Charles Hendry
Main Page: Charles Hendry (Conservative - Wealden)
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I have regular discussions with other Government Departments, including the Department for Communities and Local Government, on how to ensure that local communities hosting new nuclear power stations benefit in the long term from these large and nationally important projects. The Government will announce our conclusions shortly.
Tessa Munt
Thank you very much, indeed, Sir.
The Minister will know of my concerns about the long-term impacts of both the Hinkley Point project and the National Grid’s proposals to put pylons across the Somerset Levels, when we would naturally prefer that it was done underground. Has the Minister had distinct discussions about the crucial importance of business rate retention for the benefit of the local communities? Will he meet me and representatives from local authorities in my area to discuss this further?
Charles Hendry
The humour arose because I inadvertently sat on the Secretary of State, which shows our commitment to work seamlessly together in this coalition! My hon. Friend makes an important point. We recognise that EDF has already committed about £90 million for a section 106 agreement, but we recognise, too, the need for greater signals for the long-term benefit of the community from those who deliver nationally important projects.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I will endeavour not to sit accidentally on either of my Front-Bench colleagues this morning. One of the claimed community benefits of Hinkley Point is the ability to create and maintain highly skilled jobs. Will the Minister give his reaction to the comments of Citigroup in response to the reports of construction costs at Hinkley increasing by 40%, suggesting that an already very challenging programme might be reaching the point of impossibility?
Charles Hendry
The hon. Gentleman nearly did sit on his right hon. Friend the Member for Don Valley (Caroline Flint). He makes an important point. We are in close conversations with EDF and other potential developers of nuclear plants and we recognise that they have to be delivered in a cost-efficient way. We do not recognise the figures in the Citibank report, but we will continue to work with the company to ensure that this low-cost, large-scale, low-carbon source of generation can be part of the future energy mix.
Tom Greatrex
I am grateful to the Minister for that response. I am sure he will also be aware of the evidence that Volker Beckers, the chief executive of RWE npower, gave to the Energy and Climate Change Committee earlier this week. He explained that the company was pulling out of the Horizon joint venture because continuing
“would have meant a downgrading and we could not afford to do that”.
Given the report from Moody’s suggesting that if EDF were to continue with Hinkley and, indeed, Sizewell, it would be at risk of having its credit rating downgraded, how concerned is the Minister about the prospects for nuclear new build in the UK?
Charles Hendry
The hon. Gentleman provides a partial quote, in that Volker Beckers also said that this was a result of German Government policy and of the constrained balance sheets that resulted from the nuclear levy in Germany, and that RWE is selling off £7 billion-worth of assets worldwide, making a further €2 billion-worth of cost reductions elsewhere. Essentially, this is part of a global restructuring of the company. We continue to believe that the measures we are putting in place through market reform—more detail will be published very shortly—will create the right environment for investment in our low-carbon infrastructure for the future, which is so critical for our energy security.
Mr Tim Yeo (South Suffolk) (Con)
Does my hon. Friend agree, however, that there is no prospect of a new nuclear power station at Hinkley Point or anywhere else in the UK until we have absolute clarity about the contracts for difference regime? That clarity must extend to the credit status of the counter-party, compliance with the EU state aid regime and the setting of the strike price. Will the Minister tell us when we will have that clarity?
Charles Hendry
I can give my hon. Friend the assurance that the clarity he seeks will be published very shortly, within the next few days. When we publish the Bill, we will publish a further technical update, which will provide much of the information for which he asks. We have been very keen that the Bill goes through the process of pre-legislative scrutiny, so that his Committee, the Opposition Front-Bench team and others can contribute actively to it.
Mr Edward Leigh (Gainsborough) (Con)
7. What steps he is taking to listen to a diversity of views on the causes of change in the Earth’s climate.
Thomas Docherty (Dunfermline and West Fife) (Lab)
11. When he expects to conclude the assessment of bids for funding of carbon capture and storage projects.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Bidders were required to register their interest in the carbon capture and storage commercialisation programme with the Department by 13 April, and must submit bids by 3 July. Once bids are submitted, a full and thorough assessment will be carried out, and decisions on which projects to support will be taken in the autumn.
Thomas Docherty
I am grateful for that answer. Obviously the Minister will know that we in the UK have vast reserves of untapped coal, including much in Fife. Will he try to ensure that the opportunity for clean-coal technology is not lost in the current process, and will he find the time to come to Fife and see our technologies first hand?
Charles Hendry
I would always be delighted to find a chance to go to the hon. Gentleman’s constituency. As he knows, I fought Clackmannan in the 1983 election. They did not see the need for my presence there at that time, but finding other reasons to go back would be a great pleasure. We see this issue as an important part of coal policy, and we want it to provide a long-term future for coal in the energy mix. There are tremendous resources around the United Kingdom, and the work being done in his constituency and elsewhere is important to that process.
