Energy Bill
Debate between Mike Weir and Guy Opperman
Mr Weir
I strongly support the amendments in this group. It is imperative to decarbonise the energy sector, and I believe that including a decarbonisation target in the Bill would give a clear and unmistakeable message that we intend to do so. The first reason for adopting such a target is that we must reduce our carbon emissions. The energy sector is a major contributor to carbon emissions and the Committee on Climate Change has made it clear that decarbonising power is the cheapest way of meeting our overall carbon budgets.
There is, at best, a mixed message coming from the Government on how they intend to proceed with the decarbonisation of energy. In the Bill Committee, witnesses told us time and again of the need for a decarbonisation target to ensure that a clear message was sent to those involved in the industry. The mixed message coming from the Government could seriously harm our efforts to attract not only new renewables generation but, crucially, the supply chain that will ensure that we reap the economic benefits and the jobs that go with them. In opposing the decarbonisation target, Ministers have made the point that other nations do not have such a target. That is true, but many of those countries are already ahead of us in creating a supply chain that can supply investment in renewable energy in their territories. We are trying to attract that supply chain here and to ensure that it is established so that we do not simply continue to import the infrastructure that we need to create green energy for the future.
Much was said earlier about the situation in Germany. Although it is true that Germany does not have a decarbonisation target, it recently announced a very ambitious 2030 renewable target, which includes 25 GW of offshore wind and a budget of €23 billion. I understand that France, too, is considering moving towards such a target, so there is movement elsewhere within the EU on such targets, and we should not be left behind.
In the evidence session, Danielle Lane of DONG Energy made it clear that the 2020 target is presently at the cliff edge, and that the industry needs certainty about the direction of travel after 2020—a clear sign that after that date there will continue to be a clear commitment from all parties to continue along the route of decarbonisation.
The issue is very important to Scotland, where the development of green energy is a vital part of the revitalisation of our manufacturing industry. It is interesting to note that the Scottish economy has achieved some growth over the last two quarters, much of it through the energy sector. Scotland’s offshore potential is huge—25% of the entire European potential. If we are able to harness that, we could attract billions of pounds-worth of investment and create tens of thousands of highly skilled and sustainable jobs. Indeed, Scotland’s offshore wind route map outlined the potential for £30 billion-worth of investment with up to 28,000 direct and 20,000 indirect jobs by 2020.
We already have strong offshore experience in the oil and gas industry, particularly in the north-east, and many of these skills could be transferable to new offshore renewable energy developments. I would cite the example of offshore wind, which I believe has a strong vibrant future. There are plans to install up to 10 GW of capacity in Scottish waters over the next decade, including three projects off the coast of my Angus constituency. Many more sites, alongside commercial wave and tidal generation, are being looked at for deployment in the 2020s. We must ensure that we send a clear and unambiguous message that we want these developments, and that we will continue to push for the decarbonisation of the energy sector.
It is important to set the targets now because companies are looking at long-term investment. It will be many years before these investments come on stream, but the decisions affecting 2020 are being looked at in the boardrooms now, and if we delay in putting forward our plans for decarbonisation, we may well lose out on all the potential.
Over the last few years, both private and public investment has been made to help stimulate sustainable, long-term growth in offshore renewables, including developing the technology. The deep waters off Scotland’s shores have specific problems, but many of them have already been tackled by oil and gas development, which might point the way to dealing with offshore wind arrays and onshore development at our ports such as Dundee and, in my own constituency, Montrose. That development, however, is based on the assumption of having a long-term stable market for manufacturers.
Firms such as Gamesa, Areva, Mitsubishi and Samsung have indicated an intention to establish manufacturing plant in Scotland in order to meet the expected opportunities for offshore wind development. The difficulty we face with this Bill, however, is that we can be sure of funding only up to 2020—and then, as DONG Energy says, we face the “cliff edge” of uncertainty. Many of those who are considering investments do not feel that there is sufficient reassurance of a long-term market for their products beyond that date, which could lead them to reconsider or delay any decisions on investment. Such delays could lead to a significant loss to the economy and check ambitions to create a new greener manufacturing base, especially when, if companies decide to go ahead within the compressed time that is certain, there would be a considerable shortfall in the ability of UK-based manufacturers to meet the demand for turbines, which will inevitably lead to the importation of much of the infrastructure, creating jobs elsewhere but not in Scotland.
I finish on the point that decarbonisation is important not just for climate change benefits, but for the real economic benefit of creating sustainable jobs for the future.
