Energy Bill

Viscount Hanworth Excerpts

Wednesday 11th December 2013 Lords Chamber

[Baroness Worthington]

It is absolutely consistent because what we have said is that we will seek out the least costly forms of carbon abatement. There is no cheaper way of reducing carbon dioxide than using existing gas stations in place of existing coal stations. That is how the UK decarbonised its economy in the 1990s and that is how we should be doing it again now. However, there is sufficient doubt about that, because of the price of coal relative to the price of gas. It is absolutely consistent to say that we want to keep prices low by supporting this amendment.

One of the things that the Government are currently struggling with is that, at the root of this, there is not sufficient clarity in the backing of these decarbonisation objectives. It would obviously be very easy to solve the energy trilemma by simply lopping off one of the legs. If you simply say, “All we need to do is keep the lights on at least cost”, there is no problem; you would stick with the coal. It seems that this Government are not actually committed to decarbonisation as they have lopped off one of the legs and are seeking a return to coal at just the time when, internationally, we are pressing everybody else to move away from unabated coal.

This is a sensible and moderate amendment, and it gives clarity to everyone. It reduces investor risk, particularly for those people operating gas stations and seeking to invest in new gas stations. I hope that noble Lords on all sides of this House will find that they can support this amendment and I hope that the Minister will ultimately support it, too.

[Viscount Hanworth (Lab)]

My Lords, we have been told that the Energy Bill has two purposes. The first purpose is to secure the much needed investment in new plant for generating electricity. The second is to decarbonise our electricity supply. Amendment 105, which has been rejected by the Government, was closely aligned with these two purposes. Its effect was to ensure that if there were major upgrades to coal-fired power stations, such as to enable them to meet the European emission requirements in respect of sulphates, nitrates and heavy metal contaminations, they should also be constrained to meet the emissions performance standards in respect of carbon dioxide that are imposed by the Bill. The subsequent amendment tabled by the noble Lord, Lord Oxburgh, reinstates this requirement but includes a let-out clause that would allow the Government to alleviate the requirement, if necessary. Presumably, this would be appropriate in a case where the lack of capacity was so pressing as to imply a real danger of the lights going out.

The Minister, Michael Fallon, argued in the Commons that to include such amendments would add to the risks faced by investors. The logic of his position escapes most of us, who believe that the original Amendment 105, or its replacement by the amendment of the noble Lord, Lord Oxburgh, would clarify the intentions of the Bill in a way that would actually encourage investment. Why does that Minister insist on the rejection of these amendments? Is it that he wishes there to be a loophole in the legislation that would allow dirty, coal-fired power stations to remain in operation, notwithstanding the ostensible purpose of the Bill? There are certainly grounds for such a suspicion. However, the Minister has asserted on several occasions that he doubts, even with the allowances the Bill affords, whether any of the old coal-fired power stations have a future.

Perhaps we should believe in his good intentions and allow ourselves to look elsewhere for the reasons for his intransigence. The reasons are not hard to find. The Minister has a need to conciliate a faction in his party that is firmly opposed to all measures aimed at staunching the emissions of carbon dioxide. They point to the cases of Germany and the Netherlands, which are in the act of commissioning unabated coal-fired power stations. They demand to know why Britain should be imposing constraints upon itself when others are failing to do so.