Electricity Market Reform

Debate between David Hamilton and Chris Huhne

Thursday 16th December 2010 Commons Chamber

[Chris Huhne]

I am grateful to my hon. Friend for that question. When he reads the documentation we have tabled, he will see that we are at great pains to ensure that investors have the very clear message—not least because of recent experience in some other member states of the European Union—that the incentives that have been in place will be grandfathered. They can continue to rely on that. We shall minimise the amount of uncertainty, which is important not only to honour our past obligations but also if we want investors to believe in our future obligations. We have to be prepared to stand behind what we have said in the past, and we intend that to be the case. We will minimise the amount of uncertainty in joining up the two regimes, but we are of the view that we have to reform the electricity market to bring forward the low-carbon and secure supplies that we need.

[Mr David Hamilton (Midlothian) (Lab)]

I hope the Minister can find a way of sitting down now and again.

In terms of nuclear energy, we are talking about a subsidy by another name, and that is a major change in policy. I have real concerns—as will a number of other MPs when they come back in the new year—about supporting nuclear energy in the long term, when we have always argued that it should not be subsidised. What is in this for coal? Coal has played a major part in this country’s economic security, so what part will it play in carbon capture in the future? What projects will be going ahead and when?

[Chris Huhne]

There are two parts to the hon. Gentleman’s question. The first was whether the proposals are a subsidy for nuclear. I could not be clearer: this is a subsidy for low-carbon sources of energy generation. There is no subsidy specifically to nuclear. That is fundamental. [Interruption.] No; this is about low carbon. Our vision in the long term is that we should be able to rely on the market as much as possible to determine which sources of energy are the best for the British consumer. We want companies to make proposals, and—on the second part of the hon. Gentleman’s question—I very much hope that they will be on clean coal. We have an enormous amount of coal in this country that I want us to be able to use, but we cannot use it unless we can decarbonise it. We cannot use it and meet our carbon emissions targets unless we make a success of carbon capture and storage, which is exactly why I was so pleased that, despite a very tough spending round, we managed to secure £1 billion to make sure we have the first commercial-scale coal carbon capture and storage plant in the world. I hope genuinely that it will unlock a whole new future for coal as a source of low-carbon electricity generation.