Lord Judd
Main Page: Lord Judd (Labour - Life peer)(13 years, 10 months ago)
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Lord Judd
My Lords, I would like unreservedly to congratulate those who tabled this amendment, which makes a great deal of sense. I have for a long time been a bit bemused about why the geothermal dimensions of energy policy have not had greater prominence in the UK approach. That anxiety has been greatly strengthened because I have the privilege of being a member of Court of Newcastle University and Professor Younger at Newcastle has done a lot of really important research on this.
To reassure my noble friend a bit about his anxieties, I hope, this amendment is very topical because the news has just broken that with government support there is to be a very significant project in the heart of Newcastle. There is a proposal to drill 2,000 metres in search of this form of energy. The Department of Energy and Climate Change has awarded £400,000 to Newcastle and Durham universities to take this work forward. The borehole will be the deepest ever drilled in a UK city. Scientists believe that at that depth it will bring up hot water at a temperature of 80 degrees centigrade. It will be an unlimited source of water that will be hot enough to heat any domestic or commercial central heating system.
This project has been described not only as imaginative but as full of good prospects. The scientists concerned are saying that, depending on the mix of rock at the depth to which they are drilling, they are optimistic of reaching temperatures not short of boiling point. This will provide a fully renewable energy supply and will massively reduce reliance on fossil fuels. It will strengthen Newcastle’s position as a sustainable city. The project is expected to last for six months only, and the team hopes to be able to pump out the first hot water in early June. If it is successful, it will open up all sorts of prospects not only in the north-east but across in the west in places such as Carlisle where the geology is not dissimilar. If it proves successful in Newcastle, the same techniques could apply.
Taking up the very important point made by the noble Lord, Lord Oxburgh, about the knowledge, experience and professionalism available, there are still a lot of resources from the old mining industry around in some of these parts of the world. They could be rejuvenated to play a very important part in this. I think that this amendment is very timely because it comes just as practical work is going forward. I commend it.
The Lord Bishop of Chester
My Lords, in principle we are surely all in favour of this technology playing a part in our energy policy. It is simply practicalities that I want to ask the noble Lords, Lord Teverson or Lord Oxburgh, or the Minister about. First, we have been told by the Minister that the Government will not favour subsidies for developed technologies, but for developing technologies, such as offshore wind. We are told by the noble Lord, Lord Teverson, that this is a well developed technology. Does his proposal require some structural subsidy in the regulations he anticipates? It would be helpful to the Committee to know what financial arrangements are envisaged because there is no point in going into all this work if it is never to going to happen.
Secondly, does the success of geothermal depend on some combination of electricity generation and community heating systems? Do you need to have both? If so, there has to be a big enough community near to the geothermal unit for that to be possible. I understand that Cornwall is geologically the best area in this country in which to exploit this technology, not the north-east.
Thirdly, I understand that once a well has been drilled, the heat is gradually depleted in that locality under the surface. A typical geothermal station might operate for 20 or 25 years, which is a decent length of time for some purposes, but not if you are designing a heating system for a substantial urban area. Those are some practical questions on which either the mover of the amendment or, in due course, the Minister might want to comment.
Lord Jenkin of Roding
My Lords, the noble Lord, Lord Oxburgh, is absolutely right. The more I have looked into this, the more I see that it is a very complex problem. It has been under discussion with the two industries and my noble friend’s department for some years. From time to time, pressure has been brought on one or the other to try to find a solution. I am sure that the noble Lord, Lord Oxburgh, is right but the prospects of a serious overlap are pretty small.
It seems to me that often the problem is bringing the product ashore. The problems with offshore oil and gas are well known but I know that some wind farms have found difficulty in finding ways of getting their supplies ashore. It has been suggested to me—I think this has been discussed with my noble friend’s department—that there might be some form of compulsory purchase onshore to ensure that the product of a wind farm can be brought ashore at the most appropriate place, even if at present the landowners are reluctant to give permission. However, it does not seem to me that this complex matter has been dealt with by a single amendment in a Bill of this sort.
I entirely take the point made by the noble Lord, Lord O'Neill of Clackmannan, that oil and gas will be very important—particularly gas—for many years ahead. It is not so long ago that there was a major discovery off the coast of Scotland—the Buzzard gas field—and that could still happen. These things are far from certain and gas has to be exploited where it is. Yes, as the noble Lord, Lord Oxburgh, implies, there is a limited capacity for drilling horizontally, if necessary, or at an angle to develop a field but my impression is that the two industries have tried over a long period to reach an accommodation about how this might be handled. I think we would be a little unwise to start legislating in the way the noble Lord, Lord Whitty, suggests and simply say that there can be a retrospective revocation or variation of a lease that has been given in respect of which a great deal of capital investment may have taken place.
