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Energy: White Paper

rose to move, That this House takes note of the White Paper Meeting the Energy Challenge. The noble Lord said: My Lords, I am grateful for the opportunity to make my maiden speech today and for the kindness shown by fellow Peers, the officers and staff of the House, and particularly by my supporters, my noble friends Lady Symons and Lord Leitch. I am deeply thankful for the warmth of the welcome I have received from everyone. I also thank my home town, the city of Birmingham, for the chances that it gave me in the early years of my life. I congratulate my noble friend Lord West of Spithead. He and I have only one thing in common: we both went to Dartmouth, but only one of us went on to great things in the Navy. I am conscious of the great wealth of expertise and experience concentrated in your Lordships’ House and I look forward to benefiting from it. I am fortunate enough to know many noble Lords from other walks of life. I have admired and respected them for their work and the experience they acquired individually before they, too, entered this House. Even more, I respect and admire the wisdom and understanding of the important issues that noble Lords display every day, and from which this great nation of ours can only benefit. It is in equal measure exhilarating and daunting to join the House. I have so much to learn, not just the ““Red Flag””, as the gentlemen of the press have been quick to point out, but also the art of brevity, to which I am often informed I am a total stranger. Especially, I really do have to learn the distinction between travelling the world for my country, and eating and drinking for it. It is a particular privilege to make my maiden speech in your Lordships’ House on a subject of such national and international importance and which for a long time has been of great personal interest; that is, energy policy. The energy White Paper, which we published in May, made it clear that we face two big challenges in the arena of energy policy: first, the need, with other countries, to tackle climate change by cutting greenhouse gas emissions; and, secondly, the need to ensure that we have secure and affordable energy supplies. The White Paper also made it clear that, despite some good progress, projections for the future, based on current policies, frankly, do not make for positive reading. Greenhouse gas emissions will keep rising as world energy demand is expected to be 50 per cent higher by 2030 than it is today. That demand is likely to be met largely by fossil fuels for some time to come. Greater competition for energy resources and the UK's increasing reliance on imported energy will also have implications for security of supply and we must act now. Over the next few years, energy companies will also need to replace ageing power stations and other infrastructure in the UK. The fleet is getting old. So it is vital that we create the right conditions for this investment to ensure that we get timely and increasingly low carbon energy supplies. Beyond the United Kingdom, we must be an active part of the emerging European Union energy and climate change policy that was agreed at the March Spring Council. This included commitments to competitive markets, cuts in greenhouse gas emissions, more renewable energy and a central role for the EU Emissions Trading Scheme as the potential basis for a global carbon market. We must use our influence as a united EU voice to work with the wider international community, notably in getting a consensus on the post-2012 Kyoto framework for reducing worldwide greenhouse gas emissions. I am sure that noble Lords will have seen for themselves—the energy White Paper is a significant piece of work—that these issues require a wide range of actions in response. There is no one answer. Anyone who insists that there is just one solution to addressing these challenges has failed to grasp their scale, their complexity and the way they interrelate. The White Paper sets out a long-term framework for international and domestic action to address these challenges, recognising that we need to tackle climate change and energy security as two sides of the same coin. We cannot address one at the expense of the other. Our first priority is to find ways of using less energy. The cleanest power station is the one that you do not have to build. The White Paper sets out a range of measures to help us to become more energy efficient and to cut energy use; that includes ensuring that any householder who asks for them can get free visual real-time displays of how much electricity they are using. We are also working with industry to provide better and clearer energy bills, to introduce smart meters and, crucially, to improve the efficiency of domestic appliances, phasing out inefficient goods and limiting the amount of standby energy that we all waste. The White Paper also proposes that from next year, energy suppliers double their current efforts to increase energy efficiency among their customers, and from 2011 we aim to transform their relationship with their customers, shifting the focus to the provision of energy services, increasing energy efficiency and saving carbon in the home. It is important that we also consider how vulnerable consumers are treated. The measures in the White Paper will help us to reach out to the most vulnerable and will take a further 200,000 households out of fuel poverty by 2010—that is around 10 per cent of the total number of households that we need to reach. This is progress, but it is clear that we have a lot more to do in that area. We will also require big organisations such as supermarkets, banks, hotel chains and large public sector organisations to limit their emissions through a new trading scheme. We are setting tougher energy efficiency standards for the new homes that we build and the products that we all buy. But we cannot reach our reduction targets through energy saving alone. It is clear that we need more low-carbon generation of electricity; and more low-carbon transport and more low-carbon heat, for example through an increase in the use of biofuels and biomass. We also want to encourage more local energy production. We have brought forward a range of measures to support this approach, including removing barriers for small-scale generators and simplifying some of the processes they need to do in order to participate in the energy market. In order to meet energy demand, we shall still need investment in large-scale electricity generation over the next 20 to 30 years. We will need new generating capacity equivalent to over a third of our existing capacity. It is vital that companies have a wide range of options available to invest in, so that we can retain a diverse energy mix and move to an increasingly low-carbon economy. The White Paper made clear our commitment to a central role for renewables such as wind, biomass, wave and tidal power in this energy mix. Through our reforms of the renewables obligation we expect that by 2015 around 15 per cent of our electricity supplies will come from renewables. That is triple the amount that we have today. And biofuels have a key role to play in transport. The road transport fuel obligation will require suppliers to ensure that 5 per cent of total fuel sales are from a renewable source by 2010-11. That represents around 2.5 billion litres of fuel and we estimate that it will save a million tonnes of carbon a year. It will be important that new low-carbon technologies are developed. We have set up the Energy Technologies Institute, which brings public and private investment together, and now has a minimum budget of £600 million. We are launching a competition for the demonstration of carbon capture and storage, which has the potential to reduce carbon dioxide emissions from fossil-fuel power stations by as much as 90 per cent. As noble Lords will be aware, alongside the White Paper we published a consultation document on nuclear power. I know that I do not need to stand here today and tell your Lordships that tackling climate change is possibly the greatest challenge of our age. And I am sure you do not need to be reminded how important energy security is to the health of our economy and to the health and well-being of our communities and the people of this island. We all know that these things are important and we all recognise the scale and complexity of the challenge we face.   