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Energy: Electricity Supply

My Lords, I, too, thank the noble Lord, Lord Tombs, for bringing this debate to the House. I have not previously contributed to this debate. Energy supply is an emotional issue, but it should not be. Those of us who have worked in industry would like to know that energy is available, its price is predictable and it will be available in the long term, and would like to leave it at that. But I also recall being summonsed earlier in my political career to a farm in a very beautiful area of Cornwall. The farmer called me there because there was a proposal to construct a quite large wind farm nearby. He took me up to his farmhouse, showed me the view and said: ““Look at that. That whole vista will be ruined by wind generators””. I looked out across the countryside, but the first thing I saw were 60 or so transmission pylons which had destroyed the vista some 50 years before. The farmer had not noticed them because they had been there so long. There is a lot of emotion around renewable energy projects, especially wind farms, and certainly a lot of emotional energy around the nuclear debate. As noble Lords have said, in the past 10 to 20 years we have seen a fundamental change in the energy supply industry. For many years the Government have relied on the fact that we have already beaten our Kyoto emissions targets, primarily by moving from coal to gas for electricity generation. However, as noble Lords have also noted, our emissions are increasing because of the change in gas prices. We may now even miss our target because of energy generation by coal technologies. I might be expected as a Member sitting on these Benches to be completely anti-nuclear. I am certainly not anti-nuclear on principle but believe that there are a number of issues around the nuclear industry. All the arguments have not yet been won but they are extremely important in planning our future energy supplies. The first issue, as noble Lords know, is nuclear waste. Although Finland believes that it has solved the problem by using deep geological storage, we do not yet have an answer. Security, especially the threat of terrorism, is another problem. A plethora of questions need to be asked and answered to our satisfaction in this area. On finance, I fully accept that a number of renewable energy projects benefit from substantial subsidy. I do not think that there are any technical reasons to stop proposals for building new nuclear power stations now and on a commercial basis. But there are all sorts of other barriers, not least planning issues. And nuclear power cannot proceed without considerable public subsidy in one form or another. One of the few issues to unite people in Cornwall—that most south-westerly of counties, where people are known for arguing among themselves so regularly—was a proposal in the 1970s to build a nuclear power station in the Fowey and Lostwithiel area. Everyone came together to protest against it. I do not believe that public opinion has yet moved to the extent necessary to allow us to regard nuclear power as the silver bullet to address the immediate problems. We have a number of alternatives. On renewables, wind power has yet to address the problem of continuity of supply. We need to look at energy efficiency in a number of other areas and, as has been discussed, consider carbon sequestration and clean coal technologies. All those areas are equally important. In their energy review last year, the Government put down a clear marker that they wished to change their mind on nuclear power. I was most concerned about the hesitation they showed on energy savings and the renewable energy agenda which they had previously backed both strongly and, I think, bravely. That hesitation will cause uncertainty in those industries. I should specifically like to ask the Minister about one continuous source of renewable energy for electricity generation not mentioned in the review: deep geological thermal energy, also known as ““hot rocks”” or ““hot dry rocks”” technology. We have a potential source of geothermal electricity in the south-west of the United Kingdom, where there isa great deal of underground granite. Previous Governments undertook research in this area but that was closed down in the mid-1990s. Although the research was very successful, more money for it could not be found. Instead, the research moved to Alsace, near Strasbourg. Perhaps the Minister was able to visit the location when he was in Strasbourg. I was not able to do so because there was heavy snow on the day scheduled. However, that power station is now starting to fire-up and will be a proper test bed for hot-rocks energy. Will the Government look closely at the success of the project and consider whether it could be used in the UK? One hot-rocks power station could generate about 30 megawatts of power, has a fairly small footprint and would not create a large impression on the landscape. It is an area that has not been explored but should be. I was pleased that the noble Lord, Lord Jenkin of Roding, raised the issue of carbon pricing. As he said, it is key to how the market plans future energy supply. As a Liberal, I am very much a market-oriented person. I believe that we should allow the market to take the lead subject to certain energy security issues. I agree with the noble Lord’s absolutely accurate comments on Gazprom and its agenda. For a market to work there has to be a guarantee of stability over an investment period—which can be very long in the energy sector. We have to know the price of carbon or the levels of carbon taxation—whichever way the Government or the European Union wish to take this forward in EU emissions systems. It is critical that beyond Kyoto, 2012 and the current limit of the EU emissions scheme, something is put in place in the next couple of years to cover us post 2012. That is the most important task in addressing energy supply and climate change. This is an emotional area. The Governmentshould not use nuclear as an excuse to hesitate on their renewables strategy. However, returning to my industrial background, I know that British industry needs to know that it has a secure energy supply and that it can predict its costs although those costsmay rise.