Sustainable Energy

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 30th November 2000.

Alert me about debates like this

Photo of Anne Begg Anne Begg Labour, Aberdeen South 12:00 am, 30th November 2000

What action the Government have taken to encourage the development of sustainable energy. [139542]

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The Government have taken a wide range of actions, which are contained in the UK climate change programme, which was published on 17 November.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

What steps are the Government taking with respect to the development of offshore wind energy? Aberdeen has a great deal of knowledge about the technologies involved in offshore development in the oil and gas industry. Have the Government looked to see whether some technologies in the oil and gas industries can be transferred for use in the development of offshore wind facilities, so that areas such as mine can stay ahead of the game?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend makes an important point. Great skills and expertise have been developed, especially in cities such as Aberdeen, as a result of the exploitation of the North sea. There is an opportunity to diversify from the traditional work involved in that exploitation, and to examine ways to harness the power of wind as an alternative form of energy.

The Government have been looking closely at the matter. I was pleased that we were able to announce just three weeks ago that we were now able to make available £89 million in capital grants to support energy crops and offshore wind developments. I have no doubt that that financial contribution will make a real difference in the development of offshore wind technology. That development will be good in terms of renewables, and good in terms of creating employment opportunities in cities such as Aberdeen.

Photo of Andrew Robathan Andrew Robathan Conservative, Blaby

As far as it goes, I welcome that money, especially if it leads to an increase in the generation of renewable energy from offshore wind. However, will the Secretary of State explain how he squares the provision of that capital grant with the recent lifting of the moratorium on gas-fired power stations? [Interruption.] In addition, may I draw the Secretary of State's attention to the application for a combined cycle gas turbine station in Enderby in my constituency? It is causing a great deal of concern there.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I make no comment on what my hon. Friend the Member for Bolsover (Mr. Skinner) said from a sedentary position, although I think that he may have been quite accurate. On the important issue of sustainable energy, we were able to support the lifting of the moratorium on gas-fired power stations because we want a diversity of provision in the United Kingdom energy sector. One way to achieve that balance is to ensure that gas-fired power stations have the opportunity to make a contribution.

However, encouraging that contribution must run alongside the need to maintain the coal industry, and that explains why we will be providing a subsidy of £110 million to support the coal industry over the next two years. That goes along with having a sustainable energy policy for the United Kingdom.

Photo of Bob Blizzard Bob Blizzard Labour, Waveney

Does my right hon. Friend agree that it is important that we sustain our reserves of oil and gas in the North sea for as long as possible by ensuring that as many marginal fields as possible are fully exploited? There was a clear message in the pre-Budget report that the Chancellor was looking for new levels of investment from the oil companies, which was why he resisted the temptation to impose some kind of windfall tax. What assessment has my right hon. Friend made of new levels of capital investment by the oil companies?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

In the context of how we can develop further the reserves that are still held in the North sea—and certainly off the coast of my hon. Friend's constituency of Waveney—there are opportunities, but they will require additional investment from the oil and gas companies. It was wholly appropriate for the Chancellor to indicate that, in reviewing—as we always do—the fiscal and tax regimes affecting the sector and the industry, he will take into account the level of investment made by those companies. I hope that they will look carefully at the new opportunities in the North sea. Carrying out such investment will place them in a far stronger position, so we should encourage them to do so.

Photo of Nick Gibb Nick Gibb Shadow Spokesperson (Trade and Industry)

How does it help the promotion of an environmentally friendly energy policy to have banned the building of new gas-fired power stations for the past three years and to have the implementation of the new electricity trading arrangements delayed yet again, adding £57 to the average electricity Bill? We have higher electricity prices and higher CO2 emissions. They seem to be the cornerstone of the right hon. Gentleman's energy policy—damaging business and damaging the environment.

Who is responsible for the delays to the new trading arrangements? Is it the Department of Trade and Industry, is it Ofgem, or is it, again, the Secretary of State?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I should have thought that the hon. Gentleman might have supported the decision to lift the moratorium on new gas-fired power stations. It is not true that there was a ban—I allowed one or two to go ahead because of their particular circumstances.

The hon. Gentleman raises an important question about the price of electricity. We have changed the way in which electricity is to be traded, and he referred to the new trading arrangements. Of course, the right hon. Member for Wells (Mr. Heathcoat-Amory) was an architect of the system that we inherited—an inefficient system that inflated prices artificially.

Because of the changes that are being introduced and the forward market, electricity prices are already down. The new trading arrangements will be in place, and prices are already down as a result of that. They are down on last year, the year before that and the year before that. Consumers are seeing a reduction in their electricity prices because of the action that the Government have taken. We have moved away from the failed privatisation of the previous Government. Our system is delivering to consumers, which theirs failed to do.