Michael Fallon
Main Page: Michael Fallon (Conservative - Sevenoaks)
Dr Julian Huppert (Cambridge) (LD)
4. What progress he has made in increasing investment in low-carbon electricity projects.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
We estimate that nearly £29 billion has been invested in renewable electricity generation projects in Britain since 2010, and the Energy Act 2013 provides the framework for an increase in that investment. Last month we signed investment contracts, an early form of contract for difference, for eight projects: five offshore wind farms, two coal-to-biomass conversions, and one dedicated biomass plant.
Dr Huppert
According to Bloomberg, there was a 59% increase in finance for new renewables in the last year, making a total of £7.3 billion. Just in the last couple of days the East Anglia ONE scheme was approved, which will power 820,000 homes using clean energy. What will the Government and Minister do to extend this success and to tell people about our great success in renewables?
Michael Fallon
I think my hon. Friend has almost just done that, and I confirm that the Bloomberg analysis shows that investment has doubled during this Parliament. It increased by 20% last year at a time when it was falling in Germany. We now have the largest amount of offshore wind installed anywhere in the world. Two of the biggest wind farms in the world were opened last year. I know my hon. Friend welcomes the East Anglia ONE approval given this week, which will power over 800,000 homes, and more projects are coming on stream this year.
Dr Alan Whitehead (Southampton, Test) (Lab)
Has the Minister made any assessment of the support costs for the procurement of low-carbon capacity such as field solar and biomass compared with the support costs for securing high-carbon capacity, such as gas, through the capacity auction mechanism?
Michael Fallon
Of course, we look at the different costs of the different technologies all the time, and we have to make sure all those costs are manageable within the levy control framework and within the figures that we have set out right through to 2020.
Duncan Hames (Chippenham) (LD)
I note the progress the Minister cites in agreeing contracts for difference for biomass and offshore wind. Is the Department negotiating contracts for difference for any other renewable energy technologies?
Michael Fallon
There are already investment projects proceeding in a range of different technologies. We have some 120 renewable projects under way which are not limited to offshore or onshore wind, but include solar, biomass, dedicated biomass with combined heat and power, and some of the other renewable technologies.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I press the Minister on this? If we want to improve innovation in this sector, is not the real problem that we are not getting down to small and medium-sized enterprises enough, and is not one way of doing that through having good partnerships involving universities? Could we stimulate local enterprise partnerships and universities to do more in partnership to move this on?
Michael Fallon
A number of the LEPs have put forward energy-related projects in the strategic growth plans that we are considering at the moment, and which we hope to finalise and announce early next month. In addition, there is the community energy strategy that encourages precisely that kind of work, and I look forward to visiting the university of Sheffield tomorrow morning to see the research that it is doing on carbon capture and storage.
Priti Patel (Witham) (Con)
5. What recent estimate he has made of the value to the UK economy of the shale gas sector.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
The Government are promoting responsible shale development for greater energy security, to deliver jobs and growth and to support investment. The recent EY report estimates that there could be £33 billion-worth of spend on shale gas exploration creating about 64,000 jobs, including over £20 billion on hydraulic fracturing and £8 billion on drilling and completion of the wells. That is why we are supporting exploration to understand just how much of this potential can be realised.
Priti Patel
I thank the Minister for his response. Given the enormous projected value of the shale gas sector and the opportunity shale provides for energy independence, do the Government have plans to support more investment in shale gas infrastructure?
Michael Fallon
Yes, we have set out the new fiscal regime that will apply to shale exploration. We have a system of robust regulation in place. There are some dozen companies now exploring, and I shall shortly be inviting applications for new onshore licences under the 14th licensing round, which will afford more opportunities for new companies to enter this market, and I know colleagues across the House will want to champion applications for licences in their area.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Minister in his reply referred to robust regulation, and he is right that robust regulation is important, as is comprehensive monitoring of those regulations to meet the higher public acceptability test for this technology. Given that groundwater can contain methane naturally, will the Minister explain why it is that, more than two and half years after the issue was raised with his predecessors, it is still the case that the regulations do not include the baseline monitoring of methane in groundwater, especially as there are concerns about such contamination in the US and elsewhere? Surely it is important that we have that as part of the regulation to ensure confidence in the regulatory regime for shale gas.
Michael Fallon
There are no examples from the United States of hydraulic fracturing contaminating groundwater because, as the hon. Gentleman will appreciate, the fracturing takes place very much deeper than any groundwater levels. I am happy to look at the specific point that he mentions about baseline monitoring.
Mrs Anne McGuire (Stirling) (Lab)
6. What steps he is taking to improve competition in energy markets.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
Biomass has an important role to play in meeting our renewables target and our future energy needs. We are supporting about 3.4 GW of bio-energy technologies, including waste technologies, through the renewables obligation. As I told the House earlier, contracts have been signed for up to 1.4 GW of biomass under the early investment contracts.
Nigel Adams
Within the levy control framework allocations in July, to what extent is the Minister considering the dispatchable and secure supply of solid biomass as a strong reason for implementing the electricity market reform delivery plan’s higher level of deployment, especially in the light of the risk to the UK energy supply caused by political instability elsewhere in the world?