Mr Mark Spencer (Sherwood) (Con)
22. The Minister also fought a seat in Mansfield, very close to Thoresby colliery. If he wants to come half way up the country, he might come to see the good work going on at Thoresby colliery. I hope that he can assure the House that when the clean coal technology is developed, it will give this country a great future of energy reserves.
Charles Hendry
I did eventually work out that fighting mining seats was not the best way to get elected to this House; it is more accurate to say that they fought me, rather than I fought them. Many areas around this country have tremendous resources that can benefit from this technology and, in addition, great technological skills that we can bring forward in this process. This is a world-class, world-leading competition, and it is a very exciting time for this industry.
Mr Speaker
The Minister of State is a self-effacing fellow. If memory serves me correctly, although he was unsuccessful in Mansfield he did lose in 1987 by only 56 votes, and I think the House ought to know that.
Charles Hendry
I have yet to be tempted to fight a seat in Newcastle, but these opportunities may still happen. I was grateful for the chance to meet the hon. Lady and some of the team from Newcastle university—they and others are doing very important work in this area. We are still looking at some of the work, and I have a meeting coming up with one of the major global companies, Linc Energy, to try to understand more fully and effectively the work that it is doing in this sector. We think that it can be a player, but it is not in the forefront for the first stage of carbon capture and storage projects, because of the current stage of the technology.
Tony Baldry (Banbury) (Con)
It is estimated that carbon capture and storage technology could support an amazing 100,000 jobs by the end of the next decade, so does my hon. Friend agree that speed is very much of the essence if we are to maximise the huge opportunities that this technology offers?
Charles Hendry
I agree strongly with my hon. Friend, and the reason why we have brought forward this competition with the speed that we have—three months for submissions to be made and another three months or so before the final outcome is known—is the importance of speed. Work is going on around the world to try to deal with this. We think that with £1 billion up front and £125 million for research and development, and through our new market reform structure—a long-term mechanism for supporting that industry—we can move this from being a few pilot projects to an industry.
Dr Julian Huppert (Cambridge) (LD)
12. What support he plans to provide for Cambridge retrofit and other schemes to improve the energy efficiency of existing buildings.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I very much welcome the comments made by the chair of the Environment Agency. I believe he is correct in assessing that, subject to rigorous regulation and monitoring, hydraulic fracturing can safely be used in the UK for shale gas exploration. I also agree on the need to proceed with caution. Fracking should be carried out only under close regulatory control, to ensure that risks are minimised and the environment is fully protected.
Mr Sheerman
It is a relief to know that mentioning the abbreviation “fracking” is within the House rules. Many of us believe that fracking has real potential for energy security, and although we should proceed with it carefully, it could be of huge benefit to this country. Please, do ignore some of the siren voices in the environmental lobby and get on with doing it in a cautious but determined way.
Charles Hendry
The hon. Gentleman is absolutely correct, because we cannot ignore what is happening elsewhere around the world. The gas price in the United States is now one quarter of that in Europe and one seventh of that in Asia, so this is a game-changing technology. However, our commitment is absolutely clear: for this to go ahead, we have to have the tightest regulatory controls and the greatest focus on environmental protection. This is a densely populated island, we have to have public support for this technology going forward and we intend to go about this in a very constructive way, involving all the expert opinion we can.
Mr Dennis Skinner (Bolsover) (Lab)
Is there not another side to all this? Does not the process use a vast amount of water and involve chemicals as well? It runs counter to all this green deal talk that we hear so often. Will the Minister ensure that all those reservations are taken fully into account?
Charles Hendry
Let me give the hon. Gentleman an absolute assurance that all those issues will be completely taken into account. The fluid used is 99% water and there are already very strict controls on how it is used and on what happens after it has been through the process. There are very strong regulations, too, on how the fracking activity is separated from the water table and they are often several thousand feet apart. All those issues will be considered with the greatest care before we go forward. We believe that this technology has real potential, but it must be used in the safest possible way.
Simon Wright (Norwich South) (LD)
15. What steps he is taking to support combined heat and power biomass gasification plants.
Joan Walley (Stoke-on-Trent North) (Lab)
16. What his policy is on investment in new nuclear power.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
New nuclear power will have a vital role to play in our energy mix alongside other low-carbon forms of generation provided it can be delivered in a way that provides value for money for consumers and that is consistent with the coalition Government’s commitment to no public subsidy.
Joan Walley
I thank the Minister for that reply. Given the uncertainties about future investment, will he give us again an absolute assurance that if it is to be delivered, there will, as the coalition agreement requires, be no subsidy and no hidden subsidy, either?
