Biomass Energy

David Crausby Excerpts

Wednesday 24th February 2016 Westminster Hall

[Nigel Adams]

My hon. Friend makes a very sensible point. Many of the stations that generate from biomass—certainly Drax, two of whose units now generate solely from biomass—have used coal firing as a way of learning about the technology. That is a perfectly sensible thing for a power station to want to do. I, for one, would like to see support in that area, so that is a particularly good point.

Converting stations to biomass is the quickest, most affordable way to get coal off the system and achieve what the Department says it wants to achieve. In less than three years, Drax has become the largest decarbonisation project in Europe; previously, it was called the dirtiest power station in Europe. It generates 12% of our renewable energy. I am delighted that the company has managed to protect the 850 or so jobs that are currently based in the power station, although colleagues may have read a Telegraph article this week that appears to imply that half of the station is under threat. I hope the Minister and her Department noticed that, because such threats are not normally hollow.

The company re-skilled its employees in the use of that exciting new renewable fuel in the place of coal, and invested hundreds of millions of pounds in a supply chain that includes new import facilities, four of our ports and 200 new rail wagons, which I had the pleasure of launching at the National Railway Museum. Those rail wagons, which hon. Members will have seen adorning and adding to the beauty of the north and east Yorkshire countryside, were purchased from Britain’s last independent rail wagon manufacturer, WH Davis. It really does add value to the UK economy. The Chancellor often refers to the northern powerhouse. The UK biomass industry is unquestionably the power behind the northern powerhouse, and it will continue to power it for many years to come.

These issues are at the core of a number of concepts that I hold dear as a Conservative: competition, security and fairness. The clock is ticking, so the Government must take meaningful and decisive action. They have committed to holding three CfD auctions between now and 2020, the first of which is due at the end of the year. For the reasons I have outlined, if the Government allow biomass to compete in those auctions on a level playing field with other technologies, they could save taxpayers billions of pounds and make the UK energy grid more secure in the process. To continue with the status quo would be inconsistent with my party’s oft-repeated commitment to securing the country’s renewable future at the least cost to consumers. I urge the Minister and the Government to think carefully about this issue.

[Mr David Crausby (in the Chair)]

Four Members have indicated that they wish to speak. I intend to call the Front-Bench spokespeople at around 10.30 am, so if Members can keep their contributions to around 10 minutes, I would much appreciate it.

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[David Mowat]

rose—

[Mr David Crausby (in the Chair)]

Order. It is not really in order to intervene on an intervention, unless Mr Cowan allows you to do so. Are you allowing Mr Mowat to intervene, Mr Cowan?

[Ronnie Cowan]

I was simply slow in getting back to my feet; I have absolutely no issue with the hon. Gentleman intervening. It is a topic of conversation, but when Scotland is independent, we will then take care of our own energy resources and will use them in a way that is most efficient for the people of Scotland. Until that time, there are certain issues that will remain reserved to Westminster and we will have limited power over what we can do about it.

Most importantly, I want the UK Government to abandon their policy of managed decline in support for renewables. Scotland is ambitious and we take the responsibility to tackle climate change seriously. It is time for the UK Government to do likewise.

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[David Mowat]

The hon. Gentleman and his colleague, the hon. Member for Inverclyde, both made the point that Scotland has outperformed many parts of Europe—everyone except Sweden, I think we heard—with its decarbonisation initiatives, yet we also hear that that is a reserved matter, so such policy is for the UK Government. I am interested to understand how in that case the credit for doing so well is due to the Scottish Government, not the UK Government. I would point out, as the hon. Member for Ynys Môn (Albert Owen) did, that, of all the devolved Administrations and England, Scotland has the highest percentage of electricity generated from nuclear. It is a long road to replace that.

[Mr David Crausby (in the Chair)]

Order. That is a long intervention.

[Philip Boswell]

I concede that the hon. Gentleman is perfectly right—energy is more widely reserved. We in Scotland are keen to play our part in the UK as part of an overall national solution for energy. Our choices may be different, and our choices and powers are constrained. In fact, during the debate on the Energy Bill, the Government rejected our calls for CfD devolution, which is the most popular mechanism we would have for making inroads.

As I mentioned, we will not meet our targets under the Climate Change Act 2008, so I urge the Minister to revise legislation to enable biomass to play its part in achieving our renewable energy targets on time.

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[Dr Whitehead]

The hon. Gentleman is absolutely correct. There are system integration cost differentials between different forms of renewable energy. My point is that, depending on which report people read, those are not the same as they might appear to be between renewables. Indeed, what is undertaken in how the system works as a whole can substantially mitigate the different costs, so that, as we evolve the system, we can be in a much better position to ensure that the suite of different renewables—which, as my hon. Friend the Member for Ynys Môn mentioned, is so important for future low-carbon deployment—can properly be deployed happily alongside one another, as a suite of measures to ensure that we move towards a decarbonised economy.

I recognise that we have limited time this morning, so I want to turn briefly to the point the hon. Member for Selby and Ainsty made about the level playing field that is necessary for biomass. It is undoubtedly the case, given the measures that are in place at the moment for the enhancement of renewable energy, that there is not a level playing field. There is an overall problem with that suite of measures because of the levy control framework and the extent to which hardly anybody is likely to get a contract for difference for their project over the next period. Indeed, the hon. Gentleman will be aware that some biomass plants got contracts under the early investment decisions, prior to the new form of CfDs coming into being. However, when it comes to the efficiency of biomass, allying that with CHP schemes to ensure that biomass can get 15-year contracts under the CfD arrangements, even if the heat source is not there for 15 years, is an important change that would need to be made to CfD arrangements for the future.

As for the renewable heat incentive, the fact that there are no guarantees for tariffs between commencement and completion of a project if a biomass plant is trying to go for RHI seems to be an omission for the future that should be rectified as far as their admission to those arrangements—

[Mr David Crausby (in the Chair)]

Order. Dr Whitehead, if we are not careful, we will not hear the Minister, and I really want to hear her.

[Dr Whitehead]

I appreciate that, Mr Crausby. I will bring my remarks to a close immediately.

My view is that it will be necessary to ensure a level playing field in the future arrangements for low-carbon energy; indeed, whether biomass should be accessible to the capacity market as part of those arrangements might be a consideration the Minister is thinking about. I will be interested to hear from her what arrangements may be made for CfDs and RHI for that level playing field to ensure that biomass plays the role that all of us here this morning want it to play in the future of renewables.