Alternative Energy Sources: ECC Report

HL Deb 01 December 1988 vol 502 cc411-54

3.31 p.m.

Lord Renwick rose to move, That this House takes note of the Report of the European Communities Committee on Alternative Energy Sources (16th Report, 1987-88, HL Paper 88).

The noble Lord said: My Lords, the noble Lord, Lord Shepherd, has asked me to introduce this debate on alternative energy sources because illness prevents him from doing so in person. However, I am delighted to see that he has nevertheless been able to attend the debate today. I am sure that we would all wish him a speedy recovery and thank him for all the work that he, as chairman of Sub-Committee B of the Select Committee on the European Communities, has put into this long and detailed inquiry.

I also wish to thank all the witnesses who gave evidence to the inquiry and those who showed us round the wind turbine site at Carmarthen Bay. I also offer our thanks to Professor Michael Laughton. Pro-Principal of Queen Mary College, London, who acted as specialist adviser for the inquiry. It would be quite wrong for me not to mention the very high level of support that we as a sub-committee received from the staff of the Committee Office here. They may not all be masterminds, but we were indeed well looked after. I give my personal thanks to our clerk, Simon Burton, for whom this was his first inquiry.

I look forward to hearing what the other speakers in this debate will say, both those who served on the sub-committee and those who did not. I am pleased to note that the noble Lord, Lord Gorell, will be making his maiden speech this afternoon.

It is now nearly a year since the committee first considered the Commission's draft recommendation on developing the exploitation of renewable energy sources in the Community. The committee decided to use the phrase "alternative energy sources" rather than "renewable energy sources" in its inquiry because the former term more succinctly covered those energy sources that were not strictly renewable, such as energy from hot rocks below ground.

When the inquiry started, the committee hoped to confine its attention to only a few of the sources currently under development. That proved impossible, however, as the committee felt that a decision to exclude from its deliberations any particular alternative energy source would seem somewhat arbitrary. I shall briefly describe some six alternative energy sources before looking at the general issues raised.

Wind power is a well-developed alternative energy source and it is truly renewable. Whenever the wind blows, electrical power can be obtained by air flowing over blades or through a turbine which then drives a generator. Wind generators are used commercially in California, in this country and elsewhere. During the course of our inquiry, the CEGB announced plans for the construction of several wind farms; that is, for groups of generators sited as close together as is possible in order to enhance their cumulative output, which is quite small from single machines.

Biomass is another alternative energy source that is well advanced. The term covers a number of disparate sources of solid or liquid gaseous fuels in the form of organic matter. It also covers purpose grown crops and agricultural wastes that can be burned, digested or fermented to produce energy. It includes the use of the gas produced as a result of the landfill disposal of domestic waste.

Geothermal energy is energy in the heat of the earth's core. That can be exploited, either by drawing up from beneath the earth the hot water or steam that naturally exists in reservoirs called aquifers or by pumping down cold water which becomes heated by passing through hot rocks. Energy is extracted from the hot water after it has been brought back to the surface.

The committee looked at two applications of solar energy. First, it looked at photovoltaics, where the sun's light is directly converted into electrical energy by means of solar cells. Secondly, the committee looked at passive solar design which covers those technologies using the sun to heat buildings with an external energy source.

The committee also considered wave and tidal power, which use the energy of wave motion and tides to drive turbines to generate electricity. The committee did not look at one renewable energy source that fell within the Commission's proposals—namely, hydroelectricity—beccause it felt that its development was sufficiently advanced, at least in the United Kingdom.

I should also mention combined heat and power, or CHP. That is the exploitation of both the electricity and the heat produced by conversion of basic energy rather than of the electricity alone. Although the transformation of energy from alternative sources into electrical energy is seen as the prime method of harnessing these resources, perhaps in combination with CHP, there are also substantial opportunities for the use of the low temperature heat supplied by biomass and geothermal sources.

