Energy Bill [HL]

Lord Bourne of Aberystwyth Excerpts

Wednesday 22nd July 2015 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That it be an instruction to the Committee of the Whole House to which the Energy Bill [HL] has been committed that they consider the Bill in the following order:

Clauses 1 and 2, Schedule, Clauses 3 to 63, Title.

Motion agreed.

Sellafield

Lord Bourne of Aberystwyth Excerpts

Wednesday 8th July 2015 Lords Chamber

[Viscount Hanworth]

To ask Her Majesty’s Government what is the annual forecast cost for (1) storing, and (2) protecting, the stocks of plutonium at Sellafield in (a) 2015, (b) 2025, and (c) beyond 2025, if there is no decision to deal with the material otherwise.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the Nuclear Decommissioning Authority, the body responsible for the decommissioning of the United Kingdom’s civil nuclear legacy, has a budget of approximately £3 billion per annum. The costs of storing and protecting the plutonium at Sellafield are a small proportion of this total figure. We do not give out the precise figure on the grounds of commercial sensitivity and national security.

[Viscount Hanworth (Lab)]

I thank the Minister for that very informative Answer. What progress, if any, has been made in assessing the prospect of burning the stocks of plutonium in a CANDU reactor or a Hitachi PRISM reactor? This would not only dispose safely and profitably of the stock of plutonium but give a much-needed boost to Britain’s nuclear industry. I am aware that a report was sent to the Department of Energy and Climate Change by the nuclear decommissioning agency in January, after a considerable delay. Can the Minister assure us that a similar or greater delay will not affect the department’s assessment of the report?

[Lord Bourne of Aberystwyth]

My Lords, the noble Viscount is right on the need for a decision on this. We are expecting at the year end to have the options put in front of us by the Nuclear Decommissioning Authority and then move to a decision. He will be aware that even when a decision is made, there will be a massive stock of plutonium at Sellafield for many decades ahead.

[Earl Attlee (Con)]

My Lords, what progress has been made in establishing a deep geological depository for radioactive waste, as recommended by your Lordships’ Select Committee in 1999, and as broadly approved by the Committee on Radioactive Waste Management that was initiated by the party opposite?

[Lord Bourne of Aberystwyth]

My noble friend should be aware that we anticipate that a decision will be made on that in the relatively near future and that work will begin in 2017.

[Lord West of Spithead (Lab)]

Is there any intention to review the rules regarding the Civil Nuclear Constabulary’s extended jurisdiction or mutual aid provision, bearing in mind the one-third reduction in the Ministry of Defence police—one of the three armed police forces—possible further cuts and the increased terrorist threat to the United Kingdom? This is a very important issue to look at.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is absolutely right that civil nuclear safety is crucial. We are keeping a very close watch on this. As he is aware, that force is one of the largest police forces in the country. There is no immediate review in place but we keep the general area under constant review.

[Baroness Miller of Chilthorne Domer (LD)]

My Lords, is the plutonium currently classified in the Government’s accounts as an asset, because it will be a fuel, or as a cost, because it is waste that has to be stored?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness will be aware that there is a cost associated with decommissioning, as I have already indicated, which extends over a long period. I think the answer is there: over a long period, it is a liability.

[Baroness Worthington (Lab)]

My Lords, the stock of plutonium stored in Sellafield contains energy equivalent to the Morecambe Bay gas field, which has been serving us so reliably for 30 years. It is clearly an asset. When will the Government join the dots between our urgent need for investment in clean energy and infrastructure, and the plutonium stocks that are sitting there waiting to be used?

[Lord Bourne of Aberystwyth]

My Lords, the plutonium is a liability in the sense that it needs to be decommissioned, although the noble Baroness is right that it could be turned into an asset if, for example, we go for the MOX option when the options are put in front of us. We are looking at that, but we need to examine it very closely. It is unlikely that it will make a significant impact on the amount of nuclear power that is offered as a whole from this country by the end of the period up to 2080.

[Lord Howell of Guildford (Con)]

Could my noble friend tell us whether there has been any progress towards the use of thorium instead of uranium for nuclear fuel, as advocated by a number of people, including the noble Baroness, Lady Worthington?

[Lord Bourne of Aberystwyth]

My noble friend is right that it is important to look at this and that the noble Baroness, Lady Worthington, and other Peers have advocated it. We are looking at it, along with, as I indicated some weeks ago, smaller nuclear reactors.

[Lord Judd (Lab)]

My Lords, in the light of the Public Accounts Committee’s observation that the current security arrangements at Sellafield are intolerable, what urgency are the Government giving to getting the situation right? Given that proven adequate arrangements for waste disposal are obviously crucial for the next generation of nuclear energy, will the Government confirm that this is a national responsibility—this is national, not local waste—and that the arrangements must therefore be implemented, in the end, by the Government?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is absolutely right. There is no question but that it is a national responsibility. As I have indicated, the options will be put in front of us at the end of this year and we will look at that as a Government. I also want to reassure people that the record on civil nuclear safety in this country is exemplary and that we have an excellent nuclear police force guarding Sellafield. But yes, it is a national responsibility—there is no question about that.

[Lord Berkeley (Lab)]

My Lords, from work I did a long time ago, I believe that some of this waste has a half-life of about 1,000 years. Is there not something wrong with the system—and maybe a certain amount of complacency—given that we are storing that material in concrete that has been around 100 years or so and still importing waste from other countries, to be an even bigger dustbin, without knowing what to do with it?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord knows a lot about this subject, and I hesitate to disagree, but we are not still importing plutonium. That is inaccurate. We are dealing with the plutonium that is there—127 tonnes, and a further 2 to 3 tonnes in Dounreay. We are where we are. We are looking at the options and will come back with a decision. In the mean time, the best way forward is to ensure that it is safely guarded, which it is, at Sellafield.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, the Minister, in answering my noble friend Lord West, agreed with the importance of the security and staffing element and said, I think, that no decisions had been made to cut the budget for those staff. Am I right in thinking that that means it could be cut in the future, or was he saying that we have decided that no cuts will be made?

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[Lord Bourne of Aberystwyth]

I think the noble Baroness is slightly wrong on that. I said that these things are kept under close scrutiny but there was no specific review in prospect. No Government would say that these things would not lead to either budget increases or budget reductions.

[Lord Campbell-Savours (Lab)]

Did the Minister say that we do not import waste? Is not the policy of substitution still in place?

[Lord Bourne of Aberystwyth]

I apologise but I did not hear that question. The next Question has been called.

Fracking

Lord Bourne of Aberystwyth Excerpts

Tuesday 7th July 2015 Lords Chamber

[Lord Truscott]

To ask Her Majesty’s Government what assessment they have made of the decision by Lancashire County Council to reject a planning application by Cuadrilla to frack in that county; and, in the light of that decision, whether they plan to conduct a study into the possible impacts of hydraulic fracturing in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, it would be inappropriate for the Government to comment on the specifics of any local planning decisions, which are a matter for the local planning authority. However, I make it clear that the Government continue to support the development of the shale industry in the United Kingdom. A number of independent reports have shown that any risk can be managed very effectively.

[Lord Truscott (Non-Afl)]

I thank the Minister for that reply. In illustrating the need for a study of the environmental and economic impact of fracking, would the Minister comment on a report on the experience of Oklahoma in the Financial Times on 7 May, which pointed out that, although earthquakes are rare in that state, there were some 2,000 last year—308 of them above 3.0 on the Richter scale? Could he give further thought to a study by the Government into the impact of fracking in the UK?

[Lord Bourne of Aberystwyth]

My Lords, as independent experts have indicated, the geology of the United Kingdom is very different from the geology of Oklahoma. There, of course, it is about oil, while here in the north of England it is gas. An expert from the University of Glasgow, Dr Rob Westaway, said that if you are talking about seismic danger, you might as well talk about the danger of slamming a wooden door.

[Lord Palmer (CB)]

My Lords, would the Minister not agree that fracking is perfectly safe as long it adheres to a very strict code of conduct when carrying out the actual fracking?

[Lord Bourne of Aberystwyth]

My Lords, the code of conduct followed and the procedure in the United Kingdom, with the HSE and the Environment Agency, are among the best in the world. We have every reason to believe that fracking is totally safe and that any risks can be effectively managed.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, will the Minister recognise that the Government have given considerable comfort to local residents who object to wind farms? Are the Government going to give the same comfort to residents who object to fracking?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness will be aware that there is a strong local element to the decision that has just been taken. The Government are of the view that a strong local element is important.

[Lord Wigley (PC)]

My Lords, does the Minister accept that, irrespective of the fact that he cannot go into detail about Lancashire, it is vital for the communities potentially affected by fracking, for local authority employees and councillors, and indeed for the companies that may be interested in fracking, to know exactly where responsibility lies on these matters? In that context, and given the statement made by his right honourable friend the Secretary of State for Wales in March about transferring powers to the National Assembly for Wales, can he now tell us from what date that will be effective?

