Energy Bill [Lords]

David Anderson Excerpts

Monday 18th January 2016 Commons Chamber

[Lisa Nandy]

I do agree with the hon. Gentleman. There is also an opportunity for us to make sure that the British workforce benefit from the skills to be gained from investing in that technology, so that we can export around the world not just the technology but the skills and knowledge of our workforce. That short and medium-term investment would be for our long-term gain, and it is important that we see it as such.

Experts at the Energy Technologies Institute have estimated that, without CCS, by 2020 the costs of reaching our climate targets could be in the order of £40 billion to £50 billion a year more than if CCS were deployed. Ruling out technologies that can cut the cost of low-carbon transition is bad news for bill payers and for taxpayers.

[Mr David Anderson (Blaydon) (Lab)]

Does my hon. Friend agree that the debate about CCS should not be happening today because it should have been concluded at least half a decade or even a decade ago? We led the world in clean-coal technology for decades, but that is no longer the case because of the actions of the Conservative party. We should be doing it now, not talking about it.

[Lisa Nandy]

I agree with my hon. Friend. I am not one who is keen to cast back into history to appoint blame, but what I will say to him and to the Secretary of State is that a 10-year promise was made not just to industries and companies, but to the communities that stood to benefit and to gain a huge amount from CCS. Given that the Government have announced £250 million of investment in a competition for nuclear small modular reactors, we seem to be creating a complete lack of confidence that any of the other schemes will proceed. Such decisions and the way in which they are taken damage our energy security, not just in the short term but in the long term. We have to give a signal that Britain is open for business, but the Chancellor’s decision has done precisely the opposite.

That brings me to the part of the Bill relating to wind farms. There was once a time when the Prime Minister was so keen on wind turbines that he even put one on the roof of his house. Now his Government are trying to legislate to close a scheme that has successfully driven investment into the cheapest low-carbon energy source available. Wind farms already provide power to more than 8 million homes in Britain, and once again it will be energy bill payers who pay the price for the Government’s short-term decision. The Institute for Public Policy Research has estimated that ruling out onshore wind farms and relying on other low-carbon technologies to achieve our energy targets could increase costs for bill payers to up to £3 billion through to 2030. There will also be a cost to jobs and growth in an important clean-energy industry.

There is one area on which we agree with the Government, and that is that wind farms should not be imposed on communities that do not want them. That is why we support the Government’s proposals to put local authorities in charge of approvals for such projects. Yet the reality is that the Government are using the Bill to try to block wind farms even where they enjoy strong local support, and they are taking powers away from local authorities in relation to other areas.

--- Later in debate ---

[Nigel Adams]

I agree with the hon. Gentleman. It is tragic that we have sped up the demise of coal in this country. He will be aware that the last remaining deep coalmine was in my constituency. Unfortunately, it closed at the back end of last year.

[Mr Anderson]

rose—

[Nigel Adams]

I really need to move on, but I will give way to the hon. Gentleman because he is a grand fellow.

[Mr Anderson]

You’re absolutely right I’m a grand fellow!

If we are to put public subsidies into trying to keep the lights on, why not subsidise the coal industry? As the hon. Gentleman said, we will continue burning coal, but it is not dirty British coal, it is from places such as China, Ukraine and Colombia, where hundreds or thousands of men are dying every month or year. It is morally wrong to burn that coal and put British miners on the dole. That is completely wrong.

[Nigel Adams]

The hon. Gentleman is absolutely right, and if he was here at the back end of last year when we debated the closure of Kellingley colliery, he will have heard me very much echo his sentiments.

At the end of 2015 there were already 490 operational wind farms in the UK with an install capacity of 8.3 GW. The Government estimate that in 2015-16, £850 million of direct support will go towards funding onshore wind farms. A fraction of that sum could deliver reliable, low-carbon, cost-effective renewable electricity that can react to changes in demand if it were diverted to more and reliable renewables, such as sustainably sourced biomass. I use the words “direct support” on purpose because the £850 million refers only to subsidies that are paid to those wind farms. The inherent failings of wind farms must be compensated by someone, which comes at a cost. If there is a risk that the wind will stop blowing, National Grid must ensure that it has sufficient capacity to mitigate that risk.

If a wind farm has a load factor of 30%, National Grid must make provision for generation for the other 70% of the time. If the new wind farm has to be built deep within our beautiful countryside, or out at sea where it is more expensive, National Grid has to pay for new transmission lines. That all comes at a cost, and those costs are paid by all generators, not just the wind farm developers that caused the problem. It is yet another hidden subsidy for wind power.

The notification of inadequate system margin that occurred on 4 November was a prime example of a problem caused by a lack of conventional capacity, because on that very still day, the wind was not blowing and it could not make up that capacity, despite all our investment in wind power. All generators—and ultimately all consumers—had to pay for balancing actions that National Grid had to take, at a cost of £2,500 per megawatt-hour. That is something like 50 times the usual cost of power and—at least in part—that was because when we needed our costly wind capacity, it simply was not available.

I warmly welcome the commitment made by the Minister last week when, in a written response to a parliamentary question from the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), she promised that in the first half of 2016 the Government would publish research into those hidden costs, so that we can see the whole system costs of different renewable generation technologies, and that the findings will be used to inform policy decisions. I hope that is the first sign that future contracts for difference auctions will not simply unleash new waves of intermittent renewable technologies. More sensible, reliable renewable generation options are available to us, but the hangover from the previous Government and our coalition partner’s love affair with wind will suffocate those options unless we act.

Of course, the madness does not stop with the extra costs, because there is also a carbon problem. If a wind turbine has an availability of 30%, National Grid needs either a vast number of other wind turbines spread all over the place in the hope that the wind will be blowing somewhere, or—this is more likely—a gas or coal station on standby to generate the rest of the time. We therefore subsidise a wind turbine to push fossil fuels off the grid, while simultaneously subsidising a fossil fuel power station to stay online and generate carbon dioxide for more than half the time when the wind is not blowing—you could not make it up, Madam Deputy Speaker. The same is true for offshore wind farms, albeit they have slightly higher availability.

In conclusion, I recognise that the Conservative Government cannot make up for the mistakes of the past with retrospective action. A deal is a deal, and existing onshore wind is here to stay. We cannot reverse the insane situation in which we banked our energy security on the vagaries of the weather, but we can put an end to the madness. We can stop all new investment in onshore wind, as we have promised to do, and we can think much more carefully about the case for investing in other intermittent technologies.