Oral Answers to Questions
Debate between Charles Hendry and Neil Carmichael
Charles Hendry
I had never seen the hon. Gentleman as an advocate of alternative energy policies.
I had a meeting yesterday with the head of the National Union of Mineworkers and the head of the National Association of Colliery Overmen, Deputies and Shotfirers, but if the hon. Gentleman feels that it is time for another meeting, I will of course consider that.
Neil Carmichael (Stroud) (Con)
17. What assessment he has made of the likely implications for his Department’s energy policy on the green investment bank.
Charles Hendry
I am interested to hear the hon. Gentleman’s comments. I am not aware that he has written to me on the subject. If he has done so, I will be very keen to talk to him to see if there are things that we can do to speed up the process, because I understand the impact that it could have on employment in his constituency.
Neil Carmichael (Stroud) (Con)
Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?
National Policy Statements
Debate between Charles Hendry and Neil Carmichael
Charles Hendry
My hon. Friend raises an important issue. The situation in Germany is very different from the situation here. The plan in Germany had been to have an artificially early closure of the nuclear fleet, and Chancellor Merkel’s Government have allowed them to operate for their full lives. They have reversed a decision that would have brought about early closure. The approach that we have always taken in the United Kingdom is that plants should operate for their safe life. If there is an independent assessment that they can operate for longer than had been planned, that should be considered. The case here is based on safety and security issues and some recent life extensions have been given, which we welcome. At the end of the day the extensions are a bonus rather than a building block in energy policy, but my hon. Friend makes an important point.
I want to get back to some of the key areas of the debate. Our concern is that the existing market framework will not deliver the scale of investment needed in renewables, nuclear and carbon capture and storage, all of which have significant up-front costs. Our electricity market reform programme will examine the reforms necessary to restructure the electricity market to decarbonise the power sector by the 2030s while maintaining security of supply and affordable prices. We must move quickly to give investors certainty about our reforms because of the long lead-times in developing new generation capacity. Our reform of the planning system for major infrastructure, including for major energy infrastructure, also has an important role, as does the consultation on the revised draft energy national policy statements.
Reducing demand for electricity wherever possible is important in meeting our energy objectives. Our 2050 pathways analysis shows that total UK energy demand from all sources will need to fall significantly by 2050. As I have mentioned, the green deal will save energy in the home and non-domestic buildings. We will also roll out smart meters to help to reduce demand. However, those savings will be offset by increases in other areas, such as the increased use of electricity in industrial and domestic heating and in transport. Our 2050 pathways analysis suggests that demand for electricity may even double by 2050, as we plug into the grid to power our cars and heat our homes.
Decarbonising surface transport is essential to meet our target to reduce greenhouse gas emissions by 80% by 2050, as we are required to do by law. We expect electrification to play a major role in achieving that. While electric vehicles can be powered up overnight by fluctuating electricity generation, trains, for example, will need more base load generation. We have already announced £900 million of investment in the electrification of train lines from London to Didcot, Newbury and Oxford, and for lines serving Liverpool, Manchester, Preston and Blackpool. In the new year, we will consult on the next steps for building a national high-speed rail network, which will free up capacity to allow a shift of freight from road to rail and provide an attractive low-carbon option for travelling between our major cities.
Some 80% of journeys in the UK are currently made by car, and cars will continue to play an essential part in our national transport infrastructure. The Government announced in the spending review investment of more than £400 million in measures to promote the uptake of ultra-low-carbon vehicle technologies. That includes the plug-in car grant, which will be available from January 2011 and which will provide a grant of 25% of the vehicle price up to £5,000. We are also continuing the plugged-in places programme, which supports the development of electric vehicle recharging infrastructure in strategic locations. As part of the coalition agreement, we have also undertaken to mandate a national network of vehicle recharging facilities.
We want to see more decentralised and community energy systems, such as microgeneration, make a contribution to our targets on reducing carbon emissions and increasing energy security. However, we do not believe that decentralised and community energy systems are likely to lead to the significant replacement of large-scale energy infrastructure, which is why there is an urgent need for new major energy infrastructure.
Neil Carmichael (Stroud) (Con)
I have flicked through the plans, and I cannot see any reference to hydro-power in the context of micro-schemes. Do the Government intend to support hydro-power and particularly small-scale projects?
Charles Hendry
The Government are committed to taking us forward, and I welcome my hon. Friend’s support in that respect. Hydro has an important contribution to make. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change, set out how we can hope to achieve that ambition in his recent speech on the subject. Most issues that we are discussing today relate to major applications of more than 50 MW. Most hydro schemes will fall below that threshold and will therefore be subject to local planning decisions.
The section of the energy policy statement that deals with renewable energy does not cover major hydro schemes, such as major schemes involving tidal flow, because at this stage there is no evidence of a serious application for such a scheme of more than 50 MW. If that happens, we will need either to review the national policy statement or to introduce one specifically for marine technologies. In this country, we have a network of rivers, which are a potential source for electricity generation that we are keen to see harnessed.
Charles Hendry
I have certainly heard that point before. The OECD has a fundamentally different view of the availability of uranium stocks, and there is work to be done in plutonium reprocessing, which would provide an additional source of fuel. Furthermore, work is being done on the development of thorium reactors, which do not give rise to many of the concerns that people have about uranium reactors. A great deal of progress can be made and, at the end of the day, the decision is for investors to make. If they do not believe that there is sufficient uranium to power their plants for their lifetime, they will not make that investment. They will base their decision on the facts available to them and they will need to be reassured about the availability of stocks.
The overarching national policy statement contains information on the impacts that need to be considered for all energy infrastructure, while the technology-specific NPSs contain additional information on the impacts that are specific to each technology. They take into account the appraisals of sustainability. We have revised the AOSs for the non-nuclear NPSs substantially, which is why we are a carrying out a fresh consultation.
We believe that the revised appraisals put readers in a much better position to evaluate the revised draft NPSs. The revised AOSs give a clear picture of the likely significant impacts at the strategic level of consenting energy infrastructure projects in accordance with the NPSs, by reference to a wide range of relevant environmental, social and economic factors. They also explain more clearly why we have not chosen a number of alternative policies that others proposed, but which would not have been as good in meeting our overall objectives of maintaining safe, secure and affordable energy supplies while moving to a low carbon economy and reducing carbon emissions by 80% by 2050.
We have made significant changes to the statement of need in the overarching national policy statement. It now includes research that was not available for the first draft, including more detailed analysis of scenarios to achieve an 80% reduction in carbon emissions by 2050. We have also included more detail on what is required for an economic feasibility assessment to ensure that fossil fuel generating stations are carbon capture-ready.
Neil Carmichael
The NPS gives great support to those of us who support a green investment bank because it provides a framework for investment, which is necessary to the platform of support that investors might require. How important does the Minister think the green investment bank will be in delivering some of the outcomes?
Charles Hendry
The Government have committed £1 billion to the green investment bank, with additional funding to follow in due course. I am extremely pleased that the Environmental Audit Committee is to examine how the bank might work. Infrastructure banks in other countries—for example, the one in Holland, which was funded with €2 billion of initial capital, but brought in €100 billion of additional finance—can play a critical role, particularly in getting business through the so-called valley of death.
Returning to the technology-specific NPSs, we have revised the fossil fuels policy statement—document No. 2—to clarify the requirements for carbon capture readiness in terms of technical and economic feasibility in line with the request made by the Energy and Climate Change Committee.