Energy: Renewables

Whether or not one accepts that the emission of carbon and other gases is the major cause of global warming, to which the noble Lord, Lord Redesdale, referred—the case is pretty compelling, despite the fudged evidence—the sceptics miss two further key points. First, pollution is a major risk to public health; the incidence of asthma, for instance, particularly among children, is extremely high in the world’s most polluted cities. Secondly, we in Britain face a serious energy security risk. So I join other noble Lords in congratulating the noble Lord, Lord Beaumont of Whitley, on obtaining this timely debate, which is helpful in that it specifically links the benefits of renewable energy in reducing emissions to the major risk area of energy security. One year ago this month, the Government signed up to an EU target of generating 20 per cent of all energy from renewables by 2020, but they are already reported to be wavering. At present, we get just 2 per cent from renewables, so that target is little more than a pipe dream. Another of Labour’s targets was to reduce carbon emissions by 20 per cent below 1990 levels by 2010, but that target will now not be met either. So the true answer to the noble Lord’s Question of what plans the Government have is, at least until the Energy Bill, ““None””. They have had targets, but targets are not plans. Targets that are not delivered on are, as the noble Lord, Lord Redesdale, said, worthless. The Climate Change Bill sets more targets, but why should we believe in them? On the other hand, approximately 30 per cent of our existing generating capacity will be shut over the next 20 years, leaving a significant capacity gap. Until quite recently, we were a net exporter of oil and gas, but have now become a net importer of both. Our gas production peaked in 2000, and from now on the decline is accelerating. The Government have admitted that our reserves have also declined faster than they expected. There was a gas and electricity price shock in the winter of 2005, as a result of the tightness of the margin between supply and demand. Then, in February 2006, there was a fire at the Rough gas storage facility. By March that year, a cold snap across Europe and insufficient gas flow through the interconnector further exacerbated problems. Last summer there were price cuts; then in the new year most of the suppliers increased their prices. So we continue to be exposed to considerable price volatility, highlighting the concerns of the noble Lord, Lord Beaumont. Clearly, we have a problem. Could this at least in part be solved by renewables? My noble friend Lord Eccles, importantly, also referred to the conundrum of whether this can be done affordably, though in part that will depend on how fossil fuel prices move in the future. The renewables obligation is the Government's main mechanism to provide financial support to renewable energy technologies. Provision is made in the Energy Bill to alter the renewables obligation to try to stimulate more rapid development. Offshore wind—the noble Lord, Lord Berkeley, spoke about wind—wave and tidal technologies are given especial encouragement by the introduction of banding. Connection of large-scale offshore renewables to the electricity network will be encouraged. Microgenerators are also to be given further support. However, the Bill was published before the new EU renewables targets were demonstrating a regrettable lack of co-ordination. My noble friend Lord Eccles and the noble Lord, Lord Redesdale, spoke about biofuel, especially biodiesel. We are now just three years away from a 5 per cent biofuels target that will not, as my noble friend said, be met without significant imports, especially of palm oil. To achieve it, the Government will need to do more to stimulate competitive local production of biofuels, while guaranteeing that that does not threaten our food security and that any necessary imports do not lead to further destruction of rainforests—a crucial carbon sink. No debate on energy security can ignore fuel poverty, and the noble Lord, Lord Beaumont, spoke of that. Britain is embarrassingly high up the list of European culprits for what is known as excess winter mortality. The Energy Minister told the ““Today”” programme that his hands were tied when it came to increased spending on fuel poverty, but that he was, "““sure the Treasury are listening””." Is it appropriate for government departments to communicate with each other via national radio on issues as important as this? The Government have set a target to eliminate fuel poverty in vulnerable households, but Ministers have been forced to admit that the total number of vulnerable households in fuel poverty is likely to have risen by about a million households in England between 2003 and 2006. That is a serious problem and we will be grateful for the noble Baroness's explanation as to how the Government plan to deal with it. Although the marine, Climate Change and Planning Bills are all part of the Government's attempt to secure Britain's long-term energy supply and climate change strategy, much of the strategy on energy is contained in the Energy Bill. Although we welcome much of it, I join the noble Lord, Lord Redesdale, in saying that we think that it could do better. Perhaps I may give some brief examples. First, underpinning all policies in the Bill should be an effective carbon regime, but it is absent. The EU Emissions Trading Scheme does not currently provide that effective system, so we can unfortunately expect to continue to see wild fluctuations in the carbon price. Secondly, the Government should be committing to develop more gas storage capacity, but I can find nothing in the Bill that will promote that. Thirdly, although the Bill establishes the regulatory framework to explore the potential of carbon capture and storage, CCS is not included in the renewables obligation, the source fuel not actually being renewable. But the process captures carbon, which contributes towards achieving the same objective. That, and delays, have forced BP to pull out of the Peterhead CCS project, undoubtedly setting back the development of CCS by several years. A number of companies have proposals for more advanced and cleaner pre-combustion CCS projects, which are in jeopardy because of the Government's preference for post-combustion technology. Moreover, it is not clear that the Bill establishes provision for liabilities. The safety of the carbon dioxide stored in a geological reservoir must be monitored for leakage. So there are a number of issues here. Fourthly, the Bill aims to improve the effectiveness of the renewables obligation by banding the technologies depending on the respective levels of investment, but more than half of renewables electricity sourced under the renewables obligation has been biofuels, while almost a third has been from onshore wind. Wind, of course, has a part to play but, since it generates electricity only when the wind blows, it must be used as an appropriate proportion of total renewables. The renewables obligation would have a much greater impact if it was more broadly spread and if it provided better support for technologies for which there was less public resistance. Fifthly—the noble Lord, Lord Redesdale, referred to this—the Bill inadequately addresses feed-in tariffs, despite support from the Prime Minister’s own guru, Sir Nicholas Stern. The renewables obligation excludes microgeneration and technologies, about which the noble Lord, Lord Redesdale, spoke, and technologies to harness excess heat and to generate electricity from waste, for example. Feed-in tariffs provide a potent response, and the Government’s position is as yet equivocal. Sixthly, there is still no clear statement on the disposal of nuclear waste, which is essential. Lastly, the Bill is also missing the key element of energy efficiency. There is no mandate for smart meters, which would not only make people, especially the millions in fuel poverty, more aware of the levels of energy which they are consuming, but would give much better information to suppliers to manage the peaks and troughs. I look forward to the Minister’s reaction to these points and others made by noble Lords; they will no doubt be brought up again when we debate the Energy Bill.