Energy Bill

Ian Swales Excerpts

Wednesday 19th December 2012 Commons Chamber

[Ian Swales (Redcar) (LD)]

I welcome this Energy Bill and will speak about the provisions dealing with carbon capture and storage. I pleased to see this exciting new technology incorporated in the Bill, but clause 41, entitled “Interpretation of Chapter 8”, defines CCS technology as

“technology for…capturing carbon dioxide…that has been produced by, or in connection with, generation of electricity on a commercial scale…transporting such carbon dioxide”

and

“disposing of such carbon dioxide…by way of permanent storage”.

I am concerned that this definition is too narrow to cover the benefits deliverable from emerging CCS projects. There is the obvious one—where all or part of the energy is delivered as heat rather than electricity—but I am more concerned to ensure that industrial carbon capture and storage is covered too. I know that the Bill is targeted at generation and the market, but I do not expect that there will be another Bill to cover wider aspects of energy and CCS, so I feel that the relevant clauses must be properly structured.

[Nia Griffith (Llanelli) (Lab)]

Does the hon. Gentleman share my disappointment that the Government have made a savage 80% cut in investment in CCS?

[Ian Swales]

As far as I am aware, the £1 billion that was promised for CCS is still on the table. I am not sure where that 80% figure comes from, although I would be disappointed if what the hon. Lady said was true. [Interruption.] I hope the Minister will respond to that later.

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

Let me be quite clear: the £1 billion competition is entirely as my hon. Friend described it—it is in place and on target.

[Ian Swales]

I thank the Minister for that clarification; that was my understanding too.

I raise this issue because of the importance of the proposed Teesside carbon capture and storage network to my constituency, the local economy and, I truly believe, to the national economy. I was delighted by the recent announcement that placed the project in the UK shortlist of two for the European competition and the shortlist of four for the UK competition. I am obviously disappointed that it seems that the UK projects will not be supported in round 1 of the European competition. It was notable that the UK announcements—and, indeed, the European ones—simply listed the technology and electrical output of each project, whereas the Teesside project included the potential to bring back International Power’s mothballed 1.8 GW power station at Wilton. However, power is not the main driver of the project. Teesside has 18 of the top 30 carbon emitters in the country, excluding power stations.

[Alex Cunningham (Stockton North) (Lab)]

Will the hon. Gentleman give way?

[Ian Swales]

I will, although I am now in my own time.

[Alex Cunningham]

I am grateful to my Teesside neighbour for giving way. He talks about carbon capture. Does he share my concern about the lack of detail in the Bill on which companies will be exempt from the cost of contracts for difference? For example, it would appear that the Sahaviriya Steel Industries works in his constituency were not operating throughout the 2005 to 2011 period to quality for an exemption. What will happen to them? Will we need amendments to protect the steel works on Teesside?

[Ian Swales]

The hon. Gentleman makes a good point. There are issues about how some of the calculations have been made, given that companies were coming and going through the reference period, and he raises an obvious example.

The SSI steel works in Redcar alone account for around 1% of the UK’s carbon emissions. Supporting the Teesside project with an oversized network will therefore not only be good for decarbonising energy generation, but have the potential to decarbonise energy-intensive industry. In doing so, the project will protect existing industry—that includes steel, fertilisers and petrochemicals—and make it more competitive, and also make the area a magnet for future investment in both energy generation and industry. May I therefore gently remind Ministers that their Department is responsible not just for energy, but—the clue is in the name—for climate change? I also ask that the definition of CCS be reworded to ensure that it covers the wider opportunities that the technology represents. Meeting our carbon reduction goals requires action on all major emissions.

The Energy Bill and the move to a low-carbon economy are welcome on Teesside. In fact, the area is already something of a Disneyland for green technology. We have Ensus running Europe’s largest bioethanol plant, a £60 million anaerobic digestion power-generation unit run by Northumbrian Water, SembCorp’s Wilton biomass power station, SITA’s waste-to-energy plants, the pyrolysis of waste plants being constructed by Air Products, and 27 wind turbines being constructed just off Redcar by EDF, which I can see from my bedroom window.

The Energi Coast consortium in the north-east, consisting of more than 20 companies, has already invested £400 million, and is ready to exploit the offshore wind and marine energy sectors. I should also mention Redcar and Cleveland college, one of the first colleges in the country to be accredited for the provision of green deal training. Future plans include a biomass power station at Teesport, which has attracted Korean investment; a new community power station based on aeroplane engines; a plant for the pyrolysis of tyres, generating energy and fuel oil; more anaerobic digestion plants, one of which received money from round 3 of the regional growth fund; and sub-stations to deal with half the output of the proposed giant offshore wind farm at Dogger Bank, which are likely to be in my constituency.

I am pleased that we appear to have reached the end of the consultation period, and that there seems to have been an outbreak of agreement between DECC and the Treasury, because it is important for us to move quickly. There are many opportunities for business growth and technical leadership, but the rest of the world is not standing still. It is time to be bold and clear, and to get going. I welcome the Bill, and I hope that the Minister will note my comments on the clauses relating to carbon capture and storage.