Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Nic Dakin (Scunthorpe) (Lab)
1. What recent assessment he has made of levels of investment in energy infrastructure.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Average annual investment in energy infrastructure from 2010 to 2012 has been £8.5 billion, more than double the average for 1997 to 2010. Our electricity market reform and other measures are designed to continue this investment surge and sustain it.
Mr Davey
The hon. Gentleman will know that we are taking a whole range of measures. Obviously, the Energy Bill itself gives a very strong legal framework and the levy control framework up to 2020 gives visibility on the overall support for the system. I am sure the hon. Gentleman will also welcome the announcements we made on 27 June, ahead of schedule, with respect to the strike prices for renewables.
Stephen Mosley (City of Chester) (Con)
I welcome my right hon. Friend’s decision to seek extra investment in the nuclear industry by selling the Government’s share in Urenco, which has many factories in my constituency. Has he entered into any negotiations on the treaty of Almelo to allow non-treaty countries to purchase shares in the company?
Mr Davey
I am grateful for my hon. Friend’s comments. He will know that the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), wearing both his DECC hat and his Department for Business, Innovation and Skills hat, is very much at the centre of those discussions. We are talking to both the Dutch and the German Governments, who are key to this sale.
Mr Mike Weir (Angus) (SNP)
The Secretary of State will know that one of the problems associated with infrastructure is the transmission charge in getting the energy to market. Project TransmiT came up with a reform package, but its implementation appears to have been delayed. I understand that it was supposed to be in place by next April. Is the Secretary of State able to tell us when it is likely to come into being and what he can do to push that forward?
Mr Davey
The hon. Gentleman will know that Project TransmiT is run by Ofgem, as the independent regulator. Clearly, it would be improper for us to put pressure on the independent regulator. He will also know that we have worked very closely with the Scottish Government on issues such as those relating to the Scottish islands, where there is particular concern about transmission charges. I am sure the hon. Gentleman supports the Government’s announcement last week that we will publish a consultation on strike prices for renewables on the Scottish islands.
Mr Philip Hollobone (Kettering) (Con)
Is the Secretary of State aware that this country has a problem with not having enough transmission and distribution electricity engineers and that that is holding up new generation projects from being connected to the grid? What can he do to try to resolve the problem?
Mr Davey
My hon. Friend makes a very good point. It is important that the frameworks and policies that we put in place are stable and long-term in order to encourage people to invest in skills. He will be aware that Ofgem’s long-term settlement with the National Grid Company for the networks has been widely welcomed and will give incentives for investment.
Andrew Stephenson (Pendle) (Con)
2. What steps he is taking to encourage shale gas exploration in Lancashire.
Andrew Bridgen (North West Leicestershire) (Con)
9. What steps he is taking to meet future energy demand.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government published their energy security strategy in November 2012, and on 27 June, along with Ofgem and National Grid, we announced decisions on the capacity market and the use of National Grid’s existing system-balancing powers to secure the electricity supply in both the short and longer terms.
Mark Menzies
Westinghouse Nuclear Fuel, based in my constituency, employs more than 1,200 people. Will the Secretary of State do all he can to ensure that those people benefit from the next generation of nuclear reactors built in the UK, and will he visit at the earliest opportunity?
Mr Davey
As regards visiting the hon. Gentleman’s constituency and its installations, I shall consult my diary. At a meeting of the Nuclear Industry Council yesterday, we engaged on a range of issues, from skills to finance and future collaboration, and we have put in place the strongest ever supply-chain measures to ensure that the whole country, including people in his constituency, can benefit.
Mr Marcus Jones
I commend the Government’s effort to strengthen our energy system and bring about a sustainable reduction in electricity demand, but does the Secretary of State agree that we must take action to ensure that sufficient generating capacity is available in the short term?
Mr Davey
I strongly agree with my hon. Friend. It is important that we take action on both the demand and the supply side. With Ofgem and National Grid’s proposals, which are out to consultation, we will see measures on the supply and demand side in the short term, and of course our proposal for a capacity market will do that in the medium term. I hope that he realises that we are looking at every single measure in a very structured way.
Andrew Bridgen
Given the projected energy gap, the time scales involved and the growth in the economy, does my right hon. Friend agree that the Government should encourage further construction of gas power stations, especially given the potential exploitation of shale gas in the near future?
