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Amendment of the law

I see the hon. Member for Glasgow, North-West (John Robertson) nodding at that, but there was a good chance that Scotland could have been well ahead with carbon capture and storage through the Peterhead plant. However, Government indecision dragged on and eventually they decided not to back it, with the result that the project went to Abu Dhabi. That proved to be a disaster, and a great disappointment for the CCS industry. Since then, the Government have set up a competition that the earlier statement on carbon capture suggested was still grinding on. The Budget papers reveal that £90 million has been allocated to fund companies in that competition to undertake detailed preparatory studies for CCS schemes, with £60 million transferred from the existing transport budgets. I understand that the purpose of the studies is to reduce the technological risk associated with CCS projects and to give greater clarity on costs, but I wonder whether it will merely lead to yet further delays. I am not sure how that interacts with the announcements about CCS made in today's statement for, although it seemed to move things forward, it also left a lot of unanswered questions. We are very keen, especially in the Scottish context, that the Forth basin and the Longannet plant in particular should be part of the CCS project. As I mentioned in connection with the earlier statement, Scotland has some of the largest carbon storage reserves in Europe in the North sea's saline aquifers and depleted oil and gas fields. It also has the skills from the North sea oil and gas industry to access them, something that will be very important in the development of CCS. The Budget also makes some tax changes to the petroleum revenue tax and those governing the use of installations for other purposes, both of which are designed to help the development of CCS. However, the Energy and Climate Change Committee, of which I am member, has been conducting an investigation into the oil and gas reserves of the North sea and one company raised a slightly different problem with me. It had a licence for exploration for one part of the North sea. It decided that it was not economic to use that licence for oil exploration, but it thought that it would be possible to use it for carbon capture and storage, which may have had the benefit of extracting some oil from that area by pumping out the carbon. However, the company tells me that the licence conditions do not allow it to use carbon capture and storage technology, which means that it has to surrender the licence. The Government should look into whether there is any scope for giving a bit more leeway. Carbon capture and storage can also have quite a long lead-in time. Total has launched a scheme in the south of France, but there is a two-year period in which it will be looked at before a decision is taken on whether it is commercially viable, so we need to get moving as quickly as possible. There are other things that might stand in the way of carbon capture and storage. In questions this morning, I raised the balancing charges being proposed by Ofgem and the National Grid Company with the Minister of State, Department of Energy and Climate Change. Those charges may impact on Scottish generators' ability to invest in new plant, and in carbon capture and storage in particular. The Minister kindly said that he was prepared to meet me to discuss the issue. I will be taking up that invitation, because it is important that we look into the matter. Transmission charges have long been a problem with renewable generation. It would be dangerous if we did not sort the issue out or if we imposed new charges that affected the ability of Scottish generators to develop carbon capture and storage, especially given that Scotland is nearest to many of the possible storage places. The Government need to look at the issue in the round and not put carbon capture and storage up against the competition without looking into its distribution and the investment that could come from energy companies. There is also the question whether the Government are considering transferring the carbon to the offshore field or wherever it is ultimately to be buried. Is the intention to build a transmission network for the carbon, once it has been captured, or is it intended to be stored on site? Significant investment will be required if the carbon is to be transferred in order to be eventually stored. The Government also said that we would look into pre and post-combustion, which is welcome. I also welcome the move to allow greater help for offshore wind energy. However, I noticed that there seemed to be no mention of wave or tidal energy, both of which can be very important. Again, both may be some way from commercial application, but we need the investment to get them up and running, and to strengthen the grid so that they can be fed in. I would like to ask the Exchequer Secretary whether there are any plans to extend the help for offshore wind to wave and tidal power, with a view to moving them forward. As she may know, the Scottish Government have launched the Saltire prize to try to bring that development forward, which has generated a great deal of interest from all over the world.