§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]9.37 am
§ The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt)
This is a historic day. It is the first time that the House has debated for a full day in Government time the subject of alternative sources of energy. My hon. Friend the Member for Devon, North (Mr. Speller) has been pressing for many years for a day like this, as have other hon. Members. I am therefore delighted that we are debating alternative sources of energy—the "renewable" sources of energy, as some would say, for which I have ministerial responsibility.
This is a subject to which the Government attach great importance. Although the United Kingdom has maintained a programme of research and development in this area since about 1975, the spend of the present Government since 1980 has been at three times the previous rate.
Our work on renewables is an integral part of our approach to energy matters generally, where we seek to ensure that adequate and secure supplies of energy are available to the country at the lowest practicable cost, while meeting safety and acceptable environmental criteria. The evaluation of technologies such as the use of wastes, direct use of the sun, wind and tidal power is an importance part of our industrial strategy to encourage energy industries to develop for the domestic and export market economic, alternative sources of energy.
I should like to set the parameters for the debate in general terms, and I shall seek to catch your eye, Mr. Speaker, at the conclusion of the debate to answer points of detail made by hon. Members on both sides.
Some Administrations in the past have sought to plan for our future energy supplies on the basis of central assessments of supply and demand. We do not believe that that approach leads to the most efficient allocation of resources or is the best way of achieving our objectives. In the first place, those kinds of forecast cannot bear the weight of policy making which a central energy plan imposes upon them. Our energy policy cannot by itself control many of the important factors which are international in nature, and the forecasts will inevitably be wrong in many respects. We fool ourselves if we pretend otherwise.
What is required is a much more flexible approach to the energy future in which the essential ingredients are diversity of energy supply, economy of energy supply and efficiency of energy use. Our energy policy is aimed at achieving those goals.
We are particularly fortunate in this country to have substantial indigenous energy sources of coal, oil and gas which, taken with nuclear sources, represent valuable diversity in supply. The exploitation of economic renewable alternative sources of energy promises further diversification which can only be good news for the security of our future energy supply. Only a few weeks ago in Japan, I was asked by one of the Japanese Ministers whythe United Kingdom, so plentiful in oil, gas, coal and nuclear energy, should have such a major investment programme in renewables. I was able to explain, as I explain to the House now, that I believe that this is a wise investment in the future. I believe that renewable alternative sources of energy are a key element in United 576 Kingdom energy strategy. They are already making a useful contribution to the diversification of the United Kingdom energy economy in an economically justified way and they will be important in maintaining diversity in the future.
While the diversification of our energy base is an essential element in building a robust energy economy, our energy policy priorities rest on the belief that market forces are the best way of discovering exactly what customers want and the best means of finding out whether they can have it at a reasonable price.
We have been concerned to set a framework which will ensure that the markets operate in the energy sector with a minimum of distortion and that energy is produced and used efficiently.
A key objective of our energy policy is improved energy efficiency throughout the economy. Energy efficiency is not simply the promotion of energy conservation irrespective of cost. Rather it is to ensure that investment decisions on energy efficiency measures are assessed on the same basis as other cost-saving investments. The potential for cost-effective investment in energy-efficient equipment and technologies is immense. As a nation we waste £7 billion a year on energy. We must cut out that appalling waste. It is for this reason that my right hon. Friend the Secretary of State created the energy efficiency office and launched a nationwide campaign to improve our energy efficiency. Now we move ahead with a new impetus because 1986 has been designated Energy Efficiency Year. The aim is to ensure that the public, the business community, local government and central Government become conscious of the need to stop the waste of money and energy in which Britain currently indulges. Hence the slogan of the year is "Monergy 86". That is an opportunity to carry forward the momentum of the present campaign and ensure that our energy resources are employed to their maximum potential.
Returning to our work on renewables, I have to say that I regard the evaluation for use in Britain of the alternative sources of energy as a major British success story with much pioneering work undertaken over the past few years by the public and private sectors. In many cases, the Government and other organisations and companies have worked closely together on a wide range of projects, and continue to do so. I am confident that that spirit of co-operation will continue.
I should like to stress to the House that the development of the alternative sources of energy is not a case of dusting down the older technologies and constructing wooden windmills. Of course not. We are talking here of "state of the art" technology and in many cases working on the frontiers of science. It consequently takes time and much effort to evaluate the individual technologies and to identify those which can make a cost-effective contribution to United Kingdom energy supply.
The original objective of my Department's renewable energy research and development programme was to determine by the mid-1980s the likely cost of renewable energy technologies, together with the nature, size and time of their future contribution to future energy supplies. I believe that this has been achieved in large measure during the 10 years the programme has run.
The programme began in 1974, and expenditure is currently running at about £14 million per year. Since 1979 the Government have spent over £68 million on a 577 comprehensive range of research and development for the renewable technologies, a considerable advance on the £15.8 million spent in the first five years.
The recent review by my right hon. Friend's Advisory Council on Research and Development of the programme and the setting of revised objectives is a further reason why this is an appropriate time for the House to review recent developments and look forward to the future.
We now group renewable technologies into three classifications: first, the economically attractive, which can be deployed with profit fairly generally at present fuel prices; secondly, the promising but uncertain, where more research is needed to reduce costs or to define them better; and, thirdly, the long shots, which seem unlikely to be useful in the United Kingdom, but which need careful monitoring and exploration.
The broad aim of our renewables programme is to encourage the uptake of commercially attractive technologies and to increase our understanding of those that are promising but uncertain. Following the recent review by ACORD, the programme's new objectives are directed at achieving this goal by the early 1990s.
Most of the technologies which were shown at the beginning of the programme to have the physical potential to provide renewable energy under United Kingdom conditions were at an early stage of development and many of the economic factors were poorly known.
Some technologies were quickly shown to be unsuitable for large-scale use under United Kingdom conditions and no significant research work on them was funded by my Department. Solar voltaic cells and ocean thermal energy conversion are examples here, although the Department of Trade and Industry is continuing to provide support for voltaic cells with a view to their export potential. I had the opportunity to tour the BP solar systems factory at Aylesbury to see the tremendous technology being developed by that massive company, which is putting in enormous investment.
Other technologies have also proved to be uneconomic, but only after fairly extensive research and field trials. Examples here are geothermal aquifers and wave energy, where we have spent £10 million and £17 million respectively on investigating their technical and economic potential. However, we must be selective and concentrate our available resources into the most promising areas. Our policy is to get the best possible value for money from our research and development funds and back the winners. We cannot simply be concerned to assess the technical possibilities of extracting energy from a source without an eye for its economic potential. It is inevitable that some technologies have to be rejected on technical or economic grounds.
Although we are concentrating on those technologies which stand a good chance of becoming economic in the short and medium term, we are funding work with potential in the longer term beyond 2025. In addition, we intend to maintain a credible expertise in those technologies which can be described as "long shots"—technologies that might be deployed cost-effectively only in the unlikely event of a dramatic improvement in the costs and performance or if fuel prices escalate sharply. We remain receptive to new ideas that may offer promise of making those "long shots" economic.
We can point to three major achievements in our programme. First, several technologies have now been brought forward to the stage of being economically 578 attractive as a result of our research and development programme. Our policy for them is to demonstrate their effectiveness in the market place and our everyday lives and to secure technology transfer to companies with a commercial interest in their exploitation. Notable among them are direct solar heating of buildings and the use of wastes for fuel.
Secondly, major advances are being made in other technologies, such as wind and geothermal hot dry rocks, which have promise of becoming economic in the future. Thirdly, comprehensive assessment has been made of individual technologies, and their potential and costs under United Kingdom conditions. For example, we have made major advances in wave technology, and expertise has been developed that may have potential for overseas markets. Here we are maintaining and shall continue to maintain a substantial portfolio of wave patents in the event of that potential being realised.
Passive solar heating, or the direct heating of buildings by the sun, has been shown to be economic in many instances. Passive solar features usually add to the amenity of buildings, and most people find that the living and working environment is improved. I have had personal experience of that — I have been to housing developments that have incorporated passive solar features. That is true, whether at home or in the office.
Our programme has already established that considerable reductions in energy consumption can be achieved by utilising passive solar features in both new and existing houses in the United Kingdom. In trials at Milton Keynes houses of energy efficient design employing simple passive solar features have been shown to use 40 per cent. less fuel for space heating than conventional equivalents. The passive solar gain contributed at least half that saving. Our work has shown that in the longer term direct solar heating by such methods has the potential to save this country approximately £800 million — a staggering figure, but one that is easily identifiable when one examines the results of those important experiments. My Department's future programme of work in that area has been recently reassessed and expenditure is planned to rise from the present £750,000 a year to about £1.5 million a year over the next two years.
As well as incorporating new research and development work to extend the range of technical options and applications available, increased attention will of course be given to information dissemination, educational requirements, market aspects and, above all, technology transfer mechanisms. I regard it as essential that the results of our research and development programme reach those in the community who will have to take the responsibility for the adoption of the technology. A key element in our forward programme, therefore, will be an expanded design studies programme involving architects, quantity surveyors, builders and developers. I was delighted to have the opportunity of addressing the important Watt committee on that subject on Wednesday. I am delighted with the attention that it is focusing on that vital area. We must explore as many avenues as we can to ensure that that important technology gets away from the research station, off the drawing board and into our daily lives.
Biofuels, made from organic wastes or plants grown especially for energy purposes, can provide attractive alternative energy options now, while at the same time making good use of industrial and domestic wastes. Why do we waste wastes if they can provide substantial savings 579 on our energy bills? Using wastes in that way helps to conserve fossil fuels and increase diversity of supply. I saw several interesting developments in that area on a visit earlier this year to Denmark and Sweden. In many circumstances, biofuels are already economic and suitable equipment is already available commercially from some of the best companies in the world on the technology scene —and they are United Kingdom companies.
An important part of our biofuels programme is the support given to demonstration projects aimed at promoting the wider uptake of waste-burning technologies from both heat and electricity. Our research and development work is proving successful in the extraction and utilisation of gas from large landfill refuse tips, and work is continuing on the production of refuse-derived fuels. Several United Kingdom companies close to large landfill sites have switched on to that renewable source of energy and found that substantial savings can be made in their energy costs, as Thames Board showed me when I visited its factory, where it is taking gas from a nearby landfill site at Aveley. That vital resource is also being tapped and utilised at the Bidston tip, which adjoins my constituency.
We are now beginning to see those economically attractive technologies take off and contribute to energy supply, although much remains to be done if their full potential is to be realised. Several other renewable energy sources also show promise but have not yet reached the stage where they are economically competitive against conventional fuels. Of those others, my Department considers wind energy to be the most promising renewable source of electricity generation in the United Kingdom. Our current research and development programme is concentrating on the development of large machines, the deployment of which is likely to be necessary if wind energy is to make a significant contribution to United Kingdom energy supply. I pay tribute to the work of the wind energy group. As my hon. Friend the Member for Devon, North knows, he and I have been to see the impressive wind aerogenerator at Ilfracombe, which has tremendous export potential.
The Government have two major projects under way. The first is the construction of a 3 MW, 60 m diameter horizontal axis machine on Orkney, which is being undertaken in collaboration with the North of Scotland Hydro-Electric Board. That machine is expected to be completed by the end of 1986. The second project is the construction of a novel 25 m vertical axis machine at Carmarthen bay, with its completion expected by spring 1986. We are also supporting a comprehensive generic research programme both to underpin those two major projects and to provide essential data for the exploitation of the United Kingdom wind energy resource, both on land and offshore. There is a large potential overseas market for reliable cost-effective wind turbines, notably in the United States, Caribbean and Mediterranean areas, which is already being developed. I believe that in this country we have some of the finest technology in the world in that vital area, through the wind energy group and other associated companies. Already those British companies are competing successfully in the export markets.
For hot dry rocks, we have already established that it is a very large potential energy resource for the long term, depending on the ultimate economics of the technology. 580 The major part of our programme is the support given to the Camborne School of Mines in Cornwall, the work of which is held in high regard internationally. My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) has been with me to the Rosemanowes site. We are proud, as I am sure the House is, of the tremendous work that is being done, which is the focus of so much international interest.
The main aim of the programme is to examine whether large underground reservoirs of artificially fractured rock can be created successfully so that when water is circulated it can be raised to temperatures useful, for example. for power generation. While the programme has been very successful in meeting most of its objectives, further work down at 2,000 m is still necessary to understand reservoir behaviour before committing major expenditure to undertake deeper work.
The United Kingdom has access to a substantial tidal resource and a number of sites have potential for tidal power. While the technology is not a particular problem, the economics still remain uncertain and are very much site specific. The Severn estuary is one of the best potential sites in the world due to its exceptionally high tidal range. That is why we are providing support for the study by the Severn tidal power group of the technical and financial viability of a Severn tidal barrage financed, built and operated by the private sector. Two locations are now being examined and the results of the study should be available from the group by the end of this year. Naturally, any decisions on future steps will depend on the outcome of the study.
We are also supporting a preliminary study of a smaller but none the less potentially attractive tidal scheme for a Mersey barrage. Preliminary indications are that the Mersey is one of the most attractive tidal power sites in the country. I have had an opportunity to visit the Larance barrage, which gives us an example of what the technology can achieve. As I have explained, we still await the study. It is early days in which to reach any conclusions on the viability of that source.
Conventional hydroelectric power is the only electricity-producing renewable energy technology which is currently used on a large scale. There has also been considerable interest recently in the scope for developing small-scale hydroelectric resources in the United Kingdom. Although this resource is fairly small, and cost-effective technology exists, our funding supports applications that contain an element of novelty.
We have also supported studies to establish the size of this low head resource and, more recently, assisted the Watt committee in its work. These aspects of our programme demonstrate that we are committed to evaluating the whole range of the renewable technologies which offer potential to contribute to United Kingdom energy supply, whether it is our internationally renowned work on wind and hot dry rock programmes or work to evaluate low head hydroturbines of novel design.
I must mention a series of other matters but I am anxious that as many hon. Members as possible should have an opportunity to catch your eye, Mr. Deputy Speaker. I must stress that Britain must use to the utmost its huge resources of coal, which will fill the long-term need for liquid fuel in particular. I welcome the pioneering work which I and many other hon. Members have seen 581 being carried out by the National Coal Board at its coal research establishment at Stoke Orchard, especially on coal liquefaction and gasification.
I am aware that the hon. Member for Midlothian (Mr. Eadie) had much to do with the inception of the Point of Ayr project—my hon. Friend the Member for Delyn (Mr. Raffan) is constantly pressing me about it. The latest information is that site preparation work is in hand. A civil engineering contract will be let shortly and the main construction contract is expected to be let in early 1986. Completion of construction is expected at the end of 1987.
The hon. Member for Midlothian has every right to be impatient. I share his impatience, but it is important that the scale of operation be chosen well so that we can prove and optimise the NCB's process in the most cost-effective way. That is why I am pleased that the 2.5 tonne per day pilot plant project is proceeding so well.
The United Kingdom is not alone in recognising that alternative sources of energy may offer potential to contribute to future energy supplies. My Department is actively involved in international research and development. On renewables, for example, collaboration is undertaken bilaterally through the initiative that my Secretary of State took with Mr. Hodel to achieve greater collaboration between the United States and the United Kingdom. I am delighted that one of the best sellers produced by my Department has been the booklet on passive solar heating, which was produced recently as a result of that initiative. We also have multilateral collaboration through European Community programmes and the International Energy Agency. There is a clear cost-effective benefit from such co-operation. The research, development and demonstration programmes funded by the European Commission give opportunities for United Kingdom companies, universities and research organisations to participate and further develop the renewable technologies for applications at home and overseas.
The Government's attitude towards alternative sources of energy is responsible and imaginative. We have taken positive steps to evaluate all potentially economic technologies and to encourage their integration as quickly as possible into our daily lives.
An essential element in achieving this must be technology transfer to industry, and I should like to commend the efforts of our energy technology support unit at Harwell in working towards this. The achievements in our research and development programme so far confirm that we are on target for a significant contribution from the renewables sector early in the next century.
§ 10.6 am
§ Mr. Alexander Eadie (Midlothian)
I anticipated to some extent what the Minister would say. I, too, am conscious of time, but I have quite a lot to say. I should like first to consider what the Minister said about coal. It is right that we should debate alternative sources of energy and renewable—some people call them benign—sources of energy. The House is aware that fossil fuels are finite. Gas, oil and coal are wasting assets. I should like to develop that theme and even be controversial about when the amount of gas and oil will diminish. I do not want to be precise about that, but we all know that those resources will diminish before the end of the century. Coal will relieve some of the uncertainty, and we have coal enough probably for many centuries. We should be planning now for the gasification and liquefaction of coal.
582 Although the Government know that gas and oil reserves are finite, they are making not the slightest attempt to conserve them. We have no depletion policy. Indeed, we have no energy policy other than what the Minister said about market forces. The Government's policy is to gobble oil and gas as fast as possible, and to produce more oil than we need. The revenue from that is used to balance the Treasury books and to sustain our ailing economy. The Minister spoke about the Point of Ayr in north Wales, where there is an experiment to make oil from coal, and said that the pilot project was about to start. We have had many promises about that, and the House will have noted the Minister's remarks with great care. But when one remembers that the project will involve 2.5 tonnes a day, one realises that it is a laboratory scheme on an industrial site.
I remind the House that in 1978 I signed two agreements with Sir Derek Ezra to start two pilot schemes in liquefaction using two different technologies. The then Labour Cabinet agreed to a spend of £20 million for those projects, yet today the Minister speaks of a total spend of only £14 million. At the Dispatch Box and in Committee the then Under-Secretary of State for Energy, the hon. Member for Croydon, Central (Mr. Moore) promised that the Government would proceed with those two schemes, that they would not spend less and perhaps even spend more, and that the money was earmarked for the scheme to proceed. The skulduggery that destroyed that promise and those schemes is one of the most disgraceful acts of the Department of Energy since the Government came to office in 1979.
When the Minister replies, will he tell the House what the spend at Point of Ayr will be? He has already told us when he hopes to start that project. The Minister did not comment on proceeding with a coal gasification scheme at Point of Ayr, yet we all know that the technology to make synthetic North sea gas has been invented. Much of that work was done at the Westfield site in Fife.
When discussing alternative sources of energy we must remember that the likely life of indigenous North sea gas has been considerably amended. Will it serve the home demand for the rest of the century? Have there been discussions about extending the life of North sea gas by using coal? Has any thought been given to having a depletion policy for North sea gas? Why should we gobble it up when we have sources of coal to make synthetic North sea gas? Can the Minister explain why the National Coal Board no longer has on the board a member for research and science? Since Dr. Joe Gibson retired five years ago there has been none. That may be because the Government have changed their policy or because of Mr. MacGregor. I understand that when some of my hon. Friends visited him he said of new technology that he had no intention of reinventing the wheel.
The Minister spoke of his visit to Japan, and hon. Members read of it with interest. I do not criticise, rather I compliment him on visiting so many places. He is generous in sending me his press releases about them. A Minister should make such visits, and I compliment him on them. Some people think that the visits are merely trips, but I know that a Minister's life is arduous.