[Lord Bourne of Aberystwyth]

The noble Lord will be aware that the Wales Bill will be subject to pre-legislative scrutiny this autumn. The Bill should become law at the end of next year or early in 2017.

[Lord Purvis of Tweed (LD)]

My Lords, in February, correspondence from the Committee on Climate Change to the Environmental Audit Committee in another place said that,

“UK shale gas production can be consistent with meeting UK carbon budgets but only if … it is accompanied by a strong commitment to reduce all greenhouse gas emissions (and therefore gas consumption), for example by setting a power sector decarbonisation target”.

Will the Minister be clear about the Government’s decarbonisation target for the UK power-generation sector and what proportion they see shale gas being of that overall target?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be aware that most renewables are intermittent and we need a back-up. MacKay and Stone have said that the gas carbon footprint of shale gas is comparable to that of imported gas, lower than that of LNG and much lower than that of coal. We need it in our transition to our zero-carbon economy. That is why it is so important.

[Baroness Blackstone (Lab)]

My Lords, is the Minister aware that the House of Lords Economic Affairs Committee took evidence last year from the Environment Agency and the Royal Society, and from scientists outside those organisations, all of whom were extremely reassuring about the environmental effects of shale gas and oil exploration? In the light of that reassuring evidence, what further steps are the Government taking to encourage exploration?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness for that contribution. I was aware of the encouraging sounds made by those bodies. It is absolutely right that such exploration is safe. It is also important to note that it will generate 60,000 British jobs. The other important point is that it provides secure energy. It will mean that in 2030, rather than having 75% of our gas imported, that figure will be down to 40%. That is a massive contribution.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am sure the Minister is aware that DECC has just had its 14th licensing round for onshore drilling. For some reason, the area around the Prime Minister’s constituency of Witney appears to have been omitted in spite of being densely covered with quite promising seismic profiles. I am curious about why that has happened if the Prime Minister is such a fan of fracking.

[Lord Bourne of Aberystwyth]

My Lords, I am not quite sure—perhaps I am—what the noble Baroness is suggesting. Let me reassure her that the process is quite independent. She will be aware that most of the area for fracking gas is in Lancashire, Yorkshire and Nottinghamshire and, of course, the Prime Minister’s constituency is well south of that.

[Lord Purvis of Tweed]

My Lords, what is the Government’s decarbonisation target and over what timeframe?

[Baroness Farrington of Ribbleton (Lab)]

My Lords, will the Minister give the same assurance about the pursuit of oil? I declare an interest as a Lancashire resident and a former Lancashire county councillor. I would like a cast-iron guarantee with regard to oil and gas that the south of England will not be protected more than the north.

[Lord Bourne of Aberystwyth]

My Lords, I am happy to give that guarantee. The noble Baroness will be aware that in relation to the north, a wealth asset fund will be created from any exploitation of shale gas, but any treatment will be totally equitable throughout the United Kingdom.

[Lord Geddes (Con)]

My Lords, not for the first time, I ask my noble friend: what are the prospects for tidal power?

[Lord Bourne of Aberystwyth]

My Lords, I am aware of my noble friend’s interest in that. He will be aware that the Swansea lagoon project has planning permission and there are many other promising tidal lagoon projects waiting in the wings. Tidal power is a matter to which the Government are giving close attention. It is a very exciting prospect.

Renewable Energy

Lord Bourne of Aberystwyth Excerpts

Wednesday 24th June 2015 Lords Chamber

[Viscount Ridley]

To ask Her Majesty’s Government what estimate they have made of the cost (£/tCO₂e) of greenhouse gas emissions abatement in the most recent year for which there is data from each of wind offshore, wind onshore and solar, taking into account the additional electricity system costs appropriate to each technology.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, based on support provided through the renewables obligation, the estimated abatement cost in 2014 was £65 per tonne of carbon dioxide for onshore wind, £121 for offshore wind and £110 for solar PV.

[Viscount Ridley (Con)]

I thank my noble friend for that reply and declare my interests in energy as listed in the register. Does he agree that the Ed Miliband/Chris Huhne energy policy that he inherited has been extremely effective at taking money from the poor and giving it to the rich but much less effective at decarbonisation—and particularly at decarbonisation in an affordable way? The numbers he gave for the abatement costs per tonne of carbon dioxide from those three technologies are higher than the numbers given for the total cost of climate change—the so-called social cost of carbon—as estimated by all economists, including even the noble Lord, Lord Stern. Would my noble friend guarantee to investigate these numbers to see whether we are getting value for money as consumers through these subsidies?

[Lord Bourne of Aberystwyth]

My Lords, it is fair to say that there is a decline in the cost of renewable generation technologies. The steepest decline is in solar PV. On my noble friend’s point about the fact that the last leader of the Opposition, Ed Miliband, had a policy on energy that was not in the interests of the country, I am pleased to say that one of the first actions of the new Secretary of State for Energy and Climate Change was to write to the energy companies to say that we look forward to seeing a reduction in bills consequent on the fact that the last leader of the Opposition is not now Prime Minister.

[Lord Lawson of Blaby (Con)]

My Lords, by what date do the Government expect renewables to be cost-competitive so that hard-working families and businesses will no longer have to subsidise wealthy landlords and other green investors?

[Lord Bourne of Aberystwyth]

My Lords, it is not merely a question of cost. If it were the case that renewables were the cheapest form of electricity, we would not face the same challenge on climate change that we do. As I indicated, it is true that the cost of renewables is coming down. Meanwhile, it is the policy of the Government to focus on energy that is affordable, secure and clean.

[Lord Pearson of Rannoch (UKIP)]

My Lords, will the Government compensate the increasing number of British people forced into fuel poverty by the man-made climate change policy if climate change turns out not to have been man-made at all?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I suspect that the noble Lord may be in a minority of one in his view of the position on climate change. Obviously, we are very pleased that the fuel poverty statistics are on a downward trend and that fewer people are in fuel poverty this year than last year.

[Baroness Worthington (Lab)]

My Lords, thanks to the Government’s Energy Act in the last Parliament, virtually every element of our energy system is now subject to a subsidy, and we are currently paying to keep old, unabated coal stations open and paying to shut them. Is that not the real scandal, since all of this coal is now imported?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness will be aware that by 2025 electricity generation from unabated coal will represent only 1% of our generation.

[Lord Geddes (Con)]

My Lords, in the context of this Question, what is the Government’s policy on tidal power?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be aware that the Swansea tidal lagoon has had planning permission, and we are now looking at the position of tidal power in relation to contracts for difference. It certainly represents an exciting possibility and one that has a lot of support—but I had better say no more than that as I made the planning decision.

[Lord Broers (CB)]

My Lords, on a simple point of clarification, would the Minister confirm that these numbers are calculated from the actual delivered power and not the gross generating capability of these sources?

[Lord Bourne of Aberystwyth]

My Lords, a bear of small brain such as myself will have to get back to the noble Lord on that point, as I am uncertain.

[Lord Richard (Lab)]

My Lords—

--- Later in debate ---

[Lord Purvis of Tweed]

My Lords, I am grateful to the former Leader of the House, the noble Lord, Lord Richard. The Committee on Climate Change report on the cost-effective path to 2050 indicated that nuclear and onshore wind are likely to have broadly comparable costs to new, unabated gas. Given the fact that the predominance of the situation in Scotland has been affected by the recent government decision, should not the Government be open to amendments to the energy Bill that could be coming forward to make sure that there is a distinct case for Scotland, so that support for Scottish jobs and the Scottish economy is put on a comparable level as support for Chinese investors and the nuclear industry in the United Kingdom?

[Lord Bourne of Aberystwyth]

My Lords, when the energy Bill comes before us—it will come to this House first—we will have an opportunity to look the questions that the noble Lord raises.

[Lord Richard]

My Lords, the Minister said in answer to the Question today that unabated coal would account for 1% of electricity by 2025. On the last occasion, last week, when this was raised, he said in one column of Hansard what he said today, while in another column of Hansard he said that it would account not for 1% of electricity supply but for 1% of emissions. Both cannot be right, and I would be grateful if he could tell us which is.

[Lord Bourne of Aberystwyth]

My Lords, following a conversation with the noble Lord yesterday, I went back and checked. That is why the version that I gave today was the correct version.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, has the Minister considered the option, if we are going to take away subsidies from some energy sources, that we should take them away from all energy sources, including nuclear?

[Lord Bourne of Aberystwyth]

My Lords, nuclear is a vital part of the mix. We do not get through this energy situation without an important contribution from nuclear energy, not least because many of the renewables, such as wind and solar, are intermittent.