Michael Fallon
The Government consider those risks very seriously. We are allocating over £1 billion of taxpayers’ money to support coal-to-biomass conversion at the Drax plant in my hon. Friend’s constituency, at Lynemouth in Northumberland, and at a dedicated biomass plant on Teesside. He will be aware, however, that the cost of that support has to be managed within the levy control framework if we are to keep our constituents’ bills affordable.
Huw Irranca-Davies (Ogmore) (Lab)
What steps is the Minister taking to ensure that wherever possible biomass is supplied from within the UK? What discussions is he having with the Welsh Government and other devolved Administrations to make sure that that happens in order to minimise the carbon footprint of transporting biomass across the waters into the UK?
Michael Fallon
I discuss these matters with the devolved Administrations in Wales, in Scotland, and so on. The hon. Gentleman is right: we have to make sure that biomass is properly sustainable and that the criteria applied to these plants are even across the different devolved Administrations.
Chris Heaton-Harris (Daventry) (Con)
Does the Minister stick by his Department’s claims that meeting our 2050 targets will cost billions more without the use of sustainable biomass?
Kerry McCarthy (Bristol East) (Lab)
T1. If he will make a statement on his departmental responsibilities.
Nigel Adams (Selby and Ainsty) (Con)
T2. With one of the potential investors unfortunately walking away from negotiations over our last remaining deep mines, will the Minister update the House on what he is doing to assist in finding replacement investment for UK Coal that will give workers at Kellingley colliery in my constituency the chance of a more secure future?
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
I understand the uncertainty that this is causing workers at Kellingley colliery in my hon. Friend’s constituency and at Thoresby colliery in the constituency of my hon. Friend the Member for Sherwood (Mr Spencer). We have been working with the company since January to help it to overcome the challenges that it faces. The exceptional offer we made of a Government loan of £10 million to the consortium that was leading the rescue remains on the table despite the withdrawal of Hargreaves, and we continue to work with UK Coal and its directors to explore what other sources of private investment might be available.
Caroline Flint (Don Valley) (Lab)
As has been said, there is a great deal of concern about the future of jobs at Kellingley and Thoresby pits following the decision by Hargreaves to pull out from UK Coal’s managed closure programme. The redundancy process is already under way, but there may still be time to find a way forward, so could the Minister confirm that the £10 million loan is on the table and that the Government are still exploring all viable options, including an employee buy-out, to secure a future for these pits?
Michael Fallon
The only plan so far presented by the board of UK Coal is the plan from which Hargreaves withdrew last week. If further plans are presented by UK Coal, with which we are working each day, we will, of course, be prepared to ensure that the £10 million loan remains available. If there is a viable plan for an employee buy-out, we will certainly look at that as well.
Andrew Bridgen (North West Leicestershire) (Con)
T4. Many rural communities in my constituency of North West Leicestershire have considerable concerns about the current flurry of planning applications for large-scale solar farms on greenfield sites. My constituents therefore have considerable sympathy for those protesters campaigning against the current high-profile application by Borchester Land to build a large-scale solar farm on the Berrow estate in Ambridge. Would a Minister care to comment on that situation?
Mr Dennis Skinner (Bolsover) (Lab)
Is the Minister with responsibility for the coal industry aware that when we met the Secretary of State for Business, Innovation and Skills to try to get something like £70 million to save the two pits at Thoresby and Kellingley, I inquired about the person sitting at the back and was told that he was representing the Minister? In other words, he was jotting down everything that we said—he was acting on behalf of the Minister alone—and therefore the Business Secretary was not able to talk to us frankly, and when we asked for the £70 million to save the pits, they refused. He was like a spy in the camp.
Michael Fallon
I really do not recognise that description of the meeting that I know the hon. Gentleman and his hon. Friends had with my right hon. Friend the Business Secretary. Let me make it clear: I met the unions on Monday, including the National Union of Mineworkers, and we are prepared to look at any new plan brought forward by the directors of UK Coal that will enable us to continue the operation of the two collieries into next year, but any contribution from the Government has to represent full value for money.
Andrew Selous (South West Bedfordshire) (Con)
May we have an update on the Wood review?
Michael Fallon
Yes. We are pressing ahead with early implementation of the Wood review. We will make a full formal response shortly, but we intend to establish the principles behind the Wood review in the Infrastructure Bill, which is before Parliament at the moment, and to set out the arrangements for collecting the levy to fund the new authority. We are also pressing ahead with the recruitment of the chief executive officer of the new oil and gas authority, who will be the senior regulator.
Ian Lavery (Wansbeck) (Lab)
If the Government are committed to saving what is left of the British deep-mining coal industry, as has been expressed this morning, will the Minister give a commitment to guarantee that he will discuss state aid to the coal industry for any new potential investor?
Michael Fallon
Of course, we have been considering the state aid case and what has to be notified to the Commission in Brussels, but we need to see a subsequent plan. We can only act on the basis of a plan put forward by UK Coal Ltd, which is a private company. We are ready to help with any new plan that may emerge from the discussions going on at the moment with potential investors. I need to make it clear to the House that UK Coal Ltd has already had nearly £140 million-worth of taxpayers’ support during the past 10 to 12 years, and it is very important that any new loan represents good value for money for the taxpayer.
Mr Alan Reid (Argyll and Bute) (LD)
People who live in park homes are often on low incomes. What will the Secretary of State do to improve their access to energy and so help to bring down their bills?