I hope that when the Minister was meeting Japanese Ministers he saw a report in The Times of 24 June 1985 which referred to the Japanese non-nuclear research programme, for which £127 million had been earmarked. It is described rather startlingly as a sunshine and 583 moonlight programme. I hope that he observed that 56 per cent. of that spend has been budgeted for the development of coal gasification and liquefaction. That makes the Government's sum of £14 million seem ridiculous. I read in great detail how the Japanese proposed to tackle that technology, and it bore a close resemblance to the technological process that we developed. The House is entitled to ask whether the Government gave that information to the Japanese or whether the Japanese pinched it, because their report and our process are identical.
I now turn to combined heat and power. I do not criticise the Minister for not mentioning it. Indeed, I am compelled to mention it because I was instructed so to do. I received a letter from Lothian regional council asking me to raise the matter. As the Minister knows, Edinburgh was chosen as one of the lead cities. The Minister has a responsibility to inform and update the House on what is happening in this important energy area. The potential of combined heat and power was best described in an article in Power Generation in January 1985 written by W. R. H. Orchard. It was entitledCombined Heat and Power — the Nine-Star Energy Option.The article states that combined heat and power has the potential to provide almost half a million years of direct employment in construction, and to generate 400,000 new jobs, thus benefiting the economy. It would increase national income by £7.6 billion per annum and consumers' fuel bills would be 20 per cent. lower. It would burn 19 million to 33 million tonnes of British coal each year, which would provide 36,000 jobs in the coal industry. It would save energy—mainly coal, oil and electricity—and would provide an electricity generating capability that was equivalent to six new 2,000 MW power stations. It would avoid the need to import 3.5 billion therms of gas per annum and would earn a 5 per cent. real rate of return on overall investment. That is a graphic account of an available energy option provision, but the House would be foolish to ignore this graphic illustration of the advantages of combined heat and power. One of the most powerful arguments that I can use in favour of combined heat and power is that it would provide hundreds of thousands of our fellow citizens with better creature comforts.
I endorse the Under-Secretary of State for Energy's comment that this debate is to be welcomed. It is, perhaps, too graphic to describe it as historic but it provides the House with an opportunity to discuss the Government's rearranged programme for the development of renewable sources of energy. That programme was announced on 2 July 1985 by the Under-Secretary of State in reply to a question from his hon. Friend the Member for Devon, North (Mr. Speller).
On that occasion he gave a convoluted reply about the £14 million that is to be spent on research and development. To try to put a gloss on it, he referred to £68 million having been spent between 1980 and 1985, compared with the expenditure of £ 16 million in the period 1975 to 1980. The yah-boo approach — that this Government have spent more on research and development than the Labour Government—is wrong. Much more should have been spent. In the light of the revenues 584 from North sea oil it is indefensible that much more money is not spent upon research and development. I hope that that point will be made during the debate.
The Government's approach to the new programme is wrong. They say that their first objective is to back winners. All of us want to do that, but their language is very much like the language that would be used by somebody who knows more about the racetrack than about research and development. The reality of backing only winners in research and development is a contradiction in terms. Such a philosophy is the opposite of what is needed. It means that research and development is smothered before one begins to make headway. There will be losers in research and development.
I understand the desire to get projects away from the drawing board and out of the laboratory and to find a use for them. However, if the Under-Secretary of State uses the language of the race track to describe research and development, I must confess that I prefer the language of a report entitled "Deciding about Energy". It deals with research and development into renewable energy sources. This is described as "technological pluralism". The argument is that wasteful duplication of effort ought to take place as a result of competition between rival teams and projects. The report argues for pluralism in the funding of agencies and for creative disorder, since this accompanies the attempt to break into new technological territory. That is preferable to the Minister's strategy, because it will produce winners. Research and development will not be stifled.
In their programme the Government have backed the direct solar heating of buildings. They propose to encourage the private sector to design buildings that will make the most of solar energy. They claim that it could cut heating and lighting costs by 30 per cent. They say that solar houses are economical and that the occupants like them. Do the Government base their conclusion upon the 40 houses using solar energy that have been built at Milton Keynes? The Under-Secretary of State said that 10 million tonnes of coal equivalent—worth about £800 million a year—could be saved by the adoption of solar heating. The House is therefore entitled to ask the Under-Secretary of State to explain why the Government are not allowing such council houses to be built. Council house ratepayers should also be able to reap the advantage of the Government's claimed savings from the use of solar energy.
The Government's programme refers to the fact that biofuels have considerable economic potential. The Under-Secretary of State referred to the possibility of discussions with the Minister of Agriculture, Fisheries and Food and with the farming industry to widen support for research and development into the compaction and use of straw for fuel. It is in the interests of the Government and the industry to develop alternatives to in-field burning.
The Under-Secretary of State referred to his reservations about wood as an energy crop and said that further investigation is needed. However, is the Department of Energy aware that the Ministry of Agriculture, Fisheries and Food is cutting back on research and development? The Government have just announced that they intend to close the institute of agricultural engineering research, which is sited at Penicuik in my constituency. The laboratory at Lasswade in Midlothian where research is done into veterinary matters is also to be chopped. The whole agricultural community is incensed 585 at those proposals. We hear about all the research that is to take place, but who will pay for research into biofuels? Will it be the Ministry of Agriculture or the Department of Energy?
The Minister described geothermal energy at length. I understand that the Southampton heating scheme has been abandoned or delayed. Will the Minister comment on that scheme?
Wind power has been given approval, but can the Minister tell us whether the aerogenerators are of British design? How many are of foreign design? I recently corresponded with the CEGB on this matter and the reply from the board was unsatisfactory. The Minister talks about market forces and I suspect that they may determine that we take foreign generators because of the claims made on their behalf. I hope that I am wrong and that the Minister will give us facts and put my mind at rest.
The wave energy programme is to be discontinued and that must be a major aspect of our debate. The decision is a blunder and the Government are in danger of making themselves look foolish. One of our best research scientists on wave power, Mr. Stephen Salter, has published many articles and he makes a telling point when he says that when the wave research programme began the Department of Energy set a target of 20p per KW hour. That was later reduced to lop and, as the work continued, to 5p. If 5p is in sight, that is good progress by any research standards. So why is the programme being shut down?
I am sure that the hon. Member for Devon, North has read the article by Mr. David Ross, a well-known journalist, in the May issue of the journal of the parliamentary alternative energy group. The article said:A secret report has warned the Government that Norway is about to generate electricity from the waves more cheaply than the newest, most efficient coal-fired plant.Norway's wave power station is due to be launched in October.In fact, it is to be opened on 12 or 13 November.It has cost less than £500,000 to build and the report says it will produce a kilowatt-hour for 3.4 pence. The CEGB's latest published estimate for coal gives the figure of 3.88p for a `possible future station.'The report is by Dr. Peter White, a member of the Wave Energy Group at Lanchester Polytechnic in Coventry where the Clam was invented. He specialises in turbine design and went out to Norway as part of the British programme of research into wave energy—which is just ticking over on a pauper's grant. The Norwegians were happy to open the books and the construction site to an outside assessor. The leader is Dr. Knut Bonke, who recently made the report available to me; he said that he had high hopes of selling similar units around the world, particularly to countries which have to burn oil to generate electricity.The Norwegian device is a….Multiresonant Oscillating Water Column. It is a 60-foot chimney standing on the coast against the rocks in deep water north of Bergen. As the waves rise and fall inside it, air is pushed up and out through a turbine and then sucked in to fill the vacuum as the water level falls…The 'Multiresonant' refers to one of the distinctive Norwegian contributions, a pair of harbour walls which reach out into the sea to capture more of the available energy and increase efficiency. Dr. White has deliberately used the most cautious assumptions…The White report has been sent to the Energy Technology Support Unit at Harwell which oversees the British wave energy programme.
§ Mr. Eadie
Yes, Harwell. I will come to that later.
The report continues:its own estimates of a cost of a unit of wave-electricity have usually been around 8.9 pence. It was on the basis of such estimates that the Department of Energy pulled back from going 586 to sea with a full-scale prototype. The new report will be particularly galling for ETSU because it is ETSU itself which financed the visit.I said that there was a danger of our being made to look foolish. The Minister must explain why it is proposed to axe the wave energy programme. It is not justifiable. Much of our technology has gone into the Norwegian project and we shall look foolish in the eyes of the world if we decide to stop our programme. I have masses of documentation to prove that the decision is idiotic.
We must examine priorities. Given the availability of North sea oil and gas for at least the next decade, it is logical to invest some of the profits from the North sea in a broad energy programme. Of course, we must not forget that security of energy resources is an important factor for a country that is surrounded by sea.
The Minister hinted at employment opportunities and he knows that the United States claims that more than 30,000 people are employed in renewable energy projects, particularly those involving solar and wind energy.
A group interested in renewable energy sources has sent me the sort of programme that we should be adopting. I put it to the House because it contains some interesting suggestions. It calls for a £150 million expansion programme for research and development and takes the trouble to itemise various projects. It says that there should beContinued and expanded support for large-scale, on-land wind, including vertical axis machines".The report includes an estimate of £15 million for that work.
The document calls fora crash programme of offshore wind development.The sum involved is £30 minion. It suggests that there should beserious support for small-scale wind turbine development including preferential subsidies to relevant small firms.The sum involved is £15 million. One of the reasons for support for windmills in California is the introduction of tax incentives. There is nothing crazy about that. The document continues by suggestinga commitment to a series of mini-tidal barrages, starting first with the Severn mini-barrage.The £20 million for studies in connection with that is peanuts. There is nothing wrong with mini-barrages. They are technologically feasible. In Scotland whole tracts of country are available. Lochs are scattered all over the place.
§ Mr. Donald Stewart (Western Isles)
Is the hon. Gentleman aware that a mini-barrage is being developed in my constituency?
§ Mr. Eadie
The right hon. Gentleman should address his question to the Minister who seems to be befuddled at what I am saying.
The document suggests therefunding of the United Kingdom wave programme".A modest £30 million is involved. It calls fora major commitment to bio-fuel research and exploitationinvolving £15 million and acontinued commitment to geothermalinvolving £15 million. The document continues:Another £10 million would be needed for the administrative unit which should be moved out of Harwell. This would make a total of £150 million, significantly less than nuclear R & D (£220 million) and would provide the country with what the Government claims to want: a wide range of alternative sources of energy.
§ Mr. Spearing
My hon. Friend makes an important point about Harwell, wave energy and Norway. Does he know whether the unit at Harwell is distinct on its own with nothing to do with the wider and better known activities at Harwell, which have something to do with atomic energy, which is a rival to wave energy?
§ Mr. Eadie
The claim is that the wave energy activity at Harwell is independent. Perhaps the Minister will reply to that question. There is a feeling abroad that it is all wrong, that nuclear and wave research should be done together but that objectivity is being blocked. That might be a gross slander but that feeling is abroad in the industry.
The report continues:Such a programme could easily absorb two or three times the current level of funding"—what a pittance that £14 million is—immediately, rising to £15 million per annum within two or three years. Subsequently large capital investments (e.g. on tidal) would be required. It would be, we believe, money well spent: it should help ensure that the UK will be in a position to exploit at least some of the £200 million tonnes of coal equivalent potential p.a. that renewable sources represent, when required.I hope that we shall have a wide-ranging debate. I agree with the Minister that it is right for the House to debate this important aspect of energy provision. I shall listen with interest to other hon. Members.
§ Mr. John Ward (Poole)
I apologise because I shall have to leave the House before the end of the debate; I have a long-standing engagement.
It is appropriate that we should be discussing alternative sources of energy today because some of us, including the Minister, were desperately looking for alternative sources of energy in the Chamber at 3 am. That might account for the sparse attendance today.
I declare an interest as a director of one of the subsidiaries of a major construction group which is heavily involved in conventional and alternative sources of energy.
I hope that the House will find time to pay tribute to the Minister for the enthusiasm and energy which he brings to the subject. He can be seen in various forms of attire climbing towers and travelling here, there and everywhere to study the subject at first hand. He brings a freshness of thought which is good for the House and for alternative sources of energy. I compliment him.
I welcome the opportunity to take part in the debate because it covers areas of advanced technology on which the future of the country depends. If the programme is successfully developed, we shall be able to provide new sources of energy not only for ourselves but for underdeveloped countries. The subject involves varying degrees of technical sophistication and commercial competitiveness.
Conventional sources of energy can be complemented by further improvements in energy conservation. The Minister was right to stress that we still have a long way to go before our buildings become energy efficient. One of the best investments for the country would be to proceed with the conservation programme and to convince people that it is in their interests to conserve energy.
It is tempting to range over all the alternatives such as solar power, biomass, wind power, tidal power, wave power, water temperature gradient, hydropower, geothermal energy and so on. I shall confine my remarks to wind 588 power and tidal power, with particular reference to the Severn barrage. I choose to discuss wind power because the Under-Secretary of State has said that it seems to be one of the most attractive renewable sources for generating electricity. Information from the industry confirms that view.
The United Kingdom has considerable expertise and there is much overseas experience on which to draw. Several European countries have sponsored programmes, as has the United Kingdom. The combination of commercial enterprise and favourable tax laws has particularly benefited Denmark and the United States. In the past five years Denmark has installed 1,500 wind turbines with a rated capacity of 50 MW. By the end of the year that will represent about 0.4 per cent. of Denmark's electricity supply. In 1984 Denmark exported about 1,600 units. It is calculated that its wind turbine manufacturing industry has provided about 300 new jobs in the past five years.
The United States has established a tax regime which encourages private investment in wind parks. Earnings result from the sale of shares in such projects and from operation and maintenance. The combination of state and federal legislation has encouraged development in California to such an extent that by the end of 1985 about 13,000 wind turbines will have been installed—5,200 south-east of San Francisco and a further 3,900 in the desert near Los Angeles. It gives some idea of the installed capacity if we remember that the wind turbine generators already installed in the United States provide 1,000 MW, equivalent to the output of one of our nuclear power stations.
As so often with technology, the United Kingdom has made a slow start. However, in the current year the Department of Energy will be contributing £14 million of taxpayers' money to support all forms of renewable energy, much of it going to wind energy. I emphasise that it is taxpayers' money because, too often, when we are asked to support some of the wilder and woollier schemes that scientists think have long-term potential, we forget that we must obtain value for money for the taxpayer. We do not have any money of our own; it is always taxpayers' money, of which we are the stewards.
There has been considerable financial commitment from commercial firms in this country. They have designed and built the machines, and I understand that two of the installations have operating experience in excess of 5,000 hours. I know that my hon. Friend the Minister has taken a keen interest in that area and has seen the achievements for himself.
The industry tells me that there are several areas in which it would welcome support. Both Government and CEGB support is required to take the Orkney 60 m wind turbine generator to second generation design. The best help, however, would be given if the CEGB showed commitment by actually purchasing one of the machines. If orders are placed during the next two or three years, the manufacturers and the purchasers will have the advantage of batch production.
Greater help for exports is needed and we might press our friends in the Overseas Development Agency and other Government Departments to purchase wind turbines as part of the aid programme. They have enormous potential to provide sources of energy where none exists. 589 If we strip the aid programme of all its glamour and hard work, we often come back to the fact that there is a lack of sources of real energy at reasonable prices.
I hope that we can also look for stimulation of the home market. Apart from pure tax incentives, there should be lower rating and better buy-back rates for electricity provided under the Energy Acts.
On tidal power, the House will be aware that almost any discussion of the Severn barrage is bound to lead to the question, "What about the Severn crossing?" It is inevitable that, however much those two projects may be technically diverse, they are linked in people's minds. If it were shown that the Severn barrage could provide a viable and sensible crossing, there could be a vast contribution of public funds made available for that project rather than for the building of another bridge or a tunnel.
As the House will be aware, over the years several sites have been considered for tidal power. The Severn estuary, with a tidal range of up to 12 m on spring tides, represents one of the best opportunities in the world to harness tidal power for electricity generation. There have been various studies of the project during the past 50 years. It appears that with modern construction methods, improved generating machinery and modern technology, the Severn barrage could he a serious competitor in electricity generation.
The Department is to be congratulated on commissioning a report from the Severn tidal power group on the technical and financial viability of a barrage built and operated by the private sector. I understand that the report will be available towards the end of the year, and will include an assessment of the environmental and regional effects of the scheme. If private sector investment is to be attracted—and Conservative Members applaud that —much will depend on the rate of return, which must be at a realistic level.
The position will be complicated because any financing scheme will need to be a very long-term projection of the trend in world energy prices. The barrage scheme would effectively replace coal-fired power schemes, so an assessment would be needed for the value of coal replaced in the first half of the 21st century. If the project is to be viable in all other aspects, special consideration must be given to planning procedures because unnecessary delays could threaten even the best of financial calculations.
Some hon. Members may ask whether the labour troubles and the cost overrun of the Thames barrage will be repeated with the Severn barrage. That will not necessarily happen because, with careful planning, and with the benefit of hindsight, many of the troubles encountered on the Thames barrage can be avoided. Similar problems have been met in other large-scale projects, usually those involving advanced technology. When different working rule agreements come into use on a site, special management skills are needed to avoid the obvious problems. Quite often, insufficient design time is allowed, which complicates both programming and site negotiations.
Discontinuity of work load and the high level of on-site mechanical work that is often inappropriate to conditions prevailing on such sites are other sources of possible frustration and delay. Many of the problems can be avoided by good site management and the clients should be persuaded not to indulge in ill-judged involvement and interference in on-site management.
590 One of the factors in favour of the Severn barrage is that it is based on mature technologies with well-established design, construction and operating experience. There could be a low concentration of manpower at the barrage site and much of the mechanical construction could be carried out away from it, thus spreading the job creation prospects of the scheme. It is probable that a fully developed design could be used, which would help to reduce the unknown quantities that are so often a recipe for disaster in some of our largest and most imaginative projects.
Wales and the south-west have a reputation for encouraging job creating developments. I imagine that there would be considerable local support for the scheme. However, it would be important to clarify the attitudes of regional and environmental interests at an early stage. The Government must establish their attitude to factors not directly related to the economics of the barrage—for example, the need for strategic diversity in energy sources, insurance against unpredictable increases in energy costs and the potential for job creation. Any private investor who hoped to take part in such a scheme would need to be assured that the Energy Acts would not inhibit structural arrangements between him and the electricity supply industry.
I draw the attention of the House to the increasing possibilities of recycling waste in all its forms. Modern technology and increasing fuel prices have combined with environmental considerations to make this an area worthy of more study. Besides the conventional sources of waste that can produce heat, such as farm and domestic waste, the time must surely be coming to re-examine the policy of the European Community on the storing of surplus agricultural products.
Leaving aside the doubtful morality of subsidising the production of goods for which there is no market, and the fact that price protections often prevent the Third world from finding markets for its products, there must be a better way to handle the problem of surplus products. Should we not consider the economics of turning agricultural surpluses into fuel? If that could be achieved at reasonable cost, it must be a worthwhile line of approach. However, having seen the slowness of reaction in Brussels to the supply of grain for Africa, such a suggestion is almost bound to fall on deaf bureaucratic ears.
