| Sustainable Energy (CHP Provisions) Order 2003
|
|
The Minister for the Environment (Mr. Elliot Morley) indicated assent.
Mr. Stunell: I am delighted that those agencies are included. The point about what is included needs to be addressed. I hope that the Minister will say, ''Yes, of course that's included'' to all the possibilities that I have suggested. In which case, why is the NHS not included? There must be a reason for excluding the biggest state-owned employer in the country from the provision. I want to be told what it is. I also have queries about article 3(a), which excludes electricity that is used
Column Number: 7
We could have a situation in which the NHS north of the border has a CHP requirement, but south of the border it does not. The probation service north of the border could have one, but the service south of the border would not. Does the Minister think that that gives adequate leadership to the combined heat and power industry and fulfils the aim and claim of the Government to be a world leader in reaching our Kyoto targets? I do not think that the lamentable document could have come to us in this form had there been proper and meaningful consultation. I want to know in more detail—in any detail at all, in fact—what consultation there has been with the Energy Saving Trust and what feedback has been received. What consultation has there been with the Combined Heat and Power Association? What assessment has the Minister made of the impact of the order on achieving the 10 GW target? What advice has he received from the Energy Saving Trust and other professional bodies on its likely effect? For those of us who want the Government to succeed in reaching their CO2 reduction targets—which includes me and, I believe, the Minister, who has his heart in the right place—it is very frustrating indeed to see opportunity after opportunity thrown away. Reading the order, I thought that somebody behind the scenes was having a laugh at our expense. It almost looks like deliberate sabotage, with Sir Humphrey and Jim Hacker producing the ultimate bureaucratic fiasco. The provision is designed to fail from day one and is incapable of achieving anything useful, although it might succeed in what could be its most important aim—papering over the cracks between the permanent secretaries at the Department for Environment, Food and Rural Affairs, the Department of Trade and Industry and the Treasury. Will the Minister have the decency to pull this half-backed statutory instrument out of the Committee and to tell his officials that this rubbish is just not good enough?
10.15 amMiss Anne McIntosh (Vale of York) (Con): I welcome you to the Chair, Mr. Hurst. It is a pleasure to appear before you again; indeed, this is becoming a regular event. I welcome the opportunity to discuss the Department's commitment to combined heat and power. We share the disappointment of the hon. Member for Hazel Grove (Mr. Stunell) with the Government and urge them to do much more to Column Number: 8 encourage the adoption of combined heat and power. They recognise that this method of sustainable energy generation is vital to reducing greenhouse gas emissions, but they appear to be so obsessed with one form of renewables—wind farms—that they are neglecting other equally good sources of renewable energy, such as combined heat and power.Subject to the Minister's response to the hon. Member for Hazel Grove, it appears that Ministers were happy to set a target of 10,000 MW of installed, good-quality combined heat and power capacity by 2010, but they have done little to deliver the results. In fact, as we heard, energy generation by means of combined heat and power has dropped by 11 MW in the past year alone. The industry is in an extremely poor state because of the lack of Government support. The Minister will be only too aware of my interest in the issue. As recently as 5 February, I tabled several written questions that were directly relevant to this debate. I am perhaps not known as the most patient of people, but I feel that I have been extremely patient in this regard. Usually, one would expect an answer to an ordinary written question to be supplied within three or four days, although the Table Office gives those responsible the benefit of the doubt and allows for up to one working week. Even so, it is pushing things not to provide an answer within three weeks, which is almost one month. Can he respond to my questions today, or is there some sinister reason why he cannot share the answers with us? I asked the Secretary of State
I also asked the Secretary of State
''what the latest figure for cost per unit of operating the Department's combined heat and power plant is'' ''what estimate she has made of damage . . . caused by the Department's combined heat and power unit''—
Column Number: 9 answer at a later date. Today is a very timely occasion for an answer, however; it will do very nicely as the subject forms part of the business before us.I have a particular interest in the field. I have modest personal equity plans in Shell and BP and I did a placement with BP in the Industry and Parliament Trust, and I know that it continues to maintain an interest. I pay credit to the Department for its extensive public consultation on the Government's draft strategy on heat and power 2000-10. It published the summary of responses to the public consultation in November 2002. The hon. Member for Hazel Grove, who moved the prayer against the statutory instrument, was the only Member sufficiently moved to respond formally. I declare a further interest. I am half Danish and I studied at Aarhus university in Denmark. I studied not energy or the environment, but European law and politics, and I plan to visit a Danish combined heat and power site. My aunt and uncle living in Herning receive what they call ''Fjernvarm'', or distance warming, which is a highly prized, efficient and cheaper means of providing heating to householders. I would like to know how many of the obstacles that appear at the planning stage in this country in respect of pursuing such combined heat and power plants have been overcome in Denmark. To obtain the most efficient combined heat and power site, one has to build from new. I believe that it is very difficult to convert an existing power station to a combined plant, although the Minister may like to correct me if I am wrong. If there were any possibility of incineration, one alarm bell that would sound in every constituency is that of atmospheric pollution. I am informed that pollution from the combined method is about 0.0001 per cent. Households benefit because such energy costs them less to obtain, and combined plants in Denmark tend to be located on industrial sites—in my uncle's case, the location is Herning, a major textile town in the middle of Jutland on the Danish mainland. There appears to be a great deal to commend that source of energy. It supplies heat and power to industrial and commercial users, and to communities through district heating, as I mentioned. The thermal efficiency of the combined facility is at least double that of electricity-only plants such as power stations. I know that the Minister is aware of the great distress caused in the Vale of York when planning applications were granted for overhead pylons running from Teesside through North Yorkshire and entering the national grid at Shipton by Beningborough in my constituency. The planning inspector subsequently said that, if planning permission had been sought for overhead power lines at the same time as for the power station, it would never have been given. I ask the Minister whether there is any potential for building new CHP-specification power stations rather than old-fashioned overhead cables, because my constituents in the Vale of York and everyone else would be much happier.
