17:31 Huw Irranca-Davies (Ogmore) (Lab)

I welcome this general debate about national policy statements, which is timely and necessary. I thank the Energy and Climate Change Committee for its continuing effort and expertise and, of course, the Committee on Climate Change for its recommendations and analysis. We share much of the Minister’s analysis of the challenges, but that is not surprising because, as I say with some humility, my predecessors laid the groundwork that he is continuing. We are glad to see him and his colleagues taking up the baton with such relish, because they do so at a critical juncture, when delay and dithering would be terminal to investor certainty, UK energy security and our low-carbon future. There is a real need to get on with that work.

On that thought, the shadow Front-Bench team and I—and I am sure the whole House—send our best wishes to the Secretary of State and his team on their negotiations in Cancun. In government, Labour adopted the world’s first legally binding framework to cut emissions, by 80% by 2050, signalling our clear intent and leadership on tackling climate change. My right hon. Friend the Member for Doncaster North (Edward Miliband) played a difficult hand with some great skill and not insignificant personal commitment at Copenhagen when he was Secretary of State, and although the job has not become any easier, we hope that the new Secretary of State will keep the momentum going.

Let us reprise where we are, as laid out in the documents before us. One quarter of the UK’s generating capacity will close by 2018, and as much as 30% will need to be replaced by 2020. Without prompt action we face an electricity generation gap in the next 10 to 15 years as our nuclear and coal-powered stations are retired. World energy demand is rising and often highly politicised; as North sea reserves decline, we are increasingly reliant on imported oil and gas; and, as the Minister says, electricity demand is forecast to double over the next 40 years. That will require rapid decarbonisation of the electricity sector, diversification of the energy sector with a decreasing reliance on fossil fuels and unabated combustion, and an increasing reliance on renewables, low-carbon energy and decentralised energy.

Yes, I agree entirely. It was wonderful news that after a slight delay to do with the coalition agreement, getting things in order, and some wrangling with the Treasury, we had the announcement that £1 billion would be available—the commitment that the Labour Government had made to the first phase of CCS on a commercial scale. However, it is equally essential that we have phases 2, 3 and 4. I am sure that the Minister is committed to continuing that wrangling with the Treasury to ensure that we find the mechanisms that will allow that to happen, and promptly. We need it for coal, but we also need it for gas. I welcome the in-principle announcements that have been made about phases 2, 3 and 4, but what we are waiting for, as with so much else, is the detail to make it certain.

Is it not the case, though, that the report by the Energy and Climate Change Committee criticised the previous Government for leaving it quite so long to get to the stage where the NPSs were being considered? It published its report in March 2010, when the Government had had from 2005 onwards to put them in place.

The hon. Gentleman waxes eloquent about the right hon. Member for Doncaster North (Edward Miliband). Can he therefore explain why the Public Accounts Committee, when it reviewed the Department of Energy and Climate Change, said that it lacked a definite sense of energy and purpose under the now Leader of the Opposition?

Rather than take further interventions, I will get into the nitty-gritty. Some of my questions for the Minister arise from his appearance yesterday before the Energy and Climate Change Committee, which, as usual, did a very good job.

When we return to this matter with the finished articles in front of us—the final, beautifully honed, polished NPSs—will we be afforded adequate time? Will each national policy statement have adequate, separate parliamentary time in line with the coalition Government’s stated aim of enhancing parliamentary scrutiny of NPSs in their planning reforms, or will they be mixed together like a bag of all-sorts? If the coalition Government are true to their aims, the Minister should help us through the usual channels to push for days, not hours, to debate the NPSs. Much as we dearly love the Secretary of State for Communities and Local Government—we may ask who would not do so, when he is described on the front page of his website as “an absolute star” and a “saintly figure”, among other less self-effacing and more humorous things—when it comes to debating energy NPSs, we want the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), or the Secretary of State for Energy and Climate Change. We want them—no one else will do. Can the Minister guarantee that he and his DECC colleagues will not be squeezed out of their seats by the right hon. and saintly Member for Brentwood and Ongar?

In the coalition’s drive for parliamentary scrutiny, I am sure that the Minister will be able to confirm today that there will be a separate vote on each NPS, having been unable to confirm it yesterday to the Energy and Climate Change Committee. To mix the nuclear issue with those of fossil fuels, renewables, pipelines and the electricity network infrastructure would tax the wit of Wilde and the wisdom of Solomon. For us mere mortals, will he make representations through the usual channels to ensure that the votes are separate?