Mr Davey
My hon. Friend will know that we have done an awful lot to ensure clarity in the strategy to encourage private investment. As he will know, it is not for the Government to build gas power stations, but our gas generation strategy set out a long-term framework for gas investment last year, and with the announcement of the capacity market on 27 June, I think we have a process for encouraging that investment.
Mr Peter Hain (Neath) (Lab)
Is the Secretary of State aware that the Severn barrage will contribute 5% of Britain’s electricity needs? In deciding on the Government’s response to the Energy and Climate Change Committee’s report, will he support the project in principle and treat it exactly the same as other major power station projects, such as Hinkley, round 3 offshore wind and so on, allowing Hafren Power to raise the risk finance for the necessary work on habitats, environmental impact assessment planning, the strike price and other issues? Otherwise, he might as well kill off the project now.
Mr Davey
Obviously, I shall not prejudge our response to the Select Committee, which, as the right hon. Gentleman will know, was not very positive about the Severn barrage scheme, not least because of the costs involved, but if he studies our announcements on draft strike prices for contracts for difference for renewables, he will see in there strike prices for tidal projects as well. It is absolutely clear that we will proceed only if we get value for money for the economy, the consumer and business.
Dr Alan Whitehead (Southampton, Test) (Lab)
Has the Secretary of State made any assessment of the value of extending the National Grid proposals for a short-term strategic reserve on mothballed plants coming back into operation over a much longer term than is currently envisaged? Does he consider that doing that for only two years, rather than adopting a longer-term proposition, represents poor value?
Mr Davey
The hon. Gentleman always makes very informed contributions to our debates. He is proposing that we adopt the policy of strategic reserve, which is a long-term approach, using the powers that National Grid already has. We have looked at that and rejected it, because it is not the right approach to get best value for money and it would create perverse incentives for investment in the wholesale market. We believe that a combination of Ofgem and National Grid measures, using those existing powers, and the capacity market is the best way to meet the security supply requirements, not to impact negatively on the wholesale market and to get good value for the consumer.
Barry Gardiner (Brent North) (Lab)
Surely the best way to meet future energy demand is to reduce it, yet unfortunately the Government have focused on the supply side, not on energy efficiency measures. It will not be possible to meet future energy demand without real energy efficiency and reductions in demand.
Mr Davey
I am genuinely surprised at the hon. Gentleman’s question, because he knows that the Government have done a huge amount on energy efficiency for both consumers and industry. When the Energy Bill was before the House, we tabled amendments on Report for electricity demand reduction to be part of the capacity market. We are operating on both the supply and demand sides. That is a new initiative which has not been seen before, because other Governments have not done it.
Mike Crockart (Edinburgh West) (LD)
Next Wednesday I will hold a community energy event in my constituency, with the local council and local housing association among many others. Does my right hon. Friend agree that rather than carping about the green deal and perversely hoping for its failure, every member of the House has a duty to promote it and ensure that their constituents get all the help available?
Mr Davey
My hon. Friend makes a good point and we must promote not just the green deal as part of the community energy strategy, but all aspects of community energy. Right hon. and hon. Members may be aware that we published a call for evidence last month for a future community energy strategy, looking at energy efficiency, energy generation and purchasing energy. I urge Members to talk to their constituencies and to contribute to the formation of Britain’s first ever community energy strategy.
Caroline Flint (Don Valley) (Lab)
Two weeks ago Ofgem published its latest estimates for future electricity demand and capacity, and warned of possible shortfalls in the middle of this decade. Commenting on its report, the Secretary of State said:
“Without timely action there would be risks to security of supply”.
Will the Secretary of State explain why Ofgem states that the likelihood of blackouts is roughly one in 12 years, while analysis by his Department suggests that the true figure is closer to one in 3,000 years. Why is there such a big discrepancy?
Mr Davey
I do not recognise the figures that the right hon. Lady has just given to the House; my officials have been working closely with Ofgem and National Grid. I hope she will acknowledge that the Ofgem figures she cites are from before the measures we announced last week, following the announcement by Ofgem and National Grid on the immediate future, and our proposals for a capacity market. I would have thought she would welcome the fact that this Government have taken action where the last Government failed.
