Ed Davey (Liberal Democrat)

Let me reassure my hon. Friend. We work very closely with our European colleagues, and I formed the green growth group, currently working with about nine other member states, including our German and Dutch colleagues. We need to reform the ETS to make sure we have a functioning and effective carbon market in Europe, and we also need an ambitious 2030 target for greenhouse gas emissions. The UK Government have agreed that we will seek a 50% target in the context of winning a global climate change treaty.

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Mr Peter Lilley (Hitchin and Harpenden) (Con)

What is the point of us closing coal-fired power stations if Germany is opening 20 of them? What is the point of us having a carbon tax and reducing emissions if we thereby release trading permits for other countries in Europe to emit more carbon?

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Ed Davey (Liberal Democrat)

My hon. Friend is right. We do not want to see carbon leakage; that would not help the climate, and it would not help our economy. That is why I agreed with my right hon. Friend the Secretary of State for Business, Innovation and Skills a very generous package, working with the Chancellor, to compensate energy-intensive industries for the indirect costs of the ETS and the carbon price floor, and it is also why we have exempted energy-intensive industries from the costs of contracts for difference. We want to ensure we make progress on climate change, but we also want to ensure we keep successful businesses in the United Kingdom.

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Chi Onwurah (Labour)

4. What his assessment is of the potential effect on the UK wind industry of not setting a target to decarbonise the power sector by 2030. ( 158077 )

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Paul Blomfield (Sheffield Central) (Lab)

7. What representations he has received on setting a target to decarbonise the power sector by 2030. ( 158081 )

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Alison Seabeck (Plymouth, Moor View) (Lab)

13. What representations he has received on setting a target to decarbonise the power sector by 2030. ( 158089 )

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Diana Johnson (Labour)

15. What representations he has received on setting a target to decarbonise the power sector by 2030. ( 158091 )

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Ed Davey (Liberal Democrat)

The Government have listened to a wide range of views on the issue of setting a decarbonisation target and have legislated to set one. We fully recognise that investor certainty is essential to delivering our energy and climate goals at the least cost and have already provided very clear signals to industry about the long-term trajectory of the electricity sector; for example, through our commitment to the levy control framework, through the Energy Bill, through carbon budgets and through our commitment to ambitious long-run targets on renewables, power sector decarbonisation and carbon emission reductions.

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Ed Davey (Liberal Democrat)

The hon. Lady needs to look at what has happened. We have drafted the legislation so that we can set a target and that has been welcomed. She should remember that when the draft Energy Bill was published and we first started to discuss electricity market reform, there were no proposals to set a power sector decarbonisation target—not from the Opposition or from any other party in this House—but I, as Secretary of State, argued in the Government to set such a target, and that is what we have done.

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Paul Blomfield

We have very little economic growth in this country at the moment, but last year the CBI estimated that one third of the growth that there is comes from green business. To keep growing, green businesses say they need certainty about Government policy and they want a target in law to decarbonise the power sector by 2030. Why are the Government refusing to listen?

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Ed Davey (Liberal Democrat)

I am afraid it is the Opposition who are refusing to listen. They should look at the Energy Bill, in which we have legislated for the power to set a decarbonisation target—the first country in the world to do so.

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Alison Seabeck

On Tuesday, the Government said they opposed the 2030 decarbonisation target, in part on the ground that it would increase bills. If that were so, one would expect Fuel Poverty Action to agree with the Government, but it does not. Instead, it said:

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Ed Davey (Liberal Democrat)

I worry about all the Kingstons in the United Kingdom and as Secretary of State for Energy and Climate Change, I represent all of them. I am working extremely hard to make sure we get investment in the energy sector in this country and we are working with Siemens. The hon. Lady may be interested to know that, in fact, Siemens did not sign the most recent letter from a number of companies about this issue. In our discussions with Siemens, the issues that have come up are contracts for difference, strike prices, ports and infrastructure, and we are working with the company. The hon. Lady ought to get behind us and support us.