Some of the alternative sources of energy represent new hope for underdeveloped countries. Some of them could provide all-important energy unrelated to mineral resources. They open up new prospects for some of the poorest people on this earth. For them, and for us, we must continue to support the valuable efforts already made by the Government. We must continue to support international effort and co-operation in providing alternative energy sources to underdeveloped countries. I hope that we shall continue to look at all alternative sources of energy with the same care and consideration, but with the same regard for the taxpayers' money, as the Minister has shown.
§ 11 am
§ Mr. Malcolm Bruce (Gordon)
Like other hon. Members, I welcome the opportunity of debating this subject, and I acknowledge at the outset the Minister's personal interest and commitment to it. That is appreciated in all parts of the House. However, despite the Minister's 591 best endeavours, we are a long way from where we should be in terms of commitment to and funding of renewable energy sources.
Reference has been made to the conflict of choice between conventional existing energy sources, the development of nuclear power and the development of alternative energy sources. It seems that there is a conspiracy afoot to prevent the full-scale potential development of alternative sources of energy, while continuing to make a substantial commitment to nuclear power—that despite the fact that after 30 years' work on nuclear power many problems remain unresolved.
The small amount of investment that has been put into alternative energy has prevented the yielding of results that might change our whole conception of how we might move forward in energy requirements in the 21st century.
For that reason, what Harwell does in the area of alternative energy should be separated out, because the suspicion cannot be avoided that Harwell has an interest ultimately in ensuring the continuation of nuclear-related research. It therefore does not appear to have the same commitment to securing the viability of alternatives. However, I do not wish to concentrate in this debate on the problems that surround the nuclear power industry.
§ Dr. M. S. Miller (East Kilbride)
The hon. Gentleman made a sweeping statement about many problems relating to nuclear power remaining unresolved. There are not many problems unresolved, although there are some problems to which different solutions have been proposed. The hon. Gentleman should be careful when making sweeping assertions that do not have any foundation in fact.
§ Mr. Bruce
Without wishing to go down that road, I would remind the hon. Gentleman that an inquiry at Sizewell has just shown that after 30 years we do not seem to be clear about the type of reactor that Britain should be developing. The Government are talking about importing flawed American technology rather than developing British technology and after 30 years of research we have not developed a successful British reactor. That being so, it cannot be claimed that we have fully justified that scale of investment and continuing commitment in that area, never mind the possibilities of disposing of nuclear waste, a problem that we are far from having solved.
We are moving into an area of controversy in Scotland because of the application for a fast reactor fuels reprocessing plant at Dounreay. There is much concern about whether that is desirable or justified, and the way in which the Government handle such matters reinforces the perception among many people that there is a conspiracy to distort the balance.
For example, at Sizewell, where there were strong local objections, the Government opted for a full-blown inquiry so as to drown them. At Dounreay, where there is local support but many wider national policy considerations about the future of the fast reactor programme, the Government have opted for a local inquiry so as to close off the option of having those discussions fully aired. The Minister should tell the Secretary of State for Scotland, who is handling the inquiry, that the application at Dounreay is an ideal opportunity to use the public planning inquiry commission that exists in theory but has never been invoked.
592 The debate is about alternative energy sources. Nuclear power is one of those alternatives and the Minister went through the renewable sources list in some detail and ably covered the areas of potential and actual research and spoke of the developments that have been going on.
Those who have received representations from people involved in the wave programme will have been struck by the bitterness with which they have greeted the cut in that programme, not to mention the bitterness they feel about the way in which they are judged by comparison with the conventional and established forms of energy renewal, both in terms of expected rates of return and the amount of investment that they are allowed to use to overcome their problems. Just when they think that they are getting there, the funding is cut from under them and the opportunity to go ahead with something with real potential is closed off.
The hon. Member for Midlothian (Mr. Eadie) pointed out that the wave power programme was given the objective of securing 20p per kW and has achieved something less than 5p, which is close to becoming competitive. Those involved in the programme speak badly about the way in which they feel the Department has misrepresented what they have achieved so far. Leaving aside the heavy intonations of sarcasm that appear in the various articles written by people closely involved with the subject, David Ross, to whom reference has been made today, states in his summary:Wave energy is not to be captured for Britain because it is too expensive—there is not much of it available anyway—and the noise might frighten the fish.The frightening of the fish aspect came from Harwell.
The estimated cost is 3.4p per unit. The Norwegians are going ahead next month with a pilot scheme that looks to be commercially attractive. We in Britain should not be allowing them to get ahead in this area of technology. Many frustrated engineers in this country feel that we should be involved in that programme.
Those involved in the wave programme have made various comments to demonstrate their concern about that rate of return and the investment criteria applied to them but not applied to other forms of energy. They talk about the pay-back period and the costings that could be achieved on the basis of various pay-back period assumptions, and they conclude that the cost of generating wave power could be reduced to 1.45p. They say:These figures are of course mere fantasy because there is no question of the Treasury treating the early phases of renewable energy schemes as favourably as established methods.That is the nub of the problem. If we are to make progress in Britain with renewable energy, we must approach the whole matter in a more favourable light.
The potential for wave power, for example, was originally estimated—perhaps ambitiously—at 120,000 MW. That has been trimmed back time and again until the current figure is 6,000 MW. That is sometimes described as a rather paltry amount. It is, however, 25 per cent. of our electricity generation capacity and twice as much as we get from nuclear power, so it is an important potential which should be receiving more, rather than less, funding from Government.
The Minister has expressed interest in the Mersey barrage and its potential. It has been suggested to me that a go-ahead on that type of scheme would be a good basis, for example, for paving the way for the Severn barrage. I appreciate that the Minister misunderstood comments that had been made about the Severn barrage. It is a major 593 project and not in itself a mini-barrage, which would be a different form of development. The Mersey barrage might be the right type of scheme to have the go-ahead because it would test the viability of something more substantial—for example, the Severn barrage.
Other areas of potential development have been mentioned by hon. Members and I will not develop them in detail now, except to repeat that they need more funding and to be given different criteria if they are to have a chance to develop. Indeed, if they were treated even half as kindly as the Government have treated the nuclear industry, we could develop the various options.
I do not want the Minister to assume that I am making these comments because I am dissatisfied with the nuclear industry or that nuclear power does not have a use. It is simply that we are disproportionately committing funds to that area when we should be committing them elsewhere. I ask that we now put the same kind of money into alternatives. If we did that, we should increase the range of options available to us in the next century and that would put nuclear power in a different perspective.
The House may be interested to know that six years ago, when I was energy spokesman for the Scottish Liberal party, I produced a pamphlet entitled "Putting Energy to Work". I re-read the pamphlet before entering the Chamber. I regret to say that, six years on, many of the problems that I identified still exist. The recommendations contained in the pamphlet have been embarked upon only tentatively. Heavy stress was placed in the short term on the enormous potential that lies with conservation. The Association for the Conservation of Energy describes it, in my view rightly, as the fifth fuel. The Minister of State and the Secretary of State are launching a campaign to save energy under the slogan "Get More for Your Monergy". I think that they should find another advertising agency that can provide a better slogan.
It seems that the Government take the view that conservation of energy is such a good investment that they have only to say how good it is and everyone else will get on and do it. If that is so, why have we not achieved much better results? Why are our results less good than those of most other countries? I suggest that the answer is that the Government are not prepared to recognise their responsibility to get the programme going.
There are good reasons why many people do not invest in conservation. One reason might be a degree of ignorance, and I am not denying the value of the Government publicising the advantages of energy conservation. One of the principal reasons is the reluctance on the part of many to put the money up front, as it were. Individuals and industries are suffering from recession and it will not be as easy as the Government seem to think to secure investment in energy conservation. Accountants approach energy conservation adversely and do not allow for the same pay-back as they would for a capital investment programme. They are looking for a much quicker pay-back. Consequently, what are good investments are not presented as attractively as they would be if they were other forms of investment.
The Association for the Conservation of Energy has said that the energy programme that the Government would have to underwrite in terms of grant, investment, building standards and a variety of other factors would produce a direct rate of return that would yield £2,800 million a year on a straight line basis over 10 years for an investment of £2,400 million a year. It would create 594 155,000 jobs, which would be sustained over the 10 years. A further £1 billion of Government or public money would be saved each year because of the unemployment benefit that would not have to be paid and the tax which would be paid. Much of the work would be done by those who would otherwise be unemployed. It is a massively attractive proposition for a Government who are concerned about public expenditure, but it will be necessary to put the money up front to get that return.
The Government should seriously consider the need to provide that sort of investment to secure the benefits that I have described. If we embarked on that course, we would be making a considerable contribution to getting ourselves out of recession. We would make ourselves more competitive; we would create employment for the skilled and semi-skilled, and especially for the construction industry; we would ensure that we were far more competitive as well as giving ourselves a place in the development of new technology that would have export potential.
Given that these arguments are so convincing, why is it that the Government have not embarked on a much more ambitious programme? I am mystified by their failure to do so. I am advised that the offices of the Department of Energy are some of the least energy efficient in the public service, but as the Government rent them, they do not see the return that would be gained by investing in an improvement in energy efficiency. That is an example of the nonsense that we must overcome.
I genuinely welcome the Minister's recognition of importance on these issues. I support him in what I believe is his private battle to get the Government to give more priority to alternative sources of energy and more funding. I suggest to him and the House that if we are to develop the range of options that we want from alternative energy over the years, it is only right, proper and fair that alternative energy should be given a much greater allocation of resources than has been the case in recent years, bearing in mind the resources that are allocated to the nuclear industry.
§ Mr. Tony Speller (Devon, North)
The Government and the Opposition have given us some encouragement, but rather on the lines that we all favour truth, beauty and goodness. It has not been specified whether my hon. Friend the Under-Secretary of State is truth, whether the hon. Member for Midlothian (Mr. Eadie) is beauty, which indeed he is, or whether the hon. Member for Gordon (Mr. Bruce) is goodness. Of course, we all claim these excellent qualities.
Alternative energy is incredibly similar to alternative medicine. When oil is as cheap as it is now, or as cheap as it was in 1972 before OPEC 1973, we do not worry too much about alternative energy. The United States has recently virtually destroyed its synthetic fuel programme on the simple basis that there is no need to worry about alternatives while oil is so cheap. Until someone in the family has a bad back, the family will not be especially interested in alternative medicine. However, the family will find that conventional medicine faces problems in dealing with bad backs and the doctor will advise the patient to sleep on the floor or on a hard bed. He will say, in effect, "We cannot cure you."
However, if a larger or nastier bomb is exploded on Karg island, if there is political upheaval among the Gulf 595 states or if our nation turns its back on pollutant energy sources, we shall be left with little usable conventional energy. As the hon. Member for Midlothian said, we have coal in abundance, but if we were not in that position I am sure that we would have to consider the clean and renewable forms of alternative energy. In a sense it is the hole in the ground products versus the renewables.
Both the Government and the Opposition say that alternative energy is a good thing and a nice thing and that we should have more of it, but no one says how much more. I have a deep personal interest in alternative energy, coming as I do from the west country where there is wind in abundance. Although we would not admit it in north Devon, a certain amount of water falls from the sky. In addition, we have tides with a 30 ft rise and fall. We are told that wave power has been abandoned as it is a long shot. I advise those who have come to that decision to try their hand at surfing. If they do, they will feel the power of the waves. I advise them also to note the rise and fall of the tide and reflect on the success in Wales, in many parts of the United States and in Europe of hydroelectric schemes. Is it not more logical to supply rather more funding for these clean and renewable alternatives instead of continuing only with the vast amount of funding that is directed, quite rightly, to fission or fusion technology? Unfortunately, we leave so very little finance available for the very alternatives that may in future become necessities.
I mentioned hole-in-the-ground products, and we are all familiar with gas, oil and coal. The three major speeches in the debate have all referred to the use of coal that goes beyond merely burning it in the grate. I do not have the advantage of the Minister of travelling so freely —indeed, I do not have the benefit of travelling free at all. However, I have had the pleasure of visiting the United States, where the Texaco process is producing vehicle fuel from coal, a system which the Texaco director of research states could be producing more fuel for vehicles by the end of the century than crude oil. That company is looking to the future. Inevitably, there is Japanese participation.
The Japanese are an extremely sensible race. When I visited that country with the Select Committee on Energy a year or so ago I was fascinated to find that the Japanese are researching an old-fashioned engine called the Stirling pump. It was invented by Dr. Stirling in Scotland in the last century. It has a technical interest now in areas where there is not sufficient conventional fuel. In this context, it may be necessary even to burn cow dung. The Japanese are using this area of technology to develop an engine or pump that was invented in Britain a century ago.
At Bergen, the Norwegians are putting the rise and fall of the tide to electricity generation—a most sensible use. In the area that I represent and along the Severn there is a rise and fall of 30 ft, which must make it worth while developing the relevant technology and using it. It seems that other nations are prepared to use our technology to make the products that we could manufacture ourselves.
As I travel the world on various non-free trips, I find British technology being used increasingly through excellent firms of British consultants, but the materials that are being used are not British. Unfortunately, Britain has never been prepared to put enough money into research and development to allow British companies to make the products that will ensure that "Britain can make it". Such a phrase was used by a previous Prime Minister, but how 596 true it still is. Unless the research and development programme works, there will not be an end product to pay for the research and development programme — the essence of a catch 22 situation.
There are four main fuels—gas, coal and oil from the hole in the ground, and nuclear. I was afraid that this debate might turn into a pro or anti-nuclear one and I am glad to see that it has not. What is the alternative to such energy? It is reasonable to take an overview and say that, along with the Select Committee, many of us feel that we do not as yet have any competent idea of how to cope with nuclear waste. I do not argue that the British nuclear stations are not the most efficient and safe in the world, but I cannot pretend, as the chairman of the alternative energy group, that anything that I have heard over the past three years makes me believe that there is anything like a genuine and permanent solution to the problems of nuclear waste.
It is strange to be talking about alternative sources of energy when we are, as an island, surrounded by gas and oil and built on coal. There is nothing new in the British use of coal — the Romans used it. Interestingly, the Romans also used what might be called intelligent passive solar energy. They laid out their buildings to face the sun and had built overhangs to protect the houses from too much sun. We build our little circles of houses irrespective of how to use alignment to conserve energy. How strange it is that, in particular, the architectural profession in this country appears to be unresponsive to the logic of the weather. Perhaps one should blame those building societies which have no interest in fuel bills.
§ Mr. Speller
One must be careful when speaking about planners, as I believe that there are one or two up in the Public Gallery at the moment and I always evade their machinations if I can.
To put a conservatory on the southern side of my house, whether or not it is approved by the planners, will warm the house at no extra cost, while providing all the other things that a conservatory provides. There are so many easy and economic things that one can do.
We are fortunate to have my hon. Friend the Minister in his post because he is prepared to go out on a limb to see whether the subject of alternative energy will interest the House. The answer happily appears to be yes, but only to a limited extent. Whether that is because of the debate on fluoride yesterday, in which my hon. Friend the Member for Poole (Mr. Ward) was involved, I do not know. Is it not sad that, at a time when we have such problems with energy, our Benches are green—green is a good colour to represent energy conservation—rather than covered with pin-striped bottoms?
I have spoken in passing about what Texaco is doing in its cool water project in California. It is the first example of which I have heard of a full-scale commercial plant producing electricity cleanly from coal. It takes out 97 per cent. of the noxious bits and pieces that cause pollution and, out of one plant, produces enough electricity for a town the size of Plymouth. I congratulate my hon. Friend the Minister on the help that he has given in smaller but similar projects carried out by the National Coal Board, particularly in its pilot plants. However, while pilot plants are fine, sooner or later research and development requires a working-size plant so that things are seen to work in 597 total. We are seen to do so much research on nuclear energy—which I do not begrudge although I should like to see more research on waste—but we could do so much more with so little extra added to the pennies that we already spend on other forms of alternative energy research.
Last week, The Economist referred to radioactivity. It said:It is invisible, tasteless, odourless. Nobody knows for sure how much there is or where it is and, despite claims to the contrary, nobody knows what to do with it…there is enough radioactive garbage in the United States to wipe out the lot of them; by the year 2000, there will be enough to kill every living being.Any money spent on nuclear waste research is well spent.
§ Dr. Michael Clark (Rochford)
Will my hon. Friend elaborate on the emotive expressionsenough nuclear waste to wipe out the lot of themin the United States, and shortlyenough to kill every living being.That is not accurate.
§ Mr. Speller
I shall certainly elaborate. I did not like to use the full quotation because of other emotive phrases. The Economist, which tends to be my own trade paper, used another phrase, which isnobody knows what to do with it. If Americans were dumb enough to roll in it",that is, have personal contact, there would be enough to kill them all.
Let us come a bit closer to home and not be emotive.
My hon. Friend the Member for Rochford (Dr. Clark) has led me into talking about the United Kingdom. Quite close to my hon. Friend the Minister's constituency, British Shipbuilders has dredged up 3 million tonnes of sand and silt from the Irish sea, some of which has been dumped at Barrow-in-Furness in Cumbria. The Irish sea is probably the most contaminated waterway in the world. If sand, dredged for building purposes, is dumped by the sea or city, children may well roll in it. There is no secret about the fact that we have had disposal problems. I sought only to say, emotively or otherwise, that there are dangers with nuclear waste that do not exist with water, wind or solar power, other than the self-inflicted wounds that we get on holiday. I have also said how safe I believe our power stations are.
I shall speak now of Parligaes'—that is the name of our group—view of the alternatives, about which my hon. Friend the Minister has talked to us. His Royal Highness Prince Charles, often in the news these days, rightly said two years ago:We would be deluding ourselves if we believed that a technology based on an abundant supply of cheap fossil fuels can long continue, and it is even more unrealistic to expect it to spread through the Third World.The world has two main energy problems. The first is the worsening consequence of the west's overuse of existing energy and the second is the increasing shortage of any decent sources of energy in the rest of the world.
Mr. Frank Hooley, the former hon. Member for Sheffield, Heeley, was the excellent first chairman of the alternative energy group. He was followed by a chairman from the other place, Lord Tanlaw, and now I am the third chairman. from yet a third political party. It is good to know that most hon. Members and all those in our group are in favour of alternative energy resources. Unfortunately, there are not enough of us.
598 We have had the good fortune to have assistance from many parts of industry, not necessarily from those which one would think were in favour of alternative energy. I have had great service from Mr. David Gordon as liaison officer throughout the period of my chairmanship and we, together with major industry, conservation groups and interest groups, are working happily towards the same end.
The hon. Member for Gordon spoke of the Association for the Conservation of Energy. I applaud what it does, and although I do not know whether it created the excellent phrase "fifth fuel" for conservation, it is a good phrase and shows that energy conservation has a key role to play in ensuring that we invest in and use our finite resources in the most efficient manner.
Looked at in macro-economics terms, the issue is simple. We can keep ourselves as warm and comfortable as we now are in this country, and keep the wheels of our industry turning as speedily as they do now and still save not less than 20 or 30 per cent. of the cost of energy. The cost of energy is part of the cost of production and where one can save on cost, one is increasing profit and competitiveness. That is one reason why I join the hon. Member for Gordon in congratulating ACE on its view.
No one has yet mentioned my right hon. Friend the Secretary of State, but he too deserves congratulations. It is remarkable that this is the first full day's debate on alternative energy in the lifetime of this Parliament or any other. I pay credit to a Secretary of State who, although he may be under pressure from many other stronger and bigger lobbies than ours, has given us this debate. It is good that he has allowed us our turn to say things which, as I am sure he and my hon. Friend the Minister are aware, may not necessarily redound to the credit of any Government, past, present or future.