On the whole, I do not support the amendment in the name of the noble Lord, Lord Whitty, but I think that the discussions should continue. If it appears to my noble friend’s department that some legislative provision needs to be made, perhaps the Government could look at that for the next energy Bill, whenever it appears. My impression is that we may not see it this Session.
Lord Judd
In the cause of cohesion on this side of the Committee, might I say that it has been very intoxicating to have the thesis and the antithesis and, like others, in all humility I would like to put myself on the side of the synthesis? It seems to me that it would be tragic if we got into a vicious either/or battle. The issue is how to bring these things together constructively. I make the observation—no doubt I could be described as an unreconstructed politician of former days—that it seems to bring home to me the hazards of a market-dominated approach in these crucial strategic issues and that we really need very effective strategic planning into which the private sector can then feed its contribution. This debate brings home the need for a strategic approach, not just targets but how they are to be delivered because that is the crucial issue all the time. It is not just to spell out the aspirations; it is actually to have the mechanisms there to ensure they happen.
I take the urgency and importance of the vigorous argument of my noble friend Lord O’Neill seriously, and if I have one anxiety it is on that point. Employment, security, economy, the real immediate needs—those are all crucial and it would be naive to overlook them. However, I am fearful because we seem to keep getting caught up in the immediacy of the management situation, but the Bill should unashamedly take a visionary approach to the long-term future. I am sure that my noble friend Lord O’Neill would be the first to agree that he is talking about what we all know to be finite resources. That is crucial at this juncture. Sooner or later, this country will have to face the issue. It is not an ephemeral kind of idea; it is absolute fundamental practicality that the economy of this has to keep going at some future point without the availability—it is taken for granted—of the finite resources. If we always get into the crude argument, the long-term thinking will always be pushed to the side. We will always hear about all the difficulties and doubts.
Objective considerations about the reality of what is proposed are important, but many of these things are challenges to be overcome and to be got right; they are not excuses for delaying and pushing to one side. I for one put firmly on record that whether or not the idea is acceptable as an amendment, my noble friend Lord Whitty is to be warmly congratulated on again having brought it home to the Committee, in his characteristically firm way, that either we are serious about alternatives or we are not. If we are, we have to start putting some consistent muscle and priority behind those alternatives and stop saying that they are an also-ran to be fitted in when there are no other objections to be raised.
Baroness Parminter
I support the principle of creating a level playing field, to which the noble Lord, Lord Whitty, referred. The question seems to be about whether a reasonable dispute resolution process is in place for future conflicts between renewable energy and oil and gas. That is the heart of the issue, on which the Committee ought to focus. As it stands, the law gives the Secretary of State the ability to terminate offshore wind farm leases early, which implies primacy to oil and gas developments. That is clearly not the wish of the Government or in support of the policy developments with which we seek to move.
The noble Lord, Lord Whitty, has done well to remind us that that could seriously undermine the financing of future developments. While it is fair to say that until now financing has been less controversial and difficult, it is clear that offshore wind projects are moving further offshore, are larger and are going within known oil and gas provinces. That will make the financing of those projects more complex, so we need to consider seriously any barrier to the investment for them.
We all recognise that there is an importance to the coexistence between oil and gas companies and renewable operations. I pay tribute to organisations such as RenewableUK that have put a lot of effort in, with the support of DECC, to draw up protocols and guidance so that the respective companies can work in harmony, as they have done until now, finding a way forward where there are areas of the seabed on which they both wish to operate. The issue is whether a reasonable dispute process is there for the future; we need that level playing field.
Therefore, while there might be questions about this amendment, it is right and proper that the noble Lord, Lord Whitty, has raised it. As my noble friend Lord Jenkin has mentioned, I too hope that this issue will get further consideration. If this clause is maintained, would it not be more appropriate that there should be compensation if these leases were terminated early in order that there is a degree of parity between the respective businesses in the field?
I welcome the principle of the necessity for a level playing field and I hope that ongoing discussions might look at some of the wider issues around compensation for a reasonable dispute resolution process.
“Bodies able to produce and supply renewable energyProduction and supply of renewable energy by National Park authorities and the Broads Authority
(1) Section 11 of the Local Government (Miscellaneous Provisions) Act 1976 (production and supply of heat etc. by local authorities) is amended as follows.