Energy: Onshore Wind

Lord Bourne of Aberystwyth Excerpts

Tuesday 23rd June 2015 Lords Chamber

[Baroness Worthington]

To ask Her Majesty’s Government what assessment they have made of the impact on investment in renewable energy of their decision to end the subsidy for onshore wind farms.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, onshore wind has made a valuable contribution to the United Kingdom energy mix in recent years, but there is now enough capacity in the pipeline for the United Kingdom to meet its 2020 renewable commitments. We will consider carefully the level of investment that developers are likely to bring forward under the proposals announced by the Secretary of State on 18 June.

[Baroness Worthington (Lab)]

My Lords, I thank the Minister for his response. However, would he agree with me that we are not in fact on track to meet our renewables targets because they apply to all energy, and the targets for heat and transport are not on track? Therefore, this is an imprudent blanket ban on one of our cheapest and fastest-to-deploy technologies. Will he not reconsider?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right about the importance of onshore wind, but it is already delivering for us. On that basis, we are convinced that the mix of other renewables, together with nuclear and CCS, means that the challenging commitments that we indeed have on heat and transport are deliverable.

[Lord Vinson (Con)]

My Lords, as we learn from experience which type of renewable to back and which not to back, and as wind turbines have shown themselves to produce extremely expensive electricity due to their intermittency, would the Minister consider moving on to one of the greatest developments of our age, which is small nuclear reactors? That means that, instead of having one huge nuclear power station that probably takes 10 to 14 years to develop, you could have 10 factory-built nuclear units in a row—if one is closed down for maintenance, the other nine continue to work. This is the technology of tomorrow, which will give us limitless CO₂-free cheap energy. Will the Government consider putting some serious resource into this to make Britain a world leader in this technology?

[Lord Bourne of Aberystwyth]

My Lords, renewables are important, but it is absolutely right that some renewables are intermittent and we therefore need back-up. Nuclear is certainly vital to us and we need it. We are looking at the possibility—I put it no stronger than that—of smaller nuclear as an additional part of the mix.

[Lord Purvis of Tweed (LD)]

My Lords, the Minister was unable to respond to my question after the Statement yesterday as to whether a jobs and supply chain impact assessment had been carried out by the Government in advance of the Statement. I think that is to be regretted. One way to restore confidence within that community would be to signal that the Government have no plans to change their proposed contract date for contracts for difference from October this year. Can the Minister confirm that they are on course to do that and the details will be published before recess?

[Lord Bourne of Aberystwyth]

My Lords, first on the economic impact, it is possible to overstate that. That it is why I did not really dwell on the issue. Two hundred and fifty projects are likely to be affected, but a clear majority of those would not be processed even within the old limits, so the economic impact is small. With relation to contracts for difference, as my right honourable friend the Secretary of State said in another place, we will be making a Statement on that in due course.

[Lord Foulkes of Cumnock (Lab)]

Why did the UK Government not consult with the Scottish Government before making this decision?

[Lord Bourne of Aberystwyth]

The noble Lord will be aware that this is a reserved issue. There was correspondence with the Scottish Government and tomorrow my right honourable friend the Secretary of State will be meeting with Fergus Ewing, the Minister for Energy in Scotland.

[Lord Hay of Ballyore (DUP)]

My Lords, in the Statement that the Minister made yesterday in the House on renewable energy and the ending of subsidies, he indicated that the Government consulted with the three regional assemblies: the Northern Ireland Assembly, the Welsh Assembly and the Scottish Assembly. Could the Minister indicate who the Government spoke to within the Northern Ireland Assembly, and was there forthcoming support from the Northern Ireland Assembly for what the Government announced yesterday?

[Lord Bourne of Aberystwyth]

My Lords, there is ongoing discussion with the devolved Administrations. I am not sure whether I used the word “consult”. I said there had been contact, certainly, with the devolved Administrations and contact that is continuing, particularly on the issue of the grace period where we have indicated that we are very happy to talk to stakeholders.

[Lord Cunningham of Felling (Lab)]

My Lords, every nuclear submarine built in the United Kingdom has had a propulsion unit built by Rolls-Royce. We have decades of experience in the construction of small nuclear reactors. This is an amazing opportunity for our country to take up the point made by his noble friend and develop these small nuclear reactors for urban use.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord speaks with great experience. He used to represent the area of Sellafield and I take his contribution very seriously. As I have indicated, we are looking at the issue of small nuclears at the moment.

[Lord Callanan (Con)]

My Lords, is the Minister aware that on 19 January 2015, which was the coldest day of the year so far, electricity demand in the UK was at its highest and yet wind turbines—both onshore and offshore—produced less than 1% of the UK’s total electricity demand?

[Lord Bourne of Aberystwyth]

I was not aware that was the coldest day of the year, or indeed that that was the case. Renewables are a vital part of the contribution to our decarbonisation. That remains very much the case. We have a range of renewables, which are of key importance to us in meeting our targets and particularly in meeting the climate change agenda in Paris this year.

Welsh Assembly Elections 2016

Lord Bourne of Aberystwyth Excerpts

Tuesday 23rd June 2015 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I stand here as a poacher turned gamekeeper, as has been said. This has been an excellent debate and I will try to do justice to the contributions that have been made forcefully and with great grace. First, I thank the noble Baroness, Lady Randerson, for securing this evening’s debate, and pay testament to the considerable work she has done in the Wales Office. Her great and continuing commitment to public life in Wales is appreciated much more widely than in her own party. It is a tonic to see the noble Lord, Lord Elystan-Morgan, back in his place. Like many others, I have missed his smiling presence and wisdom. I am sure he will be giving us both of those for many years yet.

I will say a little bit about the Wales Bill. Without wishing to pre-empt the will either of Parliament or the National Assembly for Wales, next year’s Assembly elections may well be the last in their current form. The Government will publish a draft Wales Bill in the autumn for pre-legislative scrutiny and will introduce a Bill in the Commons—the correct place for Bills of a constitutional nature that are as far-reaching as this one—early next year, to implement the legislative commitments made in the St David’s Day agreement to make the Welsh devolution settlement clearer, stronger and fairer. This work was begun before I entered the Wales Office and was pushed forward by the Secretary of State and the noble Baroness so effectively.

The Bill will provide for a clearer settlement, founded on a reserved powers model, to clarify the division of powers between Parliament and the Assembly. I will try to answer the points made in different subject areas if I can. The first of these is reserved powers, a point made forcibly by the noble Baroness, Lady Randerson. We are moving to a reserved powers model. I accept the point made by the noble Lord, Lord Elystan-Morgan, that it is important to get this right and not panic. We will not. There will be no attempt at a power grab but, as has been demonstrated during the debate, it is not a straightforward issue and we want to get it right. The debate has been interesting in that, much as we all want to move on to look at health, education, the economy and transport, they barely surfaced this evening. They were touched on cursorily here and there but we are still, perhaps understandably, looking at the constitutional settlement. It is important that we get that right and we will.

We need a stronger settlement with important new powers devolved to the Assembly—as they will be—over energy, transport and elections. I will come back to elections separately. Understandably, some mention was made of policing. It is quite true that this was a recommendation for devolution from the Silk commission which was not taken up in the St David’s Day agreement. However, let us not become too pessimistic about this. We have come a long way in devolution, under the previous Government and this one. There have been previous commissions which have not seen the light of day, although they should have. The noble Lord, Lord Richard, who I see in his place, will perhaps understand my point. The Silk commission has been substantially taken forward in a way that we can see in the forthcoming Wales Bill.

I understand the points made by the noble Lord, Lord Wigley, and some of his frustration, but he himself went on to suggest that we drop the referendum on tax-raising powers, something that was in the Silk commission. Let us remember that we are driving this forward considerably in the Wales Bill and there will be a chance for scrutiny and discussion of that as it proceeds through both Houses. Legal jurisdiction was not something that was recommended to be subject to devolution under Silk. It is right that we should look at Scotland but, as all noble Lords have said, we should not be hidebound by what happens there. Scotland is very different from Wales, not least on the funding basis, to which I will come back in a while.

I will say at this juncture that I would happily run the noble Baroness’s campaign to get into the Welsh Assembly—we go back a long way. This will probably not do her too much good, but I hope they have the sense to pick her, and I am sure that they will. I had better say no more in case it does the noble Baroness more damage than is sensible.

A central issue raised by noble Lords was tax and funding. This is important and we want to get it right. The Finance Minister in the Assembly, Jane Hutt, and the First Minister, Carwyn Jones, are very much aware of the Government’s view that the funding floor needs to go hand in hand with some commitment to a referendum. A referendum has been accepted as central to Silk, for reasons we can understand. I agree that there has been historic underfunding of Wales, certainly under the Labour Party, which has continued for some time. We need to get that right. The noble Baroness talked about putting this on a statutory basis in order for it to be lasting. The Barnett formula, goodness knows, has lasted well for many years without being on a statutory basis, so I am not convinced that is the case, but we have certainly not closed our minds to that. If we have some agreement going forward, it may be something that could be looked at, but I am not sure that it is absolutely necessary.

