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25 Jun 2008 : Column GC615
25 Jun 2008 : Column GC615
25 Jun 2008 : Column GC615
Wednesday, 25 June 2008.
The Committee met at quarter to four.
[The Deputy Chairman of Committees (Lord Colwyn) in the Chair.]
Energy Bill
(Fourth Day)
The Deputy Chairman of Committees (Lord Colwyn): I start with the usual announcement that if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Lord Redesdale moved Amendment No. 55:
It is a requirement that any new-build, coal-fired power generation plant has the capability for a minimum of 10% of its output to come from the co-firing of biomass.”
The noble Lord said: This is a simple amendment, which would require any new power station that uses coal as fuel to produce a minimum of 10 per cent of its output through the co-firing of biomass. We have already had quite a detailed discussion on the pros and cons of using biomass in the generation of electricity from coal-fired power stations, and a number of power stations in the pipeline at the moment have met a great deal of opposition because of the carbon content and dirty nature of coal and its CO2 emissions.
This would be a way of ameliorating the effect of any new-build coal-fired power stations, if such power stations have to be built in the future, and would be a sensible way forward. A target of 10 per cent is not too high, because it is achievable. It would lead to great savings in CO2. It is estimated that the co-firing at Drax will save about 3 million tonnes of CO2. If we are talking about new power stations, we really must think about how we can do everything in our power to reduce the carbon content of the fuel mix. The amendment would be a sensible solution. I beg to move.
Lord Jenkin of Roding: I have always had some doubt about trying to enforce this kind of minimum requirement in the use of biomass. One’s mind goes back to the most significant biomass demonstration plant in this country—the so-called ARBRE project—which failed, largely because the distance that one has to carry the biomass source in order to reach the place where it is to be burnt outweighs any possible advantage, certainly of cost, of having a biomass plant. That is often neglected in this argument. We have had a lot of argument about whether it competes with food products and so on. That argument has reached the point where there is good biomass and bad biomass, and anything that competes with food in the present world is properly regarded as bad biomass. If you take the other costs into account, one must realise what the results can be.
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I saw a figure a few years ago, which I do not think has ever been doubted. I quoted it in public. It was suggested that instead of having nuclear power stations we should have far more biomass sources, but I was told that if you were going to replace just one nuclear power station—the example was Dungeness B in Kent—you would have to plant with willow coppicing, or whatever you were going to use, the entire undeveloped area of Kent that was not already towns and cities. That is wholly ludicrous. One would never dream of doing anything like that. It would be absolutely nonsensical.
I therefore have doubts about the practicality of the noble Lord’s amendment, although I understand his objective. Clearly biomass should be used where it can be used economically and properly, because it is a rotating source; as you burn and emit carbon, the carbon can be soaked up again through the successive planting of the biomass. I understand that, and I think it has a part to play, but I would be very cautious about trying to impose the sort of obligation suggested in the proposed new clause.
The Lord Bishop of Chester: When Drax made its announcement—
The Deputy Chairman of Committees: Would the right reverend Prelate care to stand to speak?
The Lord Bishop of Chester: When Drax said that it was intending to use 10 per cent of biomass, it accompanied that with an announcement that most of it would have to come from Scandinavia or somewhere like that. That raises severe practical questions, of not only the economic cost but the CO2 cost of transporting biomass over a large area. My question about the amendment is not with the spirit in which it was moved—I am all in favour of biomass, and my house in Scotland has been heated by a wood-burning stove cheaply, effectively and successfully for many years—but there are practicalities which putting a precise figure on does not take account of.
Lord Davies of Oldham: I am grateful to the Members of the Committee who have contributed to this short debate. As has been indicated, we are all in agreement with the amendment’s broad objective of seeking to increase the use of biomass. However, the amendment is not necessary, and it may even be detrimental to our objective of increasing the amount of biomass burned by coal-fired power stations.
The amendment proposes that any new-build, coal-fired power-generation plant should have the capability for a minimum of 10 per cent of its output to come from the co-firing of biomass. The use of biomass as a renewable energy source can be beneficial to the environment, of course, and can make a real contribution to the UK Government’s renewable energy and carbon emission targets and obligations. Therefore, we share the noble Lord’s ambitions to see a greater use of biomass, which is why we already have a number of support mechanisms in place to incentivise its use, including the support offered by the renewables obligation, which we discussed on earlier amendments to the Bill.
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The amendment would not enhance the existing incentivisation framework, partially for the reasons identified by the noble Lord, Lord Jenkin. Let me make the obvious point. All existing coal-fired plants in the UK are already capable of carrying out co-firing, and most are in fact doing so on either a trial or a commercial basis. There is no technical barrier to generating 10 per cent of power from co-firing of biomass in existing or any conceivable future coal plants, so the amendment is not necessary. The capability to carry out co-firing does not necessarily mean that it will be undertaken.
