Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.Donate to our crowdfunder
In December 2007, 5 per cent. of the UK's electricity and about 2 per cent. of its energy came from renewable sources. We are taking steps to increase this through better grid access, reforms to planning legislation, the banding of the renewables obligation and a range of other measures as part of the drive towards having 15 per cent. renewable energy. However, no sector is immune from the credit crunch, and we are also urgently looking at how measures such as the working capital scheme can help the renewables sector and whether further measures are necessary.
The Secretary of State mentioned the lack of credit, but we must also consider the rising turbine costs, which are causing many utility companies to question the validity of offshore wind farms. I am concerned, in particular, about the London Array project in the Thames Gateway, so what more can he do to make sure that that scheme goes ahead, despite Shell's withdrawal? That scheme, on its own, will contribute 10 per cent. of the Government's commitments.
The hon. Gentleman raises an important issue about London Array. We have recently overtaken Denmark as the world leader in offshore wind, despite the difficulties that he mentions. We are pleased that Masdar has said that it will invest in the London Array project, and we are keeping closely in touch with investors on issues such as the cost of turbines and the exchange rate. We agree that we need to ensure that the project goes ahead.
Does the Minister agree that these targets would be less important if it were not for the fact that, after the miners went on strike 25 years ago—in an honourable dispute that was not for money to fill their own pockets, but to ensure that pits remained open—150 pits and the clean coal plant at Grimethorpe were closed before the Tories left office? The targets we are talking about today would be a lot closer if that had not happened. Is it not a scandal that our legacy on energy is that we are in hock to countries that we cannot even trust?
My hon. Friend makes his point very eloquently. He is right that this country's energy policy has been beset by short-termism. He is right about clean fossil fuels, carbon capture and storage and coal being part of the energy mix. That is why this Government are determined to ensure that we drive the market towards carbon capture and storage, and make clean coal part of the energy mix in the years ahead.
It is different for electricity and for gas, but it ranges between 2 and 14 per cent. of the total, depending on how it is calculated. I profoundly disagree with the right hon. Gentleman on this issue, because there is no low-cost, high-carbon future for this country. Demand from India and China will drive up the price of oil and gas, and we cannot assume that $40 a barrel today will be a permanent price for oil. That is why it is right to plan for and move towards a low-carbon future. The danger of the right hon. Gentleman's approach is—as I said in reply to my hon. Friend Mr. Skinner—that it is a recipe for short-termism, and we will end up in the same situation as a year ago, with high oil prices and without the indigenous sources of fuel that we need.
Yesterday, I was fortunate enough to attend the launch of a report on renewable energy, and one of the points made by the industry people at the launch was that there are still problems obtaining consents for renewable energy in rural areas, where—without making a political point—Labour is not the dominant party. Does my right hon. Friend accept that we have to do something about the way in which, especially in rural areas, valuable renewable energy projects are too often delayed by the obstructionism of unsympathetic local authorities?
My hon. Friend makes an important point. Those who say that they are in favour of renewable energy should practise what they preach. In a way, we should be grateful to Charles Hendry who said:
"I think frankly you will find different views among colleagues—colleagues are more divided on onshore wind than nuclear power."
That speaks to an important question: if we are in favour of renewable energy, we should make sure that it happens throughout the country, including at local authority level.
Yesterday, the electricity network strategy group published an interesting report on the substantial investment needed to strengthen the grid to transport renewable energy, especially from the north of Scotland. What action is he taking to deal with the perennial problem of transmission charges, to ensure that we get the benefit of renewables?
The hon. Gentleman raises two separate issues. I took powers in the Energy Act 2008 that are available if Ofgem and the national grid fail to sort out the connection to the grid. We hope that they will make an offer on 450 MW, which would come from connecting various projects to the grid. The report that he mentions is an important contribution to how we set up the system of regulation to ensure that we have the smart grid that we need.
Does my hon. Friend agree that energy from waste is a proven technology that can deliver a great deal for our country? Is he aware that he must have the courage to face up to cowardly local authorities that will not make decisions? Planning stops everything, and PFI, at the moment, is stopping everything. Will he be courageous and lead so that we can have some energy from waste and can make a good resource more valuable?