In terms of elections, the noble Lord, Lord Roberts of Llandudno, spoke very passionately about the democratic processes and pressures that exist. Although I can understand the frustration that is felt by the Liberal Democrats and other parties about the electoral system, I gently remind him that we did of course have a referendum in the previous Parliament on electoral reform and that the fairly clear result was to retain the present system, certainly against the choice that was offered. I reassure the noble Lord that all these powers over the electoral system, the elections and the number of Members will be devolved to the National Assembly, as is appropriate. I think that will be subject to a supermajority again, as has been the case in Scotland, but they will no longer be a concern for us. Instead, they will be a concern, quite rightly, for the National Assembly for Wales.

I hope I have addressed the significant points raised in the debate. As I say, it was a very good debate and will certainly inform our thinking on the Wales Bill and the way forward. We anticipate the publication of a draft Bill which will be subject to pre-legislative scrutiny. This is an important piece of legislation and we want to see it on the statute book next year. Then I hope that we can move in a way that we all want so that we can consider the issues that truly matter to people in Wales. As we well know from the recent general election—and as we will see, I am sure, in the Assembly election in the same way—nobody on the doorsteps talks about reserved powers or the Barnett formula. They certainly talk about funding for Wales, but the issues that they really talk about and that really matter to them, as they matter to us, are education, health, the economy, transport, agriculture, tourism and so on.

Lastly, I come back to the final theme that emerged, which is Scotland. We certainly have to be aware of what is happening in Scotland—we do not exist in isolation—but at the same time, we have to recognise that Wales is very different from Scotland, not just in the way it votes, which clearly was the case and which is a relevant consideration, but in many other respects. For example, our legal history is very different and we have a much more porous border. Very few people live near the Scottish-English border, while a heck of a lot of people live near the English-Welsh border, on both sides of it. That makes a difference to many of the things that we want to do. We must ensure that what we do is for the good of the people of Wales within the United Kingdom. That is what this Government are determined to do.

I thank your Lordships once again for an excellent debate. We will take away all these comments and study them very closely to inform progress on the Bill.

Energy: Onshore Wind

Lord Bourne of Aberystwyth Excerpts

Monday 22nd June 2015 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, with permission I shall now repeat a Statement made by my right honourable friend the Secretary of State for Energy and Climate Change about ending new subsidies for onshore wind.

“Mr Speaker, with your permission I would like to make a Statement on ending new subsidies for onshore wind. This Government are committed to meeting objectives on cutting carbon emissions and to continuing to make progress towards the United Kingdom’s 2020 renewable energy targets. The renewable electricity programme aims to deliver at least 30% of the UK’s electricity demand from renewables by 2020. We are on course to achieve this objective. Renewables already make up almost 20% of our electricity generation and there is a strong pipeline to deliver the rest.

As we decarbonise, it is imperative that we manage the costs to consumers. Although renewable energy costs have been coming down, subsidies still form part of people’s energy bills and, as the share of renewables in the mix grows, the impact gets proportionally larger. It is one of this Government’s priorities to bring about the transition to low-carbon generation as cost effectively and securely as possible. The levy control framework, covering the period up to 2020-21, is one of the tools to help achieve this. It limits the impact of support for low-carbon electricity on consumer bills.

We have a responsibility to manage support schemes efficiently within the levy control framework to ensure that we maintain public support for the action we are taking to bring down carbon emissions and combat climate change. Government support is designed to help technologies stand on their own two feet, not to encourage a permanent reliance on subsidy. We must continue to make tough judgments about what new projects get subsidies. Onshore wind has deployed successfully to date and is an important part of our energy mix.

In 2014, onshore wind made up around 5% of electricity generation, supported by around £800 million of subsidies. At the end of April 2015, there were 490 operational onshore wind farms in the United Kingdom, comprising 4,751 turbines in total. These wind farms have an installed capacity of 8.3 gigawatts—enough to power the equivalent of more than 4.5 million homes.

The electricity market reform delivery plan projects that we require between 11 and 13 gigawatts of electricity to be provided by onshore wind by 2020 to meet our 2020 renewable electricity generation objective while remaining within the limits of what is affordable. We now have enough onshore wind in the pipeline, including projects that have planning permission, to meet this requirement comfortably. Without action, we are very likely to deploy beyond this range. We could end up with more onshore wind projects than we can afford, which would lead to either higher bills for consumers or other renewable technologies, such as offshore wind, losing out on support.

We need to continue investing in less mature technologies so that they realise their promise, just as onshore wind has done. It is therefore appropriate to curtail further subsidised deployment of onshore wind, balancing the interests of onshore developers with those of bill payers. This Government were elected with a commitment to end new subsidies for onshore wind and also to change the law so that local people have the final say on onshore wind applications. We are now acting on that commitment.

Alongside proposals outlined within the new energy Bill to devolve decision-making for new onshore wind farms out of Whitehall, my right honourable friend the Secretary of State for Communities and Local Government has set out further considerations to be applied to proposed wind energy development in England so that local people have the final say on onshore wind farm applications.

I set out to Parliament on 18 June proposals to end new subsidies for onshore wind, specifically in relation to the renewables obligation, which will be closed to new onshore wind from 1 April 2016, a year earlier than planned. My department’s analysis indicates that, after taking account of an early closure, onshore wind deployment under the renewables obligation will be in the region of 11.6 gigawatts. With this capacity, and that of onshore wind projects that have received support through the new contracts for difference, we expect around 12.3 gigawatts of onshore wind to be operating in the United Kingdom by 2020, supported by the levy control framework, providing around 10% of electricity generation. This puts us above the middle of the deployment range set out in the EMR delivery plan—our best estimate of what we would need to meet the planned contribution from renewable electricity to our 2020 targets.

I have proposed a grace period which would continue to give access to support under the RO to those projects which, as of 18 June 2015, already have planning consent, a grid connection offer and acceptance, and evidence of land rights for the site on which the projects will be built. We estimate that around 7.1 gigawatts of onshore wind capacity proposed across the United Kingdom will not be eligible for the grace period and are therefore unlikely to go ahead as a result of the announcement of 18 June. That equates to around 250 projects, totalling about 2,500 turbines now unlikely to be built.

Therefore, by closing the RO to onshore wind early, we are ensuring that we meet our renewable electricity objectives, while managing the impact on consumer bills and ensuring that other renewables technologies continue to develop and reduce their costs. Consumer bills will not rise because of this change. Indeed, those onshore wind projects unlikely now to go ahead would have cost hundreds of millions of pounds. I believe that this draws the line in the right place.

In advance of this announcement, I and other Ministers and officials have been discussing these proposals with the devolved Administrations in Wales, Northern Ireland and Scotland. I now want to hear the further views from devolved Administrations, and also industry and other stakeholders. This is just the beginning of the process and we will continue to consult them as we move towards implementation.

The changes to the renewables obligation do not affect remote island wind proposals, which would not have been in a position to receive RO subsidy even under previous timelines. I will say more about how future CfD projects will be treated in due course. But I am particularly conscious of the fact that 68% of the onshore wind pipeline relates to projects in Scotland. I will continue to consult colleagues in the Scottish Government. Indeed, I am meeting the Scottish Energy Minister, Fergus Ewing, on Wednesday. By implementing these changes through primary legislation, they will be subject to full parliamentary scrutiny, including from Members representing Scottish constituencies.

With regard to contracts for difference, we have the tools available to implement our manifesto commitments on onshore wind and will set out how we will do so when announcing plans in relation to further CfD allocations. I will also shortly be considering options for future support for community onshore wind projects that might represent one or two turbines through the feed-in tariffs—FITs—as part of the review that my department is conducting this year. I do not wish to stand in the way of local communities coming together to generate low-carbon electricity in a manner that is acceptable to them, including through small-scale wind capacity. However, that action must be affordable as well as acceptable.

Clean energy does not begin and end with onshore wind. Onshore wind is an important part of our current and future low-carbon energy mix, but we are reaching the limits of what is affordable and what the public are prepared to accept. We are committed to meeting our decarbonisation objectives. The changes that I have outlined to Parliament will not change this. I look forward to having meaningful discussions with industry, with other stakeholders and with colleagues in the House and in Scotland, Wales and Northern Ireland on how we move forward”.

