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Energy Bill

My Lords, I thank the Minister for introducing the Bill. We have long awaited the great Energy Bill, but this is only a small part of the energy picture. The Marine Bill, the Climate Change Bill, the Planning Bill and a future nuclear waste Bill are all vital to securing Britain’s long-term energy supply and climate change strategy. Even that list leaves out measures that are vital to that strategy, including feeder tariffs, smart metering—which I notice the Minister mentioned today—and other measures to help domestic customers experiencing fuel poverty, and a carbon capture regime that includes liabilities. While we on this side of the House welcome the proposal for a nuclear decommissioning fund, there are no measures on nuclear waste. It is impossible for the private sector to develop robust financial models when the position on deep depositing is not known. On Second Reading in another place, my colleague, the shadow Secretary of State, Alan Duncan, while welcoming the broad thrust of the Bill, criticised several specific measures. He said that the Government’s handling of carbon capture and storage—known from here on in as CCS technology—had been poor and that it was not clear what provision, if any, the Bill made for liabilities. While he praised provision in the Bill for banding the renewables obligation, he said that the proposal did not go far enough to enable the UK to meet its EU renewables target. He also regretted that no provision had been made for feed-in tariffs. The Conservatives and the Liberal Democrats have each pointed out that what is most controversial about this Energy Bill is what is not in it. They used the miscellaneous section of the Bill in the other place to try to generate debate about such important provisions as feed-in tariffs, smart metering, prepayment meters, electronic electricity devices, social tariffs and the role of Ofgem. I have no doubt that the Government will hear forceful argument from all sides of the House on these important omissions, both today and in Committee. Ten years’ dithering over energy and consultation after consultation and now, as the Minister says, there is no time left to waste. The Minister himself has admitted that the UK faces a looming energy gap. Approximately 30 per cent of the UK’s existing capacity will shut over the next 20 years. All our nuclear power stations except for Sizewell B are scheduled for closure, and many older coal-fired power stations will be forced to close under EU law. It will leave a significant capacity gap. The United Kingdom used to be a net exporter of oil and gas, but by 2004 it became a net importer of gas and last year became a net importer of oil. UK gas production peaked in 2000 at 108 billion cubic metres and has since declined by about 1 per cent every year. From 2008 a rapid decline in production is forecast. The Government have estimated that imports could be meeting 90 per cent of gas demand by 2020 and admitted that the UK’s reserves of gas have declined faster than they expected—how vulnerable this makes our country, our industry, our homes and our economy. The UK currently imports only 7 per cent of its overall gas requirement but that is expected to rise, as the Minister said, to 40 per cent by 2010 and 90 per cent by 2020. More widely, the European Union currently imports 52 per cent of its gas, a proportion that is steadily growing. The European Union is already the world’s leading importer of such resources, and the Government estimate that by 2020 we may be reliant on overseas resources for 80 per cent of our energy needs. This is affecting everyone. Companies and consumers alike faced a gas and electricity price shock in the winter of 2005-06 as the margin between supply and demand was too tight. Then, in February, there was a fire at the UK’s largest gas storage facility. By March 2006 a cold snap across Europe and insufficient gas flow through the interconnector led to a gas balancing alert being issued by the national grid. We were suddenly faced with the possibility of gas supply interruptions—unplanned, with nowhere else to turn. Increases in the price of oil on the international market sent prices shooting up. Domestic bills have risen by 35 per cent in real terms in the past seven years. Bills for medium-sized firms have risen by 50 per cent in two years. The Department for Business, Enterprise and Regulatory Reform set a target to eliminate fuel poverty in vulnerable households and now the total is likely to rise. Despite a target set by Labour to reduce carbon emissions by 20 per cent, emissions are higher now than when Labour came to power. What a mess. The quicker the Government take action, the better. We will, of course, do all we can to hasten the Bill along, to improve it where we can. Let me start with some questions for clarification. The Energy Bill contains a framework for CCS, but what use is it without provision for liabilities? What does the Minister plan to do if the Scottish Parliament blocks plans to build a new nuclear power station in Scotland? Do the Government have any plans to change the nuclear safety targets for a new generation of nuclear power stations? According to the Nuclear Installations Inspectorate, the migration of skills has placed a severe strain on its ability to find, recruit, train and retain the number of skilled employees it requires to assess and approve the different types of reactor that are seeking a licence. What are the Government doing to address this? The Government have recently voiced their support for three major international agreements which all have higher ambition levels than the targets in the Climate Change Bill—the G8, the Vienna climate change talks and the European Council spring summit. Why have the Government not put the same level of ambition on our own home-grown Bills? During debate in the other place the Minister announced several forthcoming government consultations, including ones on carbon capture readiness, a renewable energy strategy, and environmental and social guidance for Ofgem. Surely these consultations should have taken place before the Bill was published. The noble Lord, Lord Jones, is a Minister of action—surely he is not going to let the Executive hold up the Government’s business any longer than he has to. Whatever I have said so far, we are where we are. We must work with what is in the Bill, limited though it is. I make a plea today on behalf of the whole House. The Minister prides himself on travelling the world, banging the drum for Britain and British products—and he is very good at it. But unless he stays put and sees the Bill through all its stages, there will be no products to sell. To paraphrase Lord Grey of Fallodon at the end of the First World War, ““The lamps are going out all over Britain, and we shall not see them lit again in our lifetime””.