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Stephen Mosley (City of Chester) (Con)

One of the key ways the Government can decarbonise power generation is by increasing investment in the nuclear sector. URENCO has a base in Capenhurst in my constituency. In April, the Government announced that they were to sell their one third share in the company, and in May the Dutch Government announced that they would sell their one third share. Will my right hon. Friend update the House on the progress of the sale?

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The Minister of State, Department of Energy and Climate Change (Gregory Barker)

The coalition is committed to growing the green economy. An unprecedented £29 billion of new investment has been announced in renewable energy alone since 2010. We are driving further green investment through the Energy Bill, the green deal and the energy company obligation, the green investment bank, our carbon capture and storage competition, the reformed feed-in tariff, the renewable heat incentive, and our support for low-carbon research and innovation.

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

One significant form of low-carbon green investment that the Secretary of State spoke about during his speech to the Met Office on Monday is carbon capture and storage. His predecessor told the House in October 2011, when Scottish Power pulled out of the Longannet project, that he guaranteed that there would be no Treasury backsliding on the capital funds for CCS demonstrator projects in the competition. Will the Minister confirm whether that remains the case—yes or no—and whether the £1 billion is still available?

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Tom Greatrex

I am grateful for that answer, and I am sure that those in the industry who will be slightly disconcerted by the tenor of some of the remarks by the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), during the passage of the Energy Bill will be gratified as well. However, may I press the Minister a little further? Given that the Cabinet Office project assessment review that I obtained last year said that in the current comprehensive spending review only £200 million was available, will the remainder of the £1 billion be available for the next CSR period? Can he confirm that whatever else he has given up in his less grand bargain with the Treasury on DECC’s budget, that money is safeguarded for CCS in the next CSR period?

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Gregory Barker

I am very happy to scotch the hon. Gentleman’s baseless scaremongering and political point-scoring. The fact of the matter is that we are going forward with the CCS programme, and it is going to be successful, unlike Labour’s failed attempts at CCS. We have two preferred bidders in place, and it is backed by £1 billion, putting the UK at the front of the global race for carbon capture and storage.

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Caroline Flint (Don Valley) (Lab)

The Government have claimed it is too early to set a decarbonisation target for 2030, but next month they will publish their electricity market reform delivery plan, which will determine our energy mix and its carbon intensity. In the absence of a legally binding decarbonisation target, will the Secretary of State at least confirm that his long overdue delivery plan will be in line with our legally binding carbon budgets, or will the Government be rewriting the fourth carbon budget?

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Ed Davey (Liberal Democrat)

No, the plan will be in line with our legally binding obligations. As I have explained to the House, before we set the decarbonisation target in 2016 we will give National Grid guidance on setting the EMR delivery plan to ensure that it is on path to meet our decarbonisation targets in the least-cost way.

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Sheila Gilmore (Edinburgh East) (Lab)

T4. On some energy issues, such as setting a date for a decarbonisation target, the Government appear to be extremely slow, but on others, such as the exploitation of shale gas, they want to rush ahead at great speed without looking at environmental and safety considerations. Will the Secretary of State commit to looking properly at those considerations before any extraction takes place? ( 158103 )

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Ed Davey (Liberal Democrat)

In 2016, we will be the first country to set a decarbonisation target, so the idea that we are being slow on that is preposterous. On shale gas, we are behind other countries—she may have noticed that the US has already gone into it. We are determined to see whether this country can benefit from shale gas, but we will ensure that we protect the environment and take the public with us. That is the right way to get the benefits for the country that shale gas might well offer.

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Mr Dominic Raab (Esher and Walton) (Con)

T7. When will the British Geological Survey review of shale gas reserves be published? Given that IGas recently found that there are 20 times the previous estimates of reserves, does the Minister agree that shale represents a major strategic advantage for Britain, in meeting energy demand and decarbonisation? ( 158106 )

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