--- Later in debate ---

[Lord Purvis of Tweed (LD)]

My Lords, I eagerly anticipate what the Minister will say after our contributions. There is no doubt that the Conservatives, now governing alone, are sending very poor signals to the renewable energy sector. Therefore, although it is regrettable, I thank him for making that very clear at the beginning of this Administration.

The repeated Statement does not include the text that the Secretary of State added at the Dispatch Box, in which he paid tribute to the Conservative MPs who have been the most vociferous about onshore wind—a part of the energy mix that receives less support than Hinkley Point but is part of an accelerating part of our whole renewable energy generation mix.

The Government say that they were elected with a commitment to end new subsidies, but surely not to do so prematurely and without consultation, creating confusion among the investor community and industry, causing concern among those whose jobs may be now at risk, and putting in doubt our carbon reduction ambition. Niall Stuart of Scottish Renewables—where, as the Statement says, 68% of those in the pipeline are located—is right to say that the Government’s actions are bad for jobs and for investment.

Given that the Government plan for this to be implemented by primary legislation, what exactly do they want to hear as part of the consultation? It seems very obvious that they have made up their mind, not only on the policy but also on how it will be delivered. How can it be the “beginning of the process”, as the Statement said, when the Government seem to have a closed mind? What if Parliament believes that there is too much confusion in the grace period, and that before making the announcement there should have been consultation with the stakeholders and others involved who potentially could lose their jobs and their income? What if Parliament believes that this should be implemented only after Royal Assent—and when is that anticipated, because it is not clear?

The Secretary of State’s Statement in another place stated that any developer or investor now needs to contact the department to find out if they may be part of the estimated 250 projects. I hope that noble Lords will appreciate that I read that with a degree of incredulity. How on earth can it be good government policy to announce it, state how many they estimate are in the pipeline, and even say that more than two-thirds of those are in Scotland, and that any investor or developer who wishes to know if they are part of this now needs to contact the department to find out whether it will indicate whether they are to be in the grace period? The Secretary of State said that this may take some time. Can the Minister say how long it will be before we get clarity and when the list of sites will be published?

Finally, the Secretary of State was also unable to say—and I regret that the Minister has not indicated in the repeat, either, of course—whether a jobs and supply-chain sector impact assessment was carried out before this decision was made. Surely this must have been done. The Government cannot make such a decision without doing some form of impact assessment about the effect on people’s livelihoods, on reputation within the investor community and on the 68% of those in the pipeline that are in Scotland. If an assessment has not been carried out, it is an astonishing piece of work from this Government. Will the Minister confirm whether an assessment has been carried out and will he publish it?

[Lord Bourne of Aberystwyth]

My Lords, I thank the two contributors, the noble Baroness, Lady Worthington, and the noble Lord, Lord Purvis, from their respective Front Benches. I will try to deal with the points they made. In essence they seemed to be making the same point: that they had been taken by surprise by this announcement. I cannot imagine why. The policy was in the manifesto. It was not a dog-whistle policy, as the noble Baroness suggested. We are not in the business of rerunning the general election; we will be doing that in five years’ time—with the inevitable same result if nothing is learnt by the parties opposite. This should not be a surprise to anybody.

To deal with some of the specifics, this will not hit investor confidence. Some £42 billion has been invested in renewables, nuclear and CCS since 2010. I send out the message that renewables are a vital part of the mix of our energy supply and will be into the future. As I said, this policy was in our manifesto and I do not think that anybody should be surprised by it. In terms of industry, you only have to look at Siemens investing money in Hull in the offshore wind industry to know that industry is very well aware of the commitment of this Government to renewables and indeed to the agenda in Paris on climate change.

The noble Baroness said that this could be decided at local level. This is exactly what is happening. There will be further discussion with the devolved Administrations; discussion has already been going on. It is true to say that Scotland is, in terms of the percentage, affected more than the rest of the United Kingdom, as it has been from the benefits—61% of wind energy has been deployed in Scotland, so it represents roughly the same amount. Again, that should not come as a surprise to anybody.

This decision that we have made—the Statement presented in the other place by my right honourable friend the Secretary of State—represents an important way of tackling the fact that if we do not take this action it will result in higher bills and/or other renewables not being brought on stream. In terms of investor impact, there will be new jobs with other renewables—and if we had not taken this action, we would not have been investing in the other renewables.

In relation to contracts for difference, the Secretary of State made it clear that we would be bringing a Statement forward on that. It has been extremely successful in terms of value for money, as I think noble Lords across the House will be well aware.

[Viscount Hanworth (Lab)]

My Lords, this strikes me as a most deceptive announcement. The deceit lies in the fact that rather than being aimed at reducing the cost to consumers—as it proposes to be—the announcement is in truth aimed at appeasing, as we have heard, a Back-Bench Conservative lobby averse to what it regards as unsightly wind farms. The cost of offshore wind-generated electricity is reckoned to be £120 per megawatt hour, whereas the cost of onshore electricity is reckoned to be £80 per megawatt hour. Clearly, the interests of economic efficiency would be best served by preserving the subsidy for onshore power and reducing that for offshore power. The interests of the environment would be best served by preserving the subsidies for both. Could the Minister tell us how our electricity demand can possibly be met in the absence of onshore power being fostered in the way that we all assumed it would be?

[Lord Bourne of Aberystwyth]

My Lords, first of all, the noble Viscount makes the same point about this being a response to Back-Bench opinion. This is actually in response to the country’s opinion, as reflected in the Conservative manifesto, which was voted upon at the general election.

The noble Viscount is right about the current cost of offshore wind being more expensive than onshore, although I notice that that difference in cost has sometimes been exaggerated. The cost of offshore wind is falling. Certainly, it is important we realise that, for some of these new technologies, the costs will fall further. Therefore, I am bound to say that this is the reason we have made this decision. It is important that we balance the interests of the bill payer and the interests of new technologies against the fact that onshore wind has been highly successful and will continue to be so. These contracts are on a 20-year basis, so it is not as though wind farms and the contribution that they make will suddenly disappear.

[Lord Forsyth of Drumlean (Con)]

My Lords, I congratulate my noble friend on this announcement. To the noble Baroness, Lady Worthington, who suggested that he did not understand what was happening in the rest of the United Kingdom, I gently point out that her party was reduced to one seat.

My noble friend said that Scotland had benefited from this onshore wind subsidy, but I have seen the industrialisation of the countryside in Scotland take place, in a country that is absolutely dependent on tourism. That is not just because of the windmills but because of the huge electricity pylons that are required to convey this electricity across the country. This Statement will be very much welcomed.

The other thing that I would like to point out to my noble friend is that, in removing this subsidy, he is ending what has been the biggest transfer of wealth from the poorest in Scotland to the richest in Scotland because of the fact that these subsidies, which are being paid to large landowners, are reflected in the bills of the people who have to meet the cost and are undisclosed. Therefore, I believe that this is a great step forward.

I urge my noble friend to look at the next racket, which is biomass, where people are being paid huge subsidies and given large interest-free loans, again at the expense of ordinary people who cannot afford these capital investments and who have to pay the bills. I hope that this is the first step in a process that sees people in Scotland and in the United Kingdom being treated fairly in this issue of renewables.

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend for that contribution. It is right to say, as he has done, that opinion in Scotland certainly is not all one way and there are split views on the usefulness and so on of onshore wind.

In relation to his more general comment about renewables, the Government are committed to making sure that we have a balance of interests between affordability, security and clean energy. That remains the case. Renewables are very important going forward to ensure that we meet those three aims, as a department and a government.

[Lord Campbell-Savours (Lab)]

My Lords, there is something that I cannot quite understand. The Minister said that he was going to consult the Scottish Government. What is he consulting on if the decisions have already been taken?

[Lord Bourne of Aberystwyth]

My Lords, the Secretary of State in another place made it very clear that discussions have been going on with the devolved Administrations about the rollout of the policy, and that will remain the case. On Wednesday, she is meeting Fergus Ewing, the Minister for Energy in the Scottish Parliament, to further those discussions. In relation to one or two comments that have been made about consultation, I should also say that there is a dialogue with industry and interested parties—not consultation but a dialogue—about the rollout in relation to the grace period.

[Lord Birt (CB)]

My Lords, I declare an interest as a long-term adviser to a fund that invests in many sectors but also in renewable energy.

I can assure the Minister that this will be very damaging to investor confidence. I spend a lot of my time talking to global investors in renewable energy who have been frightened by a number of things. The Minister will know what happened recently in Italy, where the Italian Government retroactively changed the solar regime. A few years previously, something similar happened in Spain. I am asked over and again whether investors can have confidence in the British Government in relation to grandfathering rights and showing consistency in this area, and I am afraid that this will rattle investor confidence in renewables. As the Minister will know, wind farms take a long time—typically eight, nine or 10 years—to go through the process. The announcement today will severely undermine the economics of many companies that have already invested a great deal in wind farms going forward and cannot recoup that investment.

