Annual Energy Statement
Debate between Ian Lavery and Chris Huhne(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ian Lavery (Wansbeck) (Lab)
The right hon. Gentleman will be very much aware of the situation at Rio Tinto Alcan in my constituency, where 650 jobs are likely to be lost as a result of green taxes and high energy costs. What assurances can he give the work force at Rio Tinto Alcan that the package of measures that have been promised and promised again for energy intensive industries will be sufficient to keep the plant in operation and maintain the jobs, plus 3,000 jobs in the supply chain?
Chris Huhne
I understand the hon. Gentleman’s concern, which I have shared. I met the executives from Rio Tinto Alcan who deal with that plant and I put to them a simple question: if we were able to provide support for electricity generation through, for example, conversion to biomass, would they guarantee that they would keep the plant open? They did not give me an answer and one executive is quoted as saying that the 40-year-old plant was beyond Government subsidy. I do not think that, and I very much hope that we can work on finding a solution, but I can assure the hon. Gentleman that the energy intensive package is under serious and urgent consideration. It is on course to be announced by the end of the year, which is what we were committed to doing, and it is also a matter of regret to me that the announcement was made about the Rio Tinto Alcan plant before the managers had the opportunity to read what we were able to say, which suggests to me that they had previously made up their mind.
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne
Ian Lavery (Wansbeck) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Chris Huhne)
My Department is tasked with powering our people and protecting our planet. Since the last departmental questions, we have published the renewables obligation banding review, which examines the support that different technologies will receive under the renewables obligation. We have also published the electricity market reform White Paper, which sets out our plans to secure affordable low-carbon energy for decades to come. We have also held a consumer energy summit, bringing together consumer groups, the industry, Ministers and the regulator to help people save money on their bills this winter. Finally, the Energy Bill—including our flagship energy-saving programme, the green deal—received Royal Assent on Tuesday and is now the Energy Act 2011.
Ian Lavery
The Secretary of State is aware of the situation at Rio Tinto Alcan at Lynemouth in my constituency. Some 650 private sector jobs are hanging by a thread. The company says that the problem is the green taxes implemented by the Government, which will wipe out £50 million in annual profit. Will the Minister say when he will make announcements on the renewables obligation certificates banding and on the energy-intensive industries package, and will he assure the House that those packages combined will prevent mass job losses in the energy-intensive industry sector?
Chris Huhne
I am grateful to the hon. Gentleman for his question, not least because I have had discussions with Rio Tinto about the Alcan plant. It is regrettable that it made its decision ahead of the publication of the renewables obligation. That was published today, so, to answer one of the hon. Gentleman’s questions, those figures are now available, and we have just heard from the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), that the energy efficiency package for energy-intensive industries will be in place by the end of the year. In our discussions with Rio Tinto I asked the company whether it would give a guarantee about local employment if it received the support that it wanted in converting the electricity generation plant to biomass. It did not give that guarantee. That is regrettable, and the hon. Gentleman will have noticed that the Alcan decision is part of a wider programme of worldwide disposals by the company.
Energy Prices
Debate between Ian Lavery and Chris Huhne
Chris Huhne
I can reassure the House that on the basis of the feed studies, that does not raise questions about the generic technology. What arose were questions related to the specific costs of employing the technology at Longannet, given how far away it is from the reservoirs and so forth. Those were the issues. We are confident that we can procure a CCS commercial scale plant within that £1 billion. That is what we intend to do.
Ian Lavery
A billion pounds was allocated to the CCS project at Longannet. I am amazed by what was said at Prime Minister’s Question Time and by what the Secretary of State has just said. That it is not going to happen. Projects 2 to 4 were already in the pipeline—excuse the pun—and I believe there are a number of interested parties. Will the £1 billion allocated for Longannet be available for one of those projects or will it be available across the board? Will the right hon. Gentleman confirm that it will be committed to CCS with coal, or could it be gas?
Chris Huhne
Let me say clearly that one of the things we will do is attempt to align our deadlines on this with the European Commission’s new entrant reserve competition. One of the conditions of that competition is that the CCS plants have to be up and running and ready by 2016. That is in answer to the earlier question about the deadline. We do not foresee a slippage in deadlines.
There is money available from the European budget to support those projects. Money will be available. That £1 billion from the UK Treasury is secure. In addition, there may be help for running costs from the electricity market reform contracts for difference. With all those things we ought to be able to make sure that we get commercial-scale carbon capture and storage up and running. The projects that have been proposed to the Commission are a mixture of coal and gas. We want to make sure that we are doing both.