I know that the Government do not particularly like the idea of school sport, as we discovered yesterday, but the Minister has been indulging in his favourite sport with his ministerial colleagues—an extreme sport known as Treasury-wrangling. After some delay, he came out with a partial win, announcing the first stage of commercial CCS—carbon capture and storage—which has delivered, after a slight delay of six months, the first part of Labour’s commitment to CCS. We look forward to him rapidly bringing forward not only that pilot, but the three others, including a pilot on gas CCS. However, may I urge—or should it be “nudge”, in the Government’s new lexicon?—the Minister to get on with that pronto? He has honestly and publicly acknowledged that there is no future for coal in the UK unless that technology is made to work. However, there is also a global imperative, as developing nations rush towards their own coal-powered futures. As such, this Government must avoid any further delay on the complete CCS programme of work.

However, what if CCS on a commercial scale does not work? What if there are delays because of cost, lack of funds or complexity, or because the technology to bring it forward is not available on time, or even not at all? We all want CCS to succeed—we all say that it has to succeed—and we are full of hope that it will, both for UK energy security and abating the global exploitation of fossil fuels. However, a reasonable man—and a reasonable Minister—cannot just assume that that will happen, and must therefore make contingency plans.

I am glad to say that I am not an engineer, but that is exactly the point behind the large-scale commercial CCS pilots. That is exactly why we are running them, and we all hope that CCS will work. Indeed, I recognise the hon. Gentleman’s confidence that it definitely will work. However, there are some nagging “What ifs?”. What if CCS is not delivered on time, or cannot happen because of the technology, the scale or the investment?

The coalition Government have struggled to come to terms with their identity crisis on nuclear—do they love it or hate it, and will they unequivocally support it or sit on the fence—but the Minister deserves some credit for helping his Lib Dem comrades down off the fence. However, the industry still waits for the long-term certainty of market signals that will bring forward the investment at all, let alone on time. So, there are “What ifs?” on nuclear, decentralised energy and CCS, as well as on other things, if only we had the time to discuss them in this short debate.

Meanwhile, part 3 of the overarching energy policy statement details new electricity projections. It outlines the need for 59 GW of new capacity by 2025, of which as much as 33 GW will be from renewables, thus leaving a significant potential gap, on top of the energy gap that we already acknowledge, if the Minister’s best laid plans do not come to fruition. This raises the question of how the Minister can avoid re-carbonising instead of de-carbonising the energy sector if an unabated dash for expensive imported gas rushes in to fill the looming energy gap. The dash for gas and the energy gap could be made far worse if any of the “what ifs” were to happen. The Minister has honestly and openly accepted that gas will form part of our journey to a de-carbonised future, but how will he ensure that we do not stumble into a new generation of unabated gas use by default?

As a former Minister, I recognise the problem of dealing with highly complex issues and scenario planning. I therefore ask the Minister to share with the House his scenario planning and risk analysis for the energy market, before we come to debate the national policy statements in detail on the Floor of the House in January. If there is to be real democratic accountability, the House needs to see the complete assumptions on which the Minister is making his case for the NPSs and for the energy market underpinning them. We assume that these have been done. If nuclear, CCS, decentralised energy or a whole host of other variables were delayed or undeliverable, what is plan B, plan C or plan D, and would any of them allow us still to reach our aims on energy security and low carbon energy?

In that regard, what is the Minister’s response to the recommendation of the Committee on Climate Change, in response to the proposals for national policy statements on energy, that the Government act on the Committee’s proposal that the widely accepted concept of fully de-carbonising the electricity sector by 2030 should be made explicit in Government policy and NPSs? It has been widely accepted anyway, and it would drive the achievement of the 2050 targets on greenhouse gases. The Committee asserts that making explicit that commitment would drive forward decision making on new generating capacity and give certainty to investors regarding the Government’s overarching energy policy.

The shadow Minister has highlighted the concern that many of the Government’s plans are predicated on CCS working and on investment in nuclear coming through, and he has asked what plan B is. Can we look forward to hearing from those on his own Front Bench what their plan B would be if they were in government?

