Treaty of Lisbon (No. 2)

I understand my hon. Friend's point. We could discuss pipelines, which are a very political subject, at great length. However, I have not thought through the implications of the development that he described, but it is helpful that he has made that point. For me, there are two central things that Europe must prioritise. One is liberalisation, on which the Commission is working hard; the other is the carbon price, which is a very important mechanism. We are starting the phase 3 negotiations, and we shall see where they lead. However, my hon. Friend the Member for Croydon, South (Richard Ottaway) drew attention earlier to Dieter Helm's concerns about the long-term carbon price. Although the Commission's heart is in the right place—phase 2 is better than phase 1, and I am sure that phase 3 will be better than phase 2—I am still worried that the time scales for the mechanism for setting the carbon price are not long enough. Investors are not sure—this concern has been expressed to me by potential investors in nuclear power, for example—that they can project 30, 40 or 50 years ahead, based on what the mechanism for setting the price will be. They do not know the price—they can take a view on that—but they need certainty about the mechanism. They know how oil prices are determined—it is called supply and demand, and they can take a view on that, too—but they do not know how the politics of setting carbon prices will work out. I am concerned that that remains the most important challenge for Europe, because we need a European price. We should therefore not divert attention from that crucial issue. Very briefly—I have spoken for too long already and many other hon. Members want to speak—I should like to discuss renewables and the draft renewable energy directive. There are lots of targets floating around, which can get quite confusing. The UK has a target of 10 per cent. of electricity generation from renewables by 2010 and an aspiration of 20 per cent. by 2020. The EU has a target for the generation of 20 per cent. of all energy from renewable sources by 2020, from which we now know that the UK's target is likely to be 15 per cent. That 15 per cent. target is much more challenging than the UK's existing aspiration, because it will translate into a higher figure for electricity generation, which comprises only 18.5 per cent. of the energy market, and because we do not have the policy levers to pull to produce the solar gains in other areas. The target will translate into a big demand for renewable electricity generation. When we have the Minister for Energy before the Select Committee on Business, Enterprise and Regulatory Reform tomorrow—here is a clue to one line of questioning—we will be pushing him a little on what he thinks that target will mean in practice for renewable electricity generation as a percentage of total generation, because I just do not think that we can achieve it. That target—that expectation, aspiration or whatever one likes to call it—is unrealistically high and I do not think that we can meet it. There is some speculation that the then Prime Minister Tony Blair did not understand the difference between energy and electricity when he negotiated the figure. I understand that, because although we have energy reviews all the time, they are actually always electricity reviews. But there is a real problem here. The European Union is about to impose on us a target that I do not believe we can meet.