Crispin Blunt

Conservative Party | Reigate

Sustainable Energy Private Members Bill

Crispin spoke for the Opposition in supporting Brian White's Sustainable Energy Private Members Bill, which aims to ensure the Government meet their sustainable energy targets. Crispin's contribution is towards the end of the debate. Mr. Blunt's speech appears below but to read the whole debate and see his other contributions to the discussion simply click here

Mr. Crispin Blunt (Reigate): First, I congratulate the hon. Member for Milton Keynes, North-East (Brian White) on securing his place in the ballot and choosing this topic. I congratulate him also on the breadth of support he has achieved, not only from the dozens of organisations that have put their names to the Bill, but from Members across the House. Two of my hon. Friends have spoken eloquently in support of the Bill and I confirm that the Conservative party wishes to see it go into Committee.

The speech of the hon. Member for Brighton, Kemptown (Dr. Turner) was welcome. He said that we needed to restore credibility to the process after what

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had happened to his Bill. He did restore credibility to the process, but also to himself. He produced a withering demolition job, although he said he would not, of the inadequacies of the energy White Paper. His analysis sits at the core of the dilemma facing the Government.

The Government have decided to proceed by a series of targets and statements in the White Paper, and they have to be held to account for what they say they are going to achieve. The Government's problem was illustrated by the hon. Member for Brighton, Kemptown and by the promoter of the Bill; the Government cannot deliver what they intend. There are dozens of policy instruments but the policy framework is non-existent. That is why I found it impossible to support early-day motion 910 tabled by the hon. Member for Brighton, Kemptown in support of his Bill. Frankly, there is no policy framework and I am not sure how he could include that in the first line of his early-day motion. It could only have been an attempt to secure the good will of the Government. There is hope for the hon. Gentleman that he will get his Bill through this place because the Bill we are debating today gives the opportunity for the Secretary of State to get her hands on money that she would otherwise not have been able to spend.

The dilemma for the Government is whether to go for a liberal market in energy or to have a regulated and directed set of policies. The Government have fallen between two stools. The House will not be surprised to hear that the Conservative party favours a liberal market solution, but that market must operate within a framework. The absence of such a framework means that the Government cannot deliver what they have set out.

The United Kingdom cannot do this alone. The main aim is to protect our planet by dealing with emissions into the atmosphere. That is the overriding environmental threat. That should provide the framework within which energy policy sits and that is what we intend to provide when we provide our response to the energy White Paper and produce our own energy policy. In the absence of a framework, we will have a gentleman in Whitehall telling everyone how much is to be produced by renewables, coal, gas and the rest. As we have seen, there has been a conspicuous lack of success with such schemes.

I note that the Minister for Energy is not here and understand that he is in Shetland meeting the Norwegian Minister in a long-standing engagement to discuss arrangements for the future supply of gas to the United Kingdom. I have had the privilege of dealing with energy policy since last July and I have concluded that issues of renewables and nuclear generation are interesting and that gas is important. Gas is rapidly taking the lead position in this country's energy market. I am loth to criticise the Minister for Energy for not being here to reply to the debate when his discussions with the Norwegian Minister are essential to the economic success of the United Kingdom.

I should like to deal in detail with the problems of definition in the Bill. Clause 8 says

"'sustainable energy policy' means measures which reduce emissions of carbon and methane and promote reductions in the use of energy, and, for the avoidance of doubt, does not include nuclear power, and the term 'sustainable energy' shall be considered accordingly."

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There have been a number of criticisms of that definition and we must get it right. The hon. Member for Milton Keynes, North-East has not got it right yet. There is no reference to the cost of energy, and a sustainable policy has to be one that the nation can afford. That has to be balanced with the environmental objectives.

I am not sure that a definition necessarily revolves around a reduction in the use of energy. We are faced with a relentless increase in energy consumed in the UK, about 1 per cent. a year. That is not the problem. The problem is what is associated with it—the emissions into the environment. If we are talking about nuclear generation, those emissions are the radioactive waste that comes from that process. We must ask ourselves fundamental questions about how we try to improve the environment. It is not necessarily a question of reducing the consumption of energy. We must deal with the consequences of that energy consumption.

My hon. Friend the Member for Chipping Barnet (Sir Sidney Chapman), in supporting this Bill, reminded us of the commitments in the Labour party's manifesto. That is always a useful thing to do when those commitments are not being met. He then gave the House his definition of sustainable development, which I thought was as good as one could get in seven words. That is hardly surprising when we consider that he has the expertise of being the chairman of the committee in the Council of Europe. He also made the important point that it is the mark of a civilised society that people should have warm homes. The efforts of my hon. Friend the Member for Southend, West (Mr. Amess)—especially in his private Member's Bill—are to be commended on that issue.