If we can reduce the use of energy-intensive work, we may well increase the use of labour-intensive work. The hon. Member for Midlothian talked about the prospect of coal being used as a major fuel in other ways, and I am happy to agree with him. This would ensure the future of the British coal mining industry. The strong trade union. movement involved in coal mining has never seemed interested in new technology, yet Britain has in coal a base that will last long after oil and gas have run out and a base for industry and community that we must maintain. It can be used economically and can reduce our dependence on overseas supplies.
One cannot have a debate on alternative energy without saying more about pollution. The British and United States Governments have been ambivalent about the causes of acid rain. It is fascinating that the cities of my youth were black and grimy, yet no one said that there were no fish in the lakes or that there was acid in the water. I suspect that much of today's pollution is caused not by coal burning alone but by the use of coal, chemical products or other fossil fuels which come from a hole in the ground. The gases produced from burning or dispersing are not good to breathe or safe for any plant life. It is therefore even more important that we should use our national resources as cleanly as possible. Various experiments are being conducted, including those mentioned by my hon. Friend the Under-Secretary of State in relation to the National Coal Board and by the hon. Member for Midlothian in relation to Japan. Alas, barely a dozen countries are trying to use existing power sources sensibly.
599 Conservation is not just a matter of conserving energy. Insulation and other household schemes for which we have given sufficient grants or loans are important additions. I am a devotee of loans. I do not understand why the Government give grants when loans would enable people to make a profit by insulating and doing sensible things to their own home environments. I should like an energy audit system to be used. This is widely done in the rest of the world, especially the United States where public utilities have discovered that it is more economical to get consumers to use less of their product rather than incur the vast capital cost of new plant. My hon. Friend the Member for Poole referred to cost overruns. It is rare that any form of power generation comes within its budgeted costs. Whereas utilities in the United States have led the field by saying, "We shall pay you to use less power," utility corporations in Britain are keen to maximise sales, although sales are not necessarily the best way to maximise efficiency, strange though that may seem to the layman.
Only one in 10 homes in Britain has insulated cavity walls. One in two homes has adequate roof insulation, thanks to successive Governments and various allowances. Only one is seven homes has draught-proof windows and doors. Only 50 per cent. have any form of thermostatic controls, and even this has happened only because of the growth in central heating. Many of us in the suburbs know about the use of thermostats but there are many other houses where the installation of such controls would more than pay back their cost in less than one year. The payback time on energy conservation measures is very short.
Mention has been made of combined heat and power. My hon. Friend the Member for Erewash (Mr. Rost), who is unavoidably absent, is known as Mr. CHP. When he arrives on the scene we say, "CHP presumably means that pipe of yours." The pipe always burns, and my hon. Friend burns with support for the type of combined heat and power programme that is prevalent in Scandinavia but is virtually non-existent in Britain. About 45 per cent. of all the energy generated in our power stations is waste heat that disappears into the atmosphere, so we get only about half the energy we produce. My hon. Friend the Member for Erewash asked me to say — I do not have his expertise—that a combined heat and power programme must be the logical way to go in a time of ever-increasing costs per unit of energy production.
It would ill become me to make a radical suggestion, but I must point out that any Channel tunnel will be financed by private capital. The capital costs will be vast but the running costs will be relatively low. The Sizewell report, to which the hon. Member for Gordon referred, may approve what is not so much flawed technology as well-checked technology. I am surprised that my hon. Friend the Member for Rochford did not leap up to accuse the hon. Member for Gordon of being emotive. Because that PWR technology has been considered carefully it is probably the safest available, although perhaps it is somewhat outdated. If the Sizewell project, with its high capital cost, will produce such low-cost fuel perhaps it should be funded through the City of London. If the City can find the money for the Channel tunnel why can it not do so for the Sizewell project? Perhaps we know what the City would say if we asked it to do so, so we avoid asking the question.
600 "Rubbish" is the word sometimes used in the House. "Rubbish" is frequently cried by people involved in alternative energy. There are a number of campaigns to utilise rubbish. Perhaps the most prominent is the warmer campaign in which Mr. Evemy is involved and which aims to pelletise rubbish and burn it. The way some of my colleagues strew paper around shows how easy it would be to produce a fair amount of energy from waste paper and rubbish. Not surprisingly, much rubbish consists of paper or wood, or their by-products. This could be easily and economically used for heating along the lines of the combined heat and power programme.
There are other examples of refuse-derived fuel in which waste is turned into pellets. Cadbury's of Bournville used to get rid of 120 tonnes of waste packaging each week, but it has installed a plant to pelletise the rubbish. The pellets are substituted for a quarter of the coal that is normally burnt. The company will save £200,000 a year in this sensible use of what would otherwise be rubbish and waste.
§ Dr. M. S. Miller
Is the hon. Gentleman aware that, taking the world as a whole, wood is the substance that is most used to create energy?
§ Mr. Speller
I am grateful to the hon. Gentleman for making that point. Wood is the basic fuel of the Third world. The world is running out of forests, and I congratulate the Government on the sensible use of what might be called forest farming. The problem is that once a tree is cut down it cannot be used again and replanting must be carried out. We in the West talk about fuel as gas, oil and coal, but throughout most of the Third world fuel is wood.
I hope that in the near future other countries will follow the example of Botswana, which is tiny in commercial and economic terms. In Botswana solar energy is built into the housing programme. The photovoltaic process makes electricity directly from light. I saw on the edge of the Kalahari desert what looked like one of our own telephone boxes and I wondered whether Dr. Who had arrived. No, the telephone box was powered by photovoltaic cells. The construction looked a little like a bird table which was angled towards the light. Light produced electricity and electricity powered the telephone. There were no cables, just a simple photovoltaic process. The Third world may well show the old, developed world what should be done.
The hon. Member for East Kilbride (Dr. Miller) has a pocket calculator, probably one of those that we are often given. I discovered that the batteries in my pocket calculator, which is of the same make, had run out during the recess. Fortunately, I had recently bought a small solar-powered calculator with a memory. The light in this Chamber—there is not always light here—is enough to keep it going. These calculators are commonplace throughout the world but they are treated as gimmicks in Britain. They are not gimmicks; they are the way forward.
I move on from domestic refuse to what is known as "biomass"—another awful word—which covers everything from the burning of firewood and cattle dung to the highly controlled anaerobic digestion of sewage and/or slurry or vegetable wastes. About 15 per cent. of the world's energy comes from those sources, while America estimates that the amount of firewood burnt there compares with the energy supplied by its nuclear programme.
Biomass offers advantages to energy supply to agriculture and the environment. My hon. Friend the 601 Minister called it a winner with enormous potential some time ago. It is viable now by any Government criteria. We must do more than just say that it is viable and step back. We must provide funds for research and development to make it economic to produce. My goodness, this could do so well for us. Professor David Hall of King's College, one of the country's leading biomass experts, uses rather nonscientific phrases. He said that it was time "we stopped pussy-footing about and put some real money into biomass". He is correct, but I wonder whether we will. I hope that my hon. Friend will refer to that when he replies.
I do not intend to labour the subject of wave power. It has been well covered already, but we must return and consider the Norwegian experiment, which uses British technology. It is too easy to say that it is a long shot and we should forget it. An island nation which has tidal water flowing to and fro, hydropower and other sources of water should not write off wave power as a long shot. There is fantastic power available. My hon. Friend the Member for Poole mentioned the Severn barrage. The jobs and opportunities for industry offered by such a construction are worth having.
My hon. Friend the Member for Kingswood (Mr. Hayward) has had a long interest in the Severn barrage. He worked for GEC and learnt something about it there. He asked me to say that, while he recognises the difficulties associated with the Bondi project, he supports the project as a means of providing extra generating capacity in the south-west. He has sent his apologies for being unable to be here and has asked that I associate him with my remarks on that form of power.
The Energy Act 1983 opened the door to the private generation of electricity, but in some ways that has made it more difficult. The intended user of a mains connected wind turbine has to overcome technological and economic hurdles to obtain permission to operate through the grid and for connection to it. Rates are another problem. Although problems always belong to someone else, I look to my hon. Friend the Minister to consider the fact that, if one improves one's property, the rating assessment is increased. If someone installs a wind turbine to provide electricity, that person is liable to have the rates on his house increased to such an extent that it was not worth installing the turbine. Perhaps my hon. Friend will have a word with the appropriate Department, because we encourage people to modernise and improve their properties and then penalise them by more than the savings of the improvement. We are back to the old idea that every house must look like the advertisements — like a Monopoly board chip—with nothing interesting about it, and certainly no microchips.
A liability to pay rates which are increased and take back a substantial part of any saving produced by an improvement is ludicrous. Wind power takes up little room. There is one example of a local authority that refused permission for someone to put up a windmill unless it was surrounded by trees to mask it. That would of course also stop the wind, which is one reason why I am so nervous about planners.
Clean energy means that we do not have pollution. A smoker may kill him or herself, and there is an on-cost to the National Health Service which has to look after the result of that person's unfortunate habit. Energy is not dissimilar to that. If we use dirty energy we have the problem of cleaning up the pollution, whether it be the result of acid rain or grime on the Houses of Parliament. 602 The use of clean energy would save the nation those on-costs. We should consider how much the alternative, clean, renewable energies would save in terms of the on-costs of pollution. We all say how lovely the House looks now that it has been cleaned, but it would not have needed cleaning if the energy which we use lavishly here had come from sources other than the old conventional ones. Sulphur dioxide and nitrogen oxides are nasty things to have around. The less we have of them, the better.
I have mentioned solar energy in connection with our calculators. Solar energy does not just run calculators. It powers satellites, those objects in space we see but know little about. They are run on electricity, but electricity generated by the sun. If solar energy is good enough for my calculator and Mr. Reagan's satellites, perhaps there is scope to work along those lines. I pay tribute to the energy technical support unit which was mentioned by the Minister. It has compared the economics of renewables with fossil fuels. It has reasonably recommended that we should continue to consider the matter.
I end as I started, by saying we spend vast amounts on the established nuclear industry, which is fair enough, but minute amounts on the renewables. We should study the new ideas now available.
What are the conclusions? We should not be surprised that the Government will spend all that they can afford within their budget. The Opposition can spend whatever they like until they become the Government, when, all of a sudden, they too can only spend that which is in their budget. Some simple things could be done, and I ask my hon. Friend the Minister to consider them. I ask that allocation of research and development funds for energy projects should be consistent. They have not been consistent in the past. They have been weighted in favour of conventional fuels. We should think about reforming the Energy Act 1983 to encourage private generation or, at least, give it a sporting chance compared to the CEGB. At present, all the odds are stacked in favour of the CEGB. We do not need a vast change to allow the other side a little more help.
I hate to suggest to my hon. Friend that he should establish a committee, but some form of running committee is needed. It could study obstacles to development, such as the rating system. People probably do not consider such things until they have made the improvements and then received the rating assessments. They then may wish that they had not made improvements in the first place.
The energy equipment testing service at Cardiff university is the only independent testing centre for solar energy in the United Kingdom, and a decision by the Department of Trade and Industry about its future is pending. There must be more co-operation between the DTI, which may say that something will work, and the Department of Energy, which says, "Let us test the product and see whether it will work."
June Morton of the United Kingdom section of the International Solar Energy Society spends most of her time, I suspect, not doing the job that she is paid for, but answering questions from laymen and lay Members of Parliament who do not know where to go for the type of advice that privately funded organisations provide. A renewable energy information centre should be considered because it would cost relatively little and would have a high pay-back.
603 The terms of reference for promising energy research and development are, "You have got the problem so you must develop prototypes needed to promote export sales." But when? Hardly ever, officially.
Solar energy is thought unlikely. We rather scoff at it in this country. The sun does not shine as frequently as we might like, but in the Third world—the hotter parts of the world—export prospects are unbelievably high. We are not obtaining our share, because we are not getting research and development projects started here. It is illogical for us to say that because we do not use a product in this country we should not sell it abroad. When I was a young member of the colonial service we used water filters in the tropics produced by three major British firms. No one in Britain used them, but those firms had promoted the technology and sold them around the world. So should it be with renewable energy today.
I wonder whether my hon. Friend would be prepared to meet those of us interested in renewables fairly frequently. I speak as one who might co-ordinate such meetings. We might be able to provide a depth of specialist knowledge which might be helpful to my right hon. Friend the Secretary of State and to the Minister in promoting clean renewable energy. Everyone is in favour of it, but wonders whether it will ever come about.
I apologise to the House for labouring longer than I normally do in this vineyard. I am deeply grateful to the Secretary of State and my hon. Friend the Under-Secretary, who brought about the debate. It is something that should happen more often, as people say when they meet a nice person. The all-party alternative energy group would like to go on meeting and talking, perhaps not so formally, but looking towards a future when we shall use the wind that blows around the world all the time, the sun that shines somewhere all the time, the water that flows and the tides that rise and fall—all those simple, clean, renewable resources that we have ignored because of the technology of the Victorian age. Perhaps that is one of the reasons why our technology and industry are a little behind. We are still looking back at Queen Victoria, in the time of Queen Elizabeth II. We should be looking to renewable resources as a major part of energy supplies for the future.
§ Mr. A. Cecil Walker (Belfast, North)
It is patently obvious in Northern Ireland that we do not have a clearly defined energy policy.
At the planning stage of our new Kilroot power station there was a question of whether it should have coal, oil or multi-fuel firing. Many felt that, from the security point of view, it should have been designed as a multi-fuel station. Others felt the need for an interconnector to Scotland so that we could be coupled to a possible nuclear energy source. In the meantime we discovered a high quality commercial quantity of lignite with a low sulphur content which, it appears, offers a much lower cost than coal, based on its thermal content. For reasons that are not apparent, the energy group of the Department of Economic Development has kept its investigations into lignite very much to itself. For instance, there is the well-proven Winkler process for the gasification of lignite, which would produce much cheaper gas for domestic and, more important, industrial use. Lignite can also be converted to 604 hydrocarbon fuel, and there are other chemical processes based on that form of energy. Yet we are still waiting for a decision by the Government on the exploitation of lignite. Although Kilroot power station is being converted to burn coal, I wonder why there is not also provision to burn lignite.
Added to all that confusion is the role of combined heat and power in the Northern Ireland energy scene. I agree with the hon. Member for Midlothian (Mr. Eadie) about the advantages of CHP. I am pleased that the Government have realised that that form of energy could have an important role to play and that they have provided financial support for up to £250,000 on a 50:50 basis to consortiums of joint ventures to carry out a programme of work in Belfast, which, it is hoped, will lead to a prospectus for the formation of a company to exploit CHP. Naturally, such an investigation must include the use of lignite as we now have that fuel virtually on our doorstep.
Belfast city council is very much in favour of the provision of CHP, and its commitment is £50,000 in cash to the consortium behind the concept. That consortium has already been formed and is actively pursuing its investigations under its terms of reference. Unfortunately, due to the limited powers accorded by the Government to our city council, it regretfully cannot become a full member of the consortium.
I share the view of Belfast city council that a CHP station is a necessity for Belfast. In a conventional power station, up to 35 per cent. of the heat in the fuel is converted to electricity, and the other 65 per cent. is wasted as heat to the atmosphere or to the cooling water. That has also been mentioned by the hon. Member for Devon, North (Mr. Speller). In CHP stations, slightly less is converted to electricity, but approximately 40 per cent. goes as useful heat for heating buildings. It is realised that heat in the form of hot water is more costly to distribute than electricity and that it is viable economically only where there is an area of high heat load; hence the selection of Belfast, which is eminently suitable for such a project.
The heat load is made up of domestic heating schemes together with Government buildings, the central business areas, industry, hospitals, universities, schools and so on. Many district heating schemes have been introduced by the Northern Ireland Housing Executive, which, as many people know, is a monolithic, bureaucratic institution set up by Government to co-ordinate and streamline housing activities in the Province. It has singularly failed to do that, as is demonstrated by the problems that it has created for Government, the public and elected representatives.
Due to the incompetence of the executive in the mismanagement of the district heating schemes, it is now in the process of converting many to individual heat appliances. All sorts of excuses have been given for that decision, one of them being that metering and payment for heat consumed were unsatisfactory, and considerable debts accrued to the executive, but the real reason is that some of the schemes were badly engineered, causing problems of heat loss. Meters proved to be faulty, thereby causing tenants to withhold payment in the knowledge that they were being asked to pay for heat that might not have been used. In one area the scheme is overboilered and consequently the capital cost charge is high, although that could have been overcome by extending the scheme to cover a larger area.
605 If district heating schemes are well engineered and the costs are reasonable, they are well liked by the tenants. It must be accepted that the Housing Executive is responsible for a substantial proportion of the heat load in Belfast that could be connected to CHP. The decision relating to the removal of district heating in Northern Ireland may not be in the interests of the economy as a whole. The presentation of the executive's case for pulling out has been biased.
Bearing in mind that the Government are meeting 50 per cent. of the cost of the joint venture for Belfast CHP, it hardly seems logical for the Government, wearing a different hat, to be seen to be encouraging the dismantling of district heating schemes. I appreciate that the Government are against subsidising that form of heating, but the cost of conversion to solid fuel appliances is expensive, and at this juncture would not seem a sensible solution until the joint venture has produced its prospectus in 1987.
There are now two significant options to be considered after the demise of the Kinsale gas option that has now been abandoned by the Government. They are a Minemouth power station to generate electricity based on the use of lignite or the development of a CHP station in Belfast. The CHP option deserves special consideration by the Government in their overall energy policy. The first consideration is employment. There is no sign that assessments are being made within Government of the differing employment and economic impacts on the Northern Ireland economy, especially in terms of job creation and the effect that those options have on the payment of DHSS supplements for heating. Much of the pressure for the Kinsale gas line arose out of the employment that it would create and its rejuvenating effect on our gas industry. If combined heat and power was chosen, those responsible for laying and maintaining a gas distribution network in Belfast could equally well transfer their skills to laying and maintaining a water pipeline.
As the Minister, the hon. Member for Brent, North (Dr. Boyson), knows, we have an extremely alarming unemployment problem in Belfast. Such a scheme would provide employment where it is needed, and for a long time. It might take 10 or 15 years to develop a heat gridwork and a power station. Much of the capital cost of the power plant can be met by local labour. Our local company, Harland and Wolff, is capable of manufacturing the small turbines or engines appropriate to a combined heat and power plant.
The second consideration is low-cost heating with low incremental cost. CHP is probably the most energy-efficient and cost-effective means of dealing with the problems of condensation and damp caused by people being unable to afford adequate heating. The third consideration is security, and security of supply. The potential vulnerability of a single minemouth station and its transmission lines should be compared with a harbour-based CHP station able to burn lignite, imported coal or even oil. Belfast already has the Belfast West power station, which could easily be converted to CHP. It must be realised that the minemouth power station would produce electricity only, whereas a CHP station would produce electricity and heat.
