We should not underestimate that. It is important that it is properly considered. The hon. Lady will know that the Government are committed to sustainability in those terms. If I have time, I will say more about that, but if I do not, I would be more than happy to write to her with the detail.
The hon. Lady is right that it would be wrong to be cavalier about that, just as it would be wrong—and I say this to my hon. Friend Guy Opperman, who is a great champion of the wood panel industry, and rightly so—for us not to take into account unintended consequences. The unintended consequence for farmers, as my hon. Friend Glyn Davies mentioned, can also be profound, and it is about straw too. Pig meat farmers, for example, are concerned about the effect on straw prices of its use in biomass. My hon. Friend raised the issue of dairy farmers. I take that point, and we will consider the matters. It is important that there is no displacement effect. The unintended consequence is as significant as the virtue of what we are trying to achieve.
But the virtue is a profound one. We are talking about a proven source of energy. At the end of the third quarter of 2012, the total electricity generating capacity of biomass electricity generating stations was 3.5 GW, which was an increase of more than 900 MW over the previous year. It may not be known that landfill gas is 1 GW of that capacity. For many years it has been an important source of energy, predating some other technologies that get more airtime, perhaps because they are perceived to have greater glamour.
With the right criteria in place, by 2020 as much as 11% of the UK’s total primary energy demand—for heat, transport and electricity—could be met from sustainably sourced, biologically derived biomass. Most of it would be from wood, and our analysis indicates that that can be done without significant effects on food production or the environment. Biomass can, therefore, play a greater role, but I am mindful of displacement and sustainability. Biomass also offers controllability and predictability, as I suggested earlier, so it can provide both base-load generating resource and peak power energy as required.
It is important to recognise that biomass conversion is a cost-effective and quick means of decarbonising our electricity supply. In July last year we announced our revised levels of support for biomass under the renewables obligation and set out new bands to support the conversion of coal-powered stations, as we have heard. I recognise the challenge of Tilbury and I am happy to work, along with my officials, with my hon. Friend the Member for Thurrock to ensure that we do what we can to facilitate the process. There is, of course, a commercial decision at the heart of that, as my hon. Friend well knows, but the Government will do what they can to ensure that the process is as equitable as possible. I appreciate that my hon. Friend has been a great champion of Tilbury because she knows that the issue is not only about energy; as so many hon. Members have reported, it is about jobs and skills too.
My hon. Friend the Member for Selby and Ainsty made that perfectly clear in respect of his constituency. My goodness, I have met him a number of times to talk about this subject, including about Eggborough and Drax. I am pleased to say that my Department has recently written to Eggborough power station, as he knows, and set out the process by which it can take its ambitions further forward. I hope that that has been helpful; it has certainly added clarity to the circumstances the station is in. There are further steps to be made, and I assure my hon. Friend that they will not be unduly lengthy and that they will be clear to Eggborough. We will advise and support the process that he is so passionate about ensuring comes to a happy outcome. I am grateful to him for giving me the opportunity to put all that on the record.
I am also grateful to other Members, including my hon. Friend Ian Swales, for allowing me to say a brief word about carbon capture and storage. I want to affirm what I said in an intervention, which is that taking forward the CCS projects, with the £1 billion competition, will do so much to change our assumptions about future energy—CCS can give a long-term future to gas, of course, and to coal I hasten to add. I want to make it clear that the projects that have not made the final two are of considerable interest to us and that we will maintain a dialogue. I will speak to my hon. Friend personally about some of the details later today.
Sustainability matters too though, and we have put in place demanding criteria for the supply of fuel. The hon. Member for Stretford and Urmston has emphasised sustainability a number of times and the shadow Minister, Tom Greatrex, was right to draw it to our attention in reference to the renewables obligation statutory instrument that we debated a week or two ago. It is right that we look at the supply of wood and that we take account of the definitions of what waste wood really is. I have already said that that work is ongoing, but I am very happy to share it with the House at all opportunities and to continue to an outcome with which the wood panel industry, in particular, is happy.
The work we are doing on sustainability requires ongoing consultation. The sustainability controls that we have put in place are still the subject of further discussion. Many hon. Members have raised that matter with me when we have debated such things in the House, and I can confirm that we are tightening our thinking in this area. We intend to ensure that we can move ahead with confidence, because we think that biomass is so important.
Biomass must, however, also be cost-effective. We make no apologies for insisting that we must deliver value for money for the energy bill payer, maximising the amount of renewable energy and carbon reduction we receive for our investment. Coal conversions offer, perhaps, the best means of ensuring that value for money, and using waste to generate electricity also provides a cost-effective route, as long as we can accurately define what waste is. Let me just say this on waste: it seems that the location of this kind of biomass plant should be close to the source of supply, and ideally close to the source of demand, too. They are industrial plants with an industrial purpose, and I want to emphasise that.
I thank my hon. Friend the Member for Selby and Ainsty again for drawing this matter to the House’s attention. I confirm that the Government are entirely committed to biomass and to its role in our energy mix. I am glad that we have had the opportunity to talk about this, and while I am the Minister, and while I am driving the policy, Ruskin’s advice, about being straightforward about our objectives, will be not only my view, but the Government’s view.