HC Deb 17 January 2002 vol 378 cc414-6
2. John Thurso (Caithness, Sutherland and Easter Ross)

When she last met the energy regulator to discuss renewable energy supplies. [25546]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt)

I met the energy regulator on 15 November, and my hon. Friend the Minister for Industry and Energy met him on 11 December. The matters that we discussed at those meetings included the development of renewable energy supplies.

John Thurso

I am grateful to the Secretary of State for that reply. Is she aware of the article in the Financial Times of 5 December in which the energy regulator was reported as saying that energy projects such as those in my constituency would represent poor value for money"? May I draw to her attention the unique combination of circumstances, both climatic and tidal—and including skills such as those available at Dounreay after decommissioning—that make areas such as my constituency extremely good for renewable energy? Will she ensure that it will be Government policy, irrespective of what the regulator says, to continue to support such initiatives in such areas?

Ms Hewitt

I am aware of the press report to which the hon. Gentleman refers, but I am also aware that the energy regulator was misrepresented in it. If he cares to read the transcript of Callum McCarthy's appearance at the Select Committee on Trade and Industry, he will find that it does not bear out the press report.

I entirely agree with the hon. Gentleman's other point. In Scotland, we have some of the best offshore wind, wave and tidal resources in the world. We want to use those resources to deliver cleaner energy to consumers. Callum McCarthy was saying that we need to ensure the right transmission and distribution infrastructure, especially on the west and north coast of Scotland and England, to enable us to use renewable energy sources that are situated at some distance from the main centres of electricity demand. That is what we are seeking to do.

Mr. Kevin Hughes (Doncaster, North)

What guarantees can the Secretary of State give to the House that huge swathes of the beautiful English countryside will not be blighted by these obnoxious looking windmills—noisy instruments that cannot generate enough electricity even to boil a decent kettle? What guarantees will she give that the English countryside will not be ruined by these obnoxious things?

Ms Hewitt

I am sorry that my hon. Friend does not like the appearance of modern windmills. I think that they are rather beautiful. Environmentalists cannot have it both ways. If we are committed to the development of renewable energy, and if we want to meet our Kyoto targets—and, indeed, targets beyond that—and deal with the problem of climate change, then yes, we have to meet the targets that we have set. That means ensuring that 10 per cent. of our electricity comes from renewable energy by 2010—and, frankly, more beyond that. Environmental issues, especially in respect of areas of outstanding natural beauty, are always taken into account when planning decisions are made on the siting of wind farms.

Mr. Andrew Robathan (Blaby)

It is all very well the Secretary of State saying that and telling us how keen she is on renewable energy, but what is she going to do about NETA, the new electricity trading arrangements, which, as she will know, have led to the closure of several small wind farms and other projects, and have caused a reduction of more than 60 per cent. in the production of energy by combined heat and power plants? They are destroying renewable energy projects and not working to increase the amount of renewable energy that is produced.

Ms Hewitt

I am well aware of the concerns that have been expressed about NETA, especially by producers of combined heat and power. Let me stress that, generally speaking, the arrangements have been an enormous success, as we have a much more transparent and efficient pricing system that has brought wholesale electricity prices down by 25 per cent. These are new arrangements and yes, they are causing difficulty, especially for CHP and other small-scale renewables. We are considering that problem and consulting on possible measures to deal with it. We now have a working group that will report to me and my hon. Friend the Minister for Industry and Energy by the end of January on how we can overcome those obstacles and ensure that, within the NETA framework, we can still ensure the development of small-scale renewables.

Mr. Martin O'Neill (Ochil)

Does my right hon. Friend agree that until there is a critical mass of facilities in the United Kingdom, renewable energy will be considerably more expensive than the traditional, rather dirty and sometimes environmentally unfriendly systems? We must ensure that the attack on fuel poverty continues. She and her colleagues must advise the regulator because the problems with NETA arose in the absence of such advice. The rightly desperate desire to roll out the new system resulted in short-term disadvantage for renewable energy. A balance must be struck, but in the interests of the poor in the first instance.

Ms Hewitt

My hon. Friend is right about the overriding importance of dealing with the appalling problem of fuel poverty, which stems fundamentally from an outdated and inadequate housing stock. The Government are making huge investments in warmer, energy-efficient homes, which allow people on low incomes to heat their homes better at lower cost. We will maintain that programme. We are also doing a great deal to invest in the development of renewable energy, not least through the renewables obligation.

Mr. Roy Beggs (East Antrim)

Job losses have occurred in a small company in my constituency that manufactures hydro-generating equipment. It is one of the few remaining such manufacturers in the United Kingdom. When renewable energy is next examined, may I appeal to the Secretary of State to consider thoroughly the delays in the planning process throughout the United Kingdom? Such delays in approval for projects deny jobs in many constituencies.

Ms Hewitt

The hon. Gentleman makes an important point. We have extended the renewables obligation to include smaller-scale hydro-electricity plants. I hope that that will help to stimulate the growth of such plants and thus of demand for the products made by the manufacturer in his constituency. That is the best way in which to deal with his constituents' problems, with which I have enormous sympathy.