International Renewable Energy Agency (Legal Capacities) Order 2011

Lord Teverson Excerpts

Wednesday 7th September 2011 Grand Committee

[Lord Teverson]

I absolutely agree with the noble Lord, Lord Reay, in his use of the word “crippling”. What we have seen over the past few years is a crippling increase in fuel poverty in this country, something like a doubling. I do not know the exact figures, but is up to about 6 million because of the increase in fossil fuel prices that households have to pay. I also agree with that word “crippling” in terms of the increase in energy prices that we have seen. Gas, a well known fossil fuel, has increased by some 30 per cent this year. Those prices are truly crippling. That is the word to use in terms of the repercussions of the fossil-fuel based economy that we have at the moment. I do not want to get into that argument too much.

With regard to renewable energy worldwide, it is tempting to look just at new technologies, but we should remember that, globally, renewable energy was the only energy until the Industrial Revolution; before oil it was a major part. Renewable energy already accounts for about one-sixth of the world's energy production. Of course, that is not wind power or the other new technologies; it is largely biomass—I must admit that not all of that was renewable, but, I hope, most of it now is—and hydroelectricity, which is a major proportion of world energy generation even today. Renewables account for about one-fifth of energy production worldwide.

From what I read on the body's website, it is not just about future technologies, which are not greatly applied, but traditional renewables. That is why it is important to bring together the world community on renewable power. I was pleased to see that there are already 149 signatories and 82 members—including, as the Minister said, the European Union. I was disappointed to see that although the United States is a signatory, that is not true for China, Canada, the Russian Federation or Brazil. I do not know whether they are in the queue to join; I very much hope that they are.

Outside the argument of the cost of renewables against that of fossil fuels and technologies such as nuclear power, it is undeniable that renewables are, have been through human history and will be a really important contribution to energy production globally. That is why it is important that IRENA has been founded. I am surprised that it took so long—until 2009—before it was. The noble Lord, Lord Reay, magnifies imperfections that we all see, but I hope that it will be a body that will help the evolution of renewable power more effectively and successfully.

It is easy to set up international organisations and pay for administrations and bureaucracies, but I would be interested to understand what the priorities are in the practical programmes of IRENA in its next time horizon of three years. That is slightly more specific than the question asked by the noble Lord, Lord Liddle, which is important, of how the UK will contribute. I was not clear from the publicity of IRENA exactly what it was trying to do over the next few years in research and co-ordination, because however worthy an international organisation and its cause is, it must be effective. It costs money, so it has to produce results.

I very much welcome the Government’s move to complete our signing up to IRENA as this is clearly an important area of technology for our future.

[Lord Wallace of Saltaire]

I thank noble Lords who have contributed. Perhaps I may answer the question from the noble Lord, Lord Liddle, and then extend it to the question of what IRENA’s agenda should be for the next three years.

The United Kingdom has accepted the position of chair of the IRENA policy and strategy committee, so we will be playing a leading part in defining the agenda. British interests are clear. First, we want to support the channelling of investment in energy in the developing world as far as possible towards renewable energy and away from the further consumption of fossil fuels.

Secondly, we wish to promote the full ownership by developing countries of the switch towards renewables. I have to say that the role of Abu Dhabi and the UAE is extremely positive in this. It demonstrates that it is not simply the West pushing this agenda on the developing world, but that we have partners in the Arab world who are themselves actively concerned to assist developing countries in investing in renewables. I will come back to the role of Abu Dhabi in a minute. Thirdly, there are opportunities for UK expertise and industry, both in exports and the economies of scale that come from a larger market, which will then drive down the prices we have to pay for renewable technologies at home.

In terms of a practical programme for the next three years or so, I understand that the underlying purpose of IRENA is to encourage co-operation in renewables across the developing world. In the same way that the IPCC at an early stage put a great deal of effort into training experts from developing countries so that it was not simply a western argument about climate change being put across the developing countries, so IRENA will try to encourage the development of expertise and adoption of these technologies in those countries—both at the macro level and very much at the micro level. In a lot of these developing countries where the population is dispersed, micro power, for which renewable schemes are often extremely helpful, will be very much the local example.

The noble Lord, Lord Reay, made a number of points. I should say to him, first, that we face long-term rising demand for fossil fuel, which is, as we already notice, driving up long-term prices for fossil fuel. Further development of and investment in renewable technologies is moving in the opposite direction, driving down the prices and costs of renewables. That is part of the process we of course wish to encourage.

The Matthew Sinclair book has, as the noble Lord will know, very kindly been sent to, I think, all Members of the House of Lords, and I dare say that a number of us may read it. Countries such as Tonga are not just along for the ride. Tonga is, after all, one of those Pacific islands that have very little land way above sea level, and it is thus directly threatened by the impact of climate change. The Pacific islands are therefore among the most active countries in pushing for a switch to renewables and a really serious effort to contain the expansion of CO₂ in the atmosphere.

There is also an energy security dimension to this, as I mentioned in my opening remarks. Dependence on a small number of countries for supplies of fossil fuel over the long term is potentially a major source of global insecurity, and the more that we can reduce dependence on imported fossil fuels for all countries, the better we do.

The UK’s contribution to IRENA’s budget is on the scale provided for in British contributions to the United Nations and other agencies. It is currently £750,000; it will increase to £1 million and, no doubt, in the long run will increase further. The Government’s view and that of our predecessors is that this is a worthwhile and modest investment. I should perhaps add that so far the largest contributors by far to IRENA are Germany and Abu Dhabi, which, in addition to the scale of their contributions, are making some substantial and very valuable voluntary contributions. The interests of Abu Dhabi, I understand, are that fossil fuels should not last for ever as the driver of its economy and that it wishes to diversify its economic interests. This is very much an enlightened approach. German interests are also mixed. Germany has a highly developed renewable energy industry and its Government certainly see major opportunities for exports as this area expands. That is something that we as a country also need to look at, and that is part of where we hope the future revival of British exports may indeed come from.

On renewable energy, I simply say to the noble Lord, Lord Reay, that I spend my summers walking around the Yorkshire Dales, past weirs that used to produce power and in one or two cases, as in Grassington and Upper Wharfedale, used to produce electricity 60 or 70 years ago. We are now at last, although very slowly, beginning to put some of those weirs back into production, producing electricity. The French have been doing this for 30 or 40 years. There is a great deal that we can still do in this country.

I had an argument with a Conservative MP recently who said that it would deface the southern Yorkshire plain if we were to have windmills on it. There are in fact a number of ruined windmills scattered across the plain, but when I drive across it I find that the biggest eyesores that one faces are Drax and the other two big coal-fired stations. If I may say so, I find those who object to switching to renewable energy and wish to go on burning fossil fuels on the scale on that we do, importing coal from Poland, Australia and elsewhere, a little short-sighted in terms of our long-term interests in energy security and the balance between imports and exports.

Having, I hope, answered most of the questions raised, I hope that I may take the Opposition’s welcome as being very much cross-party approval.