I hope the House will come away knowing that we are fully committed to the programme and the technology. What happened at Longannet is a disappointment. We would have liked it to go ahead if we could have done it within the affordability envelope that we had and if we had not hit those specific project problems there, but we will now go ahead elsewhere and we are confident that we will be able to get the commercial-scale CCS.
Our proposals to reform the electricity market—I have already mentioned contracts for difference—will deliver the best deal for Britain and for consumers because they will keep prices down and ensure that consumers are protected. We are working on giving Ofgem powers to force companies to give money back to consumers if the companies break the rules. That is the point about redress that the right hon. Lady mentioned.
Electricity Market Reform
Debate between Ian Lavery and Chris Huhne
Chris Huhne
The ministerial team are committed to bringing on CCS, which will provide a place in the long term for coal to continue to meet our energy needs. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), who has responsibility for energy, is meeting representatives from the coal industry tomorrow to discuss precisely this matter.
Ian Lavery (Wansbeck) (Lab)
In addition to what has been said about the British deep-mine coal industry, does the Energy Secretary agree that it will play a crucial role in future electricity generation in the UK? If so, what sort of assistance can he give to ensure the survival of the UK coal industry?
Chris Huhne
I can assure the hon. Gentleman that coal is an important part of our energy mix now and going forward, which is why we have found £1 billion in the comprehensive spending review to fund CCS. Indeed, there has been a substantial increase in deep-mine coal over the past year.
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne
Chris Huhne
My ministerial colleagues have had regular meetings on this with the green energy programme board and are making good progress. We will continue the workstream to try to accelerate our commitment to low-carbon goods and services in the UK economy. It is a high-growth opportunity, and obviously Cornwall will play an important future role in that.
Ian Lavery (Wansbeck) (Lab)
T5. Will the Minister confirm his support for the pioneering plans for underground coal gasification off the Northumberland coast, as described earlier by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), and agree to meet representatives from the Opposition, from Newcastle university and from Five-Quarter to seek support on the issue?
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne
Chris Huhne
I am grateful to my hon. Friend for that question. What he is really asking is: does wind help when it is not blowing? Any Energy Secretary has to deal with the nightmare possibility of six cold, still days in February when the wind is not blowing but we all still need electricity. It is important for him to remember, however, that the energy sector has always had to deal with variable demand. That is why plant is often built to back up other plant. An example of the enormous variation in demand is when we all go and put our kettles on during the advertising break in “Coronation Street”. At that point, we need to bring on massive amounts of electricity generation. That is exactly the same principle, so my hon. Friend’s point is by no means a killer criticism of wind. Wind has a very important contribution to make to the national grid, and we intend to ensure that it continues to do so.
Ian Lavery (Wansbeck) (Lab)
Compliance with environmental legislation places a huge burden on companies such as Rio Tinto Alcan in my constituency. It will wipe out profits in excess of £50 million, come 2013, and it could jeopardise 650 jobs. What measures are the Government putting in place to protect jobs in that type of industry?
Chris Huhne
The hon. Gentleman is absolutely right to raise this matter. It is crucial that we bring forward proper measures to deal with energy-intensive industries of the sort that he mentions. In fact, we have had contact with Rio Tinto Alcan, along with many other energy-intensive industries, on exactly these issues. As I announced earlier this week, we are committed to working jointly with the Department for Business, Innovation and Skills to bring forward a package of measures to ensure that energy-intensive industries have a thriving future in this country. There are a number of ways in which we can help, including free allocation under the emissions trading scheme or conversion to biomass, which is also an important option.
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
Let me answer my right hon. Friend. This is not just a question of assessing the costs to the world in the long run if unrestrained climate change is allowed to proceed; it is also a question of energy security in this country and of the costs of the alternative. Given that the oil markets have gone from $60 a barrel two years ago to $80 a barrel last year, and are now at $115 a barrel, my right hon. Friend should be well aware that relying on fossil fuel markets could be extremely damaging to our economic health.
Ian Lavery (Wansbeck) (Lab)
The Committee on Climate Change has recommended that the carbon intensity of electricity should be reduced from today’s 500 grams of CO2 per kWh to the highly challenging figure of 50 grams of CO2 per kWh by 2030. The Energy and Climate Change Committee suggests that the target should be about 100 grams of CO2 per kWh. Will the Minister or the Secretary of State explain how difficult it would be to achieve the recommendation of the Committee on Climate Change?