Secondly, can the Minister explain the rationale for picking on this particular form of renewable energy when, as a number of other speakers have made clear, it is by far the cheapest form of renewable energy?

Finally, what is the rationale for allowing local people to have the final say in respect of onshore wind and have that apply here but not in respect of other strategic infrastructure or other kinds of power plants?

[Lord Bourne of Aberystwyth]

My Lords, in relation to investor confidence, I can only repeat the point that over £42 billion has been invested in renewables since 2010 along with nuclear and CCS. There has been a massive investment of £11.4 billion in two years in the solar PV sector and it remains the case that we are committed to renewables. I cannot speak for the retroactive action in Italy; this is not retroactive.

On the second point made by the noble Lord, he will be aware from mid-Wales just how unpopular these large wind farms can be. That was very much a feature of the last election. That is why it was singled out in the way that it was.

With regard to costs, it is true that the cost of onshore wind is cheaper, but one reason for that is that it was the first in the field and so it is a more developed technology. That is why we are looking at other technologies, and the costs of offshore wind and other costs—solar and so on—are coming down as well.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I confirm what my noble friend Lord Purvis of Tweed said earlier—I concur with him in his interpretation of how this will be seen in Scotland from a political point of view. The question is: what assessment was made before this decision was taken about that subject as well as the investment implications?

I agree with the noble Lord, Lord Birt, that it is nonsense to say that this will not affect investor confidence in the future—that is complete nonsense. Wise people such as Keith Anderson of Scottish Power make it perfectly clear what the consequences will be. The Government should have listened to him before they took this decision. To what extent will this decision expose Her Majesty’s Government to compensation claims or judicial review?

[Lord Bourne of Aberystwyth]

My Lords, I remind the noble Lord—he will know as well as anyone else—of the importance that we attach, as do the people of Scotland, to having a single energy market.

Sorry, I am afraid that I have lost sight of the particular point that the noble Lord made.

[Lord Kirkwood of Kirkhope]

It was on compensation.

[Lord Bourne of Aberystwyth]

My Lords, the important point about the grace period is that my right honourable friend the Secretary of State has set out what we think is the right balance between the change of policy and shift of emphasis, and the interests of the consumer and the bill payer. We believe that those projects which have planning permission, have a grid connection which has been accepted and have a right of ownership are in a special position, while others are not. My right honourable friend has said in another place that she is happy to enter into a dialogue with the industry, and that is ongoing. It is about getting the balance right, and we feel we have done that. That is one reason why we have not rushed this announcement because we have spent some time on it.

[Lord Howell of Guildford (Con)]

My Lords, this is welcome in the interests of future energy balance, but can my noble friend clarify exactly which subsidies are to be ended next April? Are they just the RO subsidies, or are we talking about subsidies for back-up power stations—which of course are necessary to make the whole system run—energy access roads, transmission lines, switching stations and grid connections? Or are they merely the RO subsidies rather than the other ones?

[Lord Bourne of Aberystwyth]

My Lords, it is merely the RO subsidy.

[Lord Cormack (Con)]

My Lords, I must declare an interest as the president of Protect Nocton Fen, a group which has been set up in Lincolnshire to protect us from 20 turbines, each one of which would be twice the height of the cathedral, which is just seven miles away. I thank my noble friend for the Statement, but I would ask him if I can go back to my supporters in Lincolnshire at the weekend and tell them that the tremendous threat to some of the most historic views in the whole of Europe will now be removed.

[Lord Bourne of Aberystwyth]

I am grateful to my noble friend for that contribution. The interests of consumers and those of people who are concerned about the impact on the landscape have certainly informed the discussions. It is important that we take people with us on energy policy. He is right to cite the example of Lincoln Cathedral, which I think was once the tallest building in the world. However, the reason this is being done is not solely because it was part of the manifesto. It was in the manifesto because we are already delivering in terms of people’s needs in relation to onshore wind; it is already delivering significantly. The costs next year will be more than £1 billion in terms of what will be paid out in subsidy, and that will be going on for the lifetime of the programme. It is not as if onshore wind will not be a significant part of the mix, and of course there is the importance of other renewables. But yes, we have very much in mind the interests of people throughout the country who are concerned about the growth of onshore wind.

[The Lord Bishop of Chester]

My Lords, if and when the new subsidies are ended, we will have 6,000 or 7,000 subsidised windmills. Can the Minister remind the House for how long the subsidies for these thousands of wind turbines are going to be guaranteed, and what the total cost will be over their lifetime? If the figures are not available, could the Minister write to me?

[Lord Bourne of Aberystwyth]

The right reverend Prelate makes an important point. I do not have the specific figure, but it is certainly billions of pounds, and the typical lifetime of a contract or a subsidy in relation to a wind farm is 20 years. But I would remind the House that this is for an important purpose. It is in order that we can reach our decarbonisation targets, and we are determined to do that by getting the mix right. This is about balancing the interests of the consumer and keeping bills down—which I think we would all want to ensure as much as possible—with the interests of ensuring that we have clean and secure energy. As I say, it is about getting the mix right, and I believe we have done that.

[Lord Donoughue (Lab)]

My Lords, will the Minister confirm that from the Government’s own projections the cost to consumers of these subsidies for windmills and solar, which I believe are currently running at 5% of household energy expenditure, will treble to 15% by 2030? Does he agree with the left-leaning Institute for Public Policy Research, a greatly respected body, that such green taxes are deeply regressive and by 2030 will amount to £226 per household? That constitutes a heavy burden on the ordinary householder.

[Lord Bourne of Aberystwyth]

My Lords, I am entering dangerous territory when I am asked to agree with a left-wing organisation. What I will say to the noble Lord is that the cost is immense, but the cost of doing nothing is even more immense. We are determined to get the balance right so that we have clean energy and we are protecting the planet, but at the same time bills have to be affordable—we are very conscious of the fact that some people struggle with their bills—and we have to have security of energy supply.

[Lord Marlesford (Con)]

My Lords, first, I congratulate the Government on making this announcement. Does the Minister agree that the beauty of rural Britain is one of our great national assets, and that the march of wind turbines has in certain respects in certain areas greatly damaged that beauty for a long time—a generation in many cases? More important, does the Minister agree that there is plenty of industrial land on which wind farms can be erected? I drove today through Dagenham, where there are three very large turbines, and where there is room for another dozen or so easily. Does he agree that, rather like building land, where there is plenty of brown land—according to the noble Lord, Lord Rogers of Riverside, there is enough brown land to build 1 million houses—we should focus wind farms in areas where they do not cause an adverse impact on our national beauty?

[Lord Bourne of Aberystwyth]

My noble friend makes an important point about the beauty of our country and our landscape. I do not want to enter into a dispute about different parts of the country. I remind noble Lords of the importance of taking public opinion with us. Clearly, in terms of future wind farms, the number will now be restricted by the Statement. Other renewables, of course, do not have the same impact, and it is very important that we carry those forward into our energy mix, ensuring three things of which I remind the House: affordability, security and clean energy.

[Lord Kilclooney (CB)]

The Minister said that one of the reasons for this decision is a commitment in the Conservative Party manifesto. Was that manifesto supported by the voters in Scotland?

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, we are one country.

[Lord Williams of Elvel (Lab)]

Does the noble Lord agree that it would be wise to stop talking about subsidies? Subsidies come from the taxpayer. What comes from wind farms is for the consumer, not the taxpayer. This is in fact a tax, and should we not refer to it honestly as such?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord makes an interesting point. It is, indeed, a transfer of tax—a subsidy—from the bill payer rather than from the normal taxpayer of income tax, and so on. We all know what we mean. It is a subsidy but I remind noble Lords that it is there for an important purpose because we need to ensure that we hit our renewable targets—I hope exceed them—and make a contribution to the climate change agenda that is coming forward in Paris.

[Lord Sanderson of Bowden (Con)]

When my noble friend’s right honourable friend speaks to the Scottish Government on Wednesday will she remind them that nuclear power is very important in the overall scheme of things for energy? Just because the Scottish Government refuse, through their planning powers, to renew Hunterston and Torness, surely that is a retrograde step.

[Lord Bourne of Aberystwyth]

My Lords, I very much agree with my noble friend. Nuclear is an important part of the mix which we rely on throughout the country, and we will continue to do so. There is no hope of meeting our targets without the contribution of nuclear throughout these islands.

[Lord Berkeley of Knighton (CB)]

My Lords, I wonder whether the Minister would agree that there is another reason why this move is to be welcomed. He talked about democracy and giving more regard to local people’s opinion, and the amount of subsidy has a direct bearing on that. I have some experience of this. Local people trying to fight one of these wind farms—in my case, overlooking Offa’s Dyke and a grade 1 Humphry Repton landscape—have seen such financial benefits to developers that it is very hard for them, standing on their own, to raise the money to fight developers and landowners who have a huge financial vested interest. Apart from anything else, this will at least level the playing field.