Guy Opperman (Hexham) (Con)
In the north-east, energy in all its forms concerns my constituents almost more than any other issue. Whether it be fuel prices, energy prices, the role of wind, biomass and nuclear, opencast mining, the renewable heat incentive, solar, off-grid, liquefied petroleum gas, heating oil, gas or electricity prices, not to mention the role that climate change should play—these are all key issues for the people of Hexham.
It is definitely the case that the Government have a fundamental duty to keep the lights on and to lift the people of the north-east out of fuel poverty. Like the hon. Member for Wansbeck (Ian Lavery), I inherited a situation in which 24% of our population were living in fuel poverty. It is a situation that has sadly not improved that much, although I applaud what the Government have tried to do. I especially welcome the work that they have done on fuel prices, and their support for household energy.
In case I am required to do so, I make the declaration that I am a member of the all-party parliamentary group on off-gas grid and the all-party parliamentary group for the wood panel industry, and that my constituency contains employers in the timber industry.
I entirely accept that our desire to reduce carbon consumption is often incompatible with a reduction in energy prices. The fact is that renewable energies are not as efficient as coal, oil and other fuels, which often has the knock-on effect of increasing energy prices. Anyone who doubts that should read the maiden speech made by Lord Ridley in the other place last month. Notwithstanding the competing difficulties with which the Government have to deal, carbon reduction and renewable energy obligations will continue to be met, and energy companies will be required to place gas and electricity consumers on the cheapest tariffs.
I welcome the Government’s efforts in relation to the green deal, about which I should have liked to say more. It is having a considerable impact, although we need it to trickle down to local suppliers, too few of whom are providing it on an ongoing basis.
I applaud the efforts made to deal with fuel poverty through the buy oil early campaign, and look forward to doing my bit later in the year. However, it has been put to me that the success of the campaign would be massively increased if winter fuel payments were made earlier in the year, when oil is much cheaper—hypothetically, on 1 August.
Having listened to what was said about decarbonisation by my hon. Friend the Member for South Suffolk (Mr Yeo), I am sadly not persuaded. This is a debate that has seen the hon. Member for Edinburgh West (Mike Crockart) charge, with Tennyson, to the redoubts of Sebastopol, and also to the shifting climatic sands of South Suffolk. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) disparages the Secretary of State and sees him as the political equivalent of Queens Park Rangers, but fails to add that Hamilton Academical are not exactly in the champions league.
It strikes me as entirely sensible for the decarbonisation target to be set after the Energy and Climate Change Committee has provided its advice on the fifth carbon budget in 2016. However, while I support the Government’s strategy of shifting away from oil and decarbonising, we must be careful not to rely excessively on wind energy. The hon. Member for Wansbeck and I face twin problems in that regard, because the Northumberland area is being randomly covered with wind farms. There is no proper strategy and no local development plan, and our constituents are not encouraging the move in any way.
I urge the Government to address the future role of wind, and also that of biomass. The continuing domestic subsidy for biomass is having an impact on the jobs of all utilisers of wood. It means that the demand for timber from energy companies increases, and so too does the price. The subsidy gives those companies a competitive advantage, enabling them to purchase timber more cheaply than any other provider in the country. I repeat my calls for the subsidy to be scrapped, so that the wood panel industry—and, indeed, anyone who utilises timber—can compete on a level playing field, while continuing to decarbonise.
The Bill should be strongly supported. I shall vote against the Labour amendment—[Interruption]—which, I hasten to add, is also the amendment of my hon. Friend the Member for South Suffolk. I should have liked to include many more items on my wish list—much like the hon. Member for Edinburgh West—but, in the interests of satisfying you, Mr Deputy Speaker, I shall end my speech.
Energy Bill [Lords]
Debate between Mike Weir and Guy Opperman(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Weir
That problem also arises in many other parts of the country, particularly in Scotland. The traditional response of Governments when asked to address the issue of tariffs was that there were too many suppliers, but it is clear that we are now moving towards a situation in which this market is controlled by just a few companies, as in the energy market, which is dominated by the big six. Does the hon. Gentleman agree that it is time that the Government looked at an equivalent to social tariffs in this area?
Guy Opperman
I would certainly welcome hearing what the Minister has to say on that. The point, however, is that there is regulation of the big six energy companies, but there is no regulation of the heating oil companies and others. I accept that we must wait until we know the results of the Office of Fair Trading investigation, however. After that, we might want to come back to the House and argue that changes must be made.
Fuel Costs
Debate between Mike Weir and Guy Opperman(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Weir
Indeed; I will come to that point later if I have time.
It is not only the businesses but their employees and the other people who live in the rural areas who are suffering in many ways. My constituency comprises small towns and villages, and many people have to travel to get to work. They have to use their cars to do so.