If we put a target in legislation, albeit a minimum one, it could send a signal to the marketplace that the Government’s preferred level of co-firing is 10 per cent. However, higher levels of co-firing may be achieved both economically and sustainably. Having what looked like a target in the legislation could hinder higher levels of co-firing that could be achieved by the economic incentives already available. The renewables obligation, the climate change levy exemption certificates and the EU ETS already provide, and will continue to provide, an effective incentivisation regime for co-firing with biomass. Those incentives are already having effect.
Therefore, I hope that the Committee will appreciate that there are no technical obstacles to the co-firing of biomass in existing or any future coal-fired plants, that the economic incentives are already available to promote the use of this technology, that the Government are four-square with the noble Lord in wishing to see the use of biomass and that the amendment would not add anything to what we already have. It might be mistaken by its 10 per cent figure for some kind of limiting target, when that is not the long-term view that the Government are taking about developing the use of biomass. I hope that he will take delight in the assurance that I seek to give from this Dispatch Box about our commitment to his objectives. This is a disagreement about means.
Lord Redesdale: I am not sure about delight. It is certainly not euphoria. I am slightly disappointed with the Minister’s reply because we are talking about only a capability. I take on board the point that the market might see it as a 10 per cent target. However, we are missing an opportunity if we do not discuss this with the planners to ensure that the capability is in place for a small target of biomass, considering a number of options that would have to be considered if biomass were introduced at a later date. If the ability for dealing with biomass was included in the planning process and thought out beforehand, stations would not have to be redesigned. That would be more acceptable than if the Government—as they probably will—introduce biomass targets in the future.
I take on board the Minister’s point that all coal-fired power stations have the ability to fire biomass. The issue that I have is that, as with carbon storage and capture, we have to have the ability and the space to handle this type of fuel source. I am slightly disappointed, but, on that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Wilcox moved Amendment No. 56:
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The Secretary of State shall, in each calendar year following that in which this Act is passed, lay before Parliament a report on—
The noble Baroness said: The noble Lord, Lord Whitty, was going to speak to Amendments Nos. 64 to 66, but he kindly sent me a note to say that he was not able to be here. I hope that he is here in spirit if not in body.
The Bill primarily concerns the production of energy and generation of electricity, but it is scanty about what happens when the energy gets to homes and businesses. That is a dangerous oversight, for not focusing on efficiency in homes and businesses can have a serious impact on our energy security as well as our emissions. Reductions can and need to be made. The new clause that we are proposing would require the Secretary of State to make a report on energy use in homes and businesses. That report would be done with an eye to locating instances where efficiencies could be made. In 2005, UK CO2 emissions totalled 550 million tonnes of carbon, 27 per cent of which comes from the energy that we use to heat, light and power our homes, yet only 10 million or 40 per cent of our homes are sufficiently insulated. That fact seems shameful when one considers that around a third of the heat loss from an insulated house is lost through the walls. Proper insulation would fix that and take around £90 a year off energy bills.
Not only would that benefit the average consumer, it would help the industry in the UK as a whole. It would save £720 million-worth of energy and 9 million tonnes of carbon—the equivalent of the power required to supply 1.8 million homes. Strides are being made by businesses that encourage insulation and other energy-saving measures. However, there needs to be a shift towards a more serious consumer awareness of the importance of energy efficiency. As my friend Charles Hendry said in another place, we in this country are not very good at switching things off. According to the Energy Saving Trust, leaving mobile-phone chargers and lights on contributes an additional 43 million tonnes of CO2 annually to the atmosphere. The estimated energy loss for the period 2006-10 is £11 billion. The UK could reduce its electricity requirements by 3 per cent simply by switching things off when they are not in use. I do not need to expound further on the benefits that that would bring to our energy security and our efforts at mitigating climate change. An annual report would be a welcome first step in analysing where further efficiencies can be found. If we are going to effect change in the way we think about energy, we must remember all the different places where savings can be made. I beg to move.
4 pm
Lord Redesdale: I commend the efforts of the noble Baroness to bring in energy efficiency. It was one of the issues discussed at Second Reading, and it is one of the great disappointments of the Bill that there is not a great deal more about it. This is perhaps an opportunity lost. The Bill is extremely technical and hardly controversial. It seems that all the elements that have
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Lord Palmer: I, too, support this amendment. Part of this is a matter of education. This morning, all the blinds in your Lordships’ Library were drawn down and every light was burning brightly. If we learn from our own doorstep, we could do an enormous amount to educate other people.
Baroness Carnegy of Lour: I support this amendment. It is the other side of what we have been discussing. We have got to change our habits. I am not sure that I mind too much that there is not legislation about what we do about switching off the lights, but we have to change habits and fashion. The high cost of fuel will change our habits a bit. People are beginning to think about it.
The noble Lord, Lord Palmer, spoke about the Library, which reminded me of a point I want to make. In advocating fuel efficiency, I hope the Government will not go too far on the type of electric light bulbs we use. Those of us who are a bit older, whose sight is suffering from years of use, need a bright light to read. Our Library now has low-efficiency light bulbs. I cannot read in the evening. I have nothing wrong with my sight, except Anno Domini, but I cannot read in the Library unless I am near the window and, of course, as the evening goes on, it gets dark. As we have a great many older people in our population, it is important not to force them to read with too low a level of light. I hope the Government are not going to go in that direction. One European country has made it compulsory—I think it is Germany—and I was sorry to see that. It is a mistake.