Charles Hendry
I refer the hon. Lady to the statement we made in October 2010 about exactly how we define subsidy and what would be meant by that commitment. We are absolutely clear that this technology must stand on its own feet. The process for taking it forward is designed to ensure that that is the case and it will be very transparent. We recognise that higher costs are associated with low-carbon technologies than with high-carbon technologies, but we remain firmly committed to that statement.
Harriett Baldwin (West Worcestershire) (Con)
19. May I put on record, Mr Speaker, our admiration of your awesome knowledge of electoral history? Nuclear power is an important source of stable energy in this country and press reports about the ability to continue to have 20% of our power coming from nuclear energy have been worrying. Will the Minister repeat his reassurances that 20% of our energy will continue to come from nuclear power?
Charles Hendry
Your knowledge, Mr Speaker, is sometimes not so much awesome as scary and I find that you know more about my electoral history than I do.
I can give my hon. Friend that assurance. We believe that the initial role of new plants will be to replace the old plants that are coming out of commission. We do not have a set Government target for delivery, but the industry thinks that it can deliver 16 GW of new nuclear power by 2025. We have identified the eight sites where that will go forward and, taking forward the work of the previous Administration, we have created the most attractive regime anywhere in Europe for new nuclear investment.
Dr Alan Whitehead (Southampton, Test) (Lab)
20. The Minister has mentioned the target of 16 GW by 2025 that the industry states it can provide, but the industry clearly is not in a position to provide that given recent developments. What work has he undertaken to revise his estimate, particularly in relation to the national planning statements, of the number of gigawatts that will be provided over the coming period through nuclear power?
Charles Hendry
I would take the hon. Gentleman to task on this. The two consortia that continue to go forward as planned—the EDF-led one and the one in Cumbria—are looking at 9.7 GW. The Horizon one—I have strong hopes that new investors will come in and take forward that programme—will deliver an additional few gigawatts as well. I firmly believe that, following on from the work of the previous Administration, we have created a very attractive regime for people from around the world to look to be part of the nuclear renaissance in the United Kingdom. We cannot do this without international investment and we recognise that we need to create the right framework for that to come forward.
Alex Cunningham (Stockton North) (Lab)
21. What steps he is taking to help households improve their energy efficiency.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
Will Ministers redouble their consistent and very welcome efforts of the past couple of years in support of the onshore manufacturing sites for offshore wind turbine production—not least sites like Kishorn in my area, which I raised with the Minister’s predecessor—which have lost out in enterprise zone status, and therefore find themselves at a bit of a competitive disadvantage over the next five years? I am sure that a summer recess ministerial visit to Kishorn and the west highlands would be most welcome and would boost morale.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
My right hon. Friend will, I am sure, be delighted to know that I am already planning that. We are looking at a visit to Nigg before going on to Shetland and doing other parts of Scotland at the same time. I am delighted to have the chance to take part in that process. We should absolutely celebrate the way that some of our great, historic industrial facilities, built for the oil and gas industry, have been given new opportunities and a new lease of life, as they start to build the infrastructure that will be necessary for our renewable future.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Have Welsh Government Ministers requested at any point that they should have the final say in whether fracking developments take place on Welsh soil?
Charles Hendry
As the hon. Gentleman will be aware, decisions on energy infrastructure matters for Wales are made on a nationwide basis. We know that that is what the industry looks for. But of course, in that process there has to be local authority planning consent for the specific project. There has to be approval by the Environment Agency and its equivalents in Wales and Scotland, if the project is taking place there, and by the Health and Safety Executive. All the appropriate bodies are involved in that process.
Ian Swales (Redcar) (LD)
I welcome the current carbon capture and storage competition. As the Tees Valley has 18 of the top 30 UK carbon emitters, I am sure the Minister will agree that its bid has a lot to commend it. Will he ensure that the needs of heavy industry are given due weight alongside the needs of energy generators?
Ian Lavery (Wansbeck) (Lab)
Coal will continue to provide between 27% and 50% of electricity in the UK for the foreseeable future. Can the Minister explain what Government support will be given to the British deep-mined coal industry to prevent it from extinction in the next few years?
Charles Hendry
The most important thing that we can do for the coal mine industry is to show that there is a continuing role for coal in the generating mix. We are all clear that we cannot have unabated coal in the mix in the future, and new plants will need to be equipped with carbon capture and storage technology. That is why the competition that we are launching here to put the United Kingdom at the forefront of the development of CCS technologies offers the best possible future for coal to have a long-term role in the energy mix going forward.
Andrew George (St Ives) (LD)
Further to the question asked by the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), Warm Front was, in my view, undermined by the extortionate charges of a small cartel of suppliers. Given that only 22 companies are so far among the providers for the green deal, can the Minister assure us that local fitters and local suppliers can be part of the programme, so that costs are competitive?