Renewable Energy (Hansard, 2 May 2000)

§ Ms Joan Walley (Stoke-on-Trent, North)

I beg to move, That leave be given to bring in a Bill to require the Government to draw up a strategy for promoting non-convergent renewable energy technologies.

If I had my way, the House would spend the whole of today's business considering and legislating for an immediate strategy to support far-from-market technologies such as photovoltaics, offshore and onshore wind, tide technologies and biomass, such is the importance that I attach to the promotion of renewable energy.

I am mindful that this debate takes place halfway through this year's Reith lectures, which, fittingly for the first year of the 21st century, are on sustainable development. Contributions from this year's speakers—they include the European Commissioner Chris Patten, British Petroleum's John Brown and distinguished international speakers—and the follow-on studio and internet debates show the wide spectrum of people across the planet who care about and want to contribute positively to sustainable development. It is unquestionably the most pressing and fundamental challenge of our time. Parliament must be part of the on-going debate and the intention of my Bill is to focus our collective energy on what needs to be done.

I do not suggest for one moment that our Government have not acted or have failed to understand the issues. Indeed, I pay tribute to my hon. Friend the Financial Secretary who has done so much, along with his colleagues in the Treasury, to ensure that we have a green strategy. Our Government have led the international climate change negotiations and pushed through targets on carbon dioxide and greenhouse gas reductions. However, the pace of environmental devastation around the world demands that we act more quickly.

Our legislative and regulatory procedures can be cumbersome. Our need to modernise government and to bring together Departments of state with industry is understood. However, as the Environmental Audit Committee, on which I sit, has shown, it is not always a straightforward matter to put sustainability at the heart of Government policy where perhaps there are vested interests and traditional ways of doing things. Ministers and senior civil servants need a changed culture where they can show leadership, introduce cross-cutting policies and come up with workable solutions before it is too late. Nowhere is that more important than on the issue of renewables.

We are at the cusp of a policy change. In 1997, this Government inherited the position of bottom of the European renewable energy league table—Sweden topped the league with more than a quarter of its energy produced from renewables. We are now, as my hon. Friend the Member for Harrow, West (Mr. Thomas) and others have so eloquently set out, reached the point where the knowledge-based economy meets the environment, where market-based solutions deliver reductions in carbon dioxide emissions and where there are opportunities to modernise and enhance our industrial and manufacturing competitiveness by developing new technologies and expertise. My Bill seeks to exploit those opportunities.

38 The Government are doing much through their response to the consultation paper on new and renewable energy, through changes in the Utilities Bill, through the further consultation on the precise nature of the obligation—I would like to see such an obligation in the Bill—and in the comprehensive spending review, and I direct those points to my hon. Friend the Financial Secretary. They are also doing much through the implementation of the climate change levy in the Budget, through the £20 million of the £50 million that is likely to come to renewables, through regional development agencies being asked to oversee regional strategies—I hope that they will do that in the west midlands—through changes to the planning system, through research and through the ALTENER European research project. However, are they doing enough and are the mechanisms in place to strike the partnerships with industry, local authorities and people across the United Kingdom that now need to be made?

The Government must champion and lead us to radical and streamlined policies, and do so quickly. We need a body to do that. I do not care whether it is a sustainable energy agency, a ministerial steering group or a Cabinet Office-led liaison group, but it must draw up deadlines and cross-cutting measures that will prioritise renewables, in particular energy technologies and non-convergent renewables.

I welcome the Government's commitment to the honouring of the non-fossil fuel obligation, but in the new world of renewable energy obligations we need flexibility as well—a fresh definition of renewables so that we promote clean technologies and a system of banding to give support when it is in our long-term interests to do so. Then, we must make sure that certain technologies do not get left behind. Suppliers are likely to target technologies that will cost the least, but that is not necessarily in our long-term interests.

A framework of support is required for specific technologies, especially as the only grant-aid framework resulting from the climate change levy is likely to be insufficient to provide the kick start that is needed. We need a forum over and above the process of consultation and a response that allows the Government to engage fully with renewable energy industries.

British Bioenergy points to the huge potential for non-convergent renewable energy technologies in terms of energy and jobs. In the UK, crops on 15 per cent. of agricultural land would supply 20 per cent. of the country's electricity. With Ministry of Agriculture, Fisheries and Food, Treasury and Department of Trade and Industry support for market stimulation, there could be £4 billion of investment and 36,000 new jobs within 10 years. As capital grants of £50 million to £60 million are needed to lever investment to £4 billion, it is clear that the estimated £20 million from the climate change levy is not enough.

Let us consider offshore wind. Britain has the largest resource in Europe, technically sufficient for three times the UK's total electricity needs. Last year, only 18 MW of wind energy capacity was brought on line, in contrast to 1,600 MW in Germany, 650 MW in Spain and 300 MW in Denmark. Despite the fact that we have 33 per cent. of the cost-effective wind resource in Europe, only 4 per cent. of capacity is based in the UK.

The UK has a thriving component supply industry. Marine renewable energy sources require exactly the world-leading maritime engineering skills that the UK has 39 acquired for its North sea fossil fuel resources. If the UK got 10 per cent. of its electricity from offshore wind by 2010, more than 30,000 jobs would be created.

Could the comprehensive spending review, which is now under way, embrace a final transitional offshore round of the non-fossil fuel obligation, to build on the experience gained in installing the UK's first offshore turbines at Blyth harbour, and so ease the transition between the existing pool price and the new electricity trading agreements? How about a maritime renewables centre of excellence to enable UK industry to capture a share of the vast global markets that those energies represent? That would assist manufacturing across the UK.

Potential solar power householders face an uphill struggle. To encourage solar power and other embedded sources of generation such as community wind projects, the electricity generator should have powers under the Utilities Bill to compel electricity companies to introduce net metering and premium price provisions.

Already, large companies such as BP are taking an interest in investment abroad. That is not altogether surprising, given the boost for renewable sources of energy from the new legislation introduced, for example, in the Berlin Parliament on 1 April. There, the Government have taken urgent steps to ensure that the price paid for electricity generated by using renewable sources of energy is high enough to allow various types of systems to operate on an economically viable basis, thereby enabling the mass production of such equipment and bringing about lower prices.

Germany also has a 100,000 roofs programme to make extensive use of photovoltaic technology. Germany's targets go well beyond 2010 to 2050, and it is investing 40 now for the long term. By comparison, solar power in this country is likely to become convergent only in the long term, after 2010. However, Eastern Energy, part of TXV Europe, has, in conjunction with Greenpeace, instigated a 1,000 roofs campaign through the introduction of net metering, so convinced is the company that net metering is vital to the nurturing of a major new solar industry. Solar power is an opportunity for the UK to capture a share of the jobs and money in the expanding global photovoltaic industry, which grew by 32 per cent. last year. Debates in the Standing Committee that is considering the Utilities Bill and replies to my questions suggest that net metering is still not part of our energy policy. I should like to see embedded generation back on the agenda and Eastern Energy's demonstration project adopted nationally.

I end with what led me to begin the debate. My constituency, Stoke-on-Trent, North, was part of the north Staffordshire coalfield, where now-abandoned collieries helped to make us the powerhouse and manufacturing base of the past. I hope that my Bill will help us to become the powerhouse of the future through our emphasis on renewable energy.