§ Debate resumed.
§ 1.16 p.m.
§ Lord Skelmersdale
My Lords, this is for me a day of sadness and regret. I regret that colleagues both old and new are retiring by rotation or because the Government have cut the ground from under their feet. Although the noble Lord, Lord Paul, was a little previous earlier in this debate, it is poignant that all I can say is that my noble friend Lord Cathcart is welcome; I thank him for making his one and only, and most pertinent, speech, in this debate; and I am afraid I have to say goodbye. I regret too that it is not "peeratically" correct for each succeeding speaker to congratulate maiden speakers. I should probably not even comment on the fact that this is the last debate on the report of Sub-Committee B to be introduced by my noble friend Lord Geddes for a while at least. I am sure that I speak for all my colleagues, even perhaps the whole House, when I say that we shall miss his lighthearted but firm leadership and his ability to put complex concepts into words that even I could understand.
My regrets are not wholly personal. I should hate to be in the Minister's shoes when he answers this debate. It has been difficult, to say the least, for any previous speaker to say anything good about the Government's response to this report. The noble Lord has been put in rather a difficult position, not only by his own department but also by the usual channels. I am also genuinely sorry for him that the DTI responded before this debate was held—I doubt that he will make that mistake again. The point is that we are all on the same side; we all want the Government to succeed.
The central theme of the report—the 64 billion dollar question—is whether the Government will meet the Kyoto target to which they themselves signed up, of obtaining 5 per cent of this country's electricity from renewable sources by 2003 and 10 per cent by 2010, and, if so, how.
I have to say that I heard no one in the committee, even after such an exhaustive inquiry as we had held, say that they had any more than a cat's chance in a whirlpool of achieving it. Nor does the Government's response make me any more sanguine. Yes, they agree with us that it is technically possible, but that is not the point. Much of the debate so far has concentrated on the technicalities. I do not think that it is right for me at this point to reiterate what has been said. Yes, the Government have a policy, but that is not the point either. Yes, renewable forms of generation have been encouraged under NOFFO and its Scottish equivalent. Contracts have been placed. Very good. But it is one thing to sign up to a contract without, I would remind the House, any planning permission required in advance; and for that contract to result in the production of a single watt of electricity. Will the same be true of the post-NOFFO arrangements?
1138 The Government's response is littered with comments like,The Government believes the existing non-fossil fuel obligation arrangements should"—I emphasise the word "should", as clearly they do not have the courage of the convictions of the former Minister for Energy that they would—secure its target of 5 per cent … by 2003".And it states:The Government has announced its intention of working towards the aim of achieving 10 per cent … as soon as possible. We hope to achieve this by 2010".That does not give me much confidence. I might have become less cynical when I read,
What is clear is that achievement of both the European Commission's renewable targets and the Government's own renewables aim will require coherent policy action and a sustained drive and leadership. The Government intend to provide that drive and leadership".That is until I read it again. The Commission has targets. On the other hand, Her Majesty's Government merely have aims which are considerably lesser things. By their own omission the Government have nothing to say about coherent policy action, a point that was made earlier in this debate.
I have one last quote. When talking about the role of planning and an inclusive approach to policy objectives, the Government say,not least those related to sustainable development and climate change. The Government also attach great importance to developing an inclusive approach to all these issues, and one which can command broad and continuing support across the wider community. It has therefore sought to develop that consensus through consultation".The sands of time are running out. We have only three years left to the first Kyoto objective date.
However, I conclude on what I hope will be a positive note. Most of the first of those years will be taken up by the utilities Bill. I have no doubt that the noble Lord will be in his place leading upon it. I understand that it will be proposed in the Queen's Speech. I and other noble Lords will scrutinise it carefully. The Government have a golden opportunity to give positive incentives, not only in the post-NOFFO regime, which at the very least is to be included, but to take other positive steps. I should like renewable energy projects on the land already owned by the generating companies surrounding power stations to come within the general development order for the purpose of renewable energy developments. That would surely get rid of most of the environmental concerns expressed on both sides of the House. If necessary, I shall seek the agreement of the House to amendments to that effect.
Outside the Bill, I should like to see changes to the tax regime. Why should landfill tax not be reclaimed when methane is used for energy production, whether in combined heat and power plants or just electricity generators? To support a point made by my noble friend Lord Geddes, why should not the electricity generating companies be given climate change tax 1139 credits for the percentage they generate from non-fossil fuel sources? That would offset the cost which they claim as their reason for being dead set against net metering; namely, the cost of inspection.
