Energy and Climate Change

David Mowat Excerpts

Tuesday 20th December 2011 Commons Chamber

[David Mowat (Warrington South) (Con)]

Over the next few minutes, I shall give a critique of aspects of the Government’s energy policy, but first I thank the Government for having an energy policy that it is possible to critique. Although I do not want to make a party political point, it is worth reflecting on the legacy that we inherited. On renewables, we were 25th out of the 27 EU countries, in front of only Malta and Luxembourg. Some 90% of our energy is from gas, coal and oil; 2.5% is from renewables. Furthermore, in 2010—the last year for which figures are available—the percentage of our energy that came from renewables actually fell. That is a staggering achievement, and it is worth noting.

What the previous Government were able to do—they had some success in this—was pass legislation, some of which is important, and that is the basis of what I shall talk about today. The Climate Change Act 2008 requires us to reduce our emissions by 80% from a 1990 baseline. I will not argue about the basis for that; we have heard from the hon. Member for Brighton, Pavilion (Caroline Lucas) about the importance of the 2° C target. I agree with much of what she said on that, but as she is present I just make the point that if she, like George Monbiot, had accepted that nuclear power has a part to play in meeting the target, her speech would have had more resonance.

The Act places onerous requirements on us. Broadly speaking, reducing our use of carbon by 80% from a 1990 base requires a strategy that may embrace 25,000 wind turbines—I say that with some regret to my hon. Friend the Member for Montgomeryshire (Glyn Davies), who is sitting in front of me—and 25 nuclear power stations. Of course, it would also mean a massive reduction in energy use; I think that Members on both sides of the House would agree with that, and the green deal is a great way forward. My difficulty is with the next Act that the previous Government enacted, relating to the EU 20-20-20 directive of 2009, which requires us to produce 15% of our energy from renewables over the next decade. In my judgment, that directive contradicts our needs under the Climate Change Act 2008. We must decarbonise, and not necessarily go in for a renewables frenzy.

People might wonder why that matters, given that renewables need to be part of the mix. It matters because the emphasis on renewables has, in my judgment, meant that we have de-emphasised other low-carbon solutions that need to go ahead much more quickly, such as nuclear power and more use of gas, which I shall discuss.

One particular aspect of the renewables frenzy brought about by the 2009 directive undermines our ability to decarbonise, and we can see it in the solar power episode that is still playing out. We made a decision to pay 40p per unit for electricity that we can sell for 8p or 9p a unit. That, of course, generates a big industry. We make that subsidy even though we are no more than 2% or 3% of the global industry for solar, and therefore realistically cannot make a big difference to how the price comes down, and even though solar power produced through photovoltaics produces more than three times more carbon than nuclear power, as was shown in a recent peer-reviewed paper from Imperial college.

Why does all that matter? Why does it matter whether we go for renewables so hard, as opposed to going for gas, which is part of this? One of the things that we have to do is get our car and transport infrastructure off oil. We shall do that not just by electrifying, although that might be part of the solution, but by going down the route of gas cars. There are about 10 million gas cars in the world, more than 2 million of which are in Pakistan. There are nothing like that many electric cars. To say that gas is not part of the solution is just wrong.

[Glyn Davies]

Notwithstanding the fact that my hon. Friend is focused on putting too many wind farms in my constituency, I agree with much of what he says. Does he agree that we need to emphasise the potential of tidal power as well? I have not heard that mentioned a great deal. The Severn barrage can supply 5% of British energy needs. The potential of tidal power is massive.

[David Mowat]

I thank my hon. Friend for that intervention. I am not an expert in hydro power, the potential of which is very large. We have a deadline of 2017 to replace about a third of our generating capacity. To do that, we must use proven technology. That meant nuclear, but we might be late for that now. It is going to end up being gas, because gas is the default solution of a failure to invest in other technologies.

The very real need to decarbonise is being threatened by the costs that we are incurring through a strategy that is too focused on introducing the wrong sort of renewables too quickly. Let me give an example of the likely cost of the carbon floor. A £70 per tonne price of carbon will add about £400 to £500 to the average domestic bill. That is important because fuel poverty is at 10% now. We have energy-intensive industries laying off people or not investing in this country, in the context of trying to grow manufacturing as a percentage of GDP. The risk is that that will prevent some of the things that we need to do in pursuing decarbonisation. I ask the Government to consider this point: optimising renewables is not the same as optimising decarbonisation, and we need to do the latter.

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[Norman Lamb]

Absolutely, I do. I accept that completely, and that is why the Government are determined to take decisive action.

The consequences, however, of a 3.5° C to 4° C rise would be devastating, including a 2 metre rise in sea levels, a massive impact on food production and so on, but to hit the 2° C target we need global emissions to peak by 2020 and, after that, to reduce by 4% annually. That target is achievable if decisive action is taken by both the developed and the developing worlds, and this Government are determined to take a lead internationally —one of the things that the hon. Lady raised specifically —in seeking to achieve it.

Developing countries on their own are likely to account for 60% of emissions by 2020 owing to rapid development, and the Government recognise that the European Union must show leadership, so we are pressing for a 30% 2020 emissions reduction target, rather than the current 20%.