I turn now to a brief resume of the more general questions concerning alternative energy sources. We must consider what their potential contribution is to energy demand. The overall impression given in the evidence we received was that alternative energy would make only a small contribution to energy demand in Europe in the near future. Thus it would be misleading to interpret alternative energy as in any way being a substitute for coal and nuclear generation, at least in the near future.

However, in the opinion of witnesses from the Central Electricity Generating Board, alternative energy could supply up to 18 per cent. of national demand for electrical energy by the year 2030. That does not mean, however, that we can absolve ourselves of our responsibilities to future generations for whom conventional energy may be in short supply. It does not mean that alternative energy systems may not he crucial in developing countries where any energy source is often a vital resource.

The economic assessment of alternative energy is complicated. Whether such an energy source can be said to offer a viable contribution to demand depends on whether the comparative assessment of different energy sources is conducted fairly. Some witnesses suggested that it was not. The rating structure applied to private generators of electricity was unfavourable in comparison with that for publicly owned generators. although the Minister argued that the Government's commitment to a new rating structure in 1990 should improve the position.

The subsidies given to nuclear research, for example, and the capital intensive nature of renewable projects may also distort the picture. Furthermore, it was not clear that an assessment of the economic viability of. for example, the proposed Severn tidal barrage could accurately take into account its long projected lifespan. That lifespan has been estimated to be up to 100 years.

On the other hand, according to the Wind Energy Group, if one applied the rates of return and the costs of capital estimated for the Sizewell nuclear power stations to wind energy generation at the best United Kingdom sites, energy could be generated at 2.5 pence per kilowatt hour. That is cheaper than nuclear energy at Sizewell.

The environmental issues raised by alternative energy are also not clear-cut. Alternative energy is generally considered clean, as it does not produce noxious emissions nor lead to hazardous waste products. But the Central Electricity Generating Board pointed out that it was a question of choosing between different environmental impacts, because nearly every large-scale energy development had an impact on the environment. That was particularly true in the case of the proposed Severn tidal barrage where the Royal Society for the Protection of Birds and others were concerned at the possible adverse effect on wildlife.

I now come to a brief account of the work of the European Commission and of Her Majesty's Government in the development of alternative energy. The Commission set up its first R&D programme in 1975 and has since helped over 500 renewable energy projects. It is aimed to encourage technical development to foster collaboration and the exchange of ideas and to standardise technologies across Europe. Several directorates-general are involved and witnesses were generally appreciative of their work. However, some witnesses expressed reservations about the unwieldy procedures at the Commission and about the low levels of money available for alternative sources of energy in comparison with the considerable sums expended on thermonuclear fusion research.

Her Majesty's Government too are committed to alternative energy. Mr. Michael Spicer, Minister with special responsibility for renewables at the time of our report, said that the Government were, however. taking a rather hard-nosed approach. Witnesses hoped that that commitment would continue after privatisation, at least so far as concerns basic R&D. The Minister seemed to imply that it would.

We welcomed the Written Answer in another place on 4th November listing over 250 renewable energy projects under way. To put things in perspective, even more recent figures from the same Minister showed that estimated expenditure on renewable energy by the Department of Energy for 1987–88 totals £15.1 million against expenditure on nuclear energy in 1987–88 of £172 million.

I turn now to some questions which were raised briefly in our report but which we did not discuss in detail. The first is the acceptability of nuclear power. Several of our witnesses used as an argument in favour of alternative energy the premise that nuclear power was or would become unacceptable to the public. Witnesses argued that if nuclear power were to be rejected there would be a need for much greater development of renewables.

The second question is the apparent problems of the greenhouse effect and how far they were being caused by noxious emissions from thermal power stations. If those problems were to be shown to be serious that too would be a case for a greater devotion of resources to renewables. The committee felt, however, that both those questions went beyond the scope of our inquiry though their relevance was not in doubt and that it would be pointless to try to tackle them without going into the full detail that they deserve.

