Energy BILL [ Lords ] (Sixth sitting)

Jonathan Reynolds Excerpts

Thursday 4th February 2016 Public Bill Committees

[Andrea Leadsom]

I think we will leave it there. We are straying well out of order in terms of our discussion of CCS. All I can say to the hon. Gentleman is that he just put a lot of words into mouths that were not said yesterday. I made it clear from the Front Bench that the Government are absolutely committed, in all our policies, to being the consumer champion and to doing everything we can to keep energy bills down. It is therefore unconscionable to try to tie this in as if somehow spending more billpayers’ money on CCS would save billpayers money in the short term.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Will the Minister give way on that point?

[Andrea Leadsom]

No, I think we have had that discussion.

As part of our commitment to the future of CCS, we will continue to engage widely, including with Lord Oxburgh’s CCS advisory group, which met for the first time yesterday. I have also met the all-party parliamentary group on CCS, whose meeting I attended and spoke at last month, and the joint Government-industry CCS development forum, which I co-chair and which met at the end of last year. We are engaging widely with the CCS industry on what more can be done, supporting individual pilot schemes and measures to try to bring costs down, and ensuring that what we are building to maintain our energy security will be CCS-ready.

We need to take this opportunity to get the next steps right. We will then set out our thinking for the way forward for CCS, using the expert advice from industry, Lord Oxburgh’s group and the APPG. I hope that I have reassured hon. Members that the new clauses are unnecessary as the Government are already considering how they can support the further development of CCS.

--- Later in debate ---

[Callum McCaig]

I have been trying to get on to funding for some minutes but I keep being intervened on. I would like to see developed at a much greater level better connections between not only Scotland and England, which are coming on in terms of the grid, but the British Isles and the continent. The way forward has to be much greater interconnection throughout Europe. That argument has been put forward by the Secretary of State, which is welcome, but it should not be seen as interconnection for the sake of getting energy from elsewhere.

We, as a nation, have issues in terms of the balance of trade, and relying more than we do now on imports of energy would be detrimental. If we can unlock the huge potential we have, particularly of renewables and particularly in Scotland, there is the potential to be a net exporter, though not at all times; the new clause would play a part in that. That should be the ambition, in my view. If we are going to have a European grid, we should not limit our ambitions to being an importer.

We need to respect the differing modes and choices of the people of these islands, if we are a family of nations that respects our divergent views. If England chooses to produce nuclear, that is fine. Whatever the relationship between the two countries, I see a point where there will be a need for nuclear from England, but likewise, there is a need for energy from Scotland at times. That is the level of co-operation.

[Jonathan Reynolds]

I think I am right in saying that the SNP’s position is that even in an independent Scotland, there would be a common GB energy market; it would effectively be the same as it is now. What I cannot quite follow—I am not against the hon. Gentleman’s new clause; I am just trying to follow the logic of it—is why this measure would be in Scotland’s interest. If Scotland is exporting electricity to the rest of the UK, or certainly to England, why have two different support regimes for the subsidy to be paid by the Scottish Government? Surely, if it is one common energy grid, it should have one set of support behind it.

[Callum McCaig]

I am not suggesting there should be different funding—I am still trying to get on to the issue of financing but am being deterred from doing so. I envisage the pots being one. Let us take the two issues together. If we had an annual CfD allocation, there would need to be discussions. I imagine those discussions being conducted similarly to those we debated yesterday, in terms of the fiscal agreement from the Scotland Bill. Agreements would be made about what proportion of the pots could and should go to Scotland and/or anywhere else. That would give the Scottish Government the ability to tweak that support and tailor it to our specific needs and aspirations.

The UK rightly lauds the success of the deployment of offshore wind. That is a good thing, but because of the technology and the different costs, it is easier to do that in the shallower waters off the shores of England than in the deeper water off the shores of Scotland. The wind resource, I am reliably informed, is greater, but the initial costs and the curve of diminishing returns requires a higher level of support initially.

Should there be a desire in Scotland for greater support for offshore wind in deeper waters—the global potential of that is enormous, given that most coastal waters are deeper than the ones we have here—that would be a benefit for not only Scotland but the UK, in terms of developing a supply chain for it. That can be looked at in different ways. A one-size-fits-all approach to renewables might work in the short term, in terms of deployment, and it has worked well, but we need a more nuanced approach and a long-term vision of the opportunities. New technologies—offshore wind in deep water is one, but there is also tidal and wave energy—are there to be exploited, should the support mechanisms be right.

[Jonathan Reynolds]

I want to be sure I understand. Is the hon. Gentleman saying there would effectively be different rates for contracts for difference in Scotland and the rest of the UK? There would be different rates for different technologies, depending on which side of the UK they were on.

[Callum McCaig]

I am saying that there would be a different bidding process, so that we could allocate the contracts differently. The bids may all come in the same. We cannot predict the outcome of a competitive auction before we have held it, but we must allow such nuancing of the competitive auction.

In summary, while we are pushing toward the targets set out in the Climate Change Act 2008 and waiting to see what comes from the fifth carbon budget, we need to provide certainty to industry that will enable it to plan for the future. That is what new clause 5 would deliver. New clause 6 would deliver the ability, through collaboration between both Governments, to unlock what is still a considerably untapped enormous resource in Scotland in the renewables sector. That would be beneficial to Scotland and to the United Kingdom as a whole.

Ordered, That the debate be now adjourned.—(Julian Smith.)