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Huhne quizzed on Energy and Climate Change

May 22, 2011 10:51 AM

• [May 19] Tony Baldry (Second Church Estates Commissioner; Banbury, Conservative): IF he will make a statement on his departmental responsibilities.

491)

Chris Huhne: My Department works to secure clean, affordable energy supplies and action on climate change. Last week, the Energy Bill received a Second Reading in this House. It contains provisions for the green deal, our flagship piece of legislation, which will deliver energy efficiency to homes and buildings across the land. On Tuesday, we announced the fourth carbon budget, setting an ambitious target for UK emissions reductions. We are now the first country in the world to publicly commit to cutting carbon well into the next decade, and I have today published the summary of conclusions of the Ofgem review.

491)

Tony Baldry (Second Church Estates Commissioner; Banbury, Conservative): Given the current drilling by Cuadrilla at Blackpool, is the Secretary of State confident that extracting shale gas in the UK will not lead to the contamination of water supplies?

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Chris Huhne: I am grateful to my hon. Friend for that question. The UK has a robust regime and it is important to recognise that we intend to ensure that shale gas operations are carried out in a safe and environmentally sound manner. Shale gas exploration has been controversial, especially in the United States where regulation has not been well implemented, but here it is subject to a series of regulatory checks, including planning permission, health and safety checks, consultation with the Environment Agency and drilling consent from my Department. The Environment Agency in particular has scrutinised

Cuadrilla's plans thoroughly and does not consider that they pose a significant risk to the environment, including to water resources.

491)

Meg Hillier (Hackney South and Shoreditch, Labour): In the last period, lending to small and medium enterprises dropped by 2%, so Project Merlin is not delivering-the Prime Minister has spoken on this. We know the importance of the green investment bank and of the need to get green businesses to grow-that is the subject of cross-party agreement. So why will the green investment bank not lend to small businesses?

492)

Chris Huhne: The exact remit of the green investment bank has still to be announced and I urge the hon. Lady to wait for that. We have said that it will be built up and able to borrow and lend from April 2015. That will be the most significant point, because at that point it will be able to provide finance for some of the biggest investments in the renewable sector in particular. My Department is acutely aware of the importance of encouraging small businesses and we intend to do so.

492)

Meg Hillier (Hackney South and Shoreditch, Labour): Once again, we hear warm words from the Secretary of State but no action. Many small businesses will be out of business by 2015 and we will have lost that opportunity for technological development in the UK backed by the green investment bank.

On a wider point, we have heard rumours in the newspapers about what the green investment bank will be and the Secretary of State has just talked about a future announcement. Will he announce it to the House himself, or will he leave to the Deputy Prime Minister to make a speech in some other place about what will happen with the green investment bank?

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Chris Huhne: I should point out to the hon. Lady that the lead Department on the green investment bank is the Department for Business, Innovation and Skills, so my right hon. Friend the Business Secretary will be making the formal announcements. That will happen in due course.

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Julian Huppert (Cambridge, Liberal Democrat): Will the Secretary of State tell me a bit more about what he is doing to encourage and support the clean-tech industry, including the excellent companies around Cambridge, such as AlertMe, which monitors energy efficiency, Econovate, which is involved in sustainable construction, and Eight19, which is developing novel solar technologies?

492)

Chris Huhne: Earlier this year, I visited the SmartLIFE centre in Cambridge and met almost a dozen clean-tech companies from my hon. Friend's constituency. I was impressed not just by the pioneering technologies that one would expect from a city with Cambridge's record on innovation, but by how these ideas are being turned into thriving businesses. I understand that the SmartLIFE low-carbon centre is expanding this year to provide the skills and training facilities needed for low-carbon qualifications. It is an exciting development.

492)

Catherine McKinnell (Newcastle upon Tyne North, Labour): Almost one in four households in the north-east is living in fuel poverty, which is the highest proportion in England. The Minister of State, Department

of Energy and Climate Change, Gregory Barker said earlier that the energy company obligation will rightly focus on fuel poverty. However, can the Secretary of State rule out its being used to subsidise banks providing green deal finance?

492)

Chris Huhne: There is absolutely no intention, and nor would it be possible, to use the ECO to subsidise banks. I am confident about that because unlike the Warm Front scheme, which Labour championed, the green deal provisions enable residents, having had a survey, not merely to go to the provider that did the survey, but to take that survey and get one or more alternative quotations. The introduction of competition into the process will guarantee that the subsidy goes to where it is needed-towards a reduction in carbon emissions and improvements in energy efficiency-not to providers, be they people in the industry or the banks.