[Lord Bourne of Aberystwyth]

My Lords, I know that the noble Lord has taken a great interest in this from a mid-Wales perspective over a period of time. Strangely, he comes to it with a different angle from that of the noble Lord, Lord Birt. It is important that we are conscious that it is very often difficult to take on, in a David-and-Goliath way, a large energy supplier. That is true across government: we need to be conscious that it is sometimes difficult for people to challenge decisions. I remind the House once again that I believe this represents the correct balance of honouring our manifesto and ensuring that we have a balanced answer to the question of energy supply—that it is affordable, secure and clean.

Climate Change

Lord Bourne of Aberystwyth Excerpts

Wednesday 17th June 2015 Lords Chamber

[Baroness Worthington]

To ask Her Majesty’s Government what action they are taking to address the risk of climate change.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, first, I pay tribute to the noble Baroness for her work on the ground-breaking Climate Change Act. We are determined to meet our commitments under this Act and cut emissions by 80% by 2050. I am pleased to affirm that commitment today, particularly given that it is a day of action for the Speak Up For The Love Of campaign. We are also working to secure an ambitious global deal in Paris this year that sends vital signals to communities, businesses, investors and people around the world that Governments are committed to a global low-carbon economy.

[Baroness Worthington (Lab)]

My Lords, I thank the Minister for his comments. On 14 February, the leaders of the three main political parties, prompted by the For The Love Of campaign, which has also organised today’s mass lobby, made three clear pledges on climate change: to win an ambitious deal in Paris, to which the Minister referred; to work together to agree carbon budgets; and to phase out unabated coal in electricity. Much has changed since then, including which parties we might now consider to be the main three, but the need to tackle climate change remains. Can the Minister confirm that the Conservative Government remain committed to these three pledges, and can he provide details of what his department is doing to implement the other two that he has not mentioned?

[Lord Bourne of Aberystwyth]

I thank the noble Baroness for that. As she will know, unabated coal is likely to represent just 1% of emissions by 2025. The Prime Minister and the Secretary of State, Amber Rudd, are very committed to the whole agenda, and we are certainly fully committed to those three goals.

[Lord Howell of Guildford (Con)]

My Lords, what the noble Baroness, Lady Worthington, says is extremely important, and indeed her work is very important; nevertheless, does my noble friend accept that the present policies of working towards decarbonisation in Europe and in this country are not working very well? Some of our energy prices are almost the highest in the world—certainly in Europe. Furthermore, coal-burning in this country is at a very high level and is increasing in many European countries, which is the very opposite of what is supposed to be happening. Can my noble friend assure us that the policy will be adjusted to make more progress on this front? We seem to be going backwards rather than forwards, particularly in respect of coal.

[Lord Bourne of Aberystwyth]

My noble friend makes a serious point in relation to Europe in general. With regard to the United Kingdom, we are on target for decarbonising and are decarbonising at the expected rate. It is true to say that obviously we need to keep a watch on external factors, but it remains the case that unabated coal is scheduled to represent 1% of electricity generation by 2025. That is the goal and we are very much on target for that.

[Lord Purvis of Tweed (LD)]

My Lords, it is the case that the Conservative manifesto said that the Government would simply continue adhering to the Climate Change Act. However, does the Minister agree that that should now be the starting point, not the destination, and that we will need to go further—to meet a binding target to decarbonise Britain by 2050? Would he also agree that a practical step to assist in that would be to greatly expand the remit and breadth of the Green Investment Bank, a really pioneering development of the previous Administration based in Edinburgh?

[Lord Bourne of Aberystwyth]

The noble Lord is right in that we do need ambition in this regard. We are encouraging more ambitious targets through Europe. Of course we are working with Europe on a reduction of at least 40% by 2030 based on a 1990 baseline—that remains the case. But, yes, we do need to take account of the fact that there is a massive challenge to keep inside the 2 degrees increase in temperatures over the period that we are looking at.

[Viscount Hanworth (Lab)]

What steps are the Government taking to sustain and enhance our competence in nuclear engineering, as indeed they have been encouraged to do in several recent reports?

[Lord Bourne of Aberystwyth]

The noble Viscount will be aware that we are very much on target for bringing on Hinkley Point C by 2023. After that, there are other nuclear generators that should be brought on, such as Sizewell. The noble Viscount is right that it remains very much an important part of the mix. We are working with EDF, taking account of what is happening in France and Finland, for example, to make sure that we deliver something that is entirely safe and contributes to a vital part of our energy supply.

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[Viscount Ridley]

My Lords, given that global warming has been much slower over the past 30 years than what 95% of the IPCC models had forecast, and given that 14 peer-reviewed papers published since 2011 find that climate sensitivity to carbon dioxide is much lower than the 3 degrees assumed by the Government’s climate impact models, what is the Minister’s preferred estimate of climate sensitivity? Does he agree that the best scientific evidence now suggests that it will be 100 years before we hit the 2 degrees threshold and that perhaps there are other more urgent humanitarian and environmental priorities?

[Lord Bourne of Aberystwyth]

I find myself in total disagreement with the noble Viscount. The scientific evidence is overwhelming that this is a very, very serious issue and we do need to address it. The consequences if we do not are dire.

[Baroness Jones of Moulsecoomb]

My Lords—

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[Baroness Jones of Moulsecoomb]

Thank you.

My Lords, is the Minister aware that, should other countries such as Norway divest themselves of fossil fuel investments, the London Stock Exchange would be highly exposed because we carry something like 19% of the global carbon budget? Are the Government thinking about stimulating the green economy, for example, through PFI contracts or similar public service contracts?

[Lord Bourne of Aberystwyth]

The noble Baroness will be aware that the green economy is growing and, at the same time, there is a lowering of the carbon economy within the United Kingdom. This is a very favourable sign, which exhibits the point made by Sir Nicholas Stern and his committee. Clearly, many businesses have signed up to the importance of tackling climate change, as the noble Baroness will be aware.

[Lord Deben]

Does my noble friend accept that the largest problem is that the Government have no plans for continuing the advantages for renewable energy and the like after 2020? We need to have clear pathways as quickly as possible because, unlike my noble friend, I think the science shows that we will reach 2 degrees much more quickly than he suggests.

[Lord Bourne of Aberystwyth]

I agree that there is an urgent need to look at the renewables programme. My noble friend will be aware that there is a new department and that we are all in new roles, but we are looking at the issue urgently.

Electricity Supply: Decarbonisation

Lord Bourne of Aberystwyth Excerpts

Monday 15th June 2015 Lords Chamber

[Lord Whitty]

To ask Her Majesty’s Government what steps they are taking to decarbonise the electricity supply system in the United Kingdom, with which targets and over what timetable.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, we are committed to doing our part to tackle climate change in line with the Climate Change Act. We want to do this as cost-effectively as possible to ensure that our energy is secure and affordable as well as lower-carbon.

[Lord Whitty (Lab)]

My Lords, I thank the Minister for that reply. I am pleased to have my first encounter with him in his new position. However, I hope that he will ask his officials to give him slightly more detailed Answers. The Question refers to a timetable, and we need action on a number of fronts. By what date does he expect the coal-fired power stations to be phased out—that was a commitment of all three parties before the election—and when does he expect the Hinkley Point B power station to come on-stream to provide us with a new source of nuclear power?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for that welcome; I am sure it will be the start of a beautiful friendship, to revisit “Casablanca”. We anticipate that by 2025, unabated coal will account for only 1% of total generation. In relation to Hinkley B, which he also mentioned, the answer is 2023.

[Lord Lawson of Blaby (Con)]

My Lords, I echo the welcome from the noble Lord, Lord Whitty, from this side of the House. In his reply the Minister referred to the Climate Change Act, which unilaterally imposes limits on carbon emissions for the United Kingdom. I am well aware that the Government wish to secure a legally binding global agreement on emission limitations at the United Nations Paris conference at the end of this year but, should that not prove possible, will he undertake to look seriously at abandoning or at least suspending our commitments? Unilateral masochism can make no sense whatever.

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[Lord Bourne of Aberystwyth]

My Lords, there is no question of unilateral masochism on this issue. We are anticipating agreement in Paris; all the signs are very favourable. It is not just Paris, of course; we have to ensure that there is monitoring thereafter. There is no plan B for the United Kingdom or the rest of the world.

[Lord Cunningham of Felling (Lab)]

My Lords, is it not obvious to everyone who has been engaged in these debates for many years that we have no hope of meeting the onerous impositions regarding climate change—including commitments from previous Labour Governments—without significant development of civil nuclear power? Why are there such repeated delays in the development of civil nuclear power in our country? Is the Minister not also concerned about recent reports that the French themselves, who are involved in our recent project, have found manifest failings in their own latest civil nuclear reactor at Flamanville?