Caroline Flint
I am afraid that the figures are from Ofgem and the Department of Energy and Climate Change, so I suggest the Secretary of State has another look. Such wildly varying forecasts of possible blackouts do nothing to help us plan our energy security for the future, so let us consider what the Government are doing about it.
On the “Sunday Politics” show on 30 June, the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) claimed that six gas-fired power stations had opened under this Government, and tried to blame the problem on the previous Administration. In an answer given to me yesterday to a written parliamentary question, the Minister confirmed that construction of all those six new power stations began under Labour. In five years of this Government, just one new gas-fired power station in Carrington in Manchester will be built. Will the Secretary of State confirm that that is the case? Would not the country’s energy security be better served if the Government and regulator could produce a coherent and consistent estimate of the likelihood of blackouts?
Mr Davey
The right hon. Lady says from a sedentary position that it all started under Labour, but I am afraid that the £29 billion of investment in renewables was announced by this Government. I can give the House some good news that the right hon. Lady might want to hear. For the first stage of electricity market reform, as the Energy Bill goes through the House of Lords, and after the deadline for applications for the final investment decision enabling project closed just a few days ago, we have received 57 applications. I am not sure whether they will all go through, but if they do, that would amount to more than 18 GW of power. That is our record on energy investment and we are putting right the appalling record of the previous Government.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
4. What estimate he has made of the number of jobs created in the UK as a consequence of his policies on offshore wind power generation.
Bill Esterson (Sefton Central) (Lab)
6. What steps he is taking to help households with their energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
We have a range of initiatives to help households with their energy bills. From our proposals to get consumers on to the cheapest tariffs and the provision of nearly £1 million for the big energy saving network, to the green deal, and from the warm home discount to our promotion of collective switching, this Government are working to help households keep their energy bills down.
Ian Austin
Those schemes are supposed to help people such as my constituent Miss Kaur, who lives in a badly insulated home. She is in fuel poverty, but her energy supplier will not help with insulation. It also seems that the energy suppliers in general are not using carbon emission reduction obligation money at all. There is a gap between what fuel-poor households such as hers can afford on green deal finance and what it will cost to do the work. Will the Secretary of State look at the detail of her situation and perhaps agree to meet her with me, so that he can tell her and me how those schemes will help to reduce her energy bills and improve the insulation of her home?
Mr Davey
If the hon. Gentleman wants to write to me, we can first look at the details before we consider whether any meeting is required, because we might be able to help his constituent more quickly. He will know that part of the energy company obligation is for affordable warmth for people in fuel poverty. I do not know whether that would apply in her case, but if he writes to me with all the details, we will look at them very thoroughly.
Bill Esterson
Thousands of pensioners in my constituency would be up to £200 a year better off if the Government adopted Labour’s plan to put all over-75s on the cheapest tariff. The Energy Bill will not become law until next year, when the Government say they will put everyone on the cheapest tariff, but why not act now to help 4 million pensioners with their energy bills this winter?
Mr Davey
I do not recognise the hon. Gentleman’s argument. The proposals that we have put forward in the Energy Bill, working with Ofgem, apply to everybody, not just to a part of the population. We want to get benefits for everybody in our society. He says that he will have to wait for Royal Assent for the Energy Bill. He is not right about that: Ofgem is proceeding apace with its consultations for tariff reforms. The Energy Bill aims to support and strengthen that, in case there was any foot dragging by the energy companies, so actually we are acting very quickly—much more quickly than under the proposal he puts forward.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
One of the ways we can help the millions of households struggling with an average dual-fuel bill of £1,400 a year—up £300 since 2010—is through energy efficiency. However, less than 1% of households that have had a green deal assessment have so far gone on to take out a green deal package. Will the Secretary of State explain to the House why?
Mr Davey
The hon. Lady will know that an awful lot of people are using ECO—the energy company obligation. She did not mention that there are more than 82,000 insulations under the energy company obligation scheme, which shows that we are taking measures. On the green deal, she will also know that these are relatively early days. We have had more than 38,000 assessments. One would not have expected many plans to have been written by now. What she also fails to the tell the House is that some people are funding the green deal package through ECO or self-finance, and it is difficult to get exact figures on that. I would have thought that she would want to support the green deal, as it has the potential to transform energy efficiency.