493)

Fiona Bruce (Congleton, Conservative): The Middlewich company, Convert2Green, in my constituency, recently won the East Cheshire chamber of commerce environmental company of the year award. It converts used cooking oil, which would otherwise go into drains or landfill, into biodiesel for use in vehicles and elsewhere. The 20p duty differential for biodiesel has helped it to develop its innovative processes. What assessment has the Department made of the contribution of the 20p duty differential to the UK's renewable energy targets, and what are the Government's future plans for the differential?

493)

Chris Huhne: I join my hon. Friend in congratulating the company involved. The recent quarterly renewable transport fuel obligation report gives clear evidence on the effectiveness of the 20p duty differential for biodiesel derived from used cooking oil in assisting the Government to exceed their greenhouse gas savings target, and in increasing substantially the retrieval of waste cooking oil, which otherwise would literally be poured down the drain or go to landfill. The differential has therefore made a valuable contribution to the Government's renewable energy targets and waste strategy, and to the growth of the low-carbon economy.

493)

Lilian Greenwood (Nottingham South, Labour): The Government's announcement of a minimum energy efficiency standard for private rented homes is welcome, but the hundreds of tenants in Nottingham living in cold, damp F and G-rated homes should not have to wait until 2018 for it to be introduced. I heard the Secretary of State's reply to my hon. Friend Graham Jones, but would the legislation not be more effective if a register of landlords was introduced so that they can be informed about the new standard and directed to information about the green deal and other measures that might help them to improve their properties?

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Gregory Barker (Minister of State (Climate Change), Energy and Climate Change; Bexhill and Battle, Conservative): The hon. Lady is right that we are taking action to ensure that the private rented sector enjoys the full benefits of the green deal, but she is wrong to assume that tenants will only learn about this from a council information leaflet or some regulated communication. The most powerful element

in driving the green deal forward will be the market, the new competition, the big retailers and the new entrants into the market. That will create a huge wave of interest across the country in all sectors.

493)

Daniel Poulter (Central Suffolk and North Ipswich, Conservative): I am sure that my right hon. Friend would agree that in making the case for the green new deal, we must bring local communities with us. Onshore wind turbines are controversial in many rural communities. If we are not careful and if local authorities push ahead with wind turbines without considering other options, we run the risk of losing the support of some of our rural communities. Does he agree?

494)

Chris Huhne: I am grateful to my hon. Friend for his question. As the Minister of State, Department of Energy and Climate Change, my hon. Friend Charles Hendry pointed out earlier, onshore wind is the cheapest source of renewable energy, and we have to take account of affordability. I should also say that there are many local communities the length and breadth of this country that actually want to install onshore wind turbines. It is not always the case that they are unpopular. Indeed, the most attractive and regularly visited tourist feature in my constituency is the Bursledon windmill. It is, admittedly, slightly older than many wind turbines, but it works on exactly the same principle. Bursledon windmill is beautiful, and many of the wind turbines that we are installing are beautiful too.

494)

Ian Mearns (Gateshead, Labour): The Secretary of State will be aware that the Renewable Energy Association has described the proposed tariff changes for solar photovoltaic installations over 50 kW as an "horrendous strategic mistake". If he goes ahead with the changes, how do the Government intend to support decentralised local community energy generation in future?

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Gregory Barker (Minister of State (Climate Change), Energy and Climate Change; Bexhill and Battle, Conservative): I am afraid that the horrendous strategic failure was made by the last Government, who failed to put any sensible financial controls on the feed-in tariff scheme. There is plenty of scope for new innovative community schemes to take shape. Indeed, I visited one only last week in the constituency of my hon. Friend Simon Kirby, and I look forward to visiting many more. We want a big push forward in decentralised energy schemes. Solar is a great technology, but it has to be affordable. We need proper controls that do not blow the budget, which is what would have happened had we not taken action.

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Jo Swinson (East Dunbartonshire, Liberal Democrat): Most of the climate change debate tends to focus on mitigation and decarbonisation, but it is also important to work on adaption, such as how we respond to pressures on water supply. What plans are the Government putting in place at home and abroad to cope with the increasing pressure and also to promote new water filtration technologies, such as that promoted by FilterClear, an innovative company in my constituency that is creating green jobs and British exports, and promoting the more efficient use of water?