To answer the hon. Lady’s specific question about whether we need to review the target level, I note that the Cancun conference agreed to a review of the science to see whether to adjust the target and whether the 2° C target is adequate to prevent the disastrous consequences of climate change. I acknowledge what she said about the outcome of the recent Durban conference, but it did make progress on the design of that review and on the steps, including negotiating a new global agreement, to get the global community back on track to achieve at least the 2° C goal. I pay tribute to my right hon. Friend the Secretary of State for Energy and Climate Change for playing a key role in the Durban negotiations, which have taken things forward.

All that sets the context—the imperative of building a low-carbon economy—for dealing with the contributions from the hon. Members for Warrington South (David Mowat), for Daventry (Chris Heaton-Harris) and for Montgomeryshire (Glyn Davies). Not only do we need to reduce carbon emissions because of the imperative of tackling climate change, but we face the massive challenge of energy security.

I shall deal first with the hon. Member for Warrington South, who criticised the focus on renewables and sought to concentrate on the optimisation of decarbonisation, arguing for the importance of nuclear and gas in the short term. We face the immediate and remarkable challenge that nearly one third of our energy supplies will be going off-grid in the next decade. That is because of decisions already taken. Nuclear cannot deliver in that time frame. There are disadvantages in relying heavily on imported gas because it makes us more vulnerable to risks with regard to security of supply, fluctuating and volatile cost, and availability of supply. To replace the lost capacity and to hit challenging emissions targets, we need a new supply quickly, and wind and other renewables are a crucial part of that. Over the longer term, the Government have no intention of favouring one form of low-carbon energy production over another. Our intention is to secure a level playing field for low-carbon technologies competing with one another. Tidal power, which was mentioned by the hon. Member for Montgomeryshire, should be given its chance along with other technologies.

The Government have already issued a White Paper on electricity market reform. That is an important way to deliver the change that we need to secure proper competition between low-carbon technologies. It will mean that a level playing field is introduced by 2020, and it covers nuclear, carbon capture and storage, and renewables. The carbon plan published on 1 December, which sets out how we will meet the requirements of the fourth carbon budget—between 2022 and 2027—does not favour one form of production over another but offers different scenarios and different combinations within the whole mix. We are not looking to lock in any one form of production. The Government have stressed the importance of reducing energy demand and of improved energy conservation. That is why our green deal is so important, as is the radical step of introducing smart electricity and gas meters across every home. We do, however, stress the need for immediate and decisive action.

[David Mowat]

Will the hon. Gentleman give way?

[Norman Lamb]

I will not, because I am conscious of time constraints and think that I must press on.

The hon. Members for Daventry and for Montgomeryshire discussed wind energy. First, it is important to recognise that this does cause concern for many people; we are all familiar with that in our own constituencies. Those concerns cannot just be dismissed. There are inevitably tensions between the absolute imperative of reducing carbon in our economy and the concerns of local people. It is important to recognise, though, that applications are turned down on landscape grounds. The key is to find appropriate locations in terms of landscape and wind speed.

The hon. Member for Daventry raised concerns about the efficiency and effectiveness of wind energy. Wind energy is generated for between 70% and 80% of the time. It is already providing about 2.9% of total energy generation—that was the figure for the second quarter of 2011—and it represented approximately 31% of the overall renewable electricity generated in that period. It is already delivering results. The costs of onshore wind are expected to come down by about 8% to 9% between now and 2030. That will result in support for onshore wind reducing by 10% from April 2013. The hon. Gentleman also raised concerns about the proximity of wind turbines to where people live and the importance of local decision making. The Government, through the Localism Act 2011, want to give people in their communities a greater say in the decisions that are taken.

The hon. Member for Montgomeryshire raised particular concerns about what is happening in his own community. I pay tribute to the passion and commitment that he has demonstrated on this issue over a long period. He will be aware that the location of wind farms in mid-Wales is down to TAN 8—technical advice note 8—which is the responsibility of the Welsh Assembly Government. Any changes or variations to TAN 8 are their responsibility rather than that of the UK Government. Six applications for developments of over 50 MW are currently in train in mid-Wales, and we are waiting on the response of the local authority, Powys county council, which is due by the end of March next year. The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) has written to the authority recently—last week, I think—to extend the deadline to the end of September so that it can conduct its assessment properly and respond fully to the proposals. That extension is subject to approval by the applicants.

I should also mention the Localism Act 2011, which has removed decision making powers from the Infrastructure Planning Commission. That body has dealt with applications for developments of more than 50 MW since April 2010. It was introduced by the previous Government and it was an appointed, unaccountable quango. This Government have returned responsibility to Ministers, thereby reinstating clear accountability.

I want to reiterate the value and importance of wind in meeting climate change targets, for the reasons that I have already expressed. It has to be part of the mix. I stress its economic benefits in Wales and elsewhere. Wind energy contributes £158 million directly to the Welsh economy every year in turnover, employment and expenditure. It is responsible for more than 800 full- time jobs in Wales, and that is expected to rise to 1,000 next year. That must be considered.

Finally, I will deal with the contribution of the hon. Member for South West Bedfordshire (Andrew Selous). I am grateful to him for raising the concerns brought to his attention by Mrs Lorraine Bond. The amount that she and others have to pay over the winter just to heat their homes should concern us all. He is right that the recent Office of Fair Trading report highlighted that cylinder liquefied petroleum gas—