Debate on the Address

My Lords, energy and the environment will occupy a great deal of our time in the coming Session and, like others, I regret that they are not down to be debated together. I fear that that represents a lack of joined-up thinking within government. I served on the Joint Committee on the Draft Climate Change Bill. The draft Bill was also examined by two committees of another place. The Government have already indicated that the Bill promised in the gracious Speech will contain a number of improvements. The work that the committees have done has been worth while, not only because of the changes already made but because both Houses will have before them a mass of useful material. My objective in committee was to challenge the Government’s assertion, now repeated in the gracious Speech, that the Bill would introduce a legally binding framework. The committee shared my scepticism about legal enforceability, an issue on which this House is well qualified to adjudicate. One positive result of the argument so far is that the Government have already agreed to strengthen the supervisory role of Parliament. Moving to consider energy issues, we will need to challenge the realism of the current EU and government commitment that 20 per cent of total energy must come from renewables by 2020. The object of the exercise should be the level of greenhouse gases, not the type of power generation. We will need a combination of solutions that will include nuclear if we are to secure both our environmental and security objectives. I will concentrate the remainder of my remarks on the report by the Sustainable Development Commission on tidal power and a possible Severn barrage. I am surprised that in its appraisal of tidal stream technologies the SDC made no reference to the important announcement last March that the power company E.ON, in partnership with Lunar Energy, is to develop off the Welsh coast the first commercial-scale tidal stream energy plant anywhere in the world. The plans to build this plant have been submitted to BERR; it is to be sited in the strong tidal currents in St David’s Sound, off the coast of my former constituency, with the aim of being fully operational by 2011. If this project is a success, it will be a significant step forward. Reading the SDC report on the barrage, with its long list of key issues not yet studied, let alone resolved, one finds surprising its positive conclusion that there is a strong case to be made for a sustainable Severn barrage. The report identifies a large number of unknowns, which, "““makes predictions of the ecological response and the impacts on habitats and birds very difficult … these areas of uncertainty also have implications for considering the effects of development on ports and navigation and flood risk management””." One absolute certainty is acknowledged, which is that, "““a tidal barrage would fundamentally change the nature of the Severn Estuary””." There is another near certainty: it is very unlikely that a proposal for a Severn barrage would ever come forward without significant government involvement. The basic capital cost for the large Cardiff-Weston scheme would be £15 billion, which would generate the same output as would be produced by just over two conventional 1-gigawatt power stations. At a commercial discount rate, private sector investment is highly unlikely. We are told by the commission that at a low discount rate of 2 per cent the cost of electricity output would be competitive and that a barrage should be publicly led as a project and publicly owned as an asset—in other words, the project is viable only if the taxpayer underwrites and owns it. That, the commission admits, would require a major rethink of energy policy and a fundamental reappraisal of government involvement in the energy sector and the incentives on offer to support all the low-carbon technologies. The cost figure of £15 billion is by no means the total; it does not include any allowance for the probable large cost of providing compensatory habitat, as would be required by EU directives. The SDC has not conducted an analysis of the compensatory habitat that would be required, even though the commission considers that factor to be of overwhelming importance. The Government’s own statutory advisers—the Environment Agency, the Countryside Council for Wales and Natural England—say that they cannot envisage how the required compensatory habitat could be provided to replace those that would be lost, and they are equally concerned about the migratory fish stocks that pass through the estuary to reach the rivers Wye, Usk, Severn and Avon. The ports in the estuary and the services that they support are responsible for handling around 3 per cent of UK trade. It is estimated that the Bristol and south Wales ports generate over 15,000 jobs between them, with many more jobs held in port-based companies. No detailed studies have been carried out of ship movements in relation to barrage operations. The commission made two important statements. First, the Government must avoid a ““decide and deliver”” approach. A number of crucial areas of uncertainty will need to be resolved before a final decision can be made. Secondly, the Government should not rush into a decision; the decision-making process must be transparent. It is alarming that the Prime Minister already seems to be ignoring that good advice. During Prime Minister’s Questions on 24 October, he offered the barrage as the first of the methods by which we would achieve the 20 per cent renewables target by 2020. Then, opening the debate on the Queen’s Speech, he spoke of the feasibility study almost as if it were a decision to proceed. I take comfort from the fact that BERR has made it clear that the study will assess all the critical questions for which we do not at present have answers, a process that it expects to take several years, with a possible timetable for completion of the whole project, if it is approved, of around a dozen years. Parliament must insist that the undertaking that there will be full and transparent consultations is honoured in full. The Government must not stampede us towards a decision.