Energy Bill
Debate between Ian Lavery and Peter Aldous
Ian Lavery
Once again, thank you very much for your guidance, Madam Deputy Speaker.
The shale gas issue, which the hon. Member for East Antrim (Sammy Wilson) referred to in his intervention, is important. By the way, the situation in the USA is completely different from what might happen in this country. I hope that shale gas is everything that everyone wants it to be—no one would be more pleased than I if it was. We are looking, but if we are to achieve our targets, we have to get carbon capture and storage. We have to be serious and urgent about it if we want to decarbonise the electricity sector. There is no other way to do it. Coal power plant with CCS can diversify the UK’s fossil fuel requirement and, in addition, deliver national security of supply.
In summary, as I have explained—I am not sure whether I have explained it enough—fossil fuels provide 70% of the electricity generated in the UK, and that is likely to continue. Fossil fuels represent a major source of CO2, and CCS is a key technology that enables fossil fuels to become a low-carbon source of electricity. Fossil fuel electricity generation is not subject to the intermittency of renewables or the inflexibility of nuclear, is an important tool in meeting variations in demand, and, with carbon capture, will allow the UK to maintain diversity of fuel and energy sources. Fossil fuel with carbon capture and storage would undoubtedly enable the UK to decarbonise, in line with so many people’s hopes and aspirations. The message from me is quite simple. The Government need to stop dithering over carbon capture and storage. They should give equal importance, attention and focus to CCS as they have to securing nuclear power into the future. We should support the British deep-mine coal industry or forget any ambitions to meet the target of a decarbonised UK by 2030.
Peter Aldous (Waveney) (Con)
At the outset I should draw attention to the Register of Members’ Financial Interests. I have interests in family farms in Suffolk where renewable energy projects are being pursued. However, this afternoon I shall largely concentrate not on land, but on the coast and developments at sea, with a focus on the nuclear industry and, predominantly, the offshore wind industry.
My Waveney constituency, Britain’s most easterly constituency, stands to benefit from some of the larger projects that will hopefully flow from the Bill, such as the construction of the Sizewell C nuclear power station in the constituency of my hon. Friend the Member for Suffolk Coastal (Dr Coffey) and the development of the East Anglia Array, the largest round 3 offshore wind farm, for which Lowestoft, the largest town in my constituency, is the nearest port. These projects provide a once-in-a-lifetime opportunity to bring jobs and prosperity back to an area that has been hard hit in the last 30 years by the dramatic decline in the fishing industry, the closure of factories and the rise of package holidays, which has hit the domestic tourism industry. If we can build a strong domestic supply chain for low-carbon energy generation, we will have an opportunity to reverse that decline and properly rebalance the economy. This opportunity is not restricted to East Anglia, but is repeated all around the coast of the British Isles. To me, the issue before us in this debate is the role that having a decarbonisation target in the Bill could play in building a domestic supply chain and creating jobs.
It is important to emphasise that there is broad agreement, at least between the Front-Bench teams, on this Bill’s direction of travel—the promotion of a mixed energy supply economy with appropriate demand-side measures. This collegiate approach is needed to attract much-needed investment—an estimated £110 billion by the end of this decade and £330 billion by 2030—in the UK energy sector. For the Government and the Opposition to be singing from completely different hymn sheets would have unnerved investors and seen them fleeing these shores. Instead, despite differences, largely of emphasis, most of the feedback that I receive from industry is that the British energy sector as a whole is a good place to do business. What we are debating is what needs to be done to make it the world leader—the come-to place.
In considering whether there should be a decarbonisation target in the Bill, I have had regard to the evidence and opinions provided by a wide variety of colleagues, local and national businesses, and non-governmental organisations. Let me go through some of these; there are differences of opinion between some of them. The CBI is of the view that the most important factor driving investment decisions is electricity market reform—the proposals in the Bill on contracts for difference, the capacity mechanism and the levy control framework. It is vital that this debate on the decarbonisation target should not hold up the Bill’s receiving Royal Assent. Electricity market reform will be the main catalyst for the investment we all seek. Likewise, it is important that the draft strike prices are published on time next month.
I take note of EDF’s findings. EDF, too, emphasises the importance of a decarbonisation target not preventing the Bill from passing through Parliament in a timely way. EDF expresses the opinion that if such a duty is to be provided for, it should be in secondary legislation, subject to adjustment in the light of new evidence. That would help to ensure that the required pathway to 2050 is realistic and deliverable. I am also mindful of the importance of a Europe-wide target and the need for agreement at EU level. The EU emissions trading scheme should be the key target in decarbonising European economies.
The issue that especially concerns me is that if no target is provided before 2016, investors’ uncertainty will be prolonged. There is a particular risk to the investment in round 3 projects, from which my constituency and East Anglia have the opportunity to benefit through economic development providing new opportunities for local businesses and creating new jobs.
The forthcoming publication of the offshore wind strategy is welcome, but the feedback that I receive from industry is that, on its own, it might not be enough to maximise inward investment. I have studied closely the Committee on Climate Change’s recent report, and in particular its conclusion that a decarbonisation target would help to deliver savings of £25 billion to £45 billion on consumer energy bills. Further, it emphasises the need for a strong signal about the future direction of travel in order to support supply chain investment, which has long payback periods, and the development of new projects that have long lead-in times. There is a risk that, owing to a lack of visibility beyond 2020, supply chain investment and project development might not proceed, as the Government have not yet clearly set out their intentions for that period.
In considering energy policy generally, regard should be given to three factors: affordability, security of supply and environmental responsibility. At this time of prolonged economic downturn, there is a fourth: the opportunity to promote economic growth and attract inward investment in order to rebalance the economy towards the regions in favour of engineering and manufacturing and to create jobs.