If, as the committee believes, the 2003 aim is not achievable, at least then the 2010 ambition would be closer to reality. What almost every speaker in the debate has asked for is simple. We want action, not chat.
§ 1.24 p.m.
§ Lord Montague of Oxford
My Lords, as have other members of the committee, I congratulate the noble Lord, Lord Geddes, first, on his patience with us and his diplomatic skills in bringing our report to the conclusion which is arousing so much interest today. I congratulate, too, the noble Earl on his maiden speech. It is customary to congratulate noble Lords on their maiden speeches. I do not know how customary it is to invite them to become members of the committee, even if they are to be no longer Members of this House. We would have welcomed the noble Earl had he been available, I am sure.
As a business man, in addition to considering all the technical points to which noble Lords have listened today, I asked myself over and again: would I invest in this industry at the present time? From a national need point, I would. But when one leads a company one does not lead it for the national good but primarily for the good of one's shareholders. I must say that at present I would find it very hard to justify investment in this industry. Could one gain a decent return on one's investment? I do not think so. At present it is a demoralised industry. It is an industry which is surrounded by uncertainty.
Of course that is not surprising, for each of the constituent parts is dependent upon government funds for its financial health, and where one relies on the custodians of the purse one is competing against a vocal public insisting on action and expenditure in areas of which this is not one. Without wider understanding and awareness of the issues, there will not be the public support which is crucial both in terms of funding and sympathetic planning approval, which is necessary.
During the two energy crises, in particular the one when it was suggested that we clean our teeth in the dark or were not permitted to travel at more than 50 miles per hour, all our citizens realised how dependent we are on energy. At the present time we burn it as though it will gurgle for ever, but in reality we know that it will not. To me it is somewhat ironic that it is the overwhelming importance of reducing CO2 emissions by 20 per cent by 2010 which is currently driving this debate. It is the fact that fuel resources are finite, and the absolute inevitability of, first, a clear decline leading to fears of scarcity coupled with sharply rising prices. That is what we shall face at some moment in time. Of course people have cried wolf about this previously. It would be a pity if we had to suffer that before renewables came into their own.
1140 Until then, we have public subsidy, and all the uncertainty that that must bring. The one thing above all others which struck me as I listened is the issue of uncertainty: uncertainty about the future of NOFFO contracts; uncertainty as to whether existing NOFFO contracts will be honoured in such a way that the finance they have put in place will not have to be renegotiated; uncertainty about planning permission for wind farms; uncertainty about offshore wind; uncertainty about biomass; and uncertainty about coppicing. We have had review after review, and we are still at it.
I quote from the Government's response to our report:The Government plans to publish a draft climate change programme for the UK towards the end of this year".Is this the Statement from the Chancellor announced for next week? Maybe not, because Mrs. Liddell, the newly appointed and very able Energy Minister, announced in a Written Answer last week that the period for discussion with industry on some aspects of the climate change levy has now been extended from mid-October to 20th December. I quote again:and a statement on renewable energy policy to follow".There is no date for that, or are we getting it next week? I doubt it.
I turn to page 27 of the Government's response to our report. It states:The Government intends to take broad powers to establish a new support mechanism in the Utilities Bill, which it hopes to announce this autumn".Presumably that will be in the Queen's Speech. In this is mentioned the possibility of a further support scheme to replace the current NOFFO arrangements, so uncertainty might continue not for more months but for a year or more in this area.
The Government, who have justly earned generous plaudits for their management of the economy, recognise that the two things commerce must have are consistency and certainty. The Government are so right. It is what we need in this area.
That prompts me to turn to the committee's recommendation that, in order to help to achieve the UK's targets, there should be established a strong and pro-active new agency to bring together the fragmented responsibilities which could provide the drive which seems to be absent at the moment.
The Government's response states:It is important to recognise the cost and disruption resulting from organisational change".But what about the gain? There is the prospect of tens of thousands of new jobs; the prospect of £6 billion of new investment from British industry for renewables during the coming decade; and the prospect of low cost, sustainable energy for all our population. What prizes in return for some bureaucratic inconvenience!
I have been through this before. In the late 1960s, when it was obvious that there was a huge potential for tourism, there were great difficulties. In 1969, the Development of Tourism Act had to be passed to create the necessary hotel logistics and the support 1141 structure. At that time, we had 5 million tourists. This year, we shall have 28 million. If we had not taken such an initiative at that time, we should not have a new industry employing 1.7 million people and a colossal foreign exchange earner.
