Energy Bill [HL]

Viscount Ridley Excerpts

Wednesday 9th September 2015 Lords Chamber

[Lord Teverson]

My Lords, I am a great disappointment to the noble Lord, Lord Oxburgh, because over the years, I have become a CCS sceptic in all sorts of ways. The reason for that is not because it is not necessary or a good way to move forward the decarbonisation agenda but because, exactly as he himself said—I have been talking about this for the nine years that I have been privileged to be a Member of this House—we have got a very short distance in terms of making it happen. Obviously there has been important progress, with projects in the formative pipeline at the moment, but one reason for that is that CCS is large scale, demonstration projects are very expensive and it stands aside from the fossil fuel-based industry that it is trying to help. The two are not directly tied up.

What I like about the amendment, and why I have put my name to it, is that it tries to find a number of ways through that puzzle. First, it says that CCS is important, and is a future technology. I really welcome the Government’s positive messages about this. From where I stand, the decarbonisation agenda seems to be rather on the back foot and going in the wrong direction, but in this important area I really welcome the Government’s positive mood music. But there are a couple of other things. One was referred to strongly and effectively by the noble Baroness, Lady Worthington. If there is greater stakeholdership of CCS by the fossil fuel industry, there is likely to be more push for there to be a real effect and for something to happen. It is also an ongoing basis on which this technology can be funded, rather than on the erratic one-off mega-subsidies and funding systems that we have at the moment.

For those reasons, this is a really positive suggestion and a way in which we can start to move forward. It is also in line with the philosophy, with which we all agree, that the polluter pays—or it is in that ballpark, if not absolutely perfectly. For that reason, I was very pleased to put my name to the amendment, as it helps to bring that forward. But as other noble Lords have said, clearly this is the start of an idea. That is why it is absolutely right that the amendment talks about a consultation process, rather than saying that it should happen. So I very much welcome this amendment and welcome the Government’s positive view towards CCS, and I hope that this can be seen as a way of moving this agenda forward more practically than we have achieved in the past.

[Viscount Ridley (Con)]

My Lords, I apologise for not being here on Monday to take part in the debates then, and I hope that the House will indulge me in speaking today. I declare my interests in surface coal-mining in the north of England. None the less, and to their astonishment and probably horror, I would like to support the amendment in the names of the noble Lord, Lord Oxburgh, the noble Baroness, Lady Worthington, and the noble Lord, Lord Teverson. It has enormous merits and is a good suggestion, although they should not worry because I will disagree with them on things towards the end of my remarks.

I welcome the remarks of my noble friend the Minister that he wants to discuss CCS further, and I hope that he might be able to include me in those discussions. I want to suggest as an extra twist—and the noble Lord, Lord Oxburgh, touched on this—that we must link this to some kind of alleviation of the carbon imposts on the industry, which are throttling various British industries at the moment, in particular the carbon floor price. What I like about the suggested amendment is that it avoids the distortion of supporting carbon capture and storage through the contracts for difference, and that it should work at no cost to the taxpayer and makes use of market mechanisms.

I think that we now have to agree that the world needs fossil fuels during this century, if only to give the billion people in the world who have not got access to electricity the chance to have access. We cannot get emissions reduction without using CCS, if we are going to use fossil fuels. We are still searching for a way in which to get emissions down without hitting affordability and security, to solve the trilemma. So far, the two main ways in which we have tried that have not worked. Subsidising renewables has worked very poorly in getting emissions down and has done so at the cost of affordability. So far, wind and solar have managed to take 1.3% of global energy use, after billions of pounds invested in it worldwide, while having a minimal effect on emissions reduction. So the renewables agenda is putting affordability at risk without achieving its goals.

The other tactic that we have tried is simply to put heavier and heavier taxes on fossil fuels, and we can see the effect of that on our electricity supply in this country. Power station after power station is closing. In the Queen’s Speech debate on 4 June I suggested rather rashly that there was now a risk that Eggborough would close—and now that has come to pass. Therefore we are genuinely looking at a worrying lack of energy security in this country. The two mechanisms we have tried for cutting emissions have either hit affordability or security, so we are still searching for a way to do decarbonisation cheaply and without hitting energy security. The best way to achieve that would be to build more gas-powered power stations and to encourage the use of gas instead of coal, but that is not possible at the moment in this country, because renewables are making it uneconomic for anybody to build or open a new combined-cycle gas turbine.

--- Later in debate ---

[Baroness Worthington]

I apologise if I have risen too soon; I look forward to hearing what the noble Viscount is about to say. It is true, is it not, that there is a time lag between our emissions and changes in temperature? We are therefore likely to have a 30 to 40-year period in which we know we have committed ourselves to higher temperatures, and yet we are waiting for the impact. That surely means that we should be concerned sooner, rather than later. Secondly, does the noble Viscount not acknowledge that a global average temperature rise of 1 degree would be double that in the Arctic? A 2 degree global rise would therefore be 4 degrees in the Arctic, which could have a significant impact on the melt, leading to sea level rise.

[Viscount Ridley]

On the first point about the lag, yes, but the whole point is that I am comparing the rate of temperature increase with the rate predicted by the IPCC, which knew about the lag and built it into its models. Essentially, the noble Baroness is talking about the difference between equilibrium climate sensitivity, which is reached after many centuries, and transient climate response, which is what you immediately get. Yes, there is a big difference there, but the climate sensitivity figures—I was coming on to this—are based on 14 new studies, one of which Myles Allen co-authored.

[Lord Winston (Lab)]

Forgive me, but is not this discussion a little irrelevant to the amendment? What we are trying to do in this Bill is to create a plan, and in considering this amendment that is what we should be focusing on, rather than the arguments about climate change.

[Viscount Ridley]

I do not disagree—I was simply picking up on a couple of points made by the noble Baroness, Lady Worthington, and the noble Lord, Lord Oxburgh. I will wrap up my remarks very soon, but let me point out that the only scenario that the IPCC considered in its models that gets us to 4 degrees by 2100 is RCP 8.5, which assumes that the world will be burning 10 times as much coal in 2100 as we are today. That is not very realistic, and it also assumes that by then, we will be getting our motor fuel from coal. Nobody thinks that is going to happen, so one has to be careful about which of the IPCC scenarios one looks at. That one is not very plausible.

Anyway, I think we agree that this is an excellent amendment, and I will leave it at that.

[Baroness Maddock]

I was going to congratulate the noble Lord, Lord Oxburgh, on introducing an amendment that has actually brought together both sides of the climate change argument. Unfortunately, that was rather spoilt by the latest comment of the noble Viscount, Lord Ridley. We were spared that on Monday, when we debated carbon capture and storage. However, I do hope that the Minister will take this proposal and this amendment seriously.

The final point I want to make, which I made on Monday, is that I am concerned that, in our rush to make sure that we keep the oil and gas industry as profitable as it can be in the circumstances, we do not put anything in the Bill that will prevent us developing carbon capture and storage. We have heard how slow and difficult progress has been, so I welcome these proposals, which we should look at. I hope we can have a good discussion of the issue, but I point out that, other than next week, it is very difficult for me to get together here in London to discuss it before we return in October.