§ Viscount HANWORTHMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they have considered the possible economic advantages of smaller electric generating stations working on a combined heat and power cycle (CHP), sited adjacent to suitable conurbations, thus providing district heating potential without the prohibitive cost and energy loss of very long mains pipelines.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie)My Lords, the programme of work announced by my right honourable friend the Secretary of State for Energy on 2nd April to examine the feasibility of combined district heating and power generation in particular locations will necessarily have to include examination of the most appropriate method of supplying heat. It is impossible at this early stage to anticipate the nature of any future CHP scheme but the siting and size of the generating capacity will clearly need to be taken into account. The House may, however, be interested to know that the report of Dr. Walter Marshall's inquiry into CHP indicates that transmission costs assume less importance the larger the scheme.
§ Viscount HANWORTHMy Lords, I thank the noble Earl for that helpful reply. Would he agree that, whereas there is a potential saving of energy from combined heat and power of perhaps 30 per cent. or more, the loss in efficiency between a large and small generating station is of the order of 5 per cent.?
998 Bearing in mind that the objection to moving ahead with a CHP scheme has always been stated as being that there was not a big enough conurbation to take the heat from a large power station, would he give particular weight to the Question which I have put down on the Order Paper?
The Earl of GOWRIEMy Lords, I am delighted to give weight to the Question which has been put down. Indeed, the Government have really to some degree anticipated the noble Viscount's Question by setting up a programme.
§ The Earl of LAUDERDALEMy Lords, are we to understand from my noble friend's reply that the Marshall Report has in principle been accepted by the Government, and that the Government will now seek to identify a suitable site for a pilot scheme?
The EARL of GOWRIEMy Lords, my noble friend is anticipating the Government a little. The Government have accepted the need for conservation and the value of CHP schemes as outlined by the Marshall Report. As a result of accepting this issue of principle, they are now setting up a programme to look at the feasibility and costing of utilising such schemes.
§ Lord LEATHERLANDMy Lords, will the Government bear in mind the welfare of the coalmining industry, because what might be a convenience to some districts here might spell disaster for some mining communities?
The EARL of GOWRIEMy Lords, there is no plan to have a CHP programme as part of a network all over the country. In the initial stages, it would probably be at most half a dozen sites.
§ Lord AVEBURYMy Lords, does the Minister recall that a few years ago the South of Scotland Electricity Board conducted a feasibility study in the Pinkston area of Glasgow, and came to the conclusion that it was marginally uneconomic on the assumptions made of required return by the Treasury and the future increases in the cost of coal? In view of the fact that the Government are now committed to undertaking a feasibility study, would not one possible way forward 999 be to request the South of Scotland Electricity Board to rework the arithmetic in that scheme, putting in more realistic assumptions about the future costs of energy?
The EARL of GOWRIEMy Lords, I think that the noble Lord, Lord Avebury, has in fact put down some Questions for Written Answer in respect of the need for the electricity board to reconsider its costings, which I am in the process of answering, if I have got the timing of that right. The broad principle about the use of CHP has led the Government to set up a programme, but what comes out of the programme will of course depend on the economic cost-effectiveness of what we discover.
§ Viscount HANWORTHMy Lords, would the noble Earl say whether I am correct in thinking that Newcastle have carefully studied the problem and asked for a CHP scheme in that area?
The EARL of GOWRIEMy Lords, I am not aware of what particular boroughs have made representations to the Government at this stage, because at this stage the Government are inviting individual local authorities to put forward their recommendations; but when they have done so I should be delighted to let the noble Viscount know.
The EARL of HALSBURYMy Lords, would the noble Earl agree that whatever conclusions come from today's studies would be a function of today's costs and prices, and that what is at issue for the future is not realistic assumptions on the lines of Lord Avebury's Questions, but updating the conclusions of any current inquiry regularly year by year in the Department of Energy's annual report, so that the issue is not lost sight of in future?
The Earl of GOWRIEMy Lords, it would also be right for that point to be drawn to the attention of those working the programme, because it would be lamentable if the programme were allowed to get out of date.
§ Lord WYNNE-JONESMy Lords, will the noble Earl take into account the possibility of retaining the CHP 1000 scheme which has been working at Battersea, and renewing the equipment of the station in order to give it a new lease of life?
§ The Earl of LAUDERDALEMy Lords, will my noble friend add this further point to the matters he has answered? Will the Government consider inviting local authorities, when they prepare their structure plans, to consider the possibilities of CHP as a suitable ingredient, if you like as a suitable input, in their studies for structure planning?
The Earl of GOWRIEMy Lords, I think that that effect will be achieved as a result of the programme which my right honourable friend announced on 2nd April.
§ Viscount HANWORTHMy Lords, would the noble Earl agree that, in looking at the economics, what really matters is the economics over the life of the power station and not necessarily at the present time? Would he also agree that costs of fuel will almost certainly rise and that what is not now clearly economic will be economic in a few years' time?
The Earl of GOWRIEMy Lords, my information is that at the upper end of the scale of energy savings given in the report, those from CHP and district heating would have an economic value equivalent to 30 million tons of coal per annum, and that would be between 5 and 10 per cent. of probable United Kingdom primary energy demand up to the end of the century.