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Energy Bill

I entirely agree with the noble Lord. I would not suggest one grid for the whole of the United Kingdom, but certainly in the Yorkshire region, with its 12 major sources of emissions—as I have explained—it would be logical and extremely sensible to have a grid. What is the intention of the Government in this regard? If they really believe in this and intend it to be a strategic investment for the UK—not an export market for technology to India and China—I entirely agree with the noble Lord, Lord Jenkin, that that is the way to go forward and I would be extremely interested in it. The Government should develop a grid for the Yorkshire and Humber region. That would make an awful lot of sense. My next two points concern strategy. A large amount of British coal-fired electricity generation will cease to operate well before 2020, given the large combustion plant directive. Other EU legislation will mean that other plants will be out of commission by the mid-2020s. Some commentators think that there will be no coal-fired power generation left in the UK by the mid-2020s. If these commercial trials are to lead to coal-fired generation in the UK thereafter, there may be none left on the timescale to which we are working. The coal-fired power stations that face potential closure will be considering the best use of their site. If they feel that there is uncertainty about carbon capture and storage and the Government’s commitment, they will build a gas-fired power station on the site of the coal-fired power station given the current regulation and policy. They cannot afford to let a coal-fired station close and then wait another 10 years to see whether the Government have carbon capture and storage in place. That is not what will happen at all. The Minister is very much on top of his brief, but does he agree that there is a real possibility that we may be applying commercial trials to a coal-fired generation scheme that may not exist by the 2020s? Has he considered that? As regards the financial and other elements of investment decisions, how can the coal-fired generation industry be confident that the long-term financial and regulatory frameworks will be in place that will be necessary to ensure take-up of carbon capture and storage even if these demonstration projects prove technically feasible? I have seen one estimate based on the assumption of an emissions trading carbon price in Europe of €35. Even that would not be enough to make carbon capture and storage commercially viable. The current price is €12 to €13. If this is based on the European Union Emissions Trading Scheme price, with some modest subsidy, how does that square up to the viability of this operation? On the other hand, are the Government considering whether to oblige electricity suppliers to buy a certain capacity from carbon capture and storage generators? In other words, just as there is a renewables obligation, is it the Government’s thinking that there will be a carbon capture and storage generation obligation? That would mean that, whatever the price of carbon, there would be an absolute obligation to buy some. These are important matters. When I talk to coal-fired generators, I am told that the carbon issue that they are thinking about is timing. They think that things are going far too slowly and that these trials will not have borne enough results to convince the Government of the day to influence investment decisions on what they will do when they close the plant down. They are so unclear about the Government’s intentions in relation to the price of carbon and commitments and obligations to buy the output from these plants that there is serious doubt about whether these commercial trials will lead to investment by the time we get to the 2020s and 2030s. I look forward with great interest to what the Minister has to say on these matters.