Energy Bill

My hon. Friend is absolutely right. Given the extent to which the developing economies and the great emerging economies, such as China and India, will continue to use coal, CCS is absolutely vital to tackling climate change, as I said at the beginning of my speech. If we are able to develop the technology speedily in this country, there will be real export potential. Co-operation is already under way between the UK and China and the EU and China. The EU will also fund some CCS projects, of which we hope at least one will be in the UK, and they will be combining all the information. CCS is very much a global project, but at the same time, from the point of view of British industry, if we get ahead we will be in a very good position to help other countries and benefit financially. Amendment 1 relates to the CCS levy, which would be used to fund a new financial incentive to support industry in bringing forward a programme of four commercial-scale CCS demonstration projects and, should it prove necessary, the retrofit of any unabated coal capacity at those stations. The amendment would insert a provision in clause 4 exempting from the levy electricity that is produced from renewable sources. I made it clear in Committee, however, that we will not apply any exemptions or reduced levies based on the source of the electricity generated, and that includes renewables. For the foreseeable future, we will continue to depend on flexible fossil fuel plant to ensure that the electricity system can respond to changes in supply and demand, thus keeping our electricity system stable and ensuring security of supply. We know that that flexibility is likely to become more important in the future as variable renewal generation increases. The CCS levy will support the development of a low-carbon technology that will benefit all electricity consumers and, in the longer term, provide an additional form of affordable low-carbon generation. That is why the levy should apply to all types of supply. The one necessary exception that we foresee may be the exemption of electricity that is exported from the UK. Our intention is that the detailed policy for the levy, together with the draft regulations, will be subject to formal public consultation in the summer. Clause 4 also requires that regulations be laid in draft and approved by both Houses of Parliament before they are made. New clause 8 would put in place a reporting mechanism that provided for the scrutiny of progress on CCS and any adjustment to a policy that already provides the most comprehensive plans in the world for the development of clean coal. The introduction of an emissions performance standard at this stage would undermine the very basis of those plans, threaten much-needed investment and jeopardise our energy security. The Government will therefore oppose new clauses 6, 15 and 25.