HC Deb 25 March 2004 vol 419 cc1049-50
6. Mr. Alistair Carmichael (Orkney and Shetland) (LD)

If she will make a statement on the level of transmission access charges levied on renewable energy providers in the north of Scotland. [163438]

The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)

Scottish and Southern Energy currently levies charges for all generators to access the transmission system, through its subsidiary Scottish Hydro-Electricity Transmission Ltd. The new BETTA arrangements in the Energy Bill will create a Great Britain-wide market, in which transmission charges will be the responsibility of the National Grid Company.

Mr. Carmichael

I thank the Minister for that answer, and commend him for some of the Government amendments to the Energy Bill in the other place. They will clip Ofgem's wings in respect of charging for transmission and access, and that is very welcome. What assessment has he made of the proposals by many members of the Scottish renewables forum that access charges should be capped instead of being subject to a rebate system? Does he agree that that would have the benefit of being much simpler and much less bureaucratic?

Mr. Timms

I agree that there is huge opportunity for renewable energy in the north of Scotland and the highlands and islands, and I have also been very impressed by the very strong public support for it. Our clear view is that we should not put that potential at risk with a charging scheme that would make electricity generation uneconomic, or which would threaten it. That is why we have tabled the amendments to the Energy Bill to which the hon. Gentleman referred. The scheme sets a threshold, above which we will be able to apply a discount. That leaves open the possibility that a cap could be imposed if there is a 100 per cent. discount on the portion above the threshold. However, that will depend on the analysis that we will carry out to determine what is needed to ensure that we retain and realise the potential offered by the north of Scotland.

Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East) (Lab)

Given the importance that the Government attach to renewable energy, does my hon. Friend agree that we need to spend a lot more on research and development to meet our targets in the future? Recently, Sir David King has floated the idea of establishing a UK research centre to demonstrate our strong commitment to renewables in the future. Does he agree with that?

Mr. Timms

I agree very much with my hon. Friend about the importance of R and D in achieving our targets. We aim to get 10 per cent. of our electricity from renewable sources by 2010, and we want to double that by 2020. I am sure that my hon. Friend was encouraged, as was I, by what my right hon. Friend the Chancellor said in the Budget about the 10-year strategy and about public support for the centrality of science and innovation in the nation's economic strategy. I shall certainly be very keen to talk to Sir David King about his proposals, and my Department works very closely with the Government's chief scientist. However, there is no doubt that publicly supported R and D is one of the major keys to bringing about the changes that we need.

Miss Anne McIntosh (Vale of York) (Con)

The Minister said that there were huge opportunities for renewable energy in the north of Scotland. Can he justify the Governments complete obsession with wind farms? They are a danger not only to birds, but to human health and the environment generally. Will he confirm that there is an estimated cost of £2 billion for each wind farm to enter into the grid and that the electricity cannot enter the grid and be transmitted without ghastly, dangerous, overhead lines?

Mr. Timms

The hon. Lady is wrong on a number of points. Certainly wind is currently the most cost effective of the renewable energy technologies available, so the current renewables obligation mechanism is bringing forward a welcome increase in wind energy capacity. However, we are also supporting the development of other technologies. It is important that every proposal should be put through a proper planning process, as each of them is. The hon. Lady will know that there is a serious threat to birds and wildlife generally from the development of climate change. We need to ensure that we change our energy economy to address that. That is why the World Wildlife Fund recently called on the Government to increase their targets for renewable energy.