My hon. Friend will recognise that nobody expects renewable resources to be the primary contributor to our electricity supplies in the foreseeable future, but does he agree that the Government's record on research into that source bears good comparison with that of previous Governments? Is not it interesting to note that we are spending 12 times as much as the Labour Government spent on research into renewable energy?
My hon. Friend is absolutely right. More than £180 million has been invested in research, development and demonstration, with a budget allocation of more than £24 million—a new record high—for this year.
Can my hon. Friend confirm that it is thanks to the privatisation of the electricity generating industry that renewables are to have their best opportunity ever to compete, and to compete on their own merits?
I can indeed confirm that. Through electricity privatisation, we established the non-fossil fuel obligation, and under that obligation we are giving renewables their best opportunity ever to enter the electricity generating market.
Does the Minister agree that the Government missed a vital chance? As they intended to privatise the electricity industry, would not it have been better to create real competition, rather than the present duopoly which is concentrating only on the cheapest options—which at the moment happen to be combined-cycle gas-burn systems? Does he agree that if we were really serious about developing renewables, we would have done something about ensuring that small generators had a chance as well?
The hon. Gentleman should be well aware that that is precisely what is achieved under the non-fossil fuel obligation. As a result of that tranche, 75 projects that are both commercially viable and environmentally acceptable have come forward right across the board—not least in landfill gases, hydro power and wind projects. I am sure that the hon. Gentleman will back all those projects and recognise that they are very important for the development of renewable energy on a commercial basis.
Does the Minister realise that the non-fossil fuel obligation can do nothing to promote renewable resources in Scotland, where that obligation does not exist? Does he recognise that many of the renewable sources involve very heavy capital starts, with the pay-back taking place over a long period? What steps is he taking to ensure that there is a lengthening of contracts so that those who supply from renewable sources have the opportunity of a pay-back on their initial capital costs?
The hon. Gentleman has raised two important points. My right hon. Friend the Secretary of State for Scotland rcently announced a scheme under which Scottish Power and Scottish Hydro will contract for the output of renewables projects in Scotland—a scheme which the hon. Gentleman will no doubt warmly welcome. The second point concerned the implications of the 1990 limitation on the levy. I am satisfied that the regional electricity companies have the flexibility that they need to offer generators acceptable contracts under the proposed 1991 renewables order. The reality of that is evident from the considerable number of projects proposed for recognition in the second tranche of that order.
Is the Minister aware that National Power has announced that it is to abandon most of the research and development work that was carried out when the industry was publicly owned and that it intends to sack hundreds of scientific research staff because, in its words, it is not prepared to continue funding research and development for the solution of national problems? If National Power will not do that research, who will?
The hon. Gentleman should have heard my response to my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice). The Government have given strong support under a substantially enhanced research and development and demonstration budget. If National Power—or any other company—can make proposals within the non-fossil fuel obligation to contract with the regional electricity companies, it will greatly benefit the development of research and development and the commercial viability of many of these important projects.