Luciana Berger
It is because the previous Labour Government piloted a pay-as-you-save scheme that we want to see the green deal work. We are trying to hold the Government to account. We want to see 14 million homes insulated by 2020, and with the current trajectory that will not happen. I am very disappointed with the Secretary of State’s answer. The Government said that the green deal would be the largest retrofit programme the country has ever seen, but fewer homes are installing insulation since the green deal launched. Thousands of insulation workers throughout the country have lost their jobs, with some estimates putting the figure as high as one in four. This is a disaster for our economy. What is the Secretary of State doing about it?
Mr Davey
I have to say that I do not recognise the hon. Lady’s points. If one looks at what has happened in the insulation industry, one will see that there was a boom at the end of last year as people worked hard to meet their carbon emissions reduction target obligations to avoid fines. That was the biggest boom we have seen, so the figure was likely to come down, and it would be good if the Opposition admitted that. We are taking huge measures that will transform things not just for a year, but over decades. The problem will take decades to sort out. We are putting the measures in place to do that.
Rushanara Ali (Bethnal Green and Bow) (Lab)
11. What recent discussions he has had with his EU counterparts on reducing European carbon emissions.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I have frequent such talks—bilaterally at European Councils and in other forums. Last year, for example, I invited other Ministers from member states that share the UK’s high ambitions to cut carbon emissions to join me in a new group called the green growth group. This has met three times, most recently in Luxembourg last month.
Rushanara Ali
I thank the Secretary of State for his answer. Last week, however, the European Parliament voted to hold back carbon credits from the EU emissions trading scheme. Does the Secretary of State agree that the 20 Conservative MEPs who voted against the proposals were voting not only against action to tackle carbon emissions and prevent climate change, but against the interests of British business?
Mr Davey
The hon. Lady will know that the Government, across the coalition, supported the backloading proposal that the European Parliament voted through. Obviously, I regret the fact that MEPs from Britain or any other member states did not vote for those proposals. But let us be clear: the backloading proposals are a first step in the reform of Europe’s carbon market. We need to go further so that we can get the carbon market and the carbon incentives that we need to see clean energy coming through.
Mr Jim Cunningham (Coventry South) (Lab)
17. Will the Secretary of State clarify something for me? In the spending review of 2010, the Government committed £1 billion to carbon capture and storage projects. Given that this money has not yet been spent and that the Chancellor did not even mention it in his recent spending review, is carbon capture and storage a casualty of that review?
John Cryer (Leyton and Wanstead) (Lab)
18. What steps he is taking to help households with their energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I refer the hon. Gentleman to the answer that I gave to the hon. Member for Dudley North (Ian Austin).
John Cryer
In the past few months, coal imports have risen sharply again. That creates questions about the future security of energy supplies. Does that not imply that there will be upward pressure on household bills over and above what is there already?
Mr Davey
No, it does not, because of the actions of this Government. The fact that we have made the announcements we have on the capacity market will ensure that the supply is there. If we had not made those announcements, there was a danger that wholesale prices would go up and peak at times of low margins, hitting consumers. The fact that we have taken action shows that we are on the consumer’s side.
Simon Wright (Norwich South) (LD)
20. What the Government’s preferred options are for structural reform of the EU emissions trading system.
Andrew George (St Ives) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
This week marks the 25th anniversary of the Piper Alpha disaster, which claimed the lives of 167 people, so I am sure the whole House will want to join me in remembering them, mindful of the pain their loved ones must still feel and the scars, both physical and mental, borne by the survivors. The best remembrance is to learn and prevent a repeat of that disaster; and their legacy, and that of Lord Cullen’s inquiry into the disaster, is an oil and gas industry that now has an enviable health and safety record. But of course there remain real risks in operating offshore, so we should be thankful to those who continue to brave the hazards of the North sea and elsewhere to keep our homes warm and our transport moving, and as we meet our energy challenges, let us pay the best tribute to the Piper Alpha victims and their families by doing it safely.
Andrew George
I am sure the whole House will wish to associate itself with my right hon. Friend’s remarks.
