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Energy: Low Carbon Transition Plan

My Lords, I thank both noble Lords for their general welcome for the Statement and the various documents that accompany it. The noble Lord, Lord Taylor, said that the Statement was long overdue. However, the Government have made a series of announcements over the last year or two, culminating in the transition plan, which sets out a coherent path for our transition to a low-carbon economy and deals with the critical issues that we face on energy policy. There have been announcements on new nuclear energy, coal CCS, our intention to hit the target on renewables of 15 per cent by 2020 and our focus on energy efficiency. These all represent a coherent approach to energy policy. The noble Lord, Lord Taylor, and the noble Lord, Lord Teverson, both spoke about where we stand on renewables. It is true that, in comparison with some European countries, our proportion of renewables is low. Much of that can be explained by other countries having made use of the natural resource of hydropower, which they have had for many years. My key point is that noble Lords should look at the increase that we have seen in the last few years. For instance, renewable electricity accounted for 2.3 per cent of electricity generated in 2003; that was up to 5.5 per cent by 2008. That suggests to me that we are making considerable progress, that we have a great deal of momentum in the system and that we can expect to see considerable increases in the future. The noble Lord, Lord Taylor talked about the variability of departments. I agree that departments need to set an example. He kindly did not mention the energy performance of my department’s new building, which he will know is not the highest—or, rather, the lowest. However, it is working with the Carbon Trust and has a commitment to increase its energy efficiency by 10 per cent over the next year. The department accepts the challenge to practise what it preaches. Of course, carbon budgets by themselves are important in driving policy change in different government departments. The noble Lord, Lord Taylor, who knows a great deal about agriculture, asked whether a carbon budget would, as far as Defra is concerned, have a negative impact on agriculture. It need not. When I was at Defra, I took part briefly in discussions between the department and the agriculture and land sector on the best approach to reducing GHG emissions. I was encouraged by the positive view that was taken by people in the farming sector about their ability to do it. Of course, they will need encouragement, advice and support, but so far the discussions have been fruitful. As for the planning system, it was always disappointing that the noble Lord’s party opposed key elements of our reform of the planning system. We think that the reform is very much in the national interest. Noble Lords will know that, historically, there have been delays in the planning system, particularly when it comes to renewables, but the same issues come up with other electricity generators. We will be publishing our national policy statements in the autumn. That was always the timetable. We think that that will be an important step along the way to a much more consistent and coherent planning system. As to the supply chain on wind, yes, it is important that we have a good UK supply chain. Alongside this, the low-carbon industrial strategy sets out a range of actions that the Government are taking to support the UK supply chain industry. There is no reason why we cannot use the transition to a low-carbon economy as a way to grow the economy and grow high-quality jobs within the United Kingdom. As for the Severn, we are announcing the short-listed sites. An important part of the assessment is to deal with the issues that the noble Lord raised about the environmental assessment, the impact on the environment and what has to be made good under European legislation if one of the schemes is selected. We are very focused on those matters. As far as nuclear power is concerned, yes, it is very important that we make progress on publishing the national policy statement. As the Statement said, it is due to be published in the autumn. We have to get it right, but I understand the need for speed as well. I was asked about financial incentives in relation to renewables. We will consult on increasing the financial incentives for offshore wind. On wave and tidal energy, we are prepared to look again at financial incentives if we receive evidence that suggests that we ought to do so. That is the basis on which we introduced the ROC banding system, which we debated only about nine months ago. I welcome the general support of the noble Lord, Lord Teverson, for the Statement. He described what we are doing as moving from a statement of intent to one of action. I am glad to endorse that analysis.