§ 2. Mr. David Heathcoat-Amory (Wells) (Con)If she will estimate the cost of the additional transmission network necessary to meet her target for renewable electricity generation. [177751]
§ The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)The transmission issues working group reported in June last year that the overall cost of connecting the additional 12 GW of renewable energy generation for the GB network will be about £2.1 billion. If shared just among domestic consumers, it would add around £10 per year to each customer's bill. A recent study by Mott MacDonald for the Carbon Trust and the DTI suggested that the cost would be in 387 a range from £1.4 billion up to an upper bound of £2.1 billion, some of that being required in any event for asset replacement.
§ Mr. Heathcoat-AmoryThat is a huge extra subsidy to be paid for by the general electricity customer. When will the Government realise that the policy of vastly increasing wind-generated electricity is technically inefficient and will not solve an environmental problem? Indeed, it will create one by industrialising our rural upland and coastal areas. As we just heard, it will greatly increase electricity costs, which will create fuel poverty for individuals and add to business costs. Does that not show that the waffle that we get from the DTI about the need for businesses to remain competitive in international markets by keeping down their costs is completely hollow?
§ Mr. TimmsThe right hon. Gentleman is wrong on every point. There is a need for investment in the transmission network, to facilitate much more distributed generation and to replace equipment that is now worn out. That investment will have to be paid for, of course, but the price is entirely affordable, especially given the environmental benefits of generation from wind and other renewables, and the advantages for security of supply.
The right hon. Gentleman is also wrong about industrialisation, as he calls it. There will be a proper planning process for every wind farm planning application, to ensure that projects that go forward are not environmentally damaging in the way that he fears. However, I accept that we need to address urgently the challenge of climate change. We cannot simply go on burning oil, gas and coke as we have in the past. We need to develop new ways of generating electricity, and wind generation is the most cost effective of the renewable technologies available today. I hope that the right hon. Gentleman will support it.
§ Miss Anne Begg (Aberdeen, South) (Lab)The right hon. Member for Wells (Mr. Heathcoat-Amory) has a very narrow view of what constitutes renewable energy. As well as onshore wind generation, there is also offshore wind power and tidal power. In addition, people at the Robert Gordons university in Aberdeen are working on tidal race technology. However, regardless of what type of renewable energy is developed, the grid must be upgraded. I go to many conferences and meetings on this matter, and one of the biggest problems is the lack of grid in areas where it has traditionally been lacking. If a tidal race were to be placed in the Pentland firth, for example, the existing grid from Dounreay would still have to be upgraded. I therefore encourage the Minister to do all he can to ensure that that barrier to the development of renewable energy is removed, so that we can fulfil the renewables obligation.
§ Mr. TimmsMy hon. Friend is absolutely right. We are supporting a range of renewable technologies beyond wind, although wind is the most cost effective at present. I welcome the progress being made in upgrading the network. The first project likely to come forward will be the 220 km upgraded line from Beauly to Denny in Scotland. That is expected to cost £200 388 million and to be submitted for consent this autumn. With Ofgem, we have set up an industry-wide distributed generation co-ordinating group to ensure that the issues involved are addressed in a timely way.
As my hon. Friend the Member for Aberdeen, South (Miss Begg) says, it is essential that we address all these matters and enable the grid upgrade to go ahead so as to allow the much more distributed profile of electricity generation that renewable and other developments will make possible in the future. No longer will we have the small number of huge power stations that have characterised the grid in the past. The profile is going to change.
§ Mr. Stephen O'Brien (Eddisbury) (Con)Will the Minister join me in congratulating his comrade, the hon. Member for Brighton. Kemptown (Dr. Turner), whose amendment No. 189 to the Energy Bill was accepted in Standing Committee? That success was due to the fact that the amendment won the support of all the Conservative members of the Committee, and of the two members from the minor parties. The amendment will make the Government's renewables targets less unachievable by making it more affordable for energy produced from renewable resources to connect to the grid. Why did the Government and the Minister oppose the amendment?
§ Mr. TimmsUnfortunately, the hon. Gentleman is mistaken. The arrangements that have applied since the Utilities Act 2000 came into force mean that the primary duty of the regulator is to protect the interests of consumers, through competition where appropriate. The Government believe that that is the right approach. We will return to the subject when the House looks at it again in a few weeks' time.
§ Mr. O'BrienDespite the Minister's somewhat pedestrian answer—and given his failure to dragoon Labour Back Benchers to support the Government in Committee—will he give an undertaking to the House that he will not seek to remove the amendment on Report? He has said that he wishes to revisit the matter. Will he seek to put something in its place that delivers the same outcome?