14:30 Nigel Adams (Selby and Ainsty) (Con)

Eggborough, as the Minister knows, is in the final stages of some detailed talks with the Department of Energy and Climate Change. The project is shovel-ready for full conversion of all four of its 500 MW units; the first unit could start generating exclusively from biomass in late 2014, if we get things right. Can the Minister reassure us that he will monitor and facilitate the progress of the second conversion project, which is important for my constituency and the UK, as it passes through the internal DECC processes? Over the next few years, as a result of the projects, the predominantly coal-fired stations will become predominantly sustainable biomass-fired stations, providing a significant contribution to the UK’s targets for renewable energy, protecting thousands of jobs, as mentioned by my hon. Friend the Member for Brigg and Goole (Andrew Percy), and enabling hundreds of millions of pounds of investment in the stations, as well as the enormous investment and job potential in the upgrading of our ports and railways to facilitate them.

Sustainable biomass is an essential part of our renewable energy mix: it is low cost, low carbon—if sustainably forested—and, importantly, it fuels reliable, predictable and dispatchable generation. Its availability is not exposed to the day-to-day vagaries of the Great British weather, so it can provide electricity when needed rather than when the weather permits. Also, unlike almost all other renewables, biomass does not require us all to pay for stand-by fossil fuel capacity for the times when the sun does not shine and the wind fails to blow.

By now Members will have gathered that I am immensely proud of and pleased with the progress we have made on biomass in Selby and Ainsty, which will soon be the renewable energy capital of Europe, as I am sure all will agree. We will have the potential for more than 4 GW of renewable generation in a five-mile radius, which is equivalent to some 8,000 of the large 2 MW onshore wind turbines or, put another way, to more than double the total realistic output of all the onshore wind turbines built in the UK by the start of this year.

In Canada, by providing a commercial use for the vast area of beetle-killed boreal forest—an area the size of England and growing year on year—we can help to turn what is currently a huge emitter of harmful greenhouse gases into a new carbon sink through clearance and Government-controlled replanting. Furthermore, the pelletising process enables us to ship the wood safely to the UK without any risk of importing disease, a subject that has been mentioned previously.

Let me provide a few more basic facts about biomass generation. It is the only renewable technology able to supply base load renewable power at any scale. It is flexible and stable, and it has a continued role in balancing the grid with low-carbon generation. It is an essential part of the low-carbon energy mix and one of the only deliverable and affordable alternatives to the second dash for gas in which we might have to engage. Excluding biomass from the energy mix would significantly increase the cost of decarbonising our energy system. The Department estimates that sustainably sourced bioenergy could contribute around 11% to the UK’s total primary energy demand by 2020 and significantly more by 2050. Even taking into account the energy used to grow, transport and process the fuel, biomass-generated electricity produces substantially fewer emissions than are produced when fossil fuels are used.

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14:52 Ian Swales (Redcar) (LD)

There is no doubt that biomass should be an important part of our energy mix. It is the fourth largest energy resource in the world after coal, oil and gas, and of course none of those is renewable, so it is the largest source of renewable energy in the world. However, this is yet another area in which the UK is playing catch-up. The Renewable Energy Association estimates that the industry employs about 2,000 people in the UK, compared with 60,000 in France and 68,000 in Germany. The technology is well established and many countries are exploiting it fully.

My constituency is in the Tees valley and, rather like the hon. Gentleman’s, it is becoming something of a Disneyland for green technology. Specifically on biomass, the advanced manufacturing technology centre, the Centre for Process Innovation and the Department of Energy and Climate Change are part-sponsoring anaerobic digestion research there, and Northumbrian Water has built a £60 million anaerobic digestion plant in the constituency. We have the largest bioethanol plant in Europe working on wheat. At the large Wilton chemicals site, Sembcorp has converted its power station to burn mostly timber. Across the river, Air Products is building a gasification of waste plant and is already planning its next one to make biofuels and even chemicals.

I am disappointed about today’s announcement on carbon capture and storage. Teesside came third on a list of two in the CCS competition, but I still believe that it will eventually get a network.

I appreciate my hon. Friend’s disappointment, but I assure him that while we have taken two projects forward, we remain extremely committed to carbon capture and storage generally. I had a meeting this morning specifically to look at how we can work with the other projects involved. There must be a feeling among all those involved in CCS that everyone is a winner.