Other interesting sources of energy were touched upon during our discussions, such as the manufacture of hydrogen through electrolysis and in-orbit solar power generation, both theoretically capable of considerable energy potential. Two other forms of energy generation using differences of temperature, one using the differences in water temperature from depth to surface known as ocean thermal energy conversion (OTEC) and the other a way of using thermal gradients to produce electricity, were not mentioned, possibly because the first is currently feasible only in the tropics and the latter is at too early a stage of development. However, such sources of energy may well have to be considered seriously in the future.

Some have argued that alternative energy now has a real chance of making a contribution to energy supply in spite of the low price of fossil fuels which make investment in new sources of energy less attractive than was the case during recent periods of the energy crisis. There is no guarantee that such times will not come again. In fact, I would say there was a guarantee that such times will come again and the European Community must continue to move towards greater autonomy of energy supply.

I now come to the conclusions of our report and I shall put some specific questions to my noble friend the Minister. I think that everyone is now agreed that wind power is worthy of serious attention. But I should like to ask the noble Baroness what steps are being taken to analyse its potential contribution to the national grid. Although it is an intermittent source it would be a dependable source of supply if available on a sufficiently large scale.

The question of visual intrusiveness of large numbers of wind turbines remains. What studies are under way or being planned to assess public reaction to wind energy development? What is going to happen about possible developments offshore? I hope Her Majesty's Government will ensure that the commitment to wind power that is evident in several sectors of the electricity industry will continue after privatisation. I am afraid that I have not yet had time to read the Electricity Bill, which came out this morning. 1 also hope that the Government will continue to support wind power in the early stages of its commercial development. I must also ask the Minister to give the Government's view on the possibility of a legislative framework to clarify the question of wind rights.

I understand that my noble friend recently addressed the international conference on gas and anaerobic digestion of solid waste and that she described landfill as a very promising source of power. Do the Government see the exploitation of landfill gas as a solution to a waste disposal problem or as an energy source? Have the Government recognised the potential dangers from pollution of landfill sites? Can the Minister assure the House that there is no conflict of interest there and that both Her Majesty's Government and the European Commission are working to bring together energy producers and those responsible for waste disposal? In relation to biomass in general, therefore, we recommend that an urgent interdepartmental review is required.

Geothermal and solar energy were two subjects we did not look at very closely. However, can my noble friend say what plans there are at the hot rocks site at Camborne to drill to a depth that would provide for commercial exploitation? In regard to the legal position, what steps will the Government take to ensure that a legal right to thermal energy in rocks can be securely established by those who wish to exploit it? Without such security investment is unlikely to be forthcoming. What are the Government doing to encourage passive solar design in buildings? Although solar energy has limited potential as a national resource for those of us in the United Kingdom, do the Government recognise the potential export market for such systems abroad?

I turn now to tidal and wave power, which the Commission excluded from its programme because interest was apparently confined to only a few member states. Spain and Portugal have recently joined the Community and have potential for exploiting power in the Atlantic waves and tides. But I believe that there are at least nine countries in the Community with coastlines on the North Sea or the Atlantic. In any case, that is a rather strange attitude for the Commission to adopt. The Commission should be encouraged to support the different renewables which are promising in different member states.

Tidal power is particularly significant in the United Kingdom because this country has several very suitable sites. The major scheme proposed is the Severn tidal barrage. I should like to know whether Her Majesty's Government believe that a privatised electriciy supply industry would be willing to support such a project, which would involve enormous capital outlay at commercial rates of return considerably in excess of the 5 per cent. discount rate currently used by nationalised industries. Are plans under way to proceed with a smaller scheme first, such as those proposed for the Loughor and the Mersey estuaries? What is the latest state of studies on the environmental and regional impacts of tidal barrages?

I must now come to the question of wave power, which turned out to be a very contentious issue. A less contentious question concerned research currently under way at Queen's University, Belfast, where the annual arrangements for finance seem rather cumbersome. I should appreciate my noble friend's views on that question.