I do not malign those who have the enormously difficult role of co-ordinating the many government departments which have to be involved in renewables. Indeed, I respect their diligence and patience and recognise how multi-dimensional their task is. The farmers, who we all know are desperate for funds, can gain special financial support necessary for coppicing, but that has yet to be clarified in full.
I turn to a new area: the waste edible oil industry. It is stated that it has identified another interesting possibility: recovered oils and fats. Is that true? I do not know; but who jumps on it to have a look? Apparently no one has that responsibility. The Government need to have technologically specific policies to ensure that developments still in their infancy do not become overlooked.
The closing paragraph of the Government's response, when I believe responding to a favourable assurance we received from the previous Energy Minister to our suggestion that there should be an annual report which measures precisely what has been achieved during the year, states:The annual report of the Government's independent Energy Advisory Panel will continue to address all aspects of energy policy, including renewables. In addition, the DTI's annual report will report progress against the Department's stated objectives. The Government will however continue to examine the need for additional reports".There is no need for any additional report. Any existing report can be used for what is necessary. It is the same reporting without which a modern business will not advance. What is planned for the year? What are the targets; the measure of precisely what has been achieved?
In one of their statements about the proposed climate change levy, the Government stated that an additional £50 million would be spent on "this", meaning a further £50 million would be recycled from the proceeds of the levy to support renewables and energy efficiency. Is that £50 million annually? Is it to be divided equally between renewables and energy efficiency? For both, it does not seem an adequate figure. So, you see, there is uncertainty here, too.
The new framework for renewables is at least 12 months overdue. 'There are tremendous opportunities for business and for jobs, if only we could get all this activated. The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions, Mr Hill, when talking about the climate change levy last week, said in the other place that action speaks louder than words. I am sure that all of us in this House urge action and look forward to seeing it.
§ 1.37 p.m.
§ Lord Cadman
My Lords, I, too, congratulate my noble friend and his committee on the production of a 1142 most interesting report into what at first appears to be a relatively simple subject but what turns out to be very diverse indeed.
I do not profess to be an expert on any of the technologies involved, but, being a practical kind of person, the mechanics of the various methods of electricity and/or heat production I find quite fascinating. During my earlier days as a farmer, we used to burn a lot of wood in the house. Eventually, we had two wood-burning stoves and, properly managed, they must have saved us a considerable sum in reduced heating bills. Much, if not all, of the wood they consumed was waste and when not picked up around the farm could be obtained locally at minimal cost. Indeed, much of the waste that the farm produced was eventually consumed by fire, and I have to confess to being among those whose fields following the grain harvest became an inferno.
Thus, it was particularly interesting to read the report of the committee's visit to Denmark where the production of electricity from straw seems well advanced. I seem to remember that around the period that I was farming, many of the Danish farmers became insolvent and there was obviously a need to diversify. Perhaps this was why the practice started there. Straw is a very bulky commodity and suffers from seasonal availability, and one tends to feel that a plant of this nature could perhaps be designed to burn other things to even out any supply problems.
This brings me to the burning of municipal waste, which has always seemed to me to be a highly desirable method of its disposal, especially in view of the benefit of the heat and power availability. Much of Paris's waste is disposed of in that way and the city is ringed with incineration plants.
The committee was disappointed that in this country there seems to be difficulty in developing that technology, and that the difficulty is associated with planning problems and emission. I share that disappointment, because it is perfectly possible to design a plant in which nothing emerges from the stack except water vapour and some carbon dioxide, and to site and design it in such a way that little environmental damage is caused, even that associated with the waste's delivery. Such a plant would be less damaging than a landfill site, with its associated problems of wind-blown debris and unsightly appearance.
I draw your Lordships' attention to the South East London Combined Heat and Power Station, which is situated in the New Cross area, and, I believe, was developed by several local authorities. It is fuelled entirely by municipal waste and is supposed to produce electricity for the National Grid and waste heat to be piped to several nearby buildings for heating purposes, but I have yet to see anything come out of its chimney. I was sorry to learn from my noble friend Lord Cranbrook that the aspirations of that plant have not been achieved.
It was pleasing to see that the report acknowledged the useful part played by small hydro schemes. To those could perhaps he added similarly sized 1143 generating plants driven by tidal flows. As I live near Bristol, I am familiar with the enormous tides that occur there associated with the Severn Estuary. There must be many places where it would be possible to set up some sort of pilot scheme at one of the many creeks and tributaries.