However, we must alter our habits. We must improve on only 40 per cent of houses being insulated. The further north in the country, the more important that is. There is no question that if one lives further north, or over the border, as I do, there is a difference in temperature and the amount of fuel one uses throughout the winter compared with down here. Insulation in northern parts is even more crucial, and people should be made aware of it.
Lord O'Neill of Clackmannan: It is important that any legislation on energy should be tested for energy efficiency, but the Long Title does not suggest that there is much scope for that. The amendments tabled by my noble friend Lord Whitty require some explanation in so far as Clause 80 makes a number of references to reports, and it would be useful if we could get a lay person’s guide to that clause in the Minister’s response.
I think it is fair to say that pretty well from the word go in this Committee noble Lords have been asking for reports and have been redirected to other reports. If they had done a wee bit of work they would probably have found that out, or the Library would have guided them. Without wishing to be unduly if not characteristically churlish, I shall move on from that point.
The purpose of the legislation is clear: to pave the way for nuclear, provide better facilities in relation to gas storage, and tie up one or two loose ends. We will
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It is important to touch on this issue. I know that it is not wholly relevant. My experience in the other place was that the Clerks and Chairs used to be rather more savage in their reluctance to accept such amendments, or to allow debate. I do not want to stray too far from what I consider to be in order as the purpose of the Bill is not to deal with energy efficiency in the way in which the amendments suggest, but I would like to think that the message could go to those who make these decisions in government. With all due respect to my noble friend, I realise that it is not always within his say-so, but it would be useful to have comprehensive legislation to deal with energy efficiency and fuel-poverty matters before too long. Technical, structural amendments to existing legislation would facilitate better consideration of these matters than they are currently receiving in the legislative programme of this Government.
Lord Jenkin of Roding: I take up the point of the noble Lord, Lord O’Neill. It is all very well for the Government to say, as they did frequently in the other place when amendments were tabled, “This is not in the Bill”. If we look at the list of new clauses that appear either after Clause 79 or before Clause 80, we can see that there is a whole range of issues that Parliament would like to be dealt with in an energy Bill. I agree with the noble Lord, Lord O’Neill, that the Bill has important points. It is about facilitating nuclear energy, dealing with gas and CO2 storage, and all the other measures that we have been debating, but it is naive of the Government to imagine that they can introduce a Bill and not recognise that the concerns of Parliament and increasing numbers of the public go rather wider. This Energy Bill is before us and we should be entitled to debate such things. I hope that if one makes a sufficient case, eventually the House may be persuaded, as it has been on previous energy Bills, to insert amendments dealing with matters that were not originally in the Bill.
All those who have spoken have referred to the extraordinary difficulty of persuading millions of ordinary citizens to change how they do things; we are creatures of habit. It is difficult when one is faced with a new overriding need—fighting climate change, a new development in this context—to recognise that people must change their way of living to contribute to dealing with these threats.
By far the single most important stimulus to change in this area is price. Some people have argued, for instance, that transport prices are almost inelastic. Well, one only has to study the recent figures in this country, Europe and the United States to see the swift response to the soaring price of petrol at the pumps.
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The same is true of household expenditure. People now feel that they have a duty to switch off lights. I wholly agree with those who say that the public sector is not very good at that. One drives around Whitehall, and the lights seem to be on all night. Why? The public notice these things. I have heard, as have others, the argument, “Why should we take this seriously if the authorities obviously don’t?”. It is a question of setting an example, which is a perfectly good way of bringing this before the public. However, trying to get ordinary members of the public, who do not read lengthy reports on company websites, to recognise that there must be a change is important.
I do not want to anticipate my later arguments on the new clause on targeting groups, which I indicated that I would raise on the Bill; we will deal with that when we come to it. However, there must be increasing awareness of what households and businesses can and should do to curb their energy consumption and contribute to reducing carbon emissions, and that should be a continuing programme. It is as much for the energy industries themselves to do this; they send their bills with leaflets and everything into everybody’s houses. These must be carefully pitched so that ordinary citizens who do not normally read the guff that comes with their bill can be persuaded to do so, and see what they can do.
It must now become much easier to get a wide variety of efficient, energy-saving light bulbs. The supermarket that my wife and I shop at has a selection, but it does not cover everything we need. I entirely sympathise with my noble friend Lady Carnegy that many of these lights are rather dim. My mind goes back to the wise words of the German Chancellor Angela Merkel when this was all introduced at the Copenhagen conference. She said that it was all very well, but if you dropped something on a patterned carpet you could not see it. We have all had experience of that, and it becomes more difficult as one gets older. One must have more readily available and efficient low-energy light bulbs. Some of them that I have been able to buy were very expensive. The noble Lord, Lord Rooker, has constantly assured the House of Lords that prices are coming down as this becomes increasingly apparent. However, anything that contributes to availability would have my support, and the amendment could be a useful contribution.
4.15 pm
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