[Mr David Amess in the Chair] — Energy Supply

Part of the debate – in Westminster Hall at 2:55 pm on 6th September 2012.

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Photo of Laura Sandys Laura Sandys Conservative, South Thanet 2:55 pm, 6th September 2012

I had an interesting experience with my right hon. Friend Dr Fox, who has never been know to be a great proponent of Europe. He said in a Chatham House speech before the election—perhaps in 2008 or 2009—that European Union member states should become a co-ordinated and active consumer of energy when it comes to Russia and certain parts of central Asia. I therefore agree with my hon. Friend Neil Carmichael.

To return to the question of a mixed energy economy, new technologies must also play a part in the resilient energy mix, but anyone who thinks that any of the energy generation sources are pain-free is misguided. Planning applications for shale gas, which I have had in my area, make onshore wind farms look like a walk in the park. The cost of nuclear, including de-risking, will be a lot more than the Government think. In many ways, that reiterates what the Committee Chairman said about considering taking on responsibility for build costs.

The wind sector needs to become much more efficient and to understand how to better engage communities. We must recognise that no energy solution comes without some pain. We must not necessarily look to pick winners and losers, but consider how the mixed energy economy needs to be addressed. We all need to appreciate that opportunities are not simple and straightforward.

The Minister faces an interesting in-tray. Energy security will be achieved through a range of Government policies, although sometimes the policies are so complex that they might create competing behaviours. There are capacity mechanisms, increasing market liquidity, which is crucial, storage policies, which were mentioned by my hon. Friend the Member for Stroud, distributed energy incentives, which have not had sufficient profile and enough focus placed on them by the Department, and smart technologies. A range of interactive measures can help to reduce wastage, increase productivity and hedge costs. If energy security means anything, we must ensure that we closely consider demand reduction. Our Committee was a bit concerned and rather disappointed that the Department did not include in the draft Bill a significant set of policies on demand reduction. That can be a very exciting win for the UK when it comes to competitiveness and to building a resilient and modern economic base.

In conclusion, I want to highlight a significant problem with the country’s energy security. This reflects something that the Committee Chair said, and I hope that the Minister will be able to resolve it. The issue is policy certainty. Companies are much less worried—strangely enough—about what incentives there are, or about exactly what they feel they will get out of choosing one energy source or another. However, we currently have rhetoric and we have reality. We have a fast track on the low-carbon economy with one measure, and the brakes appear to be put on with another. We have an opportunity to build a really strong economy around our need for energy investment, but we sometimes confuse the investment community about our intentions. Certainty and clarity of direction will offer the Minister the greatest opportunity for success when he travels the world’s energy company boardrooms, selling the UK as one of the most predictable and reliable investment locations in the world.