These debates offer one the opportunity to listen and then think about what may be better policy solutions to the objectives that we all share. On the basis of the contributions by my hon. Friend the Member for Southend, West and others, I am beginning to think that we should be considering absolute standards of fuel poverty rather than relative standards of fuel poverty. For example, we should ensure that every home in the country—where, because of the minimum income guarantee, everyone has a basic income—can be heated by 10 per cent. of the disposable income in the home, to use the definition of fuel poverty. If we set that as a standard to be achieved in housing stock throughout the United Kingdom, it would be an absolute standard to work towards. We could then have targets that were based on a proper audit of the quality of the country's housing stock.

The Bill makes an extremely important contribution to energy efficiency by giving Government the targets that are so painfully obviously absent from the White Paper. The Association for the Conservation of Energy, in the welcome briefing that it provided for hon. Members, said:

"This makes it all the more perplexing that the White Paper contains no firm target for improving energy efficiency. It also seems clear that the Government does not have the 'commitment' to energy efficiency of which Brian Wilson spoke."

The briefing quotes the Environmental Audit Committee's recommendation that there should be a sustainable hierarchy in energy, parallel to that in waste.28 Mar 2003 : Column 596

It goes on to say:

"By contrast, the White Paper seems to have adopted a reverse hierarchy. It has set a firm target for CHP . . . an aspirational target for renewables . . . and no target at all for energy efficiency."

This Bill corrects that absence of a target, which is welcome.

The aspiration on renewables is given in paragraph 4.11 of the White Paper. The Government have already said that the target of 10 per cent. is challenging, but at least that target is backed up by the policy of the renewables obligation. However, we have to ask whether the targets are appropriate. The Government have set the aspiration of a 10 per cent. contribution by renewables to our electricity generation by 2010, and a 20 per cent. contribution by 2020. That gives one the rather horrid feeling that the Government are using a wet finger in the air to judge what the targets should be.

The fundamental question to ask is this: why do we want renewable energy to supply a share of our electricity? Is it because we want to reduce CO2 emissions? If that is the fundamental reason, are there better ways of doing it? Evidence was given to the Government by Ofgem that, because of the cost of reducing CO2 emissions by focusing on renewables, it would be economic nonsense. It is a hugely expensive way of reducing CO2 emissions. It has been pointed out that achieving energy efficiency is a much more effective way of reducing CO2 emissions. We need to consider policy in the round and decide what the roles of gas, coal, nuclear generation and renewables will be within a framework that promotes the reduction of greenhouse gases.

This Government's record on combined heat and power is, of course, appalling. It is extraordinary that, although there is no target for energy efficiency in the White Paper, there is a firm target for CHP—but absolutely no measures in place to achieve it. David Green, the director of the Combined Heat and Power Association, welcomed the White Paper with the words:

"There is a complete absence in the White Paper of any significant new measures to reduce the damage done to Britain's green generators over the last three years by weak and inconsistent delivery of Government policies."

Page 47 of the White Paper is full of lines such as:

"we will undertake a review of the existing guidance on information";

"we will continue to emphasise the benefits of CHP";

"We will work with OFGEM to keep these developments under review";

"Over the coming months we will consider the nature and extent of such a target or targets and announce our conclusions";

"as we consider and consult on the expansion of the energy efficiency commitment . . . we will explore the opportunities for incentivising CHP technologies";

and

"We have invited the Energy Saving Trust and the Carbon Trust to review their current and future programmes".

All that amounts to nothing but hot air. Apparently, however, there is one undertaking in the White Paper that the Government

"will support field trials designed to evaluate the benefits of micro-CHP".

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That is very exciting: a measure actually in the White Paper. I tabled a written question to find out exactly what the White Paper would do, and what was new. By happy coincidence— Madam Deputy Speaker: Order. I see some relevance but I hope that the hon. Gentleman will now relate his remarks to the Bill.

Mr. Blunt: Of course, my comments are related to the Bill, Madam Deputy Speaker, because the Bill, in clause 1(a)(ii) asks for

"the achievement of the generation of 10GW of electricity by combined heat and power by the end of 2010 and a further 10GW by 2020".

If no policies are being pursued by the Government to advance combined heat and power, and CHP has undergone a total disaster in the last three years, I hope that I am entitled to draw attention to that and to the fact that this Bill is inviting us to put on the statute book an analysis of the Government's policy that shows that they are entirely failing in that regard. It is therefore important to draw attention to the Government's statement in the White Paper that, as a new policy, they will

"support field trials designed to evaluate the benefits of micro-CHP".