(2) After subsection (1) insert—
“(1A) In subsection (1) the definition of “a local authority” shall be understood to include the Broads Authority and National Park authorities when applied to subsection (1)(a), (b) and (d) (production of heat or electricity or both; establishment and operation of generating stations for production of heat or electricity or both; and use or sale of heat or electricity).”
(3) In subection (3), after “a local authority” insert “including the Broads Authority and National Park authorities”.”
Lord Judd
My Lords, I must say how grateful I am for the cross-party support and indeed the support of my own Front Bench. It is good to have that for an amendment. I should make plain that I am not a member of a park authority, but I take a close interest in their affairs both as vice-president of the Campaign for National Parks and as president of Friends of the Lake District.
The amendment would put national park authorities on an equal footing with the rest of local government in terms of the ability to generate and sell renewable energy. The current position for other local authorities is that they can sell electricity from renewable energy resources. Existing legislation—Section 11 of the Local Government (Miscellaneous Provisions) Act 1976—already allowed them to generate electricity and heat. Following the change made by the Government last summer through the sale of electricity by local authority regulations, they were given these additional powers.
This change makes it much easier from a financial point of view for local authorities to install renewable technologies and so play their part in the transition to a low-carbon society because they can benefit in full from the Government’s feed-in tariff. For their part, the national park authorities are tackling climate change on a number of fronts, including providing leadership on low-carbon innovation and national park communities, while also reducing the greenhouse gas emissions from their own activities. An important aspect of this can be the installation of small-scale renewable energy measures that are suitable for a protected landscape. Since the park authorities are not included in the relevant piece of legislation—Section 11 of the Local Government (Miscellaneous Provisions) Act 1976—it would appear that they do not currently have the power to generate or sell renewable energy. Through amending the relevant provisions of the 1976 Act to include the Broads Authority and the national park authorities as set out in this amendment, it would be possible to put this right. The prescriptions on the sale of electricity as set out in the 2010 regulations would then also apply to the Broads Authority and the national park authorities.
There might be other means of achieving the same outcome which the Government prefer. However, what is important is to put the national parks on an equal footing with other local authorities in terms of the generation of the electricity and heat from renewable energy and the potential to sell any surplus electricity from this renewable generation. I hope that the Minister will be able to respond positively. The national park authorities are keen to set an example of what can be done in an environmentally and aesthetically acceptable way. It is surely important for us all to give them every possible support.
Lord Davies of Oldham
My Lords, first, I am surprised that my noble friend is surprised that the Front Bench has signed the amendment. It would be somewhat remiss on our part if we did not see merits in it. He made an excellent case. What he kindly—for the Government—left out of his analysis of the situation is an actual feature of the national parks and the Broads Authority themselves: their powers in relation to the Public Bodies Bill that is before the House at present. Perhaps the Minister will offer some reassurance on that front. Suffice it to say that one can already see the national parks adjusting to a changed future in terms of the pressures upon them. We all know the particular circumstances of the Broads Authority, which was considered by this House only 18 months ago.
I emphasise the obvious fact that it is a good move to associate the national parks with the same capacity as local authorities. In fact, it seems somewhat surprising that this issue has not been pressed somewhat earlier than this Bill. I congratulate my noble friend on that point. I emphasise to him that we are in full support. I hope that on this constructive amendment the Minister is able to give a rather more positive response than has been the case on the most constructive amendments thus far. I look forward to his reply.
Lord Marland
I note what my noble friend Lord Deben says. If we are going to look at the national parks and what they will do with their microgeneration, we should obviously encourage them to practise as they preach, which I think are the words he is looking to hear from us. With that in mind, I hope the noble Lord, Lord Judd, will withdraw his amendment.
Lord Judd
I thank the Minister for that encouraging and warm response. I am sure it will be noted by everybody and bodes well for the future. We look forward to what he brings forward at a later stage on the Bill, because he has indicated that he will respond to this. That is great. I say to others who have intervened that we should not tilt at windmills. I see no evidence whatever of the danger or the prospect to which the noble Lord referred. By contrast, I am very much encouraged by the Minister. I beg leave to withdraw the amendment.
Lord Judd
I agree with my noble friend that our noble friend has opened up huge issues, but does he not agree that what this exchange really illustrates is that we limit ourselves by talking about energy as though it were a commodity, when it is not? Like water and the atmosphere, it is a public good, in effect, because human societies simply cannot operate without it. From that standpoint, these strategic considerations and how they come together are crucial.
Lord Whitty
It is a public good, but public goods also have a price, and somebody has to bear that price. The public good of energy is a variable commodity in the form in which it comes, in the way that water and air are not. Therefore, there are more policy options and more complications.