While the Government’s announcement on the strike price is very welcome, there are, as my right hon. Friend knows, many parts of the country that want to take full advantage of the future green energy revolution. Certainly in Cornwall we are very keen to become the green peninsula within the UK. Would he be prepared to come to Cornwall and speak to all aspects of the green energy revolution happening there, because we want to take this energy forward?
Mr Davey
I pay tribute to my hon. Friend and his colleagues from Cornwall, who have been true champions for green energy and the impact that will have on jobs and the economy in Cornwall. He will know that I have already visited Cornwall, but I am very keen to visit again because it is such a powerhouse behind our low-carbon economy.
Sir Andrew Stunell (Hazel Grove) (LD)
T2. Will the Secretary of State join me in congratulating Stockport Hydro, a micro-power generation social enterprise, and will he explain how he is going to make it easier for similar projects to prosper in the future?
Mr Davey
I pay tribute to all the people who have worked on that community energy project. Micro-hydro plays a real role at community level. Last month we published the community energy call for evidence, which will cover issues that affect local community developers of micro-hydro. There have been problems, and my right hon. Friend has raised them with me, but I urge him and people who want to develop micro-hydro to respond to that call for evidence so that we can get it right in future.
Rushanara Ali (Bethnal Green and Bow) (Lab)
T3. Last year the Chancellor boasted he was the first to fund a green investment bank, but that is not actually the case, because the Government are now borrowing £158 billion more than planned, and we will not have a proper green investment bank until 2016 at the earliest. How can the green investment bank be part of a growth strategy, and will the Minister provide an update on this?
Kerry McCarthy (Bristol East) (Lab)
This morning, six Greenpeace activists are scaling the Shard in what has been dubbed the “ice climb”. Does the Minister think that drilling for oil in the Arctic is an essential part of meeting our future energy needs? Or does he think that, given the huge environmental concerns about drilling there, it is a price that is too high to pay?
Mr Davey
The hon. Lady will know that the six nations that make up the Arctic Council and own the land have sovereignty there—the UK is not one of them. She will know that the Select Committee produced a report on this issue—I believe that was last year—and we responded to it. We want to be part of those discussions to ensure that if anything happens, it is done in the most environmentally friendly way possible.
Simon Hughes (Bermondsey and Old Southwark) (LD)
T6. Will Ministers set out what contribution this Government’s energy and climate change policies will make to the increase in jobs in the UK as a whole and in Greater London in particular?
Mr Davey
My right hon. Friend will know that our policies are playing a big role in that. Three years ago, the Renewable Energy Association calculated that more than 18,000 people were employed in renewable energy in the Greater London area alone. That represented 19% of the share and was a bigger share than any other region had, and we expect that to grow. Across the UK we expect green jobs to be a very important part of the boost that our energy investment restructure will give. The House may wish to know that earlier today we granted planning consent to what will be the world’s largest offshore wind farm off the Lincolnshire-Norfolk coast, with £3.6 billion of investment and 1,130 new jobs created.
Mr David Hanson (Delyn) (Lab)
Can the Minister give some comfort to the green deal installers in my constituency by telling me how many installations he expects this year rather than how many assessments he expects?
Dame Anne Begg (Aberdeen South) (Lab)
The Department for Work and Pensions Minister responsible for health and safety will reply to this afternoon’s debate on the 25-year anniversary of the Piper Alpha disaster. What is the Secretary of State’s Department doing to build on the safety regime that is currently in place to ensure that the men and women who daily risk their lives by working offshore, contributing a huge amount to the UK economy, have the safest working environment possible?
Mr Davey
We are doing a number of things, working with the Health and Safety Executive and the industry. Only last week I held a meeting in my office with a range of people from the industry and with key players to see what progress has been made since that tragedy and what more we can do. It is clear that there is no room for complacency, although there has been a great deal of progress.
Neil Carmichael (Stroud) (Con)
What steps is the Minister taking to promote the development of energy storage systems, notably liquid air, which would be a good solution to our energy problems in the future?
Ian Mearns (Gateshead) (Lab)
The Minister has talked around the question of how many green deal assessments have turned into measures being introduced in homes. How many is it, Minister? How many homes have signed up for green deal measures?