the jobs and contracts go to mainland Europe or the far east. In taking forward the next stage of offshore wind development, we must ensure that those jobs come to the United Kingdom.

We are the world’s leading market, and any company that is keen to invest in the offshore wind manufacturing chain should be looking at Britain. The contribution made by Siemens, and its determination to build in the UK, and the interest we are seeing from Gamesa, GE, Mitsubishi and other companies shows the extent to which Britain will be a global leader in this technology.

We are looking at making larger turbines than have been developed before. They need to be more reliable than those used for onshore wind, and to have deep foundations and undersea cabling. That means that they will be harder to transport than some of the turbines used for onshore wind, and there is a strong case for that manufacturing to be done locally to market.

I support the work that has been done on both sides of the Humber and, indeed, in other parts of the country to showcase the benefits of this technology for potential investors. It is also interesting to see the work that well-established local companies are doing to give themselves a new direction. For example, Cosalt, which was originally known as the Great Grimsby Coal, Salt and Tanning Company when it was founded back in 1873, now provides engineering, safety and inspection services to the wind energy sector. That typifies the economic development thinking in the area. There is no doubt that such activity should provide a major boost to the British economy, and there is every reason for us to hope that the ports along the Humber will be able to develop from that.

Of course, this issue is not just about wind power. One of the most exciting aspects is how the renewables sector brings together in specific locations a raft of different technologies and the contributions that they can make. Biomass is part of that. In 2009, biomass electricity provided 87% of total renewable generation in the Yorkshire and the Humber region. There is no doubt about the significance of the contribution that it can make.

My hon. Friends spoke about the importance of bioethanol and the leadership that Britain ought to be looking to establish in this sector. Bioethanol offers one of the few options in the short term for tackling greenhouse gas emissions and for meeting our renewable energy targets in the transport sector. We are considering the opportunities that can be provided through eligibility to benefit from the renewable transport fuel obligation and the renewables obligation. As my hon. Friend the Member for Brigg and Goole set out in opening the debate, we are looking at the renewables obligation, and this issue can be part of that process, although as he will understand, it is my colleagues in the Department for Transport who lead on those issues.

We are also committed to harnessing the benefits that a successful marine renewables sector can bring to the UK generally and, within that, to the Humber area. The schemes to which my hon. Friend referred show some of the thinking that is going on. This is a fast-moving sector. As he has said, the struggle is in getting things to a commercial scale. What we have seen in looking at the schemes that were in place already—the marine development fund and particularly the deployment fund—is that the bar was set too high to be relevant to the stage that the industry is currently at.

We have examined how we take the technology further and faster. Its development is an explicit written element in the coalition agreement, which is at the core of what we are trying to do in the Department of Energy and Climate Change. The benefits go well beyond providing us with secure, clean electricity, because there is an opportunity to build a new manufacturing sector in the UK, which will create new jobs and grow economic opportunities both at home and globally.

That will happen only if we ensure that we capitalise on the hard work that the sector is doing already and ensure that the right foundation is in place on which to build success. We have established a marine energy programme, and we now want to ensure that small, dynamic companies have every reason to stay in Britain by putting in place a network of marine energy parks around the UK. That will enable us to take forward the technology and ensure that those emerging companies want to develop in the UK, rather than, as we have seen too often in the past, taking their technologies elsewhere in the world.

We have brought forward the banding review for renewables obligation certificates by a full year, so that we can provide much greater certainty to investors. The difference between different parts of Britain—the difference between ROCs support in England and in Scotland—will feature in that, although of course the level at which support is set in Scotland is a matter for the Scottish Government and the same applies in Northern Ireland.

We can offer a real opportunity to take forward these technologies in this country. Our objective must be to remove barriers, to encourage investment and to ensure that we identify where the challenges are, so that the potential throughout this country can be achieved. This has been a short but important debate. The Humber has a very important contribution to make to the renewable energy future of this country, and I again pay tribute to the Members of Parliament who are representing the area for the determination and assiduity that they have brought to its cause.