About a third of the United Kingdom’s electricity generation is due to be retired over the next two decades. That includes almost all our nuclear power stations, which currently provide around 18 per cent of our electricity. In addition, the UK's indigenous supplies of gas from the North Sea are running out and we are becoming increasingly dependent upon imports.  In the UK, we are used to being largely self-sufficient in terms of our electricity generation: the people are used to it. But times are changing, and they are changing at a time of rising demand and prices and at a time when energy supplies are becoming increasingly politicised. This is not a position anyone in this country will be comfortable with. So the challenge is not just how to ensure that we can generate the base-load electricity that we need to underpin our renewable electricity generators: it is how we do so in a way that does not contribute towards climate change. So, what are the available solutions? Clearly, renewable energy will have an increasingly important role to play. Carbon capture and storage also has the potential to play a key role, and we are launching a competition for a full-scale demonstrator. But it is a relatively unproven technology. We can rely on gas, but the big reserves of gas are concentrated in a relatively small number of countries, and I do not need to spell out the challenges that that situation puts us in. Nuclear has played an important role in providing this country with low-carbon, base-load electricity for half a century. It is a mature technology with a proven track record in providing very low-carbon, baseload power. I believe that the best way to meet the low-carbon, secure energy challenge is by doing everything we can, from encouraging responsible energy use to making sure that energy companies have access to all the available low-carbon technologies. That is why we have taken a preliminary view that energy companies should have the option of investing in new nuclear power stations. However, we are currently consulting on this view and will fully consider the responses we receive before making any final decision later this year once full consultation has closed. But we do not have the luxury of time. We have been clear that one way or another we need to make a decision on nuclear power stations this year. We recognise that there are important specific issues to consider in respect of nuclear power, including the question of waste and we are making progress on this. We initiated a review of nuclear waste policy and appointed the Committee on Radioactive Waste Management in 2003 to assess and recommend the best options for dealing with higher activity solid waste. CoRWM concluded that geological disposal was the best available approach, coupled with safe and secure interim storage in the mean time. We accepted its recommendations and have begun the process of developing an implementation framework for providing a geological disposal facility. We are currently consulting on a framework for implementing geological disposal. If nuclear is not available to the energy market as an option, it is likely that in its place much of the new investment will be in gas or coal generation, which, of course, emits higher levels of carbon and leaves us increasingly dependent upon imports for this nation’s electricity generation. Even with nuclear power stations as an option, over the next 10 years or so most new investment will be in renewables and fossil-fuel plant. However, over the longer term we need to ensure that we can provide the low-carbon, baseload electricity that this nation needs. I know that nuclear power is a controversial issue, but we must not lose sight of the significant challenge that faces this country; a challenge which we must all confront, not avoid, and work together to solve for the benefit of everyone in the United Kingdom. The measures to address climate change, including those in the White Paper, put us on track to make savings of carbon emissions of between 23 million to 33 million tonnes by 2020—putting us on track to meet our 2050 goal of a 60 per cent reduction from 1990 levels. By saving energy, encouraging new timely investment in gas import and storage infrastructure and by maximising recovery of UK reserves of oil, gas and coal, our measures will also help the security of supply. The White Paper sets the policies. We now need to get on with delivery. We are in the process now of implementing the measures. Some we can do without the need for further regulation or consultation, such as providing the energy markets outlook, which we will do this autumn. Others rightly require consultation, and some, indeed, will require primary legislation. Yesterday the Prime Minister announced our proposals for legislation in the next Session. These include Bills on planning, energy and climate change. All three are crucial to meeting the energy challenge; not the least planning reform. I speak from personal experience on this one; our businesses, wealth creation and our whole economy and infrastructure are crying out for a streamlined planning system. Of course, no one document—not even as comprehensive a White Paper as this one—can be the final answer to the long-term challenges that this nation faces. Becoming a low-carbon economy will mean a series of changes and developments over decades to come. Further measures will be needed if we are to achieve our long-term goals, in the light of further international agreements, or as new technologies emerge. While further refining of our policies over the long term is inevitable, the framework for action is set out in the White Paper. It is based on the principles of competitive energy markets, energy efficiency and a diverse energy mix, with more low-carbon sources of energy. That will not change, and it enables us to make real progress now towards tackling climate change and ensuring secure and affordable energy supplies in the most effective and cost-efficient way. Much has been made of my appointment as a Minister. There is a big job to be done for the country, for the Government and for the Prime Minister in emphasising every day, everywhere, the importance of UK trade and investment for jobs and for the capacity of this great nation of ours to pay its way in the world. It should be clear enough to everyone that this is above the conflicts—understandably so—of party politics. From value-added innovative manufacturing—which I remind the House very much thrives in 21st-century Britain—to the creative industries, from financial services to retail and oil and gas, from our world-class universities to our tourism, I intend to bang the drum for Britain wherever I go in the world. I hope that your Lordships will all be as proud of me as I do this job as I am so very proud to speak to you today. Thank you. I beg to move. Moved, That this House takes note of the White Paper Meeting the Energy Challenge.—(Lord Jones of Birmingham.)