I must also mention what I call the rating of heat distribution networks. Public authorities such as those for water, gas. electricity and telephones are treated favourably in regard to rating. The public utilities also 606 have legal rights concerning wayleaves and disturbing public highways. There is no case law concerning CHP schemes and heat distribution. The Government should as a matter of urgency support the joint ventures of Belfast, Edinburgh and Leicester so that they can make a realistic financial appraisal for their prospectuses. There should be comparability as between the public utilities and heat companies.
I am sure that the Government are aware of the benefits of lower-cost heating from CHP. It is freely admitted that the heat wasted in electricity generation could heat most of the country. If subsidies to certain sections of the community to cope with damp and other problems must continue, the establishment of a system such as CHP under which the cost of staying warm is low must deserve special consideration. There are many benefits to be derived from the development of CHP and it is no wonder that our more efficient competitors such as the Dutch, the Germans and the Swedes are adopting it. I understand that we are to have an Energy Efficiency Year. The Government can participate by adopting CHP as an energy option. It is a much more cost-effective means of saving energy than double glazing and external wall insulation.
§ 12.4 pm
§ Mr. Spencer Batiste (Elmet)
Our having a full day's debate on this subject in Government time might not be an historic event but it is a welcome and timely development in public attitudes to alternative sources of energy.
Long gone are the days when the subject was shrouded by an aura of quaint eccentricity normally reserved for learned dissertations on the fiat earth or flying saucers. Today alternative energy lies at the heart of the energy debate and I also congratulate my hon. Friend the Minister and my right hon. Friend the Secretary of State on doing so much to ensure that it is there and not before time.
Alternative energy is about choice and innovation. The enthusiasm of my hon. Friend the Minister and my right hon. Friend the Secretary of State, their sustained support of the promotion of energy efficiency and the £68 million of investment in research on renewable energy sources during the past five years demonstrate a recognition of opportunity and the resolve necessary to achieve success. As has been said, it also demonstrates that there are problems inherent in the use of or four existing major fuels for generating heat and power.
Many of those problems can be solved. Many of my constituents are involved in the coal industry. The problems of pollution can be solved, given the will and the money. Indeed, given the will and money, the prospects for the coal industry as a whole will be much enhanced by an accelerated research and development programme into alternative uses of coal. Liquefaction and gasification are not merely desirable alternatives to burning coal in grates but vital steps in preparing for a future when oil and gas supplies run short.
Some of the problems that are attributed to our major existing fuels are exaggerated and distorted by special interest groups who seek to manipulate public opinion for their own purposes irrespective of the unnecessary fears and damage that they might arouse. Nevertheless, part of a coherent national energy policy must be the promotion of energy efficiency, the search for alternative sources of power and heat, a fair comparison of the advantages offered by coal and gas, nuclear and oil industries and the 607 making of objective judgments. Only in that way can we be sure that the consumer will get value for money, that the national interest is being best served and that the natural British genius for invention is translated into exploitable technology. There can be few more important objectives today than the expansion of our technological base and its conversion into national wealth and jobs.
Many factors must be involved in making fair comparisons. Nobody has a reliable crystal ball in which they can predict future supply and demand or the movement of particular energy costs. It must therefore be realistic and prudent to start from the proposition that, all other things being equal, it is best to eliminate waste whenever possible and to diversify whenever practicable, especially when our sources of supply are home produced. Yet it is at that fundamental point that our system begins to load the odds against alternative energy. The big battalions—the Central Electricity Generating Board, the National Coal Board, British Gas, British Nuclear Fuels Ltd. and the oil majors—the list is endless—have massive resources which are deployed more or less skilfully to fight their corner. I imply no criticism of people who fight their own corner, but reality must be recognised. The energy supply industry is rich and powerful and too often wins the argument just because of that.
On the other side, there is the commitment and enthusiasm of the Minister and Secretary of State, without which nothing could have been achieved. There is the energy efficiency office, and the energy technology support unit, which have performed vital roles, which I shall mention later. Most of all, there is the growing industrial and commercial awareness created by such measures as the excellent series of breakfast specials, which have brought the question of energy efficiency into the forefront of good management decision making.
Obviously, there is vastly more to do. Colleagues have spoken of a woeful lack of awareness of the possibilities of efficient design among architects. Nevertheless, a good step forward has been taken, in particular the enlistment of public opinion based on sound commercial judgment.
However, the scales are still well and truly loaded. The imbalance of resources and the vagaries of ministerial transition heavily favour the energy barons whose horizons are limited to the boundaries of the energy market, and who naturally seek to increase energy demand, and to obtain the maximum share of it for their industry. They disadvantage those who seek to contain demand by the elimination of waste, and those who see energy as the solution to other environmental and social problems that cannot be for ever avoided.
How else can one explain the fact that the Treasury and Department of Energy look for far higher returns from energy conservation projects than in evaluating major new energy supply projects? What else can one understand from the fact that industry is aided to convert its boilers to burn coal, with which I thoroughly agree, but not to burn its waste materials? What else can it mean when the Government spend so much on social security payments in heating the homes of low-income families and so little on insulating those homes to make them more energy efficient? My hon. Friend the Member for Devon, North spoke of the increase in rates when one harnesses wind energy to reinforce the energy supply to one's home.
608 This depth of the disadvantage for alternative energy and the extent to which it pervades the Government machine as a whole go a long way towards explaining why, for example, we have been so slow to develop combined heat and power in this country when it is so widely and efficiently used abroad, and has been for some time. The advantages accruing from combined heat and power, especially when combined with refuse burning, as used in some parts of the world, would cross the boundaries of different Departments. Therein lies another range of problems for us. Projects which cross departmental boundaries are notoriously difficult to fund, especially when new technologies are involved or when new ideas need to be implemented.
Energy Efficiency Year in 1986 is a great idea, but energy conservation will never be successful in Britain if it is the exclusive enthusiasm of the Department of Energy. It requires complete commitment by Government and all Departments — not merely lip service but commitment to action, not tomorrow but today. It involves all Departments in critically reviewing their own energy use, including energy efficiency as a high priority in their own building requirements, and in assessing their legislative and executive actions in the context of their impact on energy conservation generally. The rewards are considerable—indeed, much has been achieved—but, on any reckoning, much remains to be done.
Cost is a central and vital factor. I do not advocate any extension of subsidy for energy. On the contrary, I seek profitable and worthwhile investment. However, it is not unreasonable to expect in the public sector a fair assessment of cost to be based on sensible and consistent criteria, and to take all relevant factors into account—both long and short term. I referred to the inconsistent view of the pay-back period, which discriminates against conservation investment compared with energy supply projects. That thinking, which is by no means unique, illustrates the type of distorted financial vision which has so artificially and unnecessarily constrained CHP schemes in Britain to the limited and experimental processes that we have employed, while overseas the schemes are successful and established, especially in combination with the disposal of refuse.
Rubbish is all too renewable and expanding an energy source. Surely, therefore, any realistic appraisal of cost of CHP must include not just the costs of generating the heat and power and their distribution, but the savings in waste disposal in the long term, and the enhancement of the environment, which will be brought about by such a sensible development. Why, for example, should my constituents, who live on the periphery of Leeds and who for many years have endured the disruption of opencast mining at Gamblethorpe, now, when mining has come to an end, face many more years of distress while that hole in the ground is filled with rubbish? The rubbish should be producing heat and power.
We must rise above the blinkered short-term judgments that avoid long-term solutions until they are forced upon us. We shall eventually run out of suitable holes in the ground in which to dump our rubbish. The sensible course must be to plan for that now and adopt long-term solutions that will enhance our environment. That requires urgent co-ordination, not just between Departments, but between central and local government, so that coherent and comprehensive schemes may be suggested.
609 Our environment is important. Public demands for its protection grows, quite properly, ever stronger, and fuel demand for alternative energy sources. One of the benefits of alternative energy which the recent ETSU report highlighted is the fact that many of the projects assessed are environmentally benign, have negligible environmental impact or, in some cases, can provide solutions to other problems that affect our environment. The reports are a treasure trove of useful information about the valuable work sponsored by the Department and the criteria that it has used.
That is of particular interest to constituencies such as mine where the city and countryside meet—sometimes uneasily. We have just passed through the annual ritual in which sections of the media attack cereal farmers for straw burning when in reality they have little choice. The ETSU is sponsoring research to resolve that problem and I have an interest in a company investigating the possibility of using surplus straw as a feedstock for producing fertiliser. It is particularly gratifying, therefore, to see that the ETSU, in exercising a strategic overview of the matter, has identified the cost of transport of straw as a crucial limitation in developing commercial solutions, and is looking to promoting research into the economic compacting of straw to ease that limitation. If it is successful, it will open the door to processing biomass fuel on a much wider scale, and solve economically a significant environmental problem.
It is precisely because of that broad-ranging approach that alternative energy has created and nurtured a public and political awareness that the energy debate does not start and finish with coal, oil, gas and nuclear power—important though they are. It also demonstrates that in a modern technological society the Government have a crucial role to play in research and development—in developing strategies, in directing resources to promising projects, in bringing complementary programmes together, in acting as a catalyst, and in picking winners and, inevitably, losers, at least concerning public money and investment.
We cannot afford the scatter gun approach of the United States Government towards research and development. Nor should we, with our natural gift for inventiveness, confine ourselves to the laser-like concentration of Japan on limited areas of research. Our approach should be somewhere between the two. It is gratifying to see that the Government accept that responsibility.
It is notoriously difficult for Governments to pick winners, especially in the uncertain world of new technology, but that is no reason for not trying. Without such support and a measure of strategic direction, much of the research simply will not happen, and there will be no winners to pick.
The Alvey programme for information technology is a model for governmental participation in strategic research in an important commercial technology. The ETSU reports demonstrate the beginnings of a similar approach towards renewable energy, and should enjoy the fullest support of the House. I do not suggest for one moment that I envisage a practical scenario in which coal, gas, oil and nuclear power will not, in some proportions, continue to be the mainstay of our energy needs, but I believe that great sums of public money can be saved and better invested in the national and public interest if energy conservation and the development of alternative energy sources are assessed on a fair and comparable basis.
610 I commend the Secretary of State and my hon. Friend the Under-Secretary of State for Energy for the progress which has been made and for the effort and commitment that they have demonstrated, but I am sure that they will be the first to agree that much still remains to be done.
§ Mr. Nigel Spearing (Newham, South)
I apologise to the House and to the Under-Secretary of State for not being here for his opening speech. I understand that some of the points that I hoped he would make were not made. I have no doubt that he will deal with them in his winding-up speech.
There was much in the tone and content of the speech of the hon. Member for Elmet (Mr. Batiste) with which I agreed wholeheartedly. I have asked many questions about the progress of combined heat and power, which I had hoped might come to London's dockland where opportunities abound, but Government progress is disappointingly slow. It could be speeded up.
Ten years have passed since the great energy crisis of 1974. It produced a plethora of ideas and policies which the previous Labour Government began to sort out. Since then, however, there have been six years of relative lack of effort. I sympathise with the Under-Secretary of State. He is doing his best perhaps, but he is doing it in difficult circumstances, about which I should like to be provocative.
Let me deal with one of the excellent examples of the hon. Member for Elmet—the generation of electricity from rubbish. That is exactly what the Greater London council does at its Edmonton works. However, the generation of electricity from London's rubbish is possible only if that rubbish can be managed over a reasonably wider area. The Government did not allow that to happen in another place or in this place. Despite, therefore, the hon. Member for Elmet's generalities, I suspect that when the vote took place in this House he was not, in practice, in favour of the generation of electricity from London's rubbish. He will correct me if I am wrong, but I suspect that he voted against the continuation of a single authority —not necessarily the GLC—in London for the disposal of rubbish, let alone its generation into electricity. Conservative Members very often speak in generalities, whether or not they have an interest in the matter, which many of them have. In practice, however, they deny the means for the kind of progress which they say that they support.
§ Mr. Michael Portillo (Enfield, Southgate)
Is it not true that this project could continue if the Labour boroughs in London decided to co-operate to keep the scheme in operation?
§ Mr. Spearing
I am dealing with the principle. That may happen, and it will probably have to happen. However, the hon. Gentleman must understand that the extension of schemes of that kind will not be easy to achieve with a fragmented pattern of local government in an area where regional organisation is needed. That applies not only to London but to the metropolitan counties.
§ Mr. Batiste
Does not the hon. Gentleman accept that part of the problem over the development of combined heat and power, particularly in the context of burning rubbish, is that because the strategic authorities, like the 611 metropolitan counties, were so big they had easy access to holes in the ground and adopted the easy option? If they had concentrated on solving the problems where they arose, there would have been much more rapid progress.
§ Mr. Spearing
The hon. Gentleman says that the size of these authorities has given them an easy option. I do not agree that that is necessarily so. There was the opportunity to develop a coherent strategy if the authority wished it, and if the Government had wished it, too. I am not sure that the Government wished to develop such a strategy. I do not believe that the Government are interested in a coherent or alternative energy programme. These sources of power and energy supply are intrinsically alternatives. Although the debate has concentrated upon the alternatives—wind and wave energy, renewable resources and the burning of rubbish—we forget at our peril that all sources of energy in Britain, which has an abundance of different forms of energy saving and production, are alternatives.
The hon. Member for Elmet mentioned the lack of progress due to the entrenched interest of the market place. The Government are interested only in a market economy and they are trying to apply it to energy. The 19th century prototype Leeds school of non-political economy cannot and does not work. One cannot apply stone age economic principles to the needs of the present day. The Government are trying to do that in almost every area. That is why they are failing not only here but elsewhere.
Time is all-important in energy. Our coal and oil resources are being run down. A fundamental principle of the Leeds school of non-political economy is to work on the basis of annual profits. According to that philosophy, it is perfectly all right if large profits are made for one, two or even 10 years. One is getting a good return on one's investment. What happens after that does not matter. In other words, après moi, le deluge.
If we are concerned about alternative energy resources we must plan for posterity as well as for profits next year. The Government do not appear to take that view. The Leeds view is too short-sighted. Therefore the Government do not take time into account. Do they take cost into account? I doubt it. There is no integrated energy cost or pricing policy. That element is missing. The social impact element is also missing.
The choice between different forms of energy also has a social content. I am not referring just to acid rain, smog and the efficiency of rubbish disposal, all of which we must take into account. I am referring also to the impact upon communities where changes in the implementation of energy and pricing policies have a social impact. We know the view of the chairman of the NCB on carrying money over to avoid undue unemployment and damage to the social fabric of society.
The Government's school of non-political economy is incompatible with a reasonable, balanced and coherent approach to all the alternatives of energy supply. If they took such an approach, the pattern would be clear.
We are living in a fools' paradise as North sea oil rapidly runs out. The assumption in terms of the economy is that there are alternatives to follow. I shall leave that assumption aside, although it has been prevalent in our debates this week.
612 The assumption in terms of power is that atomic power will come through. It may do, but the atomic solution is only one of the alternatives. We must ensure that, when the choice is made, the alternatives are clear and are not distorted. That is where suspicion and debate arise over how the Government undertake their national responsibilities.
I shall not repeat the arguments about coal costing and the arguments in accountancy journals about the rundown of the alternatives to pits. That is not the centre of our debate, although it is relevant to what I have been saying, because there is widespread suspicion that the Government's approach was less than credible. They emphasise conflict and confrontation, and that is as true of energy policy as it is of almost everything else that they do.
Let us look at the more exotic alternatives that have been in the news for the past 10 years and at what the Government have done to ensure a proper evaluation of those systems. It is easy to say that windmills are not the answer, but if someone says that there may be a place for vertical axis wind generators that sounds more scientific. What is happening with vertical axis wind generators or any other wind generators?
About 10 years ago the CEGB published an interesting research document about wind speeds off the British coast. It revealed a tremendous potential for wind power, even in the Thames estuary where there were still some wartime forts. We have had 10 years to do something. What has been done, what is the state of the art, and what is the Government's view? The engineering department at Reading university was doing some interesting work about five years ago. Is that still in British hands?
I had an interesting exchange earlier with my hon. Friend the Member for Midlothian (Mr. Eadie) about the fact that techniques for the generation of electricity from wave power have not been taken up by the United Kingdom in the Highlands of Scotland or on the Atlantic seaboard, but have been taken up, apparently with great success, by the Norwegians. Why? Why have our Government not grasped that winner?
The Minister said that we must invest in winners. Was not there a winner at Leicester university? Did not the economics of Leeds permit the development of the winner from Leicester? Perhaps the winner from Leicester fitted in with the economics of Leeds. Was there no patent? Were there no engineering companies in Britain scrambling for this marvellous device? If the Norwegians are right, what has happened to the Government's theories on economic exploitation?
The Minister will either have to say that the Norwegian device is no good or he will have to explain why his much-vaunted private enterprise "spot-the-winner" laissez-faire economy did not spot it here. The Minister must explain why, even if it was on the margin, the Government did not spot the development and keep it going.
Departmental Select Committees keep an eye on Ministers. The Select Committee on Energy in Session 1983.84 produced a report entitled "Energy Research Development and Demonstration in the United Kingdom". The Committee clearly was worried. Paragraph 65 of its report states:In practice, the Department presides over a disparate portfolio of RD & D programmes and projects, which have in 613 part been inherited and in part have been evolved, but which in total do not appear to reflect a coherent set of energy policy objectives.An official reply has been made to that, but I should like it to be repeated today.
Paragraph 68 of the report states:The point is, however, that when the treatment of different aspects of energy RD & D is so glaringly inconsistent, it is difficult to be satisfied that a sensible balance of priorities has been arrived at.Referring to the Advisory Council on Research and Development, the report states:However, if it is to perform these functions effectively the ETSU's—that is, the energy technology support unit—spread of experience would have to be widened to include more specialists with non-nuclear backgrounds.Two questions arise. Have more specialists with non-nuclear backgrounds been appointed to the energy technology support unit; and, if so, why were they not on it at the beginning? Secondly, it has been said outside that none of the members of ACORD is well placed or expert in the alternative technologies. If that is correct, why? If it is not correct, will the Minister tell us which members of ACORD are experts or experienced?
My hon. Friend the Member for Midlothian (Mr. Eadie) referred to wave power and ETSU activities at Harwell. I understand that the unit is run by the United Kingdom Atomic Energy Authority. It is under that umbrella administratively, and perhaps geographically, but is it technically?
The Minister seemed to imply earlier that, although the unit is at Harwell, its work is separate from the atomic work being done there and that it has a proper relationship to that work. I am told that most if not all of the people involved in the ETSU have had careers in the atomic industry. I do not say that atomic energy is not important. It certainly is, although it is controversial, but I should have expected people with career backgrounds, experience, friendships and knowledge in the wider energy industry to be involved. If that is so, we must ask ourselves whether the energy technology support unit personnel are properly balanced.
In the whole area of alternatives in energy, which is what we should be about, the Government's performance is unclear and incoherent. Many serious questions need to be answered. If we try to apply the Leeds school of nonpolitical economy to something as basic as energy, which requires national intervention and planning for posterity and not profit, even at a national level, let alone that of the world, we cannot obtain a proper answer. During the past six years the Leeds school has attempted to get its philosophy interlarded with or imposed on an area that is not appropriate. Indeed, I doubt that it is appropriate in many areas. In national energy policy, especially the so-called alternatives, it is the least appropriate philosophy of all.
