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Energy: White Paper

My Lords, I am here to respond to the White Paper. If the noble Lord would like to talk to me over coffee later, I shall be only too delighted to tell him our programme. As it is, any decision that is finally made seems likely to be based on uncertain estimations and unclear risks. How is the industry expected to calculate whether it will be feasible to invest in new power stations if the Government refuse to lay out what would be expected from them? For example, the Government have not yet made it clear how clean-up or waste disposal costs will be calculated, or what steps they will take to ensure that the taxpayer does not end up carrying the cost. Such clarification will not prejudice the consultation that is currently going on, but will inform it, and raise the debate from one of sentiment and prejudice to one of practical concerns and necessary safeguards. Nuclear power has both benefits, such as a relatively low carbon footprint and the potential to improve UK energy capacity significantly, and risks, such as dangerous waste and expensive decommissioning. Those risks cannot be accurately calculated without more information on the Government’s intention. Turning to the other aspects of the White Paper, I must admit that I am rather disappointed by the lack of clear decision on many issues that we would like to see moved forward. In particular, the Government’s proposals on renewable energy are not adequate. It is going to be very hard as it is to reach the EU target of 20 per cent of energy from renewable sources by 2020, especially as we are starting from such a low point compared with other countries in western Europe. Government delay and confusion have already caused a promising carbon capture scheme to suffer. BP has had to pull out of the Peterhead scheme after the Government decided to delay the competition until November this year. The waste of the resources already invested is a disgrace. I wonder whether the Minister can explain how this was allowed to happen. We are very glad that the renewables obligation is to be reformed. After criticism by Ofgem earlier this year, it would have been worrying if it was not to be. However, the Government are still pursuing the idea of banding and many of Ofgem’s criticism are still applicable. In particular, Ofgem and the National Audit Office have pointed out that the current scheme is still very costly, with customers paying, even if the renewable generator is not built. Is the Minister not also worried that the Government are continuing the policy that Dr Dieter Helm called, ““picking winners””? In October last year he warned of the inability of governments to predict costs and returns from specific technologies. Will the Minister explain why he thinks that the ““man in Whitehall”” knows best when it comes to choosing between competing renewable technologies? Does he not agree that under a banding scheme the potential is still there for directing funding away from one source to another for reasons that have nothing to do with cost-effectiveness? Why are the Government continuing to interfere at this level? If they were to ensure a level playing field, the market would make the decision on which renewable is supported, and costs and risks would accurately be taken into account, resulting in a more efficient apportionment of subsidy. The level playing field should also apply to other methods of improving our environmental record. I hope that the Government will eventually accept the Conservative policy of focusing on carbon emissions rather than selecting favoured industries. With a uniform price of carbon, set by a long-term cap and trade regime, the industry will establish the best method to improve its output itself, whether that be by encouraging energy efficiency, low-carbon energy production or renewable energy sources. There is disappointingly little of substance in this paper about many of those methods. The EU emissions trading scheme has the potential to provide the necessary incentives to encourage their development, but only extends to 2012. The Government must start looking at ways of not only improving the method of assigning credits, but also extending this to the long term as soon as possible. I ask the Minister to explain to the House what the Government are doing to achieve a firm EU-wide commitment to a strong carbon price for the long term. Climate change is a very real and present danger. The long-term consequences will affect both rich and poor across the world. Decisive action needs to be taken now. The alternative is a future of rising energy bills, increasingly uncertain energy supplies and continuing environmental damage. Yet the Government appear able to talk only about what might be done in the future. The Energy Bill that we have been promised in the next Session must show what will be done. I shall quote my noble friend Lord Howell, who has written a widely acclaimed book, Out of the Energy Labyrinth, in which he says: "““The future needs to be sharply different from the past in energy matters, but those with authority and with the power to give words wings have yet to find the over-arching story with which to inspire””." Our energy policy needs to become both substantial and secure, and the journey towards this end must start immediately. There is no more time to lose.