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Renewable Energy (S&T Report)

My Lords, first, I thank the noble Lord, Lord Oxburgh, and his committee for such an expert and detailed report, which he outlined today. That is very helpful. My thanks go, too, to the right reverend Prelate, who has not only anticipated my lines on the importance of climate change but done so far more eloquently than I could have. That is the backdrop against which we are discussing the issue of renewable energy and energy efficiency. Although the noble Lord, Lord Oxburgh, is right to say that this is not primarily a debate about climate change, climate change is what drives much of our consideration today. Much technical expertise was represented on the noble Lord’s committee, many members of which are speaking today, along with many others with detailed knowledge of this area. My only claim to fame is that for the past three years part of my title in Defra was Minister for sustainable energy. Broadly, that meant that I looked after the environmental and social dimensions of energy policy. I must say, it was one of the more frustrating aspects of my job. Given that I was also Minister for agriculture, in proportionate terms, that is saying quite something. I therefore thought that I would take the opportunity of this debate at least to share some of my frustration. The key to that frustration is that this is such an important issue. There are not only the catastrophic consequences of failing to tackle it, which the right reverend Prelate has already pointed out, but the difficulty of doing so, because we are engaged in a process of changing the behaviour of millions of individuals, of hundreds of thousands of institutions and companies and, indeed, of government departments. So I shall talk about a few of the specific aspects of renewables and mainly about energy efficiency, but also about the machinery of government. My frustration is not because I disagree with the broad thrust of government policy. I strongly support it—indeed I was party to it. My frustration—this was reflected by the right reverend Prelate—is at the lack of urgency, priority, resourcing, redirection of other governmental bodies in terms of regulation and of co-ordination of government in this field. There are some serious issues here that the Government will have to grasp if they are to live up to the objectives set out by the Prime Minister in the speeches already referred to. We ought to be absolutely clear that the prime objective of energy policy must now be a reduction in the carbon content of our energy sourcing and use. There are of course other objectives of energy policy, which are set out in the White Paper on energy, but the prime objective of energy policy over the past 20 years of minimum price achieved through maximum competition is no longer valid. That was the policy objective for several decades, and as a society we have benefited from it in many ways, but there is now a more important objective: the environmental climate change objective. Although there are always trade-offs, that priority must be reflected over other objectives. These include   consumer preference in relation to planning considerations; waste management, whether in relation to biomass or nuclear power; and—even I, who was its champion, am prepared to admit—the fuel poverty programme, despite the consequences of higher energy prices to drive the achievements in energy efficiency that are now needed. We will need other measures to offset some of those effects in the social and environmental field, but we ought to be clear, as the right reverend Prelate has just been, that the overriding objective of energy policy, in sourcing and use, must be to minimise the carbon content thereof and that of other greenhouse gases. Some serious ideological problems are involved here. Reference has been made to the American position. The   Americans also have heavy investment in the technology that is required. The world will need that American investment and commitment to technology, but we cannot afford the American ideology that says that technology will provide the solution—that we do not need other market interventions, either nationally or internationally because, ultimately, technology will provide. Technology is a vital part of the solution, but it emerges only in a framework set by governments nationally and internationally and by society as a whole. We recognise that. Although there has been liberalisation and privatisation of the industry, we have already recognised that this is not a normal market. We have had heavy regulation. The whole paraphernalia of   ROCs, tax interventions, the energy efficiency commitment and the role of Ofgem indicates that it is not a normal market. It is one in which government must intervene, and we cannot afford the ideology that says that the market will, in the end, provide without very heavy intervention by government regulators and others. There is also a bit of an ideological problem, particularly in this House, about the role of nuclear energy. I do not believe that we should have the argument in terms of ““nuclear energy versus renewables””. It is a question of nuclear energy and renewables replacing carbon-based fuels. With nuclear power, the timescale, the cost, the management of by-products and public acceptability must be addressed. It ought not to be seen as a question of wind power against nuclear power. That is a false dichotomy. Among the areas in which I found some frustration in developing renewables was the biomass area. Reference has already been made to the committee that I helped set up under Ben Gill—I hope that it will report later this year—to consider how we might overcome some of the regulatory and financial difficulties in getting the biomass market off the ground. With regard to liquid biomass and biofuels, we already have a solution. We provided it in this House through amendments to the Energy Bill. I do not understand why the Government have not adopted the renewable fuels obligation with regard to transport. After all, transport is our most rapidly growing source of carbon-based emissions, and that issue must be tackled directly. We have already put the ability to do so on the statute book. There are other frustrations. One is the change in behaviour that we need and the timidity with which government, industry and those who advise them accept interventions to try to change behaviour. Behaviour will not change of itself; we all know that. We know that, despite the increasing price of energy, energy is a pretty low priority for almost every company—big or small—in the land. We also know that we leave the television and the computer on stand-by. Unless there are interventions to ensure that we change our behaviour—they can come only from the state—we will not achieve change. We need fiscal intervention, regulatory intervention, standard setting and some restructuring of the taxation of consumer products. My experience in government suggests that Her Majesty’s Treasury and the regulatory authorities, particularly Ofgem, find it difficult to intervene in a way that is designed to change behaviour. If we do not change behaviour, all the interventions in the world and all the debates, declarations and exhortations from the Prime Minister downwards will not achieve the kind of improvement in energy efficiency that we need. My final point is that I believe that we have not yet got complete cohesion in government on the matter. I welcome the appointment of Malcolm Wicks. He may be in the wrong department, but we shall settle for that at the moment. I do not normally argue for changes in government structure to achieve a change in government policy, but, in this context, I think that, despite the relatively good co-operation involving Ministers in the energy field, we need a more focused structure, to take in not only the environmental dimension of energy policy but a broader role for Ofgem and new responsibilities for buildings, which produce 50 per cent of our carbon, and for transport. We need a more focused structure for dealing with energy, which is probably the most important aspect of our attempts to tackle climate change.