I can give the hon. Gentleman a guarantee that we are committed to assisting the Government to deliver this, but to ignore the potential scenarios of not making good in any one of these areas would be to bury our head in the sand. There are real concerns that there could be delays in one of these areas, and if that were to happen, we, as a constructive Opposition would have to work jointly with the Government to fathom a way in which we could still deliver de-carbonised energy, hit our carbon reduction targets and deliver energy security and affordable energy. I have not even touched on the issues of the green deal and the green investment bank that were raised by other Members earlier. That is why we need to see the Government’s working assumptions, the detail behind the Minister’s development of these NPSs and, as soon as possible, the proposals for electricity market reform.

I am pleased that the Minister is talking a lot about the intentions behind the NPSs, but we are really up against time. I know that he will once again stand up and say that that is all the fault of the previous Administration, but actually it was the previous Administration who put in the foundations for what the coalition Government are now rightly taking forward. We will look to the Government to make good, and we will be constructive in helping them, but the House and the Energy and Climate Change Committee need to be able to wrestle with the facts as well as with the broad thrust of the statements. I have spoken longer than I intended to, and I look forward to hearing the comments of other Members.

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18:03 Damian Collins (Folkestone and Hythe) (Con)

My concern in that respect is that no energy company would take forward such a proposal for Dungeness if it were not included in the list of preferred sites. The Minister said to the Energy and Climate Change Committee yesterday that national policy statements

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18:10 Dr Alan Whitehead (Southampton, Test) (Lab)

EN-1 is an overarching policy document setting out our energy planning framework for the future. It deals with our climate change commitments, and our commitments to reduce our greenhouse gas emissions by 80% by 2050. That, in turn, means the documents have to address the decarbonisation of the UK’s energy supply. The Committee on Climate Change wrote to the Secretary of State for Energy on 17 June, stating baldly:

“The path to meeting the UK’s 2050 target to reduce emissions by 80% requires that the power sector is largely decarbonised in the period to 2030 (e.g. average emissions should be about 100 g/kWh in 2030 compared to around 500 g/kWh currently).”

I assume that the Government largely agree with the Committee on Climate Change that to meet the requirements of our climate change budgets this, or something like it, should be the scenario and that that will be reflected in the planning documents that are published. After all, if we are to achieve these goals we cannot just hope they will happen; we need to plan for them, and to achieve them through a combination of planning signals, market incentives and supply and trading arrangements.

EN-1 states that under some of our pathways some revisions have taken the scenario beyond 2025 towards the 2050 targets. It states:

The hon. Lady is absolutely right. In response to the Energy and Climate Change Committee report examining the previous national policy statements the Government have accepted they need to undertake some sort of spatial planning arrangement which will look at the cumulative impacts between various arrangements as they progress. She is also absolutely right that in this NPS that question of decarbonisation of supply needs to be part of the process, not anterior to it. The current level of emissions of our energy supply means that if we are to get to that position, gas at about 450 grams per kWh unabated probably will have no part to play in the energy economy by 2030—when abated, it comes in at about 100 grams per kWh.

If we reach the renewables targets for wind, and we probably will, given the amount of wind power already in planning, we will have about 33 GW of wind power on the grid. That means that we will need 26 GW of new build non-renewables or non-wind. Of whatever type, they will, for the reasons I have outlined, need to be low-carbon or lowish-carbon. Some 8 GW are under construction and almost all that construction relates to gas. That leaves a balance of 18 GW. Some 9 GW is not under construction but has planning permission. The Government dismiss that as uncertain, but 5 GW of that relates to gas; plans for a further 7 GW are under consideration, most of which also relates to gas. So it appears that most of the current gap is set to be made up by gas. As the Select Committee has been told by the Committee on Climate Change, more gas is in the pipeline in terms of planning, permissions or build than we need for that future decarbonisation strategy to work.

If industry decides as it appears to be deciding, it will choose gas. If it is to be gas and that gas is unabated or only partially abated, the decarbonisation of our electricity supply will not happen.

Thank you for your help on that matter, Mr Deputy Speaker. I agree with the hon. Gentleman’s point about decarbonisation, but it prompts the question: how much cost penalty would he advocate as reasonable in order for us to go down the route of a totally carbon-free mix in the way he is suggesting? Each household in the country already pays about £50 for the renewables obligation. The implication of his remarks is that the sum should be very much higher. I wonder whether he has thought about that.

