---

Energy White Paper

My Lords, I do not recognise the confusion which the noble Baroness, Lady Wilcox, describes in the White Paper. I think that our position is absolutely clear. She also made some points on the consultation process for new nuclear build. The consultation on new nuclear build will be full and run over 20 weeks. Afterwards the Government will have a period of reflection and then take our final decision. As noble Lords said, we published our energy review last July and said that nuclear should form part of the future low-carbon energy mix. That is still our view. The exact number of nuclear stations has not been decided. However, if we take no action, our nuclear capacity will decline over the next few years from about 18 per cent to 6 to 7 per cent. That would have a big impact on our emissions as that capacity would have to be replaced by gas or other forms of generation which are not as low-carbon. Security of supply issues would also arise. The UK’s policy on renewables is clearly laid out in the White Paper: our strategy is to triple the amount of electricity generated from renewables between now and 2015. The noble Baroness also mentioned investment in nuclear and asked why energy companies should invest in it. Energy companies have shown a lot of interest in investing in new nuclear in the UK. EDF has said that, providing that the Government make a decision relatively swiftly, it could have a new nuclear power station up and running by 2017. On subsidy, E.ON has said that it would require no subsidy whatever to build a nuclear power station in the UK. I do not see an issue there. Our view on the EU Emissions Trading Scheme is that it should be strengthened. We want to ensure that there is a robust price for carbon. The EU ETS was particularly weak in its first phase but has strengthened somewhat in its second phase. We want to strengthen it further in its third phase. The renewables obligation will be worth £1 billion annually to the renewable sector by 2010. We are consulting on the banding of the renewables obligation specifically to ensure that there is more support for the renewable technologies that are currently not viable. We are therefore looking at offshore wind, tidal and marine technologies and ensuring that we give more support to them than to others such as onshore wind and biomass. We looked at the previous Government’s feed-in tariffs but felt that they were not effective in boosting renewables. Under the renewables obligation this Government have doubled the amount of renewable energy, with considerable increases in , for example, wind generation. It took 14 years to develop the first gigawatt of wind energy in the UK, and 20 months to develop the second. Only eight countries in the world, including the UK, have reached that level of wind generation. I do not see the problem that the noble Baroness outlined on carbon capture and storage, which is going ahead. We are having a competition and expect to have the details in place by November 2007, and we are working closely with energy companies to take it further. We intend to proceed as the first country in the world to have a demonstration project for carbon capture and storage. As noble Lords will know, although CCS exists in a number of forms, no one has yet succeeded in putting the technology together on a commercial scale. I acknowledged what the noble Baroness said. I mentioned the carbon reduction commitment and the benefits that it would have. I agree with that. We are currently on target to achieve a 60 per cent reduction in CO2 emissions by 2050. The White Paper outlines how we will achieve that. On smart metering, the benefits of which were mentioned by the noble Lord, Lord Redesdale, I agree. If I may say so, the noble Baroness seemed to be misinformed about our proposals for smart metering. We are not abandoning it in favour of visual display units; we propose that they be introduced for all businesses within five years, apart from the smallest businesses, and within 10 years for domestic users. We are also offering the opportunity of visual display units free of charge for consumers during the next couple of years. The noble Lord, Lord Redesdale, mentioned Scotland. Of course we do not intend to change the devolution settlement. The Scottish Executive have certain powers on planning matters and those will remain the same. We have undertaken some contingency work dependent on the final outcome of the consultation, but we are looking at strategic siting assessments for new nuclear power stations, which will obviously take into account the issues that he mentioned concerning rising sea levels. On carbon capture and storage, the noble Lord pointed to page 175, paragraph 5.4.18 of the White Paper. The intention is that the first commercial-scale demonstration of CCS will be brought on stream between 2011 and 2014. That will be part of the bid criteria; proposals will have to take that into account. Companies will have to promise that they will deliver in that timeframe a UK CCS programme. These things take time, but if we do not take the decisions now, we will not have a CCS demonstrator in that timescale. Time is pressing, we are aware of that. That is why we are proceeding with all speed on the matter. I agree with the noble Lord, Lord Redesdale, that energy saving is very important for both businesses and individuals. We have ensured that there will be a successor to the carbon emission reduction target which will double the obligation of suppliers to introduce energy-saving measures. The Government’s plans to introduce zero-carbon homes by 2016 will also reduce CO2 emissions and make individuals think more about their carbon footprint. That is very important. On the renewables obligation, which I mentioned briefly, I return to the point made by the noble Lord, Lord Redesdale. As I said, it will be worth £1 billion a year to the sector by 2010. We have the marine renewables development fund, which contains £50 million to support tidal power. We are establishing the Energy Technologies Institute, which will have a budget of £600 million over 10 years, which will support a range of new renewable technologies. We have invested about £500 million in development grants for renewables. As I mentioned, we are looking at a renewable banding to give more support to wind and tidal power, among others. Will nuclear power be included in the renewables obligation? No.