494)

Gregory Barker (Minister of State (Climate Change), Energy and Climate Change; Bexhill and Battle, Conservative): The hon. Lady is absolutely right. There are opportunities for green growth and innovation right across the economy, and a lot that we can do in the water sector in particular. However, that is a matter for the Department for Environment, Food and Rural Affairs, which is looking carefully at how we develop the green deal. Indeed, it is possible that we could see a similar programme offered in due course-perhaps a blue deal-to ensure that water-saving measures are funded in the same way. However, she is absolutely spot-on in realising the huge potential that exists.

495)

Katy Clark (North Ayrshire and Arran, Labour): Has there been any discussion about the geographic spread of carbon capture and storage demonstration projects? The Minister will be aware that there are a number of proposals in Scotland. Is it possible that two or even three of them might be allowed to go ahead?

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Charles Hendry (Minister of State (Renewable Energy), Energy and Climate Change; Wealden, Conservative): The hon. Lady raises an extremely interesting point. Clearly there is an interest in sharing infrastructure, rather than everybody rebuilding their own, for CCS to go forward. We are putting forward seven schemes to the European funding mechanism -the NER300-which is more than any other country in Europe. Some schemes are geographically close to each other and some are further apart. However, they will be chosen on their merit, and there is a lot of work being done to ensure that the infrastructure costs are shared wherever possible.

495)

Damian Hinds (East Hampshire, Conservative): Ofgem's retail market review finds that many consumers are not getting nearly as good an energy deal as they could, and that includes too many of the poorest and most vulnerable. We have a diverse and dynamic market. That is a good thing, but it also means complexity, with more than 300 different tariffs available, 50% more than a year ago. Does my right hon. Friend agree with Ofgem's proposal to simplify things and make it easier for consumers to compare prices and get a better deal?

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John Bercow (Speaker)

Order. The questions are becoming too long and they need to be shorter.

495)

Chris Huhne: I am grateful to my hon. Friend, and I am extremely enthusiastic about the thrust of the question. I am delighted that Ofgem is looking at this issue, because as we have known ever since the middle ages-if not before-if a market is to work effectively, we need common weights and measures, so that people can compare prices in the marketplace properly, and that is exactly what tariff simplification would enable them to do.

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John Bercow (Speaker)

I call John Robertson. Not here.

495)

Barry Gardiner (Brent North, Labour): Fifty per cent more CO2 emissions savings could be made in the

transport sector by adopting Greener Journeys' ONE Billion challenge for a modal shift. Will the Minister look into the efficacy of the scheme and discuss the proposal with his counterpart at the Department for Transport?

495)

Gregory Barker (Minister of State (Climate Change), Energy and Climate Change; Bexhill and Battle, Conservative): I am not familiar with the details of the scheme that the hon. Gentleman has mentioned, but I will certainly look into this and I would be happy to communicate with my colleagues at the Department for Transport.

496)

Chris Heaton-Harris (Daventry, Conservative): Can the Secretary of State remind the House how much energy was contributed to the grid by onshore and offshore wind last December-one of the coldest periods of time on record?

496)

Chris Huhne: I am grateful to my hon. Friend for that question. What he is really asking is: does wind help when it is not blowing? Any Energy Secretary has to deal with the nightmare possibility of six cold, still days in February when the wind is not blowing but we all still need electricity. It is important for him to remember, however, that the energy sector has always had to deal with variable demand. That is why plant is often built to back up other plant. An example of the enormous variation in demand is when we all go and put our kettles on during the advertising break in "Coronation Street". At that point, we need to bring on massive amounts of electricity generation. That is exactly the same principle, so my hon. Friend's point is by no means a killer criticism of wind. Wind has a very important contribution to make to the national grid, and we intend to ensure that it continues to do so.

496)

Ian Lavery (Wansbeck, Labour): Compliance with environmental legislation places a huge burden on companies such as Rio Tinto Alcan in my constituency. It will wipe out profits in excess of £50 million, come 2013, and it could jeopardise 650 jobs. What measures are the Government putting in place to protect jobs in that type of industry?

496)

Chris Huhne: The hon. Gentleman is absolutely right to raise this matter. It is crucial that we bring forward proper measures to deal with energy-intensive industries of the sort that he mentions. In fact, we have had contact with Rio Tinto Alcan, along with many other energy-intensive industries, on exactly these issues. As I announced earlier this week, we are committed to working jointly with the Department for Business, Innovation and Skills to bring forward a package of measures to ensure that energy-intensive industries have a thriving future in this country. There are a number of ways in which we can help, including free allocation under the emissions trading scheme or conversion to biomass, which is also an important option.

• Full Debate in Parliament