Far more worrying, however, was the sudden termination of support for the wave power programme led by Professor Stephen Salter of Edinburgh University. Professor Salter and others presented to the committee evidence which was in serious conflict with the official view. Since the publication of our report the committee has received further evidence to support Professor Salter's claims that the Department of Energy and ETSU handled his projects in an unsatisfactory manner. Some serious allegations have been made and our report says that we did not feel that we were, in the context of the inquiry we had undertaken, in a position to resolve the outstanding questions. We therefore call for an independent review of the whole problem to ensure that wave power has a fair chance of serious consideration.

In conclusion, I should like to express the hope that the exciting developments in alternative energy will only benefit from the changes that the electricity supply industry will be going through in the next few years. There remains a need, however, for the establishment of a body with specific responsibility for the development of alternative energies. Some of those may not have attractive short-term profits but nevertheless represent a valuable natural resource. It is a field that embraces both low and high technologies and is beset by many difficult scientific and engineering problems which require much investigation of an impartial nature.

There is also a need for continuing financial support from the Government and the Commission to help alternative energy progress through its initial stages. Moreover, it would seem to be essential to take account of the cyclical variation of oil prices and the need to ensure that we provide financial support for the research and development of alternatives so that the equipment is ready when it is needed.

The nuclear industry receives a great deal of support and, to ensure a balanced approach, the committee hopes that the Government's commitment to alternative energy will continue to be converted into further financial support. I commend the report for your Lordships' attention and hope that the House will continue to take a keen interest in alternative energy. I beg to move.

Moved, That this House takes note of the Report of the European Communities Committee on Alternative Energy Sources (16th Report, 1987-88, HL Paper 88]—(Lord Renwick).

3.50 p.m.

Lord Stoddart of Swindon

My Lords, first of all I should like to welcome the fact that my noble friend Lord Shepherd is able to be in his place today although unable to present the very comprehensive report on alternative energy that his committee prepared. As I read the report I realised that the committee must have spent a great deal of effort and time interviewing witnesses in order to have been able to address the full range of alternative energy sources. Perhaps I may also congratulate the noble Lord, Lord Renwick, for stepping in at short notice and presenting the report in lucid terms that all of us, whether experts or laymen, can understand. I am sure that the House is grateful to the noble Lord.

I am interested in particular in the questions that the noble Lord put to the noble Baroness who is to reply. I sincerely hope that she took full note of the noble Lord's remarks and I trust that the House will receive very full answers. The questions are highly relevant and of supreme importance to energy in this country.

The noble Lord said that the committee started its work a year ago. It was my noble friend Lord Wilson of Rievaulx who said that six days was a long time in politics. If six days is a long time in politics, then 12 months in politics is an era. So it has proved in the case of alternative energy and the environment. Over the past year it is not only the Friends of the Earth and such bodies who have been raising environmental and green issues as their standard; the Prime Minister herself has also now begun to understand, if she did not before, the importance of the environment and indeed the damage that we have done to it over a long period. So matters have changed somewhat.

The awful problems caused by the increased burning of fossil fuels in power stations are now being borne in upon us. We are aware of the greenhouse effect. Not only the experts are aware of it, but, I am glad to say, the man in the street has become very conscious of it and of the consequences if we continue to do little or nothing about it. So a year has changed attitudes.

We need to find alternatives to the burning of fossil fuels in order to produce energy, electrical energy in particular. I fear however that the Government do not have in mind as their alternative the remedies put forward by the select committee. They have one single remedy; namely, to cease building coal-fired stations and instead build nuclear power stations. I believe that to be a serious mistake. To substitute nuclear power stations for coal-fired stations would merely present us with a new set of problems to solve. We already know the difficulties of disposing of longterm nuclear waste. No acceptable solution has yet been found. And until we find that solution it would be unwise, to say the least, to increase the building of nuclear power stations, as Mr. Ridley apparently wants. It is to be hoped that saner counsels will prevail, especially within the Department of Energy.

