Renewable Energy (The Humber)

Debate between Mike Weatherley and Andrew Percy

Wednesday 16th February 2011 Westminster Hall

[Andrew Percy]

I thank my hon. Friend for that glowing pledge of support for the Humber, and that demonstrates a point I will go on to talk about. The supply chain for this industry will not be limited to the Humber—it will benefit UK plc. There will be jobs through the development of the renewable sector across the whole of the UK in manufacturing. I know that he will be at the forefront of campaigning for those jobs to go to his constituency of Colne Valley.

What we seek from the Minister is continued support in selling the Humber—I know he has responsibilities for the whole of England—and England, internationally. We would also welcome support from the Government in terms of the pressure they can apply to ensure that once agreements have been made, as they have been with Siemens, there are no glitches in the system. I also seek clarity about the framework in which we are operating. I will turn to that point first, in relation to wave and tidal technologies.

In terms of R and D, the UK is at the forefront of these technologies and there are huge opportunities, not only because we are an island, but because of the skills we have. There are massive opportunities along the Humber, which is served by several other tidal rivers including the river Aire, which I live next to, the Ouse, the Trent, and what we call the Dutch river, but which is the Don to everybody else. It is estimated that marine power has the potential to bring approximately 10,000 jobs to the UK by 2020.

There is a project on the Humber at the moment, the Pulse Tidal project, which is one of those great British entrepreneurial technologies. It started in someone’s garage. After 10 years of working in someone’s garage, that has now developed into a machine that is operating on the Humber, just off Immingham dock. It was funded 50% by the Government and 50% by private funds, and has been operating successfully since 2009. It cost £2 million to build, but the beauty of the project is that it used Corus steel and is maintained by another local company, Humber Work Boats. The next step of the development is a commercial scale machine, rated at 1.2 MW, which will be installed by 2013. There the good news tails off a little. It is likely that the commercial scale machine will go to Scotland, because the renewable obligation certificate scheme is more generous there. In fact, Bob Smith the CEO of Pulse Tidal, tells me:

“The single biggest funding issue for us today is the market pull—at present there is nothing to incentivise investors to support a tidal power project in favour of a wind power project—they both receive 2 ROCs. Given that tidal is early in its development, comparable to wind about 15yr ago, it is more expensive than wind, and higher risk. Hence no investor would put money into tidal projects. With 5 ROCs in place for tidal, there is sufficient incentive to bring investors to the sector.”

I know that there is a review of that scheme, but will it consider the current disparity between England and Scotland? The scheme is currently in favour of Scotland and we are at a disadvantage, so will the review recognise that?

I hope the Minister will consider the need for extra support for these emerging technologies, so that we remain at the forefront. We have had all that R and D. We have successful projects up and running, but we risk losing them overseas and missing out, just as we did with onshore wind technology.

What are the Department’s plans for the longer-term capital support for this sector? The marine development fund is being phased out. Will that be replaced and what will be put in its place? There is a need for capital and revenue support to ensure that we do not miss out. I am sure that we will get that, because I know the Government are certainly committed, but we seek a clear commitment from the Government on the future of wave and tide.

[Mike Weatherley (Hove) (Con)]

On losing industries overseas, does my hon. Friend agree that, given our heritage of petrochemical skills and a highly efficient agricultural base, it makes sense to have a bioethanol base here in the UK?

[Andrew Percy]

I will be coming on to talk about that exact point. As with the wave and tidal technologies, where we have the skills base and the R and D, the same applies to bioethanol. I seek those commitments in relation to wave and tidal. My hon. Friend’s intervention moves me beautifully on to bioethanol.

The question, of course, is why bioethanol and why the Humber? My hon. Friend made the comments that I would have made about the petrochemical skills heritage in this country, so I shall not repeat them. We also have mandated targets for biofuels, so whatever people’s individual views about biofuels are, the reality is that if we do not produce them locally in the UK, and specifically in the Humber, they will be produced elsewhere, and the jobs will be elsewhere.

As with wind—and, potentially, wave and tide, if we are not careful—the UK has been lagging behind. In 2008, France had 15 operational plants, Germany had nine and the UK had one large and one small plant. There is huge potential: as with wave and tidal technologies, the predictions for the industry are impressive. It could be worth as much as £3.25 billion to the UK by 2020, and could employ some 14,500 people. There is huge potential, in the Humber in particular, for the reasons that I have outlined in respect of infrastructure.

Two plants are coming to the Humber: Vireol will be running an industrial-scale wheat-based production plant in Grimsby from 2013, which should produce about 44 million gallons of bioethanol a year. I am told that that is the equivalent—my science was never very good—