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
I am very sympathetic to my hon. Friend’s points. There is an important agenda for trying to make water use sustainable, as well as the other elements covered by the green deal. The difficulty lies in attaching measures that would affect water to an electricity and gas Bill, and that has so far proved insuperable for the ministerial team. We would like to see real improvements, however, and we have been working across Government on this. I know that the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman) is also concerned about this, and is working hard on proposals.
Ian Lavery (Wansbeck) (Lab)
The Secretary of State will be aware that the Hatfield colliery in South Yorkshire is in administration. It has more than 100 million tonnes of coal. Has he had meetings with the owners or their representatives to try to resolve the situation, and will he agree to meet me and other representatives to discuss it?
Annual Energy Statement
Debate between Ian Lavery and Chris Huhne
Chris Huhne
I am grateful to my hon. Friend for that question. He is absolutely right; one of the most powerful instruments in the toolbox is the unleashing of competition as effectively as possible. Competition is ineffective if there is not a clear commitment to information and understanding on the part of consumers. We will bring forward proposals in the energy Bill later this year to make sure that consumers are properly informed. We will take account of the time scale that my hon. Friend has proposed.
Ian Lavery (Wansbeck) (Lab)
Is the Secretary of State aware that at this moment in time coal produces up to 35%—at times, 50%—of the electricity generated in the UK, yet the announcement this morning did not make a single reference to coal? Will he give a commitment to the continuation of the British deep mining coal industry?
Chris Huhne
The hon. Gentleman clearly was not listening to the part of the statement that dealt with carbon capture and storage. The future of the coal industry—and, potentially, of gas—is about carbon capture and storage. It is an exciting technology on which this country has led. We have done a lot of the interesting, pioneering science on it. That, above all, will be the commitment to the coal sector.
Oral Answers to Questions
Debate between Ian Lavery and Chris Huhne
Chris Huhne
That is certainly an interesting model. It has been tried with other schemes, such as with wind turbines. I know of a wind farm in the highlands where that was the case. It certainly helps to get local support for particular schemes. However, fundamentally it has to be a local decision for the local authority. Local authorities know very well that we want to recycle first before going through to waste and energy recovery, but very high rates of recycling and energy from waste can co-exist. In the Netherlands, for example, there is a 65% recycling rate with 33% energy from waste. Local authorities must make their own decisions on this, but if they get the waste hierarchy right they can get the whole mix right.
Ian Lavery (Wansbeck) (Lab)
2. What plans he has for the development of nuclear power in the UK.
The Secretary of State for Energy and Climate Change (Chris Huhne): The Government are committed to removing any unnecessary obstacles and allowing the construction of new nuclear power stations to contribute to our energy security and climate change goals, provided that they receive no public subsidy. The Government will complete the drafting of the nuclear national policy statement, which will be put before Parliament for ratification as soon as possible. The Office for Nuclear Development continues. The Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has announced a new streamlined system to replace the Infrastructure Planning Commission. We will publish an updated timetable for the production of all national policy statements, including the energy national policy statements, later in the summer. On new public subsidies, the former and new Chief Secretaries to the Treasury have pointed out that there is no money left.
Ian Lavery
The Secretary of State has referred to nuclear power and nuclear energy as a tried, tested and failed source of energy with huge costs and huge risks. That is in stark contrast to the policy of the Tory Government. Given this huge conflict in policies within the coalition, will the Secretary of State tell the House what impact those differences will have on the future energy requirements of the UK and, in particular, on the development of new nuclear plants?
Chris Huhne
The hon. Gentleman knows that it was precisely because there were very clear differences between the Conservative part of the coalition and the Liberal Democrat part of the coalition that we dealt with that as one of the key issues—we reached agreement on how we would treat it—in the first coalition agreement. We set out very clearly that there will be a framework in which there will be no public subsidy for nuclear, but that if investors come forward with proposals they will without any doubt be able to get them through the House of Commons, as there is a majority on the hon. Gentleman’s side of the House in favour of nuclear power, and the Conservative party is in favour of nuclear power.
I must say that the hon. Gentleman does a slight injustice to my personal position, which has been very clear. As an economist, I am sceptical about the economics of nuclear power, but I recognise that it is entirely up to investors to make that decision. If there is no public subsidy and if investors think that it is worth taking the risk, as they increasingly do, looking forward to rising oil and gas prices and a rising carbon price, they will take those decisions.