The Government simply cannot—and I hope will not—see nuclear power as the alternative to the burning of fossil fuels in power stations. Although I have not had an opportunity to read the Bill, I heard a number of speakers on the "World at One" say that after privatisation a nuclear tax would he levied on all of us. Presumably, that is to compensate private industry for the additional costs of nuclear power—no doubt the £10,000 million that will be required to decommission power stations over the next 40 years. I hope therefore that the Government will understand that the provision of additional nuclear power is not the answer and that they will take particular note of the committee's report.

The need is to substitute for existing methods of energy production those which do not harm the environment but secure the best possible efficiency in energy use. That is a problem with which, understandably, the committee did not deal. The Government's attitude toward renewables has been deplorable. I do not mean just a Conservative government attitude; 1 refer to the attitude taken by all governments to renewables. Indeed I am ashamed to say that the present Conservative Government have paid more attention to the matter than did a previous Labour government. I believe that my Bench colleagues have taken note of' that and that in future their record will be better. Indeed I take full responsibility for my own part in failing to ensure that my party paid far more attention in the past to this matter. However, the noble Lord is right: that has nothing to do with this discussion.

The fact is, as the noble Lord, Lord Renwick, said, that we still spend only —15.1 million per annum on research into renewables. I am afraid that that is simply not good enough. It seems to me that a sufficiency—indeed, perhaps an abundance—of fossil fuels has led to complacency and a lack of urgency in our approach to research into, and development of, alternative sources of energy.

I wish that I could feel confident that the Government were now fired with a new dynamism in regard to renewables. However, the attitude so far displayed, and indeed displayed by Mr. Spicer to the committee, does not inspire such confidence. The noble Lord, Lord Renwick, quoted Mr. Spicer to the House. Let me quote again from the report. Mr. Spicer told the committee that the Government took a rather hard-nosed approach and were not starry-eyed about renewables. Government policy was to develop those renewables which have a real commercial and economic future provided that they are environmentally acceptable". One does not mind the Government having a hard-nosed attitude but why are they taking this attitude towards alternative energy sources? As the noble Lord, Lord Renwick, reminded us they most certainly have not taken that attitude towards the research into and the development of nuclear power. Hundreds of millions of pounds every year have been spent on developing nuclear power, a source of energy which in many senses is dangerous but which is also unable to compete with coal in its costs. In particular it is unable to compete with wind power and some alternative energy sources. Therefore if the Government are to adopt this hard-nosed approach, I hope that they will do so with some equity. There are some indications that they may now be doing exactly that.

I should like now to deal with some of the recommendations and methods of alternative energy production which are referred to in the report. There is the matter of wind power—power from the wind. Indeed, it seems that that is a very good bet at the present time. The committee came to that conclusion. But undoubtedly there are enormous difficulties in providing wind energy in any great quantity. The amount of land required is enormous and unless we can develop the vertical axis wind machines off our East Coast in particular, I am afraid it does not have a great future in the provision of large scale energy to the grid. Nevertheless, it could make a significant contribution to our total energy needs in the next 20 or 30 years.

The noble Lord also mentioned biofuel. This is another form of alternative energy which should be treated seriously. ETSU has estimated that we deal with wastes with an energy content of 25 million tonnes of coal equivalent every year. There is a possibility that up to 8 million tonnes of coal equivalent of energy every year could be provided by the year 2025. I hope that the Government will get on with that. Refuse-derived fuels, or direct burning of wastes, are a possibility, as I understand that Edmonton has shown to its benefit—financial and otherwise.

The other possibility in this field is energy cropping, but I sincerely hope that, if that form is adopted and becomes popular throughout the world, we shall not find people in some regions of the world cutting down forests to provide a cash crop: that would undermine the whole basis of finding alternative energy sources.