Column Number: 10 The Government's CHP strategy was published in 2002, and it set a target of 10,000 MW of energy by 2010. In 2001, there were already 1,573 sites where CHP was operational in the UK, supplying 4,801 MW. Meeting the 2010 target for the CHP strategy will require at least 500 MW of new capacity to be installed each year from 2001. However, in the 2003 digest of UK energy statistics from the Department of Trade and Industry, it was reported that there had been a reduction of 11 MW in 2002. In addition, a report published by Cambridge Econometrics in November 2003, which was mentioned in the Government's consultation and was commissioned by the DTI, predicted that only 8,100 MW of CHP would be in place by 2010.As I have mentioned, CHP is commonplace is Denmark. Some 57 per cent. of municipal waste incinerated in Denmark is treated in district heating plants, compared with only 17 per cent. in the UK. Will the Minister tell the Committee how Denmark managed to make CHP plants so much more acceptable than they are in this country? Denmark has 5 million people. They live in a small country and I would imagine that planning applications are no easier to obtain there than in this country. However, Denmark has linked CHP to the benefits of distance warming. It would appear that neither the Government's waste strategy nor their CHP strategy provides the framework that is required to increase the supply of CHP from energy from waste facilities. For example, energy from waste plants with CHP facilities could be located on a dedicated energy park to support process industries by supplying steam and energy. As I mentioned in relation to Denmark, industrial sites are the most common locations. My understanding is that a district heating infrastructure could be installed during the construction of housing or industrial developments. Retro-fitting is difficult and costly. The Government could require local authorities to demonstrate that they have considered the provision of CHP for all significant new developments by acting as a contingent purchaser. It is believed that a local authority should carry out a heat planning study to identify high-density areas. Perhaps the Minister will help the Committee by giving an indication of what the cost of such a study would be. I cannot imagine that it would be a mammoth amount. One of the directives that is currently being finalised by the European Parliament and the Commission will allow an even greater amount of incineration in Denmark and Sweden. Surely that will promote much more CHP in those countries, making Great Britain appear even more behind than it currently is. I quite understand that the risk involved in investing in CHP is considerable. For example, many potential industrial and commercial end users of CHP are reluctant to enter into a long-term agreement with a supplier until the CHP system is in place. That is natural, but it does not provide the level of security needed to develop a costly CHP infrastructure. Would the Government consider enhancing certainty by Column Number: 11 extending the grants available to develop an infrastructure for community district heating to industrial and commercial users and eventually to household users? The Government could also increase their funding of the community energy programme, which has been successful in encouraging CHP and district heating. For example, we have seen the development of a heat grid from the energy from a waste plant in Huddersfield, which I imagine is the first of its kind.The introduction of the new electricity trading arrangements has resulted in CHP plants exporting less electricity and receiving lower prices for it. Will the Minister comment on whether that has had a retrograde effect on the promotion of CHP? It would appear from the bodies and Departments listed in the schedule that the Minister's Department must be a frontrunner. I beg him to take the opportunity this morning to respond to the questions that were tabled some three weeks ago. I would also be extremely interested to know why the exclusions are such as they are. What reason is there for excluding the Farming and Rural Conservation Agency, the Probation Service, National Savings, the Office of the Judge Advocate General of the Forces, the Information Technology Services Agency and the Invest In Britain Bureau, which one would have thought would naturally be included? The Department of Health, as well as being a major employer, should be a flagship showing the way forward, and one hopes that hospitals will eventually follow suit. In the executive summary published by the Minister's Department in November 2002, it is clear that almost every respondent cited the high market price of gas compared with the low price of electricity as the key barrier to further development of combined heat and power in the UK. There is also general agreement that the impact of the new electricity trading arrangements has been detrimental to CHP. A number of comments and suggestions were also received regarding network connections and distributive generation. Fuel cell CHP was also mentioned by many correspondents who felt that this technology had much to offer, but needed additional support for its full potential to be realised. Does the Minister imagine that the grants offered by his Department, and probably the DTI, will also be extended to fuel cells? While the majority of respondents welcomed the Government's commitment to CHP and supported the target of 10,000 MW for installed good-quality CHP capacity by 2010, a few of them believed that the target should be even higher. What realistic prospect is there of reaching even the 10,000 MW target by that deadline? I understand that the purpose of the statutory instrument is to define a Government estate for the purpose of allowing a 15 per cent. electricity source target to be set.
|
| |
| ©Parliamentary copyright 2004 | Prepared 24 February 2004 |