I agree with my hon. Friend, and I hope that I will live up to his recommendation to be courageous. In the civil service, that is not always a compliment, but I think that my hon. Friend is right to say that one should be courageous on these issues. Energy from waste can play an important part in the energy mix. Waste that would not otherwise be used for good purposes can be used to heat our homes and to make a real difference to our energy needs. I agree that this needs to be pursued urgently.
At a recent planning appeal in my constituency, the Government inspector overturned a decision by the local planning authority to reject a single wind turbine application. Given that Fenland district council has one of the best records for wind farm development in the whole country, where does that leave local democracy and the wishes of local people?
I cannot comment on the individual case, because I do not know the details. However, let me say more generally to the hon. Gentleman that I think that all of us in this House who believe in renewable energy and who believe in the part that renewable energy can play have a responsibility to do all we can to encourage wind farms—[Hon. Members: "Waste of time."] Some Opposition Members say that they are a waste of time, but I profoundly disagree. To be completely honest, I am afraid that that attitude will get us nowhere. If we preach renewable energy at a national level, we need to encourage it at a local level.
My right hon. Friend has just recognised that there is a big difference between the setting of renewable energy targets nationally, which everybody supports, and their implementation locally. I live in Derbyshire, which is very rural but is Labour from the constituency down to the local authority. We have a gasification unit and a wind farm is now in the planning system. Will my right hon. Friend consider what they do in France, which is to have a 2 km buffer zone around any such projects, which goes from the site to the nearest residences? To please the Opposition, we could perhaps have a 2 mile buffer zone.
I will definitely consider my hon. Friend's proposal. It is right to understand the concerns of local residents about these issues, but I think that in 10, 20 or 30 years, people will look back on this debate as they do on the debate about electricity pylons, when people asked how we could possibly have those things that disfigured the countryside. I am afraid to say that this is a cultural change that needs to happen. We need to be sensitive and to understand that local communities need to benefit from wind turbines in their area. That is very important and some of the more progressive-thinking companies understand that, but we do need to move forward with it.
If we are to have the secure energy future that the Government want and to meet the climate change targets that the Government have set out, as well as having a future for coal with carbon capture and storage, does the Secretary of State accept that we need a renewables energy industry in which investors can feel real confidence that they will be able to find the billions of pounds that yesterday's report said we needed? That needs the Secretary of State to co-ordinate with the Treasury and those responsible for planning so that everybody seeks to deliver that goal, which has to be at the front and the centre of the Government's energy policy for the future.
I agree. Let me take the opportunity to welcome the hon. Gentleman to the Front Bench, as this is our first interchange at Question Time. He brings a wealth of experience and knowledge on these issues.
I agree that co-ordination is necessary. We passed the Planning Act 2008 to encourage the speeding-up of renewable technology and renewable energy projects and we moved on the feed-in tariff, about which I know the hon. Gentleman is rightly enthusiastic. The credit crunch is also a concern, and I have recently returned from the United States, which faces the same issues. No sector can be immune from that. It is an added complication to the issues that we face, and that is why we are urgently considering how existing schemes, such as the working capital scheme, can be used by small and medium-sized companies and why we are also considering whether other measures are necessary.
Yesterday, the Prime Minister told the American Congress that only by tackling climate change could we create the millions of new green jobs that we need. Yet back in the real world here not only are we flagging in our efforts to meet our 2020 renewables targets, but E.ON UK has been quoted as saying that the economics of the London Array project are on a knife edge. In addition, UBS is predicting a 20 per cent. decline in investment in new wind capacity this year, and Siemens has seen a 28 per cent. year-on-year decline in renewables orders. However, instead of seeing them drive real job-creating change now, all that we see from this exhausted Government is the same old dither and delay. So will the Secretary of State say how many new green jobs his climate change and renewables policies will create this year?
Thousands of green jobs will be created. The attitude displayed by the hon. Gentleman, who knows that Conservative councils throughout the country oppose renewable energy and wind turbines, does not speak well for him. I have said that no sector is immune from the credit crunch, which poses added difficulties. I have also said that we are looking at what we can do, but the point that I would gently make to him is that the Government are acting on the credit crunch, whereas all we hear from the Opposition is "do nothing." The £20 billion working capital scheme is precisely designed to get finance to the companies that need it. Instead of carping from the sidelines, he should support the measures that the Government are taking on recapitalising the banks and encouraging lending.