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Energy Bill

I was interested to hear what the hon. Member for Clwyd, West (Mr. Jones) said about wind energy, in particular. As one who also represents a rural constituency, I understand the concerns that many residents have about the impact of wind turbines on the landscape. However, we have to accept that this is a proven technology and that many other countries have developed their wind industries in areas that are important to their citizens in terms of landscape value. Perhaps the way forward is a policy that states that the wind industry should not develop in national parks and areas of outstanding beauty, but that elsewhere we must accept compromises because ultimately they give us the prize of low-carbon, low-emission generation. I accept what the hon. Gentleman says about its efficiency compared with base-load generation, whether in nuclear, gas or coal, but we must accept that it was never intended as a base-load form of generation. I was somewhat concerned by the references to security of supply made by Conservative Front Benchers and several Conservative Back Benchers. What is missing from their equation is what is already happening in relation to the building of new generation facilities. In my constituency, the construction of a 2,000 MW gas-fired power station is under way. There is Staythorpe, a large gas-fired power station in Nottingham, and another such facility in Plymouth. Some Conservative Members gave the impression that the Government have done nothing, not recognising that the large combustion plant directive means that several coal-fired power stations will have to close because they have reached their decommissioning date, and several nuclear power stations will be phased out as well. Several projects are already in the pipeline and under construction. There is also a substantial expansion in wind generation, particularly offshore, which the Government were right to encourage. The offshore wind industry will start to deal with the problem of renewables development, which we must accept has been too slow in this country. It also presents many opportunities, not only for CO2 reductions in our own economy, but through the expertise that Britain has developed, particularly in our offshore oil industry. There are real opportunities for British companies to develop offshore wind farms around the world. Another aspect of security of supply, which was not mentioned by Conservative Front Benchers or anyone else, is what has happened in the new market that has developed for liquefied natural gas. At Milford Haven, there are now two large LNG terminals which together can supply 30 per cent. of the UK market for gas—just from one part of Wales. The development of a new LNG terminal at the Isle of Grain provides further opportunities for substantial imports from—in terms of the middle east—relatively stable regions. We also import gas in LNG form from the Caribbean. There are already several developments taking place that will provide us with security of supply in the gas industry. Unlike continental Europe, which has very little indigenous gas supply, we have had North sea gas. Basically, the industry grew on the back of that and used those gas fields as a storage facility. We are now moving on: supply from the North sea is declining and we must depend on imports. I emphasise that we import our LNG from stable areas, unlike continental Europe, which has depended on a Russian gas supply that, sadly, has been unpredictable, let us say, in recent times. That is why continental Europe has such substantial storage capacity—it is aware of that instability in its source of supply. I welcome the Bill. The fact that we are now legislating for essential new technology indicates that the market has not worked. The science and technology behind carbon capture and storage is not new, but ways of converting it to a practical form, so that it can work in large coal or even gas-fired power stations, have yet to be developed and proved. It is clear that the market was not prepared to take the risk of such a development on its own, and given those circumstances it is right that the Government have said that this is an absolutely essential technological development, and we have to support it. A number of Members asked whether it is fair to expect those who are on a green electricity tariff to make a contribution in their bills to the development of CCS. As the hon. Member for Clwyd, West said, the green tariff source of energy is not available to some people. Whether electricity is from a coal, nuclear or gas-fired station or a wind turbine, it all comes down the same cable at the end, so the idea that the contribution should be across the board is a relatively fair and reasonable compromise. We should be saying to the industry now that we are going to set carbon emission targets for future new generation. As I am sure many Members did, I received a briefing from a number of organisations, including the Royal Society for the Protection of Birds, arguing that the Bill should include a mandatory emissions performance standard for any new applications for fossil fuel power stations. That is a reasonable concept, because at the moment the large combustion plant directive means that generators know that they have to meet certain standards on emissions of sulphur dioxide, nitrous oxide and so on to prevent acid rain and other pollution. We should say to them now, "If you build any fossil fuel power station, we will set a mandatory emissions standard that you will have to meet." We should give them notice of that. In my constituency, RWE npower has started