In view of the great difference in level between high and low tides, useful quantities of water could be impounded and its energy used in both directions. I understand that such a scheme was envisaged for the River Avon at Bristol, but, alas, planning difficulties caused it to founder. Attempting to place a barrage across the Severn itself must be fraught with difficulty and, as the report notes, looks likely to produce too much power at the wrong times.
Wind generation using turbines is another useful method of electricity generation on a local basis. The concentration of the turbines at so-called farms is perhaps rather environmentally unfriendly and tends to concentrate any noise nuisance. One appreciates the economies of concentrating these turbines. However, a recent journey through the Eifel region of Germany revealed that many of the heights were crowned, in a fairly sympathetic manner, with at most two turbines or, more often, a single turbine. That arrangement appeared quite attractive and the presence of those majestically revolving propellers seemed almost complementary to the attractive landscape.
Travellers on the motorway in France driving parallel to the Channel coast will not have failed to notice, at the service area to the south of Boulogne, a wind turbine constructed as part of the service area site. It is fascinating to speculate as to whether the power requirements of that service area are provided by the turbine, assuming of course that there is sufficient wind.
That motorway is very well designed environmentally, with frequent crossings for local wildlife. Many of the telephones and signs are powered by photovoltaic panels, which I suppose are associated with batteries. Those devices are becoming increasingly available. Their uses run from being a power source for camping and caravanning to providing power for railway track lubricating units. I agree with the right reverend Prelate on this point. I feel that this technology associated with renewable energy will be most useful in the area of relatively small-scale projects and usage.
It is of course far more convenient to be connected to the public electricity supply, but one of the policies that might be adopted is perhaps to encourage people to use those renewable technologies as a primary form of energy, with back-up from the public supply. If that sort of use became widespread, the energy saved could well go a long way towards helping us to meet our Kyoto obligations.
The report notes that that type of energy use will be difficult to achieve and that most people seem to regard planning difficulties as one of the main obstacles. That is unfortunate, since planning seems to be problematic in many other fields. The adoption of 1144 a less obstructive planning system is important not only in connection with this subject but with many other unrelated infrastructure projects, especially in connection with transport.
In an excellent maiden speech, my noble friend Lord Cathcart said that planning problems arose more often as a result of planning policies rather than local obstructiveness. I agree with him, and feel that the Government should perhaps take a serious look at how guidance is provided to local planners.
Overall, the report will be a valuable reference for the future. Its excellence highlights the valuable work performed by such committees in this House.
§ 1.44 p.m.
§ Viscount Hanworth
My Lords, this report (which we are debating on a Friday afternoon at the end of a long parliamentary Session) represents a seemingly modest doorway which opens on to some of the most daunting perspectives of the coming century.
The report on electricity from renewable sources is concerned with how we should strive to reach the targets that we have set ourselves for reducing our dependence on fossil fuels. At the conference on climate change at Kyoto in September 1997, the Government committed themselves to a reduction of 12.5 per cent in our emissions of carbon dioxide over a period from 1990 to some date within a target interval that runs from 2008 to 2012.
As many speakers have informed the House, the European Communities have derived some more specific targets, proposing that 5 per cent of their energy should be obtained from renewable energy sources by the year 2003, and 10 per cent by the year 2010. Among other matters, the report is intent on assessing the likelihood of our meeting those EU targets. It reaches the conclusion that, unless drastic action is taken, we have no chance of attaining them.
The Government, in the persons of the Deputy Prime Minister, John Prescott, and the Minister of State at the DETR, Michael Meacher, played a leading role in saving the Kyoto conference from breakdown. They were faced with the unwillingness of some of the industrial nations, notably the United States and Japan, to commit themselves to taking any measures to reduce their emissions of carbon dioxide. The American negotiators were doubtful that the US Congress could be prevailed upon to ratify the Kyoto protocols, given the powerful opposition of the members representing coal, oil, steel and automobile interests.
Third-world countries were in turn unwilling to help in overcoming a problem that was not of their own creation, unless they were offered major inducements. Their negotiators protested that they were being asked to forgo their own opportunities for industrial development by renouncing the use of their available energy resources, which they refused to do. The US 1145 Vice-President Al Gore said that the Clinton Administration would not even send the treaty to the Senate unless the third-world countries agreed to its terms. The outcome was a set of agreed emission targets to which no nation seems to be seriously committed.
I shall cease at this point because there seems to be some anxiety.
§ Baroness Farrington of Ribbleton
My Lords, I beg to move that the House do now adjourn during pleasure.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The Sitting was suspended from 1.47 to 2.8 p.m.]
§ Debate adjourned.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House adjourned at nine minutes past two o'clock.