Promotion of Wind Energy (Hansard, 8 April 1987)

§ Mr. James Wallace (Orkney and Shetland)

I beg to move, That leave be given to bring in a Bill to promote the generation of electricity by means of wind powered generators by encouraging appropriate research and development, reforming the rating valuation base for private wind generators and by providing for revised terms for the supply of electricity to the electricity boards from private wind powered generators; and for connected purposes. Slowly but steadily, those with responsibility for securing our energy supply are recognising that renewable sources of energy can make a significant contribution to meeting our future energy needs. Of the various renewable alternatives, it appears that wind power is emerging as a front runner. Indeed, the Department of Energy seems to regard wind energy as the most promising of the renewable energy sources, with some experts predicting that up to 20 per cent. of our current electricity demand could be supplied by land-based generators and that an even greater contribution will be possible if we can successfully develop offshore arrays of wind turbine generators.

The potential contribution cannot be dismissed as marginal, as some have tried to do in the past. The purpose of the Bill which I seek leave to present is to help the development of this important energy resource. The Bill would have three principal strands: first, the promotion of research and development; secondly, amending the valuation base for the rating of private wind generators; and, thirdly, improving the terms under which private wind generators can sell electricity to the electricity boards.

It is only lair to put on record the fact that the Department of Energy, the generating boards, research councils and the private sector have already co-operated well in the research and demonstration programmes, not least in my constituency. Two generators are already operating on Burgar hill in Orkney, and a 3 MW machine should be operational this year as part of a construction, design and monitoring programme involving the British Wind Energy Group, the North of Scotland Hydro-Electric Board and the Department of Energy. In Shetland a project is underway to establish how much wind energy can be fed into the Shetland grid and how wind installations might be operated in the most efficient manner.

Further south, the Central Electricity Generating Board is monitoring the performance of a recently opened vertical axis turbine at Carmarthen bay. The board has planned a 1 MW turbine for Richborough in Kent. Therefore, considerable research and development is already taking place. However, it is now necessary for us to look forward towards a major national wind energy programme.

A much increased purchasing programme by the electricity boards would give a considerable boost to our home-based manufacturers, enabling them to undertake more research and development and demonstration of their own, and would put them on a better footing to exploit the home market and to take advantage of the considerable export opportunities. If that is to happen, it is important that the underlying programme of reserach and innovative support must be undertaken by Government, their agencies and the research councils.

308 The British Wind Energy Association recently published a paper outlining what it believes to be a necessary programme of demonstration projects, research and development. It would not be realistic for the House to demand that the Department of Energy should slavishly follow that programme in every detail. However, my Bill provides that the Department should prepare and present to Parliament a five-year programme principally directed towards research and development and wind energy. It provides also for a programme of demonstration projects, which will be necessary to underpin a major expansion of wind power generators in this country.

The other two measures that are features of the Bill are intended mainly to help private generators. One of the principal aims of the Energy Act 1983 was to facilitate the sale of electricity produced by private generators to the electricity boards or to third parties on terms which, at the time, were claimed to be fair. Indeed, in moving the Bill's Second Reading, the right hon. Member for Blaby (Mr. Lawson), then the Secretary of State for Energy, now the Chancellor of the Exchequer, stated: As a result of the Bill, private generators should no longer have cause for complaint. These measures will, I am confident, encourage the growth of private electricity generation in the United Kingdom." —[Official Report, 24 November 1982; Vol. 32, c. 867.] The object of that Energy Bill, now the Energy Act 1983, was right and was supported by my right hon. and hon. Friends. However, experience suggests that, in practice, it has not been as effective as was hoped at the time. No provision was made, for example, to take account of the heavy rates burden that has fallen on private wind generators. Indeed, in recent months, this has been focused upon by unsuccessful appeal of the Wind Energy Group against a rating valuation on its wind generator in Ilfracombe which, when rates were applied. amounted to half of the estimated annual revenue from the machine. In my constituency, a private wind generator has received a rates bill which works out at more than 60 per cent. of its estimated revenue.

I understand that the Department of the Environment's position is that any appeals for rates to be modified should be delayed until such time as the new legislation on local government finance has been put into place. However, the view of those involved in the industry, especially those involved in the manufacture or wind turbines, is that the time delay that that would involve would be too long.

What is needed, in their view—and, I hope, in the view of the House—is much more immediate action to ensure the survival and prosperity of our wind turbine manufacturing industry.

We shall not encourage the development of private generation by wind power if operators face penal rates bills. It is estimated, for example, that in relation to the generating costs of the electricity boards, rates bills amount to one sixth of a penny, whereas for those operating private generators they amount to 2p per unit. My Bill seeks to establish a formula whereby assessors would be obliged to consider the relatively low running costs of wind turbine generating plant, and fix the valuation with greater reference to profits or units produced rather than to the exceptionally high capital costs that appear to be the basis of present valuations.

My Bill would provide for fairer, more favourable terms to be provided by electricity hoards to those who are offering a private supply of electricity to the boards The 309 terms which electricity boards have been offering have not been as attractive as many anticipated and in many cases the availability charge has been particularly onerous. There is a case for an availability charge when substantial new plant and lines must be laid to a new wind farm development, but when electricity has already been supplied to a private generator it seems exceptionally onerous to impose an additional charge on the private operator. My Bill seeks to provide that such a charge should not be made where electricity is already available.

If we encourage the development of wind power, as I believe we should, because it is clean, renewable, can make a significant contribution to supplying our energy needs and because many believe that is one of the cheapest forms of generating electricity, we should be prepared to give private wind generators more favourable terms than they have at present. In the United States, favourable rates for the purchase of power generated are given in addition to tax and grant incentives. My Bill seeks to amend the Energy Act to provide more favourable terms than exist.

Wind energy is increasingly proving itself to be an alternative, cheap and plentiful source of energy. Developments to date have provided us with a skilled work force, experienced scientists, and a lead in this technology. If Britain is to maintain that lead, and if we are to tap the considerable potential for exports, it is important that our home market should now be given a substantial boost. The purpose of the Bill is to promote wind energy, particularly in the home market. I hope that the House will give me leave to present the Bill.