§ Mr. Michael Portillo (Enfield, South)
I have a longstanding engagement this afternoon, and apologise to my hon. Friend the Minister and the House for not being able to stay to listen to my hon. Friend's reply to the debate.
I listened with great interest to the hon. Member for Newham, South (Mr. Spearing). I hope that he will find that some of my remarks are relevant to the points that he raised. I have long had an interest in alternative energy sources. As long ago as 1977 I was lucky enough to join 614 a trip to the United States where I visited a number of installations using alternative energy. Even that many years ago I saw aerogenerators, solar power research and a plant that was burning rubbish to raise steam to produce electricity. The smell of the plant was truely unforgettable However, just as memorable was the dedication of the scientists and engineers trying to find technical and economic solutions to the problems. I am equally impressed by the Government's diligence in trying to find solutions on both those fronts.
Before I turn to the inexhaustible sources of energy, I want to refer to energy efficiency, which the hon. Member for Gordon (Mr. Bruce) described as the fifth fuel. It is not exactly a fifth fuel, but given the possibility of using energy more efficiently rather than producing more energy and wasting it in consumption, that does stand as an alternative.
Not many hon. Members have mentioned something to which I believe tribute should be paid—the fact that the Government have begun to establish energy prices that are realistic and market related, and which are the essential background to the efficient use of energy. Sensible energy prices are also the essential background to the development of alternative energy sources. If the conventional energy sources are not priced at market and realistic rates, the alternative sources will have no chance of competing against them.
The most important element both in the development of alternative energy and in energy efficiency is the operation of the free market. However, I am prepared to admit that the Government have a proper role in promoting energy efficiency. I can explain that under four headings. First, the Government, at both local and national level, own a tremendous estate of buildings in which energy is consumed — for example, schools, office buildings, hospitals and universities. Therefore, the Government must be as concerned to use energy efficiently in those buildings, as they are concerned to spend taxpayers' and ratepayers' money efficiently in other areas.
Secondly, the Government are in a good position to recognise the danger of returning to dependence on energy imports. They recognise that the greater the pressure on energy supplies, the faster energy prices will rise and the greater will be the danger of a return to recession.
Thirdly, in the help that we provide to poor domestic consumers, energy efficiency means providing help that relieves poverty in a more cost-effective manner than arty other means of disbursing money to them, such as through higher social security payments or other transfer payments.
Fourthly, the Government must be concerned with energy efficiency because of the impact of that on industry. If industry is more efficient in using its energy, that can help to boost GNP and produce jobs, and they are legitimate concerns of the Government. I therefore commend the Government for everything that they have done in that sphere, although I agree with my hon. Friend the Member for Elmet (Mr. Batiste) that we are still left with the problem that it is much easier to justify investment in new supply energy than in saving energy. One must make a strictly economic comparison between whether a pound spent on saving energy can save more energy than the same pound spent on producing more energy.
I said at the outset that I had taken a long interest in the subject and felt a certain enthusiasm for it. The subject is a natural magnet for attracting ideas. We can enjoy 615 imagining a time when our energy sources would be as inexhaustible as the sun, wind and waves. We should like to dream of power stations that emitted no radioactivity, no waste and no smoke, and of energy sources that were completely invulnerable to Arab boycotts or miners' strikes.
Idealism is not enough, and I commend the Minister for recognising that. He is concerned with spending taxpayers' money and has decided, rightly in my view, that he must look to spend that money effectively and wisely and is taking the advice of ACORD in doing that.
The Minister has, rightly, divided the alternative energy sources into the three categories to which he referred—the economically attractive, the promising but uncertain and the long shots—and I commend him on that because it would have been easy for him to have tried to satisfy everybody by spreading the money thinly, trying to cover every area of alternative energy development. To do that would have been wrong.
Nevertheless, I do not believe that we can get far in developing new alternative energy using only Government money. At some stage there will have to be commercial interest in the matter. Because energy prices are now relatively low, that commercial interest is limited. As the New Scientist said in an article on 11 July:The sad fact is that the economics just aren't right for a massive foray into renewable energy.I am concerned because, at a time when commercial incentive is weak, the Government are spending a great deal of taxpayers' money, as it were, against the grain of market forces. The Government may argue that they are there to spend against the grain of market forces and to keep momentum going when the price structure is not right. I hope that means that when energy prices rise and commercial interest is, therefore, that much stronger, the Government will reduce the amount of commitment of taxpayers' money.
§ Mr. Bruce
Will the hon. Gentleman acknowledge that the Government are giving £400 million a year in fuel subsidies, which is about four times what it was four years ago, and that some of that money would be better invested in insulation and conservation projects? That would give a return to the Government, being the public sector. It would ensure that people were not only getting a real benefit in extra comfort but that the nation benefited from energy efficiency, rather than pouring money down the drain to consume energy inefficiently.
§ Mr. Portillo
I agree with the hon. Gentleman, and the point he makes echoes what I said earlier about one having to view in economic terms what the Government can do in terms of energy efficiency. It may be that they can spend money most efficiently in relieving poverty by helping people to use less energy in their homes.
I was worried slightly when my hon. Friend the Under-Secretary of State, who is for the moment not in his place, said that his programme was to back winners. I understand that he was referring to the need to consider the prospects within the alternative energy area that are the most promising, but the expression "to back winners" is one that is not especially fashionable within the Government at present. Some Departments such as the Department of Trade and Industry would not use the phrase at all at the 616 moment. However, my hon. Friend is not a slave to fashion. He has used the phrase more than once and he obviously uses it deliberately and bravely.
We may be able to identify the projects that are the most promising now but it is quite a different matter from identifying those that will make it to the finishing post. We have heard this morning that over the years we have invested £16 million in wave research, yet it is now regarded as one of the long shots. For the moment, it has virtually been stamped "Reject". There are other alternative energy sources, such as wind power and geothermal hot dry rocks, that are considered the flavours of the month, but I ask my hon. Friend to recognise that in due course these sources may not reach the winning post and may also be regarded as long shots, just as wave energy is today.
§ Dr. M. S. Miller
I wish to take up the hon. Gentleman's reference to the phrase, "to back winners". Is he aware that one of the most successful energy-producing companies in the world, General Electric of the United States, has placed a sign on its headquarters which states, in effect, "We do not want to be first; we want to be second and the best."
§ Mr. Portillo
I am slightly puzzled as I am not exactly sure of the point that the hon. Gentleman is trying to make to me. I think that there is a difference between Governments who spend taxpayers' money and companies that spend shareholders' money. Companies are accountable directly to their shareholders. I may have misunderstood the hon. Gentleman.
I do not wish to carp about what the Government have done. They have rightly tried to identify which of the alternative sources of energy are the most promising for the moment. I concur with the conclusion reached in an article that appeared in the New Scientist that there is not much to be lost by jumping off the waves and into wind energy.
An alternative source of energy which has not been mentioned so far to my knowledge is thermonuclear fusion. The House will be aware of the remarkable maiden speech that was made in another place by Lord Marshall of Goring on that subject. Fusion is an exciting alternative source of energy, like many others. However, Lord Marshall took us through the many technical barriers that will have to be overcome one by one if fusion is ever to become a reality as a power-producing source in Britain. If it is ever to reach the stage when the amount of energy that we extract from a fusion machine is greater than the amount of energy that we need to put into it in the first place, there will have to be a tremendous commitment. He explained that when we have surmounted all the technical hurdles we shall face the economic hurdle, which is that of producing power that is economic and competitive with other power sources. Lord Marshall concluded that it was his present judgment that we would surmount the technical barriers one by one but not the economic barrier because of the complexity of the technology involved.
The remarkable maiden speech of Lord Marshall concluded with his saying that he wished that reality would temper our enthusiasm for thermonuclear fusion. I think that that advice applies broadly across the range of alternative energy sources. We are dealing with exciting technologies that require much imagination, and a tremendous amount of effort has been put into them. It is 617 understandable that we are all enthusiastic and possibly idealistic about them, but, at the end of the day, they will have to prove economic. For that reason, I join with Lord Marshall in saying that it is appropriate that while we are enthusiastic we should be extremely cautious.
§ Mr. Eadie
Is the hon. Member not aware that a Labour Government were responsible for the nuclear fusion project coming to Culham and that it is a joint European project? Surely he is not arguing that we should abandon nuclear fusion, even at the expense of not having technical collaboration with our European partners?
§ Mr. Portillo
I would be concerned if the hon. Gentleman thought that I was implying that Lord Marshall was saying that we should abandon nuclear fusion. Lord Marshall was not saying that. He was saying simply that one must be realistic about the prospects and that his best present judgment is that nuclear fusion will never overcome the economic hurdle. My knowledge of nuclear fusion does not compare to that of Lord Marshall, and I restrict myself to putting Lord Marshall's point, which he made so eloquently to the other place, to the House. It is worthy of broader application.
§ Dr. M. S. Miller (East Kilbride)
I commend the hon. Member for Enfield, South (Mr. Portillo) for his words about Lord Marshall, the chairman of the CEGB, an eminent and distinguished energy scientist. If my memory serves me right, Lord Marshall has not always been so pessimistic about the possibility of fusion. I may be doing him an injustice, but I have a feeling that some years ago, while he was not saying that we would get quick returns from fusion, he was not so pessimistic about something developing, perhaps in the middle of the next century. That is not long in the lifetime of a country, although it is for me.
We have to inject some science into a debate such as this, and I am sure that the hon. Member for Rochford (Dr. Clark) will do so, because he is a scientist. We should not get carried away on the winds and the waves of imagination which will lead only to marginal developments at best, certainly within the near future. We need alternative sources of energy. All methods of producing electricity should be investigated, but some of them will, at best, have only a marginal effect. For example, this country will never produce enough solar energy to make an enormous contribution to our energy requirements, although it might make a little. I am all in favour of the conservation of energy. It is essential, even from the point of view of finance.
The Government have to look at this in the reality of today's situation. To go in for experimentation when there are methods that are proved, cheap, clean and effective would be wrong. We have not the time to do that, even if we wanted to. We may have had time before, but no longer, as our competitors will be producing electrical power far cheaper than we are, and we shall have to do the same.
It is not just a question of which are the best methods of producing energy and electrical power. Coal is a good method and has stood us well, as have oil and gas. However, we know that the sources are finite and will give out soon. Therefore, we have to be involved in other methods of producing energy. Once coal, oil and gas give 618 out, we shall never have them again, and if other alternative methods are chasing what I have to call will-o'-the-wisps, we shall have to use the proved method of nuclear energy. I am all in favour of using rubbish, but the trouble is that one often needs more energy to produce power from rubbish than one gains. Extra equipment is needed to burn rubbish in the quantities required.
I have been interested for several years in the disposal of radioactive nuclear waste. Britain is way behind its major industrial competitors. The hon. Member for Gordon (Mr. Bruce) was disparaging about the amount of money that was spent on producing energy and electricity by nuclear means. England produces only 17 per cent. of its electricity from nuclear energy, compared with 50 per cent. in Scotland. Scotland has always been at the forefront of scientific advancement and these figures show how badly England is doing. That 17 per cent. compares with 48.4 per cent. in France, 45.9 per cent. in Belgium and 37 per cent. in Sweden, to say nothing of the United States and Japan. We are not even keeping pace with these other European countries in the production of electrical power.
I am not against coal production. As Mr. Michael McGahey is on record as saying, the last thing that we should want to do with coal is burn it. We should be extracting from coal all the wonderful materials available from it, including chemicals.
Coal-fired power stations stood us in good stead, but at enormous cost. The ash produced from coal is radioactive. The various acids that are released into the air from coal and oil are extremely dangerous. It is difficult to assess the damage that has been caused to human beings and the ecology. This was not the fault of the coal miners or of Governments—we used the only method of producing energy that we had. Other methods now supersede it. Coal still has its place, if it can be used at 80 per cent. or 90 per cent. efficiency rather than 25 per cent. or 30 per cent. I know of no method that has been devised to produce that efficiency, but it must be found because Britain in particular has large supplies of coal.
We make our choice and we go ahead with it. There is a tremendously long lead time between the commissioning of any type of power station, especially nuclear, and production. We have heard about the dangers from radioactivity, but I wonder whether those who are concerned realise that radioactivity is all around us There is enough uranium in the oceans to run every nuclear reactor in the world today for 300 years. The presence of this uranium is not unusual. It has been with us since the sun first came up and it will be with us until it goes down permanently, which is a very long time away. The Government must decide what to do in energy production. They do not have a great deal of time to decide. Once they make their choice they should stick to it and get on with the job.
§ 1.4 pm
§ Dr. Michael Clark (Rochford)
I should like to start by addressing a few remarks to the hon. Member for East Kilbride (Dr. Miller) because he invited me to make a few comments on fusion. I am sorry that Lord Marshall in another place should have been pessimistic about the future for fusion, because it gives us our brightest hope for electricity generation.
We can have a fusion process, rather than a fission process, where, by persuading two atoms to collide and 619 stick together, we can generate electricity. The only byproduct will be helium—one of the safest gases we know, because it is not inflammable—which is used in air balloons because it is so safe. That gives us a vision for the future that we should never disregard.
I was speaking recently to the director of the European fusion project. I asked him whether the process would eventually work. He said that it was a matter not of if but when. When I questioned him further on the "when", he admitted that it would be 40 to 50 years from now. At least it gives us a vision of cheap and safe energy in the future.
I welcome the debate and the Government's interest in alternative energy and renewable sources. I was pleased to learn this morning the extent of Government funding. I should like to congratulate my hon. Friend the Minister, who is not present in the House at the moment, on a comprehensive review of all alternative and renewable sources. However, there was one omission from his remarks to which I shall return later. I hope that he will put that right when he replies. We talk about alternative sources of energy—alternative to what? We have used wood as a source of energy for thousands of years. We have used coal for hundreds of years. We have used other hydrocarbons, such as oil and gas, for only tens of years. We can see from past energy sources that each new one gives us less scope than the one it replaces.
The total availability of hydrocarbon fuels is rapidly declining. I agree with the hon. Member for East Kilbride that we must conserve hydrocarbon fuels. They are far too precious to burn. They have premium uses. They can be used for making plastics, as chemical industry feedstock and for fertiliser manufacture. They must be conserved to enable us to have aviation. We can move towards an electrical society, but we cannot yet think of having electrically-driven aircraft. There are intermediate ways of achieving that. We can use electricity to electrolyse water and use the hydrogen as a fuel for aircraft, but that is a long way off and very expensive. We must conserve our hydrocarbons for aviation, chemicals and feedstocks.
§ Dr. Clark
Yes, I am aware of that. The Germans developed that process. The South Africans, the Americans and this country are doing the same now. My point has been endorsed by the hon. Gentleman. He is reinforcing the fact that hydrocarbons must be conserved to turn into fuel later rather than be used at present in a short-term process. I thank him for his comments.
The hydrocarbon fuels are coming to an end. We shall find that the alternatives are less convenient, more expensive and economically less attractive. Some will be controversial. We need to find an alternative series of fuels that will last longer than some of the fuels that we used at the end of the last century and are using this century.
Let us consider some of the alternatives. They have already been reviewed this morning so I shall not dwell on them at length. Let us look quickly at solar energy. It has abundant local and specific uses. The only power station of that type that I know is in Italy, where 727 mirrors are used to focus the sun's beams on to a heat source and 620 generate the steam to drive a turbine. The output from that power station is 1MW, not much more than two or three windmills and only one thousandth of the power from a conventional coal or nuclear power station. The power station may help the Italians to drive their air conditioning in the summer when the sun is abundant, but it will do little good in helping northern Italians to have heating in their houses in winter when there is not so much sun. Despite all the admirable uses of solar energy, I suspect that we in this country will not be able to use it to a great extent because we shall have the sun, if any, only in the summer, and we need our heat in the winter.
There is a similar problem with biomass. It is marvellous that we can get fuel by using the sun's rays to grow vegetation and burn it or degrade it in such a way as to get gas from it. We are doing that to some extent. However, again, it will be only a small contribution to our overall energy needs.
I turn from the sun, which is rare in this country, to elements of which we have plenty—wind and water. I recently visited the large British Aerospace windmill at Burgar hill in the Orkneys. When I visited the site, the windmill was just ticking round, generating no electricity because it was not going fast enough. It had been kept going because the people were frightened that if they stopped it, it would not turn again for us to see. We were at the northern tip of these islands in July, seeing a windmill that could generate electricity, but could not do so because there was no wind. Ironically, when we flew back to Hatfield airfield the wind was so strong that we could barely get down from the aircraft. When we stepped out we had to be helped down by the people waiting for us, bundled into cars and driven off. That illustrates the vagaries of alternative power from wind, yet it is a marvellous supplement and complement to other sources. However, in itself it will not solve our energy problems.
I am delighted that Howdens, which has a windmill on that site, too, has been able to get export orders, and has sold 10 to California. I am sure that it will sell many more across the world. I agree that we should perservere with wind energy not only for our own use but because it can be a significant contribution to the Third world and developing countries with no other source of energy, where they do not have the infrastructure to allow them to have the transmission lines that we are used to seeing in western Europe. They can have windmills local to demand. I am sure that in that way we can make a contribution to their well-being.
My hon. Friend the Member for Poole (Mr. Ward) mentioned that Denmark has 1,500 windmills, which would produce 0.4 per cent. of Denmark's electricity requirement. If the Danes are to produce anything like a significant percentage of their energy from wind, imagine the number of windmills that will be required. It is estimated that if we had windmills in this country of 60 m diameter with a significant output of 3 MW, we would need about 10,000 scattered across the country to provide us with half our electricity needs.
Many environmentalists will say that windmills are a good form of energy because they do not disturb the landscape. However, how many of those same environmentalists would be happy if every beauty spot and high peak had three or four windmills located at the very top? Every prominent area would have three or four 621 windmills of 60 m diameter. Those people would be just as concerned about that as about a conventional power station tucked away in a remote part of the country.
Other hon. Members have referred to wave power, so I shall refer only briefly to it. My hon. Friend the Minister and others have said that we are not pursuing research into the contribution to be made by wave power. If half of our electricity came from wave power, we would require a wave barrage, most likely on the west coast of Scotland, comprising 600 miles of wave machines. That is environmentally unacceptable. Even 10 per cent of our electricity needs would require 100 miles of wave machines.
The Bondi and the Wimpey-Atkins barrage on the Severn have been mentioned. The latter is an admirable scheme, and I should like to support it. I hope that it is eventually built, but we should get the matter into perspective. It will generate about 1 per cent. of the country's needs. It will indeed supply one sixth of the electricity required in Wales, but that is only a small part of Britain's needs.
One of the most interesting installations that I have seen in the past year is the Dinorwic pump storage station in north Wales. We can be proud of it. Water is pumped from the bottom of the hill to the top at night when electricity is cheap and plentiful, and it then goes through reversible turbines driving the generator when it cascades back down. It has a capacity of 1,700 MW—about 1.5 times that of a conventional power station. At Dinorwic we are turning the power of water to advantage, as it can go from zero generation to 1,300 MW in 10 seconds—something a Jaguar would be proud of. That means that the station can meet a surge in demand in a mere 10 seconds and that conventional power stations do not need to idle using valuable hydrocarbon fuel. Moreover, that capacity avoids the need to build an extra conventional power station.
