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Draft Overarching National Policy Statement for Energy (EN–1)

My Lords, on an equally optimistic note I should like to say how thorough a job the Government have done and how thorough a service they have provided in setting out the background to major infrastructure and planning decisions in the energy area, because that is what this is all about. Today and on other occasions, a number of noble Lords, and of course Members of the other place, have raised some important issues that the Government will no doubt reflect on carefully before coming to final views. However, setting out the policy background within which major planning decisions will be taken in the future is enormously important. The careful consultation processes that the Government have been through, spanning two or three years and probably even longer in some respects, has been painstaking but extremely worth while and will, I hope, be of benefit when the Infrastructure Planning Commission, or whatever it may be called in future, makes its decisions. If I understood our discussions correctly, essentially over the next 10 years a number of our energy-generating plants will close, particularly coal-fired and nuclear, being replaced overwhelmingly by more gas-fired power stations and onshore and offshore wind. However, what happens beyond 2020 is still a matter of considerable uncertainty. The Energy Market Assessment document, which the Government published at the same time as the Budget and which looks at the whole question of the financial, regulatory and pricing backgrounds and frameworks within which energy policy will develop beyond this decade, will be as important as these energy planning documents. The one word of caution that I would give to people reading these documents is that they should understand that, looking ahead to 2020 and 2030 through to 2050, the precise way in which our energy requirements will be met is by no means set in stone. When reading documents such as these, there is a temptation to think that they set out how the world will be. However, saying that there are uncertainties and that technology, pricing, market effectiveness and the consumer will all play their part is not to gainsay the importance of having a clear statement now of government policy that will be a guide to important planning decisions over the next few years. At the same time, it is important to say to the public, ““Don’t think that this is a simple matter that remains fixed or easy to predict in the years ahead””. I look forward, as I am sure do many other noble Lords, to discussing the outcome of the consultations on this latest document. The decisions that follow from those recommendations and the White Paper will be very much more difficult than planning decisions. Creating the financial, fiscal and regulatory framework that will result in the best outcomes for nuclear, wind, biomass and other forms of energy will, in many respects, be much more difficult. I suspect that it will certainly be much more difficult to get consensus across the political parties. So far there has been a great deal of consensus in this area—something on which the Government and all parties are to be congratulated. That has been very important and I hope that consensus can be found on pricing and regulation, although, as the noble Lord, Lord Teverson, has already demonstrated, that may not be as easy as this stage has been.