CCS leads me to talk about something that I do not think the hon. Member for Selby and Ainsty mentioned. Biomass with carbon capture and storage is one of the very few technologies that can sequester carbon dioxide from the atmosphere for carbon-negative power. If we think about the problems we have in the world, how big a prize is that? We should seriously consider that combination of biomass with CCS, and the resulting sequestration.

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14:59 Jackie Doyle-Price (Thurrock) (Con)

I have long felt that biomass was the Cinderella of renewable energy. Although lots of subsidies have been thrown at wind and solar, the development of biomass capacity has been rather left to flourish by itself. As a good Conservative, with a clear understanding of the limits of Government, I feel it is probably better off for that. However, I am really grateful to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) for securing the debate, as it is high time that the potential of biomass generation is fully recognised by Government, so that sufficient effort can be made to secure a regulatory environment with the certainty that my hon. Friend the Member for Redcar (Ian Swales) referred to, which facilitates its expansion.

At its peak, Tilbury employed 750 people—today it employs 250, all in very highly skilled jobs—and it generated more than 1,000 MW, which is enough to power 1 million homes. In its 50 years of operation, it never breached its environmental licence. That prompts the question, although we implement EU directives with very good intentions, in terms of reducing emissions, when we look at the detail of the impact, are we really hitting the right things when we are looking at tackling climate change and environmentalism? I just put that out there. It is not unusual for the European Union to get things very badly wrong. As I said, the directive had the effect of finishing off Tilbury, despite the fact that Tilbury only ever breached its emissions limits when the A13 was full of traffic, which tells us exactly where the air contamination was coming from.

It is fair to say that the conversion is less efficient than coal, but it is still pretty efficient. As I said, under coal-fired generation, the plant generated more than 1,000 MW, and now it generates 750 MW. That is a significant contribution to the national grid, and much more than the wind turbines that my hon. Friend the Member for Selby and Ainsty referred to. The conversion has, however, had a significant environmental impact, with a 70% reduction in greenhouse gases. That illustrates just how powerful converting existing infrastructure could be in terms of meeting our objectives on climate change.

It is telling that coal-fired power stations are being built in Germany, when we have made coal completely uneconomic in this country. When we are dealing with private investors and expecting them to invest billions of pounds so that we can keep our lights on, we must recognise that they are not in it for charity, and we must enable them to facilitate that investment in the best way we can. To put it bluntly, the Department has, hitherto, been not enough about energy and rather too much about climate change. I believe that really has to change, and I know that if anybody will facilitate that change, it is my hon. Friend the Minister.

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15:30 Guy Opperman (Hexham) (Con)

Can my hon. Friend say where this Government energy policy or renewable energy policy generally would be without subsidy? I am struggling to understand, because surely all energy policies attract subsidy. The question is whether it is good or bad and how far it goes. Renewable energy policy attracts subsidy across the board.

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15:37 Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)

The hon. Member for Redcar referred to the decisions announced today on carbon capture and storage. I was interested to hear the Minister’s response, particularly on the two projects that were not included in the announcement in the Budget today. If we are serious about CCS, we need to ensure that we get the long-term support regimes—such as those we are discussing in the Energy Bill, which is awaiting its Report stage—right. That will ensure that those two projects—and the Hatfield project, which was not successful in the New Entrants Reserve 300 funding scheme, because it did not get the go-ahead for match funding from the Treasury—are not completely lost and that we do not lose opportunities in those areas and in the export potential of our technological and academic lead in the industry.

The hon. Gentleman is right to flag up the differences in data. Is he aware that the Renewable Energy Association says that there has been a 15% fall in wood prices in real terms since 1996?

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15:49 John Hayes (Conservative)

I recognise that there are many pros and cons involved, and to balance them the Department has set out four guiding principles for our biomass energy policy. They are that biomass must be sustainable, that it delivers genuine greenhouse gas savings, that it is cost-effective and that its unintended consequences on other industries are minimised. All those issues have been mentioned during the debate. The hon. Member for Stretford and Urmston (Kate Green) talked about sustainability, the hon. Member for Blackley and Broughton raised the issue of greenhouse gas savings, and my hon. Friend the Member for Brigg and Goole (Andrew Percy) and others mentioned cost-effectiveness. I see my role as ensuring that the principles are applied pragmatically and consistently.

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.

I am also grateful to other Members, including my hon. Friend the Member for Redcar (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.

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.

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