All of those schemes are to be applauded, but to what extent will renewable sources provide us with energy? This is the admission that my hon. Friend the Minister made. He did not quantify output now or in the forseeable future. He said that solar energy will provide real savings, that biomass is attractive, that wind energy is promising, that hot dry rocks have potential, that tidal energy is a substantial resource and that hydro-electricity could be used on a large scale. They are all words—he gave us no figures. If my hon. Friend catches your eye, Mr. Deputy Speaker, I hope that he will quantify the amount of electricity that he believes we can get from renewable sources. I hazard a guess that it is between 10 and 20 per cent. on the most optimistic forecast. I doubt whether it is 10 per cent. now and it will not be 20 per cent. until half way through the next century. Although renewable sources must be exploited, we cannot rely on them.
The world population will double in the next 50 years and energy demands will increase 2.5 times, so it is essential that we find an alternative fuel. I believe that that alternative fuel is uranium. I agree entirely with the hon. Member for East Kilbride. Uranium is plentiful and has no other commercial value. Moreover, we have enough to last us many decades, if not two or three centuries. Nuclear generation is one of the safest forms of electricity generation. It is environmentally less obtrusive than many other forms of generation, and at present it is the cheapest form of electricity. Nuclear generation using natural uranium as a fuel for nuclear power stations also has the bonus that we are creating a fuel for the fast breeder reactor 622 when in future that comes on stream. We already have enough spent fuel from our conventional nuclear power stations to provide electricity for Britain for 300 years if that spent fuel is used in a fast breeder reactor.
My hon. Friend the Member for Devon, North (Mr. Speller) said that nuclear waste was dangerous and that it could kill people. He explained that it was dangerous if people roll in it. Cyanide and many other chemicals and materials are dangerous if one rolls in them. Indeed, even sand is dangerous if people roll in it and lie face down on it for too long. We must keep a sense of proportion on the nuclear issue.
In conclusion, it is right to conserve our energy as much as possible, to use storage such as we and the Norwegians have developed and are developing. It is essential to have renewables as far as possible. It cannot be denied that they have specific and localised use. We must continue to develop other forms of energy for the future. We must put most effort into nuclear energy so that following generations will not be deprived of hydrocarbon fuels, which are so essential to modern life and the well-being of the world.
§ Mr. Robert Key (Salisbury)
It is always a relief that much remains to be said, even after sitting patiently through four hours of debate. I congratulate my hon. Friend the Member for Devon, North (Mr. Speller) on his sheer persistence, which has not been unrelated to the fact that we are having this debate today. I, too, come from the west country, and I am glad to say that in Salisbury we have more sun and less rain than he has in Devonshire. The people of Salisbury have been aware of the power of the sun for 760 years. In about 1220 they applied to the Pope for permission to move the cathedral because the sun was dazzling them while they worshipped.
I thank the Secretary of State for agreeing to the debate and the Ministers for being present. It is encouraging to see two Energy Ministers present. My hon. Friend the Under-Secretary of State for Energy stressed the importance of flexibility, diversity, economy and efficiency. He said that while he was in Japan he was asked why the United Kingdom had such a substantial investment programme in renewables. His answer was that investment in the future was a key element in United Kingdom energy strategy. I hope that I shall show him an additional Key element in my speech.
First, the Department of Trade and Industry is investigating photovoltaic cells, because of their export potential. There is a hiccup in our energy strategy which, if cured, could lead to great benefit accruing to British export industries and our overseas aid programme.
Alternative energy technology has been embraced by many of our most prestigious companies and institutions — for example, McAlpine Taylor Woodrow, James Howden, the National Engineering Laboratory, and the Central Electricity Generating Board — but many of them are in receipt of Department of Energy grants, and I sometimes suspect that they do not wish to ruffle Whitehall's feathers. What worries them is that the Department of Energy will consider only the big projects, around 1,000 MW, and has chosen, quite legitimately. to have little or nothing to do with small projects around the 10 MW range. Indeed, I would go so far as to say that schizophrenia has set in at the Department of Energy. The energy efficiency campaign, masterminded by my right 623 hon. Friend the Secretary of State, has been universally acclaimed, and will be marvellously successful. The part of the Department which is responsible for that is humming with activity.
On the other hand, the energy generation side of the Department of Energy is a little dull. There are vast opportunities for United Kingdom exports of small-scale generation technology in the range 100 kW to 10 MW. Half the world's population requires energy at that level. The Department of Energy is denying support to the United Kingdom industry for small-scale projects to get the prototype demonstrations that are required for export purposes.
The Department of Trade and Industry is fulfilling that role to some extent, but it does not have the Department of Energy's expertise. The Department of Trade and Industry has had its successes. It supported the Orkney scheme of James Howden of Glasgow. During the past 18 months that company has sold 10 generators overseas. However, all this bypassed the Department of Energy.
The hon. Member for Midlothian (Mr. Eadie) referred to the Norwegian wave energy project. I, too, regret the United Kingdom's withdrawal from wave energy research, because it has reached an advanced stage at East Kilbride in the National Engineering Laboratory and Coventry, at Lanchester polytechnic, which has a consortium of companies ready to go ahead, given a little help with funding. The Norwegian companies have been successful in building 500 KW generators, two of them for £800,000. But this is "too small" in Department of Energy terms.
What is the role of the Central Electricity Generating Board? I suspect that it, not the Government, gives the thumbs down to alternative energy schemes. There is no way in which a prototype demonstration can be cost-effective.
As for photovoltaic cells, the Under-Secretary of State said that the Department of Trade and Industry supports companies with a view to realising export potential. But why is the Department of Energy not interested in the development of amorphous silicon systems, such as those developed at Dundee and Herriot-Watt universities? They have a real export potential.
I was in Japan at the same time as the Minister. I visited Mr. Iwe, the president of Sanyo. He showed me round his solar house in Osaka. This is a massively expensive capital project which has largely been designed as a research base. It is completely reliant upon solar energy. I visited Osaka with Mr. Steve Wozniak, the founder of Apple computers, who had also evaluated a "total reliance" scheme for his home in California but had turned it down. Nobody is seriously suggesting total dependence upon alternative energy. In simple, pragmatic terms, we are looking, as the Minister said, at flexibility and diversity.
The practical problems facing local authorities need to be taken into account. I pay tribute to the Wiltshire county council architect, Mr. Haynes, who for some years has been seeking to develop an energy policy. Some of the most effective measures are the most simple, such as new buildings with proper draught exclusion systems and cavity wall insulation. The county council has examined the use of straw for heating. It has visited Denmark and Germany but has found that this is not economic. In response to the possible use of straw for heating, farmers have put up the price of straw.
624 Domestic rubbish is being burned in the cement works at Westbury. The county council is evaluating conservation measures, including double glazing and cavity walls. The pay-back on double glazing is 15 years and on cavity wall insulation four years. If county councils can build that into their building programmes it is useful. County councils will probably believe that they can save on static measures but that people on site cannot be controlled. That is one of the biggest sources of wasted energy. People leave doors and windows open in offices and schools and a kindly caretaker will probably increase the heating, if it gets a little chilly, by putting up the thermostat.
I pay tribute also to commercial undertakings such as Endless Holdings in my Salisbury constituency. It has developed such successful energy management systems for large buildings that it now operates in New York and Hawaii as well as in Salisbury. How appropriate that its headquarters in Salisbury is situated in one of our oldest medieval streets, Endless street.
My hon. Friend the Member for Poole (Mr. Ward) was right to mention wind generators as a potential project for our aid programme. As I said, half the world's population needs small-scale energy generation and the Danes have developed the Vesta wind turbines. Since they were designed seven years ago, production has reached 10 a day, at £30,000 each and 80 per cent. of them go for export.
It is time that the Department of Energy, the Department of Trade and Industry and the Overseas Development Administration started working much more closely. I bear in mind particularly the report on the science budget published at the end of July by the Select Committee on Education, Science and the Arts and I draw the Minister's attention to the fact that there is a severe squeeze on the research councils and the universities. Our competitors are increasing their spending and in Japan the proportion of gross national product spent on research will soon rise to 3 per cent.
There is one area where this country has egg on its face, Eigg, the island off Scotland, was to have been the site of an exciting scheme sponsored by the United Nations and managed by the university of Strathclyde. I understand that the project has fallen through and I urge the Minister to look at the problem urgently.
That is the new key element that I mentioned earlier. The Eigg project was overseen by the Ministry of Agriculture, which, understandably, has no energy commitment. To its credit, the Ministry approached the ODA which, equally understandably, questioned whether aid money should be spent on Eigg.
The energy studies unit at Strathclyde university is involved in a project with the United Nations Food and Agriculture Organisation and the United Nations development programme to evaluate the possibilities of renewable energy for farms and rural communities in Europe. It seeks to define economically viable technical solutions to meet energy demands in farms and rural communities from renewable sources and to identify combinations of technologies that give the best economic and operational results. It also seeks to define the barriers that hamper the diffusion of renewable energy systems in agricultural and rural communities.
The FAO-UNDP project was started only at the beginning of this year, after a two-year study. The countries involved are seven less-developed countries— 625 Czechoslovakia, Greece, Hungary, Poland, Portugal, Romania and Yugoslavia and six more highly developed countries —Finland, France, Israel, Italy, Sweden and the United Kingdom.
The ultimate goal of the project is to commit the rural communities of those countries to reduce their dependence on external energy supplies, which are often transported great distances at great cost and carry subsidies, either implicit or explicit, because the rural area is charged the same price for its energy as the urban area. It is intended to demonstrate that the use of locally developed energy resources can reduce the production costs of agricultural commodities and increase farm profits.
For each participating country, an analysis has been made of individual technologies that are both technically and economically capable of supplying energy requirements in agriculture and villages.
The most rational combination of technologies for reducing the external energy consumption, depending on the individual requirements, is the goal of the analysis. In order to realise the aims, three steps were adopted. First, demonstration sites had to be found. Secondly a methodology was defined to analyse the energy requirements of the sites and, thirdly, a computer model was made to simulate the renewable energy systems and calculate the optimum combination of plant sizes.
The first two steps have been completed for the 10 participating countries. The sites have been selected, the energy demand curves have been measured and the locally available renewable energies have been identified. The next step is to define the optimum integrated energy systems and carry out installation in each country.
Work on that last part of the project has only recently started in earnest. Data are being collected on the positive and negative factors that affect the acceptance of renewable energy at farm level. Those factors include legislation, subsidies, and an infrastructure of maintenance, such as the existence of companies manufacturing appropriate plants.
The project is co-ordinated by the university of Milan, which carries out all the data collection and computer model work. Strathclyde university's energy studies unit is responsible for overseeing the computer modelling work and the data collection techniques.
Unless we manage to find funding to start a United Kingdom demonstration site, our involvement will be terminated by FAO and UNDP. That would be tragic. Demonstration site technology includes gasifiers for wood and crop residues, solar ponds, heat pumps, aerogenerators and windmills, biogas digesters and solar collectors for crop drying.
The energy produced from those sources is used for grain drying and vegetable drying, wood chip drying, milking, space heating, greenhouses, stables, hot water, lighting, water pumping and distilling as well as basic electricity generation. This is just the type of international collaboration in which we should be involved.
I congratulate the Minister on his enthusiasm and leadership, but we want him to do more. He has our full support. Please will he have another look at his Department's attitude to small-scale projects that can be of enormous benefit to ourselves in our urban communities through passive energy design, in our rural communities through increasing use of on-site supplementary energy, and in response to the strength of feeling that we must do more to aid the development of the Third world?
§ Dr. David Clark (South Shields)
When it was announced that we were due to have today's debate, I am sure that many thought that it would be a debate for the echo freaks and the friends of the foxgloves, that we would look back on a land with windmills at which we could all tilt and that we should be lounging on our green Benches dreaming of the countryside. That could not be further from the truth, as the Minister made plain in his spirited defence of the Government.
The Minister set the tone for the debate. We are looking not backwards but at the frontiers of modern technologies. When we discuss alternative energy and renewables, we are trying to harness and use skilfully the lessons of higher and nuclear physics, chemistry and technology and to use to the best of our ability our natural resources. We are talking about a new subject and I am pleased that we have been able to have such a good debate.
It is inevitable that politicians should have to grapple with today's problems. That is our role. We tend to put off tomorrow's problems for tomorrow's generation. At best, we leave the alternatives and subjects connected with the forefront of technology to the academics and scientists.
We have discussed renewable energy in two dimensions or timescales. The Minister spoke of trying to use and generate renewable energy to deal with the problems of today, tomorrow and the day after tomorrow. However, we should constantly bear in mind the other problems that will emerge in 20 or even 50 years from now. I am certain that many of the projects which w e reject today will be developed in the years ahead.
There are difficulties because Governments have to deal with budgets and rates of return. The Minister repeatedly made it plain that he is looking for the most cost-effective way of using energy. Although that may seem attractive, when trying to look far ahead it is difficult to be absolutely certain that the accounting system of today will also be the accounting system of tomorrow.
There is a great divide between Opposition Members and Conservative Members. Although we agree with much of what has been said today, we do not believe that a cash value can be put on every judgment. The Government should take other aspects into consideration when deciding which of the alternative forms of energy to back.
We would not have been seriously discussing the subject today had there not been an oil price hike in the mid-1970s. As the Minister said, he had to look at a programme that had been developing for 10 years, and which was aimed to come to fruition in the mid-1980s. It has done so, and he has taken decisions for the second advance of the programme.
The Minister, rightly and not surprisingly, pointed out that the Government had increased spending on renewables. Using a five-year block involved a little sleight of hand, but it was convenient and suited the Minister. I do not quibble about the figures that he used; they were accurate. However, it was not the best way to present them. He should have adopted the same manner that he used on 13 June in response to a question from my hon. Friend the Member for Bootle (Mr. Roberts), when he gave a breakdown of the Government's reports over the past 10 years for each broad band of renewables.
Those detailed figures show a slightly different picture from the broad global figure that he used today to defend the Government's record. Even his broad global figure of 627 £14 million to be spent in the current year is considerably less than the figures for 1981–82 and 1982–83. If analysed in detail, the position is alarming. That is why his hon. Friends were critical of some aspects of the Government's approach to renewables.
The figures show that the amount spent on wave power research has fallen from £1 million in 1983–84 to £400,000 in 1984–85. That really means the end of support. Expenditure on geothermal aquifers has fallen from £1.8 million to £1.1 million; on solar power it has fallen from £900,000 to £500,000. As many hon. Members have said today, research on solar power should go ahead as fast as possible, not only for our benefit and that of the good citizens of Salisbury, where apparently the sun is always shining, but as an effective way to give overseas aid to underdeveloped countries. I suspect that many Conservative Members agree with the Opposition on that point. Indeed, the hon. Member for Gordon (Mr. Bruce) mentioned that.
Expenditure on biomass fell from £300,000 to £200,000. The Minister will say that there have been increases, and there have. They have occurred primarily in two area: in wind, where expenditure has increased from £2.5 million to £4.8 million, and in geothermal hot dry rocks — principally the Camborne experiment —where expenditure has gone up from £2.9 million to £4.6 million.
The Minister said that they had been identified as winners. We are worried lest they are being developed at the cost of the remainder. Decisions seem to have been made too early. Rather than increasing just those two and reducing the others to compensate, it would have been better to increase expenditure on the two winners while maintaining research work on the others as well.
Short-sighted gains and immediate advances have been the main determinants in the Government's judgment. When we examine the matter in the long term, I am not sure that the decisions that the Government have taken will prove to have been wise.
My hon. Friends and I are keen to support all the efforts that are being made, and I echo the remarks of the hon. Member for Rochford (Dr. Clark). He will agree that, while we do not want to see windmills on the top of every hill, there are places where useful windmills can be established.
§ Dr. Michael Clark
The hon. Gentleman will agree that windmills could be established, for example, offshore, where they would not cause any environmental upset, yet we would achieve the same generation near to urban areas.
§ Dr. David Clark
I am not sure that the fishermen of my constituency would agree with the hon. Gentleman. Rarely does one get something for nothing. A cost must be paid, even for renewables. However, in the Orkneys, at Ilfracombe and in Carmarthen bay windmills are functioning effectively.
Why does there seem to be a mood, in particular in the CEGB, to favour overseas designs and installations? I understand, for example, that the 200 kW machine owned by the CEGB at Carmarthen bay, which has been in service for two years, has run into problems, including trouble with the control system and cracks in the blade 628 sparts. I understood that the machine was a proven United States design and was chosen in preference to a United Kingdom machine with a good record.
Parliament would be interested to know the thesis behind the decision to purchase that equipment, in view of the troubles that have occurred with it. As I say, there is a suspicion, I hope not born simply of jingoism, that there is a tendency to think that anything built overseas must be better than anything built in this country.
When I visit other countries I find, for example, that in pollution technology much of the equipment has been produced in this country. Almost all machinery concerned with coal—one need only think of coal pulverisation and the like—is manufactured in Britain. We have a tendency to undersell British industry.
Nowhere could that be more true than in relation to wave power. I do not apologise for returning to that issue because every hon. Member who has taken part in the debate has talked of wave power and agreed that the Government's decision has been wrong. The Minister shakes his head, but I had the feeling that it was the clear wish of those who participated in the debate that the Minister should reconsider the issue. I hope that he will give us an assurance that he will monitor closely that which takes place in Norway. If there is an inkling of evidence that his figures are wrong, I hope that he will do what he can to resuscitate the programme. I speak as someone from South Shields when I say that just across the sea in Norway, at Toftestallen, there is an oscillating wave column machine that is due to go into production on 13 November which will put electricity into the Norwegian grid. It is ironic that that should be done at the very time when we have, in effect, scrapped our wave power research programme.
Another worrying feature is that the machine in Norway, which will go on stream within the next few weeks, was devised and invented in the United Kingdom. It was developed by Professor Wells at Queen's university, Belfast. What has happened with the wave generating machine in Norway has happened all too often with British industry. The result is that hundreds of thousands of jobs have been lost by the failure of Governments and industry to capitalise on their research and development capability.
There is a dispute about figures and the Minister says that wave power is being phased out because the experts have estimated that the cost per kW hour will be between 9p and 15p. We shall be able to see in 12 months or two years whether the Norwegians' claims are right. The installation at Toftestallen has taken 10 years to develop and the decision has not been taken lightly. the Norwegians are skilled business men and very good assessors and they have been prepared to face high construction costs. They claim that they can produce electricity from the installation at 3.4p per kW hour.
The Norwegian Government have supported the project even though the average cost of electricity from the vast hydro network in Norway is only 2.7p per kW hour. It is no use the Minister saying that it is easier for the Norwegians to implement the development because of the topography of their country. When I first made inquiries of the experts, I was told that the reason for the different estimates of cost per kW hour was that of tidal differences. I am assured by energy experts that that is not so. Dr. Peter White, of Manchester polytechnic, is on record as saying:For the Wells generator"—that is the one that will operate in Norway— 629all you need is a cliff, deep water and a smooth bottom, and that is not uncommon.I suggest that that sort of territory is not confined to the eastern side of the North sea. We have that sort of topography on the western side, especially in Scotland. I think that we have missed a great opportunity. I hope that the Minister will give us an assurance that he will monitor the Norwegian development and that if there are any signs of error on our part we shall put the process into reverse immediately and start pumping up the wave power programme.
