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Draft National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2)

My Lords, the Minister is making my case that when we finally approve these documents, we will need to sit down and start reviewing them pretty well straightaway. That is that; I could not resist. I have to get involved to some degree on the question of carbon capture and storage. We have probably heard quite enough about that already today, but there are one or two things that we need to think about. First, there is no question but that carbon capture and storage can work. The question we cannot answer for a considerable time is not what it costs but whether, when we have installed it, it will be economically competitive with all the other sources that may come on stream. I simply observe that the relative costs of all other sustainable energy sources seem to keep creeping down vis-à-vis current energy costs. I have seen only one cost suggested. That came from Australia. It postulated an 80 per cent electricity price rise to pay for carbon capture and storage. We may be able to do it for rather less than that here, because we already have a reasonable pipe infrastructure going into the North Sea, which might be used to take the CO2 to the gas fields. I note the reservations of my noble friend Lord Jenkin about the need for that, but we have it there, so the cost may be somewhat less. The issue is not the absolute cost but competitiveness. We do not know what will be competitive. Having said that, I should say something about energy costs. I shall talk for a moment about red tractor diesel, which farmers use, which is a pure oil cost because there is no duty on it. When I started farming, I bought that oil for one shilling and threepence and three-eighths of a penny. I hope that the Hansard reporters can keep up with that. It is about six and a half pence a gallon, new money, and between one and a quarter and one and a half pence a litre, for which I now pay in excess of 40 pence. Over my lifetime, the cost of my basic propulsion energy on the farm has risen by more than 3,000 per cent. If you had told me when I started farming that I would have to live with that, I would have thought, "Oh my God, never". I would have been pretty close to blowing my brains out, I suppose. I did a similar calculation on my electricity. I am sorry that I do not have the precise figures, but I can tell you that the electricity-generating industry has treated me much more favourably. The price increase there over the same period is a little over 1,000 per cent. We need to be cautious about costs. It is unlikely that the costs will suddenly rise by 80 per cent if we start using CCS in a major way. That might be what is needed to sustain that, but energy will come from many sources. I strongly suspect that many of the other renewable sources of energy will come in at a more competitive price. The other point that we need to bear in mind is that we have to deal with the competitiveness of our economy in global terms. That will include energy costs. If other technologies are introduced, even if CCS is relatively easily available here, if it is not economically competitive, it will die. In the end, we are in a global market and whatever we do must be economically competitive. To introduce another "C" acronym, I have a shrewd suspicion that we may well find when we get to 2050 that the big supplier of energy by then will be CSP, which is nothing to do with carbon, but is concentrated solar power. That is another matter. The other thing that really worries me about this whole exercise is that the documents almost exclusively consider the period from now to 2025. That is fine as far as it goes, but given the timescale for construction for all the major plants that we are talking about, they will have a lifetime that will take them up to and beyond 2050. We are expecting to invest in construction and plant that has a lifetime of 40 years plus, but it is perfectly possible that economic competitors will cut away the markets before the plant is more than half way through its lifetime. That will lead to very difficult financial problems. It is something that the Government will have to face. I do not see an easy answer. We cannot defer the decisions because we have a short-term problem. Using natural gas is not an easy answer, because either it has to be shipped in expensively or we have to put pipelines across to Siberia or Kazakhstan. A little while ago, I heard the cost of securing Europe's gas supplies estimated at £200 billion. The funding operations that we will be involved with over the coming years, whatever the future, will be both very hazardous and very expensive. I do not wish to say more than that. It is perhaps a somewhat acid note on which to finish our debate, but in the end we will have to overcome huge financial problems, and I do not envy those in the commercial world or in government who have the responsibility for taking the decisions.