---

Energy Bill [Lords]

It was not clear to me this evening whether I would make the remarks that I want to make, because it occurred to me that they might be more apposite to the next energy Bill than this one. However, I want to make a few points that perhaps have not yet been made. First, on the context and the legacy with which this legislation is kicking off, we have heard about two dates this evening. We have heard about 2050, which is the date by which we must reduce our carbon emissions by 80%, and 2020, which is the date by which renewables must account for 15% of electricity generation. However, we have heard less about another date that is equally important, which is 2017 or thereabouts, which is the date by which we will start having power cuts unless we put in place measures to stop that happening. I have two other pieces of legacy data for the House. Currently, 0.5% of our total energy production comes from renewables. It is also true that 7% of electricity generation comes from renewables, but 0.5% is the measure of what we have to achieve over the next 40 years to meet that 80% reduction. Roughly speaking, even if we achieve a 40% reduction in energy use through such excellent measures as this Bill, we will need to scale up renewables by a factor of about 50. That is absolutely massive. Although we have talked about fuel poverty, another thing that has not been mentioned in this debate is the fact that energy prices in this country are among the highest in western Europe. Our starting point is that our industries and our people pay more for fuel than others. In particular, those in competitor countries such as France have had cheap, plentiful nuclear power for many years, and they pay less than us. Why does that matter? It matters because we are trying to rebalance the economy towards manufacturing, and a unit of GDP generated from manufacturing requires more energy than a unit of GDP generated from services. That is a further challenge that we have to face. Broadly speaking, Government policy has two thrusts to it, one of which is energy reduction, which is dealt with in this Bill through the green deal. Our target is to reduce total energy use by some 40%, and that can be achieved—the Royal Academy of Engineering is certainly of that view. Part of that will involve the measures that have been discussed at some length this evening, but part of it will involve, for example, smart meters and smart grids, and all that goes with that. The other part of our strategy to meet the challenges that I have spoken about is the fact that we are about to manage the market. Why are we managing the market? We are doing so because if the market were left alone, we would end up using gas. That much is clear. Using gas would not be disastrous for our climate change objectives, given that so much energy comes from coal and oil, and that gas is 50% better in terms of carbon emissions, but that is nothing like enough to meet our statutory targets. That is why the strategy on the mixture of renewables, nuclear and carbon capture is important. One of the oddest things about the whole energy debate is that we talk about nuclear and renewables as though they are competing with each other, when we clearly need both. If anything, they are both competing with fossil fuels. The default solution if we react slowly is that we will have to use gas, because that can be obtained relatively quickly. I have a couple of observations on the Government's strategy. One relates to urgency. We have heard numbers relating to how quickly we need to implement the green deal, but I do not believe that the 2017 deadline is being treated with sufficient urgency. I was at a meeting recently with some nuclear supply chain people in my constituency, and I was disappointed to hear that they did not believe that any effective nuclear new build would start for at least another year, although time was ticking away. An ex-colleague of mine in Shell once told me that the chief executive officers of the utility companies were quite sanguine about the fact that all this was taking so long, because they had nothing to lose from our inertia. When the time comes, what they have to offer will cost even more. It is important that the Government should take the initiative, rather than leaving this to the utilities, because it would be a perfectly viable strategy for a utility CEO to take their time over this. Another aspect of the strategy is cost. We have not said a great deal about the differential costs of the different kinds of energy. Energy has to be environmentally sustainable, but it also has to be economically sustainable. I leave the House with the thought that the brilliant technical achievement of the Thanet wind farm, which is a tremendous thing, is going to cost £1 billion in subsidies over its lifetime. It does not produce that much electricity, and its actual cost is therefore very high indeed. Some of the hon. Members who have spoken about fuel poverty today might like to reflect on the fact that a starting point for fuel poverty is when our power costs more than that of other people in the first place. A third element of our strategy is our approach to technology. Possibly the most impressive technological breakthrough in energy in the past 30 years is horizontal directional drilling, which, combined with a fracture technology, is enabling shale gas and coal gas to be discovered in quantities that would be of material use to the US and the UK, but I am concerned that their use is not forming part of our approach. Perhaps a wider point on technology is that I believe that we should be a fast follower, rather than being at the leading edge—or perhaps the bleeding edge, as one might say. Carbon capture and storage was mentioned earlier. Of course it is a good technology, but it is unproven, and there are other technologies out there that we need to adopt more rapidly. This all leads me to the subject of nuclear. There is no possibility that we could come close to meeting our 2050 commitment without a massive upgrading of renewables and nuclear. In fact, they go together. Renewables are, by their nature, somewhat intermittent, while nuclear has a very high base-load. The two can be put together quite well. I support the Bill. It is innovative, it is radical and it is right. I hope that it will result in a 40% reduction in energy use, but there is no realistic alternative to nuclear and if we are to meet the 2017 deadline, it is important that we move faster, because 2017 will be here a lot sooner than 2020 or 2050.