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Renewable Energy (S&T Report)

My Lords, I welcome with others the fact that this debate is taking place. It will of its nature be a fairly diverse debate because so many different issues are raised. I hope that the right reverend Prelate will forgive me that I do not follow his very eloquent speech as he outlined the pressing need to address climate change, but rather concentrate on one or two of the other detailed matters to which the Select Committee drew our attention. I make no excuse for that because, as with so much else—this has emerged from the speeches that we have heard—the devil is often in the detail. Although I may not follow exactly what the noble Lord, Lord Haworth, has said, he has put his finger on one of the details: the problem of the transmission of electric power from renewable generators to customers through the grid. The noble Lord spoke about the environmental aspect—I had not previously heard ““Highlands before Pylons””, but I shall treasure it—but I shall look at the other aspect which flows from the nature of wind power; namely, that it is intermittent and will have a progressively more serious impact on the operation of the grid. I shall turn latterly to a second question on that, but I shall come to it in a moment. The Select Committee dealt very fully with the problem of the intermittent nature of wind power, in chapters 6 and 7 of the report. In paragraph 6.16, it highlighted it as,"““an issue of major importance””," and gave proper attention to it. The problem arises because intermittency inevitably gives rise to uncertainty of supplies. That adds to grid costs because of the need for back-up. In a very trenchant paragraph, in box 13, the committee referred to,"““a law of diminishing returns: the amount of conventional generating capacity that can be displaced by intermittent generating capacity falls proportionately as the absolute amount displaced increases””." There is a generally accepted view that up to 10 per cent of wind penetration can be managed fairly simply without undue difficulty to the operation of the grid. But as the figure goes beyond 10 per cent, the strains on the system become increasingly serious. I was privileged a few days ago to be briefed by a couple of senior operational managers of the National Grid company. Their message was very clear: they entirely corroborated what the Select Committee had said about the matter—indeed, their evidence may have been the source of it. They pointed me in the direction of Germany, where wind penetration has now reached the figure of 16 per cent. They cited it as an eloquent example of the problems that it causes the operation of the grid. Wind power can sometimes fall by hundreds, or even thousands, of megawatts, in the course of just two or three hours, which requires the immediate mobilisation of fossil fuel generators to meet demand, with consequent major increases in emissions. But there is the other side of the problem as well, as exemplified by Denmark, to which the managers at the National Grid also drew my attention. If there is a full supply of wind, and the wind is blowing neither too lightly nor too hard, at a time when electricity demand is low the resulting excess has either to be sold across borders or the turbines simply have to be switched off. In Denmark they have the opportunity to sell it. But what happens? They produce their wind power very expensively—and the Danes have the highest electricity charges in Europe, both to industry and to   householders—and when they cannot use it themselves they sell it at a loss across borders to their neighbours in Sweden, Norway and elsewhere. The Danes have naturally enough become pretty cross about that, because what they are effectively doing is not only subsidising their neighbours by selling them cheap electricity but allowing those countries to store up their hydro when they do not need to use it, so that when they have a high demand and no wind, they have hydroelectric power. So it is not surprising to learn that the Danes have stopped building wind farms. I saw a report recently that was put to the Whinash public inquiry, which said that,"““the problems of imbalances . . .  will almost certainly be repeated in the UK””." So what does the Government’s response say about that? There are some advantages in having an original and a revised response. Paragraph 119 of the revised response says:"““The Government agrees with the Committee that there is a need to improve our understanding of the technical implications of high levels of wind generation connected to the electricity networks””." They go on to say that they have appointed the Joint   Government/Industry Electricity System Issues Steering Group to oversee work by the NGC and others. They hope that that report will come,"““in the next few months””." But the corresponding paragraph in the original response, published in December last year, said that they were expecting that report early in the new year—that is, early in this year, six months ago. We are now told that the report will not come for a few months. Here we have, as the Select Committee said, perhaps the major issue in the operation of the grid in relation to wind power, and the committee’s report seems to have slipped by nearly a year. Why is that? Is it a manageable problem or one which will present us with considerable operational difficulties? I do not find the revised response in the least bit persuasive, and it gives the impression that Ministers do not really seem to have taken on board the seriousness of the issue. I hope that the Minister this evening will give us some more comfort on that matter. The second point that I wish to raise very briefly is the question of transmission from remote renewable generators. The Minister will recognise that I asked   him about that matter at Question Time earlier this month on 13 June. When discussing the Bill Parliament agreed to allow substantial additional subsidy for that transmission, I have to say against the advice of Ofgem. I asked when that would happen. The noble Lord, Lord Haworth, has given us one reason why that is not happening. The Minister gave the following reason on 13 June when he said that,"““one of the important issues with achieving our target for wind power and renewables is that we do not have problems with the upgrade of the transmission lines, particularly from Scotland. Those are now going ahead””—" but here is the point—"““but there is obviously the question of where the costs fall””.—[Official Report, 13/6/05; col. 1065.]" Here we are a year after the passage of the Act and a year after the new subsidy was agreed but, so far as I can see, none of these lines is being built because there is no agreement regarding where the costs fall. I hope that the Government will give us some comfort on that matter because offshore wind is one of the things that they are really hoping to press. However, if there is no transmission, there will be no offshore generators.