Energy: Annual Statement

Lord O'Neill of Clackmannan Excerpts

Tuesday 27th July 2010 Lords Chamber

[Lord Marland]

I shall be brief. I think that the noble Lord’s idea of a chip in a smart meter is a good one, and I shall investigate it. I do not have the answer. I do not recall the smart meter that I have seen having a chip, but it is a very sensible idea.

We are reviewing all the bodies that govern electricity. Ofgem is obviously the primary one, but we have been reviewing all the other bodies to see whether they are fit for purpose and serve the current Government’s requirements.

[Lord O'Neill of Clackmannan]

My Lords, the Minister has already said that there is going to be no possibility of subsidy, but I suggest that he be very careful about offering some kind of nuclear/ROCs arrangement, because 8 per cent of domestic electricity bills are already accounted for by that form of consumer subsidy and it is therefore very dangerous to put any more on it. If he wants to increase investor confidence in the nuclear industry—I speak as the chair of the nuclear industry—he ought to look speedily at the question of a carbon price and a carbon floor. Could he perhaps provide a paper for us, which would enable us to see the relative merits of the various positions on this? Until this question is resolved, the massive investments which will be required to realise the nuclear ambitions of this country are not going to happen. With that and the Forgemasters decision, we have the kind of climate in which we get the uncertainty that frightens off potential investors, and that mood has to be changed quickly.

[Lord Marland]

I totally agree with the point made by the noble Lord, Lord O’Neill, on a carbon price floor. As we have committed to in this document, that is something which we will be reviewing with great urgency. We intend to legislate early in 2011 in the energy Bill, having reviewed it during the Recess. The problem with the carbon price, as he quite rightly identifies, is that it has ranged from €30 per tonne in July 1989 to €16 per tonne in July 2009. It is such a volatile price that it makes planning very difficult, particularly in the noble Lord’s sector, so we will be looking at it.