I asked the Secretary of State for the Environment, Food and Rural Affairs how she intends to meet her commitments to support such field trials, given what is on page 48 of the energy White Paper, beyond the Government's fuel poverty strategy. I asked her what was new. The answer from the Minister responsible was as follows:

"I understand"—

"understand" not "know"—

"that The Carbon Trust will be working with the Energy Saving Trust and other stakeholders, including DEFRA, to undertake a major field trial for micro-CHP in order to evaluate the potential benefits this innovative technology has to offer. The trial will aim to feature a range of technologies and end use applications."—[Official Report, 27 March 2003; Vol. 402, c. 309–10W.]

That was happening already. There is nothing new in the White Paper.

I concur absolutely with the hon. Member for Hazel Grove (Mr. Stunell) on the potential importance of micro-CHP. There are about 18 million boilers in homes in this country, which are replaced at the rate of about once every 20 years—we are therefore talking about 1 million boilers a year—and the Government have done their analysis of the boiler market with the comparison between conventional and condensing boilers that appears in the White Paper. As there has been a relative failure to introduce condensing boilers in the United Kingdom, a huge opportunity exists for energy saving and CHP—two key elements of the hon. Gentleman's Bill—by moving from a country that relies largely on conventional boilers in the home to one that can move to micro-CHP plants, which are condensing boilers that also generate electricity.

Mr. Stunell: I am listening carefully to what the hon. Gentleman says, and I fully agree with him. Would he accept that putting a regulatory requirement on Ofgem

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would be a useful way of approaching the matter and would go a long way towards tackling the issues that he raises?

Mr. Blunt: I am very grateful to the hon. Gentleman for his intervention. In terms of how we achieve the objective, however, I part company with him. I think that there should be some form of trades description on the word "liberal" because what he proposes would be utterly illiberal and would direct people to install such boilers. I believe in the operation of the market. We should do our best to take the horse to water but if it will not drink we should not force it to do so. The opportunity should be there, however, to enable micro-CHP to succeed in the market. I would therefore seek to add one or two things to the Bill in Committee. First, however, we should understand the scale of the potential contribution of domestic micro-CHP. The technology behind the product that will be launched by Microgen toward the end of the year will mean that a boiler can produce about 1 kW of electricity. In about five years, fuel cell technology is likely to be sufficiently developed to allow micro-CHP plants to produce about 4 kW. If such plants were put into half the homes in the country during the 17 years up to 2020, the generating capacity of the United Kingdom could be increased by about 40 GW. As electricity consumption in the UK is just over 50 GW, one starts to appreciate the scale of the system's potential. There would be further important side benefits, such as the resilience of our electricity generation capacity.

Inevitably, most micro-CHP plants will operate on natural gas, which relates to the importance of the Minister for Energy and Construction's attempts to secure our future access to gas, as we start to import it. However, generating electricity in the home is about twice as efficient as generating it at a central plant and transmitting it throughout the country. The issue is important and if the House gives the Bill its Second Reading—there seems to be little opposition floating around at the moment—I shall table amendments in Committee so that it would not only exempt CHP from the renewables obligation, but extend the benefits of the renewables obligation to micro-CHP that is installed in people's homes by energy service companies. That would boost micro-CHP, which is a necessary step because it could make an enormous contribution to energy efficiency. I know that it is not strictly a renewable but everyone knows that the renewables obligation will not be achieved because we will not achieve 10 per cent. of generation from renewables by 2010, given the current situation. My suggestion would represent a proper use of the available resources that are identified in the scope of the present renewables obligation.

There are omissions from the Bill. Clause 1(2) would require the Government to report on the respective roles of possible contributions to a sustainable energy policy. The hon. Member for Milton Keynes, North-East has been too purist by considering only renewables, energy efficiency and CHP. We must look to the future of the hydrogen economy and the contribution of fuel cells because that could make the most enormous contribution to help us to meet our climate change targets. If fuel cell technology were successfully rolled

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out, we could easily achieve the Royal Commission on Environmental Pollution's target, provided that we do not produce hydrogen by burning coal.

Nuclear fusion would be a way to generate electricity in order to produce hydrogen. That might be a cleaner technology than nuclear fission because it would produce less waste. The successful introduction of that technology could radically change the way in which electricity is generated, and it should not be ignored. The Government should be invited to report on the progress of nuclear fusion development in the way in which they would report on other technologies, and I shall table an amendment to that effect in Committee.

I look forward to hearing in more detail what clause 5 will achieve and why the Government need that measure to obtain access to the money that I mentioned. As I said, we will want to debate clause 8 and, hopefully, to amend the definition of a sustainable energy policy so that it is more robust and takes account of affordability and economic efficiency as well as the absolute necessity of protecting the environment.

The Bill holds to account a Government whose record on manipulating targets has discredited public administration and is, perhaps, shown at its worst by the subordination of the Government's information service to Alastair Campbell. That is the disgraceful culmination of the process of twisting the presentation of Government statistics. Any measure that holds the Government to account for their overblown rhetoric is welcome, and that is why the Opposition support the Bill in principle.