[Lord Bourne of Aberystwyth]

My Lords, civil nuclear is certainly an essential part of our energy mix—I welcome what the noble Lord said about the Labour Party—and that continues to be the case. We are confident that Hinkley C will be delivered by 2023, and there are several other nuclear power stations in the line after that. Obviously, we learn from the French and the Finnish experience with regard to delivery.

[Lord Purvis of Tweed (LD)]

My Lords, from these Benches I welcome the Minister to his portfolio. Will he ensure that the momentum established by the previous Administration in this field continues, and indeed goes further? Will he commit that if energy proposals are brought forward, Parliament will consider them—they could include the de-coaling of our electricity supply by 2025 as part of an ambitious target to halve energy demand by 50% by 2030, so that we can meet the aim of a zero-carbon Britain by 2050—in order to maintain the momentum that has already been established?

[Lord Bourne of Aberystwyth]

I thank the noble Lord for his kind comments. The ambitions for, and commitment of the Secretary of State and the Prime Minister to, this agenda are undoubted, and we will continue the work of the last Government in that regard. The targets and aims are ambitious, and we will share those with both Houses so that we can gain the consensus and achieve the momentum to take this agenda forward.

[Baroness Worthington (Lab)]

My Lords, I, too, take this opportunity to welcome the noble Lord to his new post; I look forward to a fruitful relationship. I also take this opportunity to wish my noble friend Whitty a happy birthday. Can the Minister confirm whether the department has assessed the price implications of adopting a decarbonisation target for the electricity sector? That might well be a cheaper way of proceeding than the carbon price support mechanism we are currently using to try to phase out coal and make good on that pre-election pledge.

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[Lord Bourne of Aberystwyth]

I thank the noble Baroness for her comments and belatedly offer birthday congratulations to the noble Lord, Lord Whitty; I have not had an invitation to drinks as yet, but no doubt that is in the post. On the noble Baroness’s comments on decarbonisation of the electricity sector, we are convinced that the best way forward is the path we are currently set on. We are delivering through a combination of environmental policies, the ageing coal fleet and support mechanisms for renewables, and that remains the case.

[Lord Flight (Con)]

My Lords, what are the Minister’s views about the commercial viability of Hinkley Point? The increases in costs since the project was first envisaged have been very large indeed; might there not conceivably be cheaper ways of producing nuclear power on a smaller scale?

[Lord Bourne of Aberystwyth]

My Lords, as I have already said, it is vital that we deliver on the nuclear agenda, and Hinkley C is part of that agenda. We are convinced that the price mechanisms will deliver that, and thereafter the other reactors that are queued up, such as Sizewell. Obviously, we remain open to looking at other nuclear technology, but at the moment the aim is to ensure that we, together with EDF, deliver on Hinkley Point C.

[Baroness Howarth of Breckland (CB)]

My Lords, does the Minister agree that efficiency is equally important in order to meet the targets? What is happening with the European electricity grid and developing a strategy right across Europe to share electricity at a better price?

[Lord Bourne of Aberystwyth]

I thank the noble Baroness for that question. I had the opportunity to visit the national grid and see how the interconnectors work; in fact, they proved vital when we were there, as we noticed, so that is an important part of it. Further interconnectors are coming online to Norway and to France, and they are certainly part of the Government’s energy supply mix.

Wales Bill

Lord Bourne of Aberystwyth Excerpts

Monday 24th November 2014 Lords Chamber

[Lord Elystan-Morgan]

My Lords, I assume that we have already dealt with the amendment and are now dealing with the totality of the Bill on Third Reading?

[Lord Bourne of Aberystwyth (Con)]

I am sorry. The noble Lord should speak only once in this debate and we have not dealt with the amendment yet.

[Baroness Randerson]

My Lords, I thank all noble Lords who have spoken in this debate, and indeed throughout the numerous debates we have had on the Bill. My noble friend Lord Tyler started his response on this amendment by pointing out that all parties endorsed the agreement that led to votes at 16 in Scotland. I make it clear that I strongly appreciate the work that my noble friend has done over a very long period to raise awareness of, and develop a campaign generally on, votes at 16.

The noble Lord, Lord Wigley, made the point that he would have preferred there to be wider powers for votes at 16, but he will understand that this question is best considered as part of the devolution of further powers to the Assembly, which is something which is being considered at this time, with a view to agreement and announcements by St David’s Day. He also asked about the precedent for future referenda. These amendments deal with the referenda provided for in the Bill. There are no further referenda planned in Wales. I point out to the noble Lord that the Welsh Government have not yet committed to this referendum. My view is that we should get this one out of the way first before thinking of further referenda.

My noble friend Lord Crickhowell referred to the ad hoc approach on this. I believe that our general approach to the devolution of further powers for the Assembly overcomes this problem. The noble Lords, Lord Cormack and Lord Empey, also referred to the way in which the decisions were being made on votes at 16. There has been a response to the success of the votes at 16 in Scotland. There will be a full analysis of the impact of that in due course, but the success in Scotland has certainly sparked debate. Given the points that the noble Lord, Lord Morgan, made about the way in which we make constitutional decisions in this country, it is important that there is considerable public debate on this. One could say that that debate has started in Wales, in general terms, with the debate that was held in the Assembly in which an overwhelming majority of Assembly Members supported votes at 16.

The important thing is that the Wales Office and my right honourable friend the Secretary of State for Wales are leading on the four-party discussions, in which the options for the future of devolution in Wales are being considered—the reserved powers model and the scope of any additional powers. That will include, for example, the devolution of powers over election arrangements. I believe that we are embarking on a period of considerable reflection and debate on the nature of our democracy in the UK as a whole, but we have already taken steps to ensure that that debate takes place in Wales. In line with the commitment made by my right honourable friend the Prime Minister on 19 September, we have made sure that Wales is at the heart of the debate on devolution.

My noble friend Lord Crickhowell asked two questions. One was related to the Electoral Commission’s concern about time constraints. I point out to him that the detail in the amendment ensures that time would be available in practice to assemble the electoral register required. The details in the amendment are based on a franchise Act of the Scottish Parliament. The Bill, as amended, will allow for 180 days for the Secretary of State to lay the order, plus the time that it would take to pass through both Houses of Parliament and the Assembly. There would be a pre-election period as well. If one takes all those periods of time together, they come to approximately seven months, which is the time that the Electoral Commission recommends for new legislation of this type. We believe that there is sufficient time to amass the register as required. My noble friend also asked about resources for awareness raising and so on. I assure him that we are well aware of the resource implications of this.

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[Lord Tunnicliffe (Lab)]

My Lords, perhaps I may invite the government Front Bench to point out the protocol for the Motion that the Bill do now pass.

[Lord Bourne of Aberystwyth]

As I understand it, it is not normally debated but it is quite in order to do so.

[Lord Morris of Aberavon]

My Lords, it is not my intention to detain the House, despite this interruption, for more than a few minutes. I welcome very much the significant powers granted to Wales in this Bill, which has been so ably steered by the Minister. Perhaps of greater importance will be the conclusions of the consultations which will be produced, I hope, by 1 March. They will be groundbreaking. I also welcome very much the role being played the Secretary of State who is carrying out what I hope is the mandate given to him following the reshuffle by the Prime Minister in the words of my noble friend Lord Elystan-Morgan.

Following 7 May, my hope is that a Labour Government will bring forward proposals. By our votes in Committee, the Labour Front Bench underlined its commitment, as did my noble friends Lady Morgan of Ely and Lady Gale at Second Reading. They have provided the basis for a manifesto commitment. In the 1970s, when I set up the role of the Attorney-General to police the Assembly if it exceeded its powers, I never expected or contemplated one of my successors being so trigger happy and repeatedly trying to overturn the Assembly, and getting, for his pains, black eyes on two occasions. A simpler, cleaner, reserved powers model would be much better.

I close on the need for a high-power constitutional convention. In 1969, the setting up of the Kilbrandon royal commission by a Labour Government was the vital catalyst for the path that we have been treading over the years. I shall never forget the noble Lord, Lord Elystan-Morgan, coming up from the beach at Newquay in Cornwall one lunchtime and brandishing his idea for a royal commission as a way forward. It seems from the papers I have seen at Kew that other work along the same lines was also being done by Ministers. The announcement at the next Labour Party conference of a royal commission was the culmination of that work.

Today, something more profound and influential than even a royal commission is needed to map out the role for Scotland, Wales, Northern Ireland and England as partners in the future of the United Kingdom. I hope that there will be courage on the part of all the parties to work out a broad-based convention so that we can come to the end of piecemeal reform.