Indeed I have. I think we will find out considerably more about that in the material that will come out on energy market reform, particularly the details on what a carbon floor price will look like and what capacity payments will look like to keep the energy balance more decarbonised in future. Yes, that will add costs to the system and there need to be circumstances in which those can be abated for the public, but that is a particular issue for the energy market reform material to address.

When the Minister was asked in the recent Energy and Climate Change Committee sitting about the gap that I have mentioned he said that it is possible that 16 GW of the 18 GW gap could be new nuclear. That represents 10 new nuclear power stations by 2025, and although that would solve the gap problem it has the unfortunate downside of being inherently implausible. The Minister may want to rectify what he said in the light of that implausibility at a future date.

The Committee on Climate Change’s estimate for the nuclear roll-out, produced in 2009, said that there would be a maximum of three nuclear power stations online by 2020, even based on optimistic build and planning time scenarios. Indeed, as we have seen, the timing of the justification process has already slipped.

That leaves a gap that is not filled by nuclear. It is clear at the moment that there is an apparent contradiction in our national planning statements. We want to decarbonise our supply, but for 2025 we are pushing towards having a majority of gas as opposed to a small amount of peripheral gas at peaking periods, which is what our future energy supply should be based on.

That is compounded by NPS EN-5, which attempts to collate permissions for plant and line. It will therefore replicate the question of providing grid capacity for plants as they stand and not provide new grid capacity for plants that are not yet completed and that will be needed for a decentralised and decarbonised future energy supply.

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18:26 Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)

I am grateful for the opportunity to speak in this debate. I served for a short time on the Energy and Climate Change Committee before being moved on to other things.

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18:32 Sarah Newton (Truro and Falmouth) (Con)

As hon. Members will be aware, I represent a constituency in Cornwall, where we aspire to be world leaders in the new low carbon industrial revolution. As a result I have a particular interest in how the relevant parts of the NPS support the development of renewable energy. We are blessed with an abundance of natural resources that make us ideally situated to develop significant quantities of low carbon electricity to feed into the national grid. In the universities of Exeter and Plymouth and the Camborne school of mines, we have a world-leading knowledge base in renewable and sustainable energy. In local companies such as GeoScience and Kensa Engineering, we have pioneering and highly skilled engineering companies. The wave hub off Cornwall’s north coast is the first of its kind in Europe and it enables the testing of prototype wave and tide devices. We have great light for photovoltaics, an abundance of onshore wind and the hottest rocks in the UK. What we do not have is a national grid infrastructure able to take the anticipated volumes of electricity that can be generated locally to be fed into the grid. I believe that the NPS will help to tackle that wholly unsatisfactory situation.

Although I understand the Government’s reasons for feeling that there is no urgency about including technologies such as wave and tide in the NPS until large-scale commercially viable schemes have been developed, I urge the Minister to keep them in mind for the next round and subsequent revisions and, in the meantime, to do all he can to support that sector of renewable energy generation and to keep a watching brief on how the Marine Management Organisation handles its responsibilities. He will not be surprised to hear a similar plea from me for deep geothermal energy generation, which has the potential to contribute 5% of the UK’s electricity. That technology, which is tried and tested in other countries—often developed by UK engineers—is yet to receive the support it deserves from Government in this country. With my hon. Friend’s assistance, I hope to reverse that.

Given the scale of the challenge ahead, it is vital that NPS is capable of being revised and updated, so that, as we learn more about new and emerging technologies and develop an evidence base for their capacity to deliver energy into the grid and to contribute to the Government’s aim of decarbonising electricity production, they are supported and given the chance that inclusion in the NPS will provide.

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18:39 Andrew Percy (Brigg and Goole) (Con)

On the relationship between national policy statements and local councils, I echo some of the concerns expressed by the Energy and Climate Change Committee, which said:

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18:49 Charles Hendry

My hon. Friend the Member for North Warwickshire (Dan Byles) talked extremely clearly and effectively about the energy security needs that we have to address. It is possible that CCS may not work, or that the price may be too high, but if we do not push the process forward and take advantage of the extraordinary opportunities that we have in this country, we will always be followers and never be leaders. That is why we have been so keen to take forward that technology.

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