§ Mr. Bruce
Perhaps the hon. Gentleman or the Minister will be able to clarify the complaints of those who are involved in the wave power programme. They claim that the method of calculation has been to average the worst and the best, and has therefore produced a much higher estimate of cost than is realistic and much higher figures than the industry thinks are obtainable. That is one of the main reasons why we should reconsider the matter.
§ Dr. Clark
The hon. Member for Gordon has made a pertinent point. I have here the papers that he has already seen, and the Official Report from which the figures were derived. It would be helpful if the Minister would refer to that. I see that he is nodding his head. Hon. Members would like to see a detailed statement. We feel that, leaving the Norwegian example aside, it just does not make sense for us, as an island nation, to write off wave power. Even if the Norwegian example had not been in existence, we should be pursuing that route for renewable energy.
Something else has been presented to us as new—the burning of waste. I applaud everything that the Government are doing in this respect, and their conversion to the case. I make this not as a point against the Government, but as a complaint against the nation. We are not the leaders; we are back with the laggards. It would be wrong to present ourselves as the leaders in waste burning. Many of the continental coutries have done this for a long time, as the Minister knows, and he and I have visited plants in Denmark and Sweden and seen the magnificent work there. They have taken it a stage further by integrating a combined heat and power system and a local district heating system. The latter was referred to by hon. Members, particularly the hon. Member for Belfast, North (Mr. Walker), who spoke about the particular problems of Belfast.
Hon. Members have recited examples from their constituencies of individual firms using different ways to heat their premises. That should be encouraged and we have to pursue the work that has been going on at Doncaster, where the local council has been involved with the Department of the Environment in a scheme. In Newcastle, a similar scheme, involving the use of propellants, has been set up.
This brings us to the divergence between the two sides of the House as to the true cost of any scheme. I hope that we have converted the Government from their narrow ideas on alternative energy sources. However, not only money, but other factors are involved. One thinks of the environmental impact. Perhaps the Minister can give us an assurance that when he is making a decision on what should go ahead he always makes the invironmental impact assessment. I hope that that will particularly be the 630 case with the two studies of the Severn barrage scheme, which may be finished by the end of the year, because that is very important.
Other costs are involved, such as those of transport, nuisance and sea pollution. The amount of material dumped at sea, particularly in the North sea, is outrageous. As the Minister knows, we do not have the best reputation in Europe for the way in which we treat the North sea. I know that the argument is that our situation is different because we have fast rivers and currents. Nevertheless, we pollute the North sea more than any other nation, although people may point fingers at the Germans. We not only use our rivers—we take stuff out to sea to dump it. The cost of that may eventually have to be borne by the fishermen from constituencies such as mine, who have told me that their catches have fallen by tenfold in the past 20 years. I cannot say whether their figure is right, but there is an obvious shortfall in the catches.
The hon. Member for Salisbury (Mr. Key), the hon. Member for Rochford and other hon. Members spoke about straw burning, which is a perennial and major problem. It causes a great deal of nuisance. The problem has not been lessened by the Government's decision to halve the amount available to the Soil Survey as from April this year. That is a retrograde step. We believe that the Soil Survey's expertise should be used to investigate the soils into which it would be beneficial to plough back straw and those into which it would not and those areas where we must find alternative uses for straw. The work of the energy technology support unit and other groups suggests that farmers are using straw to heat their houses, byres and buildings. The technology jump needed to utilise the fuels is not great. There have been huge developments during the past 10 years in the technology applied to wood burning. The oil price hike of the mid-1970s made that necessary. I believe that before long we shall burn up to 1 million tonnes of straw to heat not only farms but rural industry. The chalk drying plant operated by Needhams Chalk Ltd. in Suffolk has a demonstration project. We hope that it will be successful and will point the way forward.
The fifth aspect—conservation and insulation—has been mentioned. We were pleased to read about the Government's recent announcement on "Monergy 86". All our worst fears are borne out when we see the way in which the Government are adapting "energy" and "money", but I shall say no more on that point. We wish the Government well. I hope that there will be a great advance in conservation measures in 1986. But is the Under-Secretary of State happy with the co-orclination between Government Departments?
Is the hon. Gentleman aware that the Department of the Environment has announced major cuts next year in the home insulation programme'?
§ Dr. Clark
The hon. Gentleman shakes his head, but the figures show that each local authority has received an allocation for 1985–86 from the Department of the Environment which, on average, is 30 per cent. below the 1984–85 allocation. In some cases the figues are much worse. When we talk about lack of home insulation, we talk about people living in great discomfort and in bad winters risking hypothermia.
§ Mr. Hunt
It may be helpful if I explain why I shook my head. There have not been savage cuts in the home insulation grant. The history of the grant is one of underspend. The balance of the money has been retained to be allocated to those authorities that meet the revised targets and overspend. This year I hope that we shall exhaust the amount of money allocated, which is exactly the same as last year's amount.
§ Dr. Clark
I take the hon. Gentleman's point but, discounting the holdback, the total amount allocated this year to the English homes insulation programme is still 15 per cent. below the value of the previous year. I concede that consumers can claim extra, but the councils will not be able to make up the loss. There have been cuts in the home insulation scheme: Lambeth 87 per cent., Stockton-on-Tees 82 per cent., Norwich 69 per cent., Plymouth 65 per cent., Taff-Ely 84 per cent., Cynon Valley 77 per cent., and Monmouth 64 per cent. Even taking into account the Minister's point that local authorities can return when they have spent up to their level, I doubt whether Lambeth will ever make up 13 per cent. to reach 100 per cent. I emphasise the fact that the overall reduction is 15 per cent. on current values. There has been a change in the formula, but the overall amount of money is still reduced by 15 per cent. Other hon. Members have referred to that point. It is an example of a lack of co-ordination between Government Departments.
I feel that the point made by several hon. Members about the machinery of government is pertinent. One of the problems of renewables is that the subject is ranked way down within the management structure of the Department of Energy. It is headed by the chief scientist, whereas each of the other major sources has an undersecretary as its head. It is the odd man out in the management structure. The fact that it is so low has meant that it has not always had the co-ordination with other Departments that it should have had. We are unhappy about that. A point that other hon. Members have made is worth repeating. There should be a closer link with the Overseas Development Administration and the Department of Trade and Industry. One might wonder whether the export aspect of renewables should be with the Department of Trade and Industry or the Department of Energy. There is a certain logic in saying that, if solar development is within the Department of Energy, solar development for export should also be within that Department. There needs to be a study of the whole machinery of government.
We should be putting more money into renewables and formulating an energy conservation policy. The hon. Member for Gordon put the point fairly and strongly. To be successful, there must be capital investment. We must put the money up front, as he said. He is right. An energy conservation agency is needed to co-ordinate activities along the lines suggested in the fifth report of the Select Committee on Energy.
This has been a good debate. I have made my criticisms. I probed the Minister. I have suggested what we would do differently. My main anxiety, if I have one, is about philosophy. I was worried by the Minister's repeated emphasis on cost effectiveness throughout his speech. I realise that we have a Government who worship monetarism, but I suggest that this is one subject to which it is inappropriate to apply the simple cash nexus.
632 I had to smile because I could not help thinking at times that the Minister was running his Department's policies, not on Civil Service lines but almost like a bookie's office. All the phrases were there. "We are going for the long shot; we are backing winners." I expected to hear about the racing certainties. I wondered which ideas would be the accumulators and which would be the each way bets. That was slightly worrying.
I shall end with a slightly different analogy which the Minister has used previously. He said, correctly, that renewables are our insurance policies because we shall depend on our present energy forms for many years, no matter what policy decisions are taken. However, the point is whether the amount that we are spending — £14 million—is sufficiently high a premium to guarantee the insurance. That is the question that the House must answer.
§ Mr. David Hunt
This has been a marvellous debate, and I welcome the contributions that have been made. It has been extremely valuable to range as widely and comprehensively as we have over the whole area. I appreciate the kind remarks made by hon. Members on both sides of the House. My right hon. Friend the Secretary of State has been rightly praised for his initiatives in many areas. In particular, I welcomed the diversity of views on what the priorities should be. It was not quite as simple as the hon. Member for South Shields (Dr. Clark) sought to summarise it. I regard that diversity as extremely important. In opening the debate, I stressed the importance of technical transfer and education in encouraging the commercial take-up of the renewables shown to be economic. The debate has also been a key element in drawing public attention to renewables.
I am grateful for the technical support that I have had. Scientists always tend to disagree. Today some scientists have been backed against others. We, as Members of the House of Commons, must rise above the merely technical arguments and try to fit the priorities into the overall policy structure.
There have been 12 speakers. It was appropriate that we should start with the hon. Member for Midlothian (Mr. Eadie) who, for five years, was Under-Secretary of State for Energy. Therefore, he draws on a wealth of experience. Part of that experience is knowing how to put questions to junior Ministers summing up debates. I counted 47 questions. I hope that the hon. Gentleman will forgive me, as will other Members, if I do not go through every question in detail, and that they will give me an opportunity to respond in written form to the questions that I do not have time to cover.
A leading figure in this area is my hon. Friend the Member for Devon, North (Mr. Speller), the chairman of the all-party group Parligaes, who has been pressing for such a debate for a long time. He has great knowledge, experience and enthusiasm. However, he does not have great knowledge, experience and enthusiasm for surfing off the north Devon coast, to which he referred as an example of wave power. Four weeks ago I went to Australia. I said to the Australians, "Here is all this wave power around the coast. Are you still pursuing your wave power investigations?" They said, "No. We have examined it carefully but it is nowhere near economic." 633 I mention that because in some ways individuals behind the debate, some brilliant and outstanding in their field, have their own hobby horses to run.
My hon. Friend the Member for Poole (Mr. Ward) made a clear, concise and businesslike speech. He emphasised wind and tidal, not wave, energy. The hon. Member for Gordon (Mr. Bruce) made a thoughtful contribution, but he reflected a little of the inconsistency about the spend, as did the hon. Member for Midlothian. There is always a limited amount of money. There never can be unlimited funding for the renewables programme. Therefore, it is necessary to get the priorities right. Let us have a good debate on what those priorities should be, but let us not think that it is all black and white, simple, easy and naturally obvious to anyone who cares to consider it, because it is not.
I rely heavily on the support that I receive from my advisory committee ACORD. In a robust speech, such as we always expect from him, the hon. Member for Newham, South (Mr. Spearing) said that there is nobody in that committee who understands anything about renewables. It was never intended that ACORD should represent sectional interests. The council is broadly based and comprises people of high repute and integrity. They are all independent and are drawn from the academic world, private industry and enthusiasts. The principal qualification for membership is broad experience relevant to research and development. The programme that the Government have announced is broadly in line with ACORD' s unanimous recommendations.
My hon. Friend the Member for Elmet (Mr. Batiste) mentioned liquefaction and gasification. I should like to return to that matter. He also mentioned combined heat and power. Such programmes are important, but I had not regarded them as relevant to today's debate. They merit a debate of their own. They represent tremendous potential, which is why my right hon. Friend has allocated £250,000 each to Leicester, Belfast and Edinburgh, to conduct studies into CHP. We await those studies with interest. I was present at the signing of the contracts and have met the leaders of the consortiums. I have asked them to keep me closely in touch with developments. Many right hon. and hon. Members will be watching them closely.
I hope that the hon. Member for Belfast, North (Mr. Walker) will accept my passing his comments on to my opposite number in the Northern Ireland Office. I shall ensure that his questions are responded to.
The nuclear arguments have been advanced strongly today. The hon. Member for East Kilbride (Dr. Miller), who is known for his knowledge of the subject, gave us the benefit of his experience and mentioned other matters. My hon. Friend the Member for Rochford (Dr. Clark) made a good speech, in which he said that he went to the Orkneys and found no wind there, but discovered it was all down here on his return. Somebody once said that the trouble with the United Kingdom is that everybody talks about the weather but nobody ever tries to do anything about it. We can never do anything about the problems that my hon. Friend mentioned, but they demonstrate the problems faced by science and technology in these matters. We can never rely on the presence of the resource at the appropriate time.
634 My hon. Friend the Member for Salisbury (Mr. Key) took us on a tour from everywhere between Hawaii and Japan. He demonstrated his wider vision and gave us some interesting ideas, which I would like to think about.
My hon. Friend the Member for Enfield, Southgate (Mr. Portillo) also made a good speech. He has some clear views, and he said that I should not talk about backing winners. Any politician is criticised for his use of language. In a fair and well balanced speech, the hon. Member for South Shields also took me to task. The Government's programme of support for research and development fully recognises that there will be losers as well as winners. That is a fact of life. There is a huge increase in costs as we proceed from laboratory research to development, to demonstration and finally to exploitation. When I talked of backing winners, I intended to stress our policy of keeping the programme on each technology in the renewables under careful and detailed review so that we do not proceed from one stage to the next, often much more expensive, stage, unless we are satisfied that the technology has some prospect of economic success. If we did not do that, we would prejudice other technologies and ideas.
The policy does not fail to recognise the need to investigate fully all the technologies that offer a prospect of economic energy production. I hope that the House agrees that it is a policy that selects possible winners and proceeds with their development in close conjunction with industry and progressively secures the technology transfer essential for successful exploitation. Taking full account of the United Kingdom's energy resources, I am convinced that that is the sensible way to proceed, and not through crash programmes without regard to costs.
I should mention the hidden hon. Members of the debate who could not be present. My hon. Friend the Member for Devon, North dealt with the points that my hon. Friends the Members for Kingswood (Mr. Hayward) and for Erewash (Mr. Ross) would have raised. Later I shall deal with the points brought to my notice by hon. Members who were sad to be unable to attend today. Some hon. Members were in the Chamber at 3.30 am this morning, and it is difficult to attend when one also has a full constituency programme. It is not fair to judge the interest in this policy sector by the bare numbers who turn up on any one day. For the record, many hon. Members are present, which shows the interest that the matter arouses among hon. Members on both sides of the House.
I started by detailing energy policy, and I do not wish to go over that ground again. However, the hon. Member for Midlothian said that oil and gas would soon run out. I challenge him, because there is no question of that happening in the near future. At present oil and gas exploration in the North sea is at record levels. We expect a significant production of oil to continue well into the next century. Regarding gas, the hon. Gentleman may recall that earlier this year our estimates of the proven and probable reserves were raised by 15 per cent. The Government are confident that we have sufficient gas supplies to meet the country's needs well into the 1990s.
§ Mr. Hunt
We have gas reserves to last into the 1990s, and beyond. I want to answer carefully the question raised by the hon. Member for Midlothian.
We also had the usual arguments about money. One can do anything with figures. I could prove that the Labour 635 Government spent nothing on renewables and that we have spent 90 per cent. of all the money ever spent. Nevertheless, everyone will recognise that we have expanded the sector and the spending considerably. It is difficult to judge year after year. For example, in 1983–84 we spent only £11.3 million, while in 1984–85 we spent £14 million. I did not mention that statistic, because each year must be taken separately, bearing in mind that some programmes have major bills at some stage in the programme. I hope that the House understands that the Government have a good record on renewable energy technology. That is not to be judged only by the £14 million, because it does not take into account the European Community spend, coal gasification and liquefaction or a range of other energy research and development schemes.
This year we spent £1 billion on energy research and development. My chief scientist calculated that figure. We spent £350 million on oil and gas exploration in the North sea and elsewhere, £175 million on energy-intensive equipment manufacturers, £197 million on nuclear power fusion, £123 million on electricity, £78 million on gas, £43 million on coal—that is a wise investment for the future — and about £40 million on renewables technology. That represents a massive spend on research and development in the energy sector.
We are dealing with the renewable technologies. In response to my hon. Friend the Member for Rochford, I should say that the renewable technologies, with the exception of conventional hydropower, are unlikely to make a significant contribution to United Kingdom electricity supply this century, but they should make a contribution in the 21st century, which will grow as they become increasingly competitive. A comprehensive assessment of the prospects for the exploitation of renewable energy technologies in the United Kingdom is given in ETSU report 30, a copy of which has been placed in the Library. I commend it to hon. Members, because it contains very interesting information.
Wave energy was referred to by about two thirds of the speakers. This theme was stressed by certain hon. Members to the exclusion of others. Some hon. Members consider that it must be placed on an equal footing with other sources of energy. There has been a massive programme of wave energy research, costing £17 million. I have been beaten with the Norwegian stick, but we must put this matter into perspective. The contribution of the Norwegian Government is still very small — about £600,000 a year—compared with the United Kingdom's expenditure of £4 million.
We are closely monitoring the device that is being developed by the Norwegians and the Japanese for small scale use in particularly favourable cliff face locations. I have been asked by ETSU to prepare a report upon it. We shall be interested to know whether the costs of the project, as installed, are as low as have been estimated. However, even if it is successful, the Norwegian project would apply only to small and isolated communities that require limited amounts of power. That is the function of our project elsewhere.
During the course of the programme we have investigated a number of similar devices, and a certain 636 amount of work is still being done. My Department is contributing to a study by Queen's university, Belfast, into a wave energy system which could be installed in a rock gully on an island site. Energy would be extracted from an oscillating water column by taking advantage of natural rock formations in coastal locations. Energy would be extracted by a Wells air turbine, which was invented and developed at Queen's university. Similar work is being undertaken in Norway and Japan.
We must carefully monitor all that is taking place in this crucial area. That is why international collaboration is so important. However, we must highlight those priorities upon which there should be maximum expenditure. That is why I have spent a great deal of time explaining why we are spending so much upon wind energy, which is much more promising. That is the unanimous view of my advisers.
I point out to the hon. Member for Midlothian that the cost of developing coal gasification and liquefaction is not contained in the £14 million. Substantial and wise investment by British Gas and the National Coal Board is taking place in that area. It is in addition to the figures to which I have referred.
Tidal energy has also been mentioned. In the United Kingdom this is potentially a large, self-renewing source of energy. I shall bear in mind my hon. Friends' points. I await with great interest the tidal power report from the power group. Its report is expected before the end of this year. We shall then be able to consider this matter in greater detail.
My hon. Friend the Member for Devon, North referred to the energy equipment test centre at Cardiff. I recognise its importance. The former Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and my hon. Friend the Member for Cardiff, Central (Mr. Grist) have already conducted a very strong lobby on behalf of Professor Brinkworth, the director of the centre. It does excellent work in active solar energy. I understand that proposals to continue to provide financial assistance to the centre are being considered sympathetically by the Department of Trade and Industry.
The warmer campaign was mentioned. Government policy is to encourage the use of waste as a fuel where this is environmentally acceptable and where there is no further economic use for the waste. The Government welcome the warmer campaign and are happy that Ministers have participated in the events that it has staged.
We have had some wonderful examples of what could be done with photovoltaic power, but no one has seriously argued that that is a renewable source for the future, bearing in mind our climatic conditions. However, there are good arguments for developing such systems for export, and over the past five years the DTI has made offers of assistance amounting to over £2 million for such projects, and the Department is currently supporting two projects on solar cells, which, if successful, should lead to the United Kingdom manufacture.
We have had a good debate, and I hope that Hansard will try to reflect—
§ It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.