building a large, 2,000 MW power station. During the planning process, the Countryside Council for Wales expressed concern that the waste cooling water that would be taken from Milford Haven, then returned there having gone through the plant, could cause environmental problems. The solution that it suggested would have required the construction of cooling towers. Although they would have been electric-powered, rather than the traditional very large ones that give off a plume of steam, the power station would have been significantly less efficient and its CO2 emissions would actually have increased. In trying to address one environmental problem, we create another. If, right from the word go, an emission performance standard had been set for the amount of CO2 per kilowatt-hour generated, perhaps the company could have come up with an alternative use for the excess heat from the waste water. To be fair to the company, it is now trying to deal with the problem. It is considering developing, with another partner, large glasshouses for the production of fruit and vegetables or flowers. That interesting suggestion could perhaps be explored in Committee. I intervened on my right hon. Friend the Secretary of State to ask about social tariffs. I welcome the fact that we are now moving to mandatory schemes. The arrangements that have been made with some companies are welcome, but the identification of those who should, in my view, be eligible for social tariffs, is a major problem. Many such people are on benefits, and when it comes to identifying them, there are data protection issues. The fact that there will now be a mandatory scheme will hopefully encourage the Department for Work and Pensions to become involved in the decisions about who qualifies. There are two issues related to social tariffs. First companies currently give social tariffs almost exclusively to pensioners, but Citizens Advice has informed us that not many pensioners remain in fuel poverty because of the effect of the winter fuel allowance. However, significant numbers of younger people, certainly below pensioner age and some who have children, go to citizens advice bureaux with major problems with fuel debt. It is fair to assume that if people have problems with fuel debt, they have problems with fuel poverty. It would therefore appear that a significant number of people who would benefit from a social tariff—perhaps a significant majority—cannot currently access one. I hope that any mandatory scheme will definitely include those younger people. For example, a single pensioner on pension credit receives £130 and under-80s also qualify for the £250 winter fuel allowance, but a single person aged 50 on long-term incapacity benefit would have a total weekly income of £91.80, no winter fuel allowance and the same sorts of needs. There is also a very strong argument behind the Macmillan campaign for assisting those with cancer, to which hon. Members have referred. The second issue, which has also been referred to by hon. Members, is that 4,300,000 households are not connected to the mains gas system and depend on heating oil or LPG for their central heating and hot water. A number of figures have been bandied about, but Citizens Advice estimates that someone who is not connected to the mains gas system has an average fuel bill of £1,700, whereas those who are connected to the mains gas system have bills of just under £1,200—approximately £500 difference, or £10 a week, purely because people have no connection to the mains system. The sale and distribution of LPG and heating oil are not regulated, but they should be. We are talking about a significant number of people—4,300,000 households, almost exclusively in rural areas. It is the oil companies that are supplying the distributors of LPG and heating oil, so I do not see why they cannot be regulated for that part of their business by Ofgem. The mandatory social tariff should also be available to those people who are dependent on LPG and heating oil. I hope that in Committee we can make that happen. It is essential, as a matter of fairness, that we do so, given that the average consumer in a rural area has to pay at least £10 a week more than the average urban consumer. That is wrong, and we need to address the issue, especially for those families and individuals on low incomes. I am glad that clauses 16, 17 and 18 will change the responsibilities and duties of Ofgem, and I hope that part of its responsibility will stretch to transmission capacity. Areas such as Wales have a strong electricity distribution system in the north and in the south, but very little in the middle, and wind farm developers are having a real problem—not in finding the funding to invest in building the turbines, but in obtaining a connection to the national grid. The hopes of achieving a significant offshore wind industry, especially down the west coast of both Wales and England—and Scotland, although I do not wish to speak for Scotland—depend on a submarine cable network. I hope that the Bill will provide sufficient powers to ensure that such development takes place as quickly as possible, so that we can take advantage of the major opportunities that it will bring. The regular wind provided by nature down our west coast should be exploited, and the main stumbling block appears to be the connection with the national grid. I welcome the Bill, and I hope that it can be improved along the lines that I and other hon. Members have suggested. I hope that the Minister of State, who will take the Bill through Committee, will be able to accommodate some of the sensible suggestions that have been made in the debate so far.