I should like now to turn to combined heat and power. There is a great potential for burning existing fossil fuels far more efficiently. At present when we burn coal or oil in power stations we derive about 35 per cent. to 38 per cent. overall efficiency from those fuels. If we were to burn it in connection with district heating or with a large-scale heat use industrial complex, we should be able to extract up to 80 per cent. from those fuels. It should be almost illegal to allow generators to push up into the atomosphere, or out into our rivers or seas, 50 or 60 per cent. of excess heat which could be used for heating people's homes and for driving factories, and which could make an enormous reduction in the quantity of fossil fuels burnt in our power stations.

Quite frankly, I believe that the day of building 2,000 megawatt power stations ought to be over. We should now be building power stations of not more than 500 megawatts together with district heating near large towns and conurbations or indeed anywhere where there is a big industrial and factory complex which could use the excess heat.

There is also tidal power. I believe that tidal power can probably provide this country with sufficient power to enable us to meet the foreseeable demand up to the end of the century if we will only get on with the job. The noble Earl, Lord Lauderdale, drew attention last Tuesday to the fact that we should need additional power station capacity throughout the 1990s not only to deal with the growing demand but also to replace power stations which were coming to the end of their useful life. There is a potential of 7,200 megawatts in the Severn estuary alone. If we make tidal power a priority, we may very well be able to meet those demands from alternative energy sources. The main possibility in this regard rests in the Severn estuary.

The Earl of Lauderdale

My Lords, will the noble Lord allow me to intervene to clarify this? He was good enough to refer to some remarks of mine from this Bench the other night. Would he not agree that in fact the officially admitted shortfall in capacity by the end of the century is 15 gigawatts, which is considerably more than is likely to come from the Severn tidal barrage, even if it was being built now?

Lord Stoddart of Swindon

My Lords, that is absolutely true but 7.2 gigawatts would make a significant contribution. The rest could be made up by developing other barrages which are available, and re-planting existing power stations. This is an alternative energy source of very great potential. I believe that that potential should be pursued vigorously by the Government. I hope that we shall have an announcement from them by the end of the year or early next year about the future of the Severn barrage.

I turn next to wave power. The noble Lord, Lord Renwick, noted that there had been some considerable problem over the development of wave power. It is quite true that at the Isle of Islay the Government are supporting an oscillating column project. The project is very small indeed; but the major projects were abandoned by the Government in 1985 without any proper explanation. That means that large scale wave power projects have not been developed. Indeed, virtually no money has been sunk into them over the past two or three years.

The most famous machine must be the Salter Duck. There has been grave suspicion, as the noble Lord pointed out, that perhaps this scheme was not properly evaluated. I believe with him that it should be properly evaluated. I understand that Professor Salter and Mr. Senior met the Minister on Tuesday this week. I sincerely hope that she listened to them very carefully indeed. I also hope that as a result of what she must have learned she will now say to the department that the whole question of wave power ought to be evaluated in accordance with the committee's recommendation. There is no doubt that it provides enormous potential if it can be successfully developed.

Finally, I should like to mention one other matter—that of conservation. We could save enormous amounts of power if we persuaded people that they should conserve energy. I have just a few statistics:6 million homes in this country still have no loft insulation; 15 million homes are inadequately draught-proofed; 11 million homes have cavity walls, but only 1.75 million homes have cavity wall insulation. Clearly on the domestic front alone there is an enormous capacity to save energy. When energy is saved so is the provision of power stations and also the burning of fossil fuel which, as has already been noted, injure the environment. Also in industry, in spite of the efforts of the Energy Efficiency Office, which we all wish to commend, a great deal more must be done to conserve energy. The Government energy audits indicate that in industry there is a potential for energy savings of some 20 million tonnes of coal equivalent per annum of which 60 per cent. would be for waste heat recovery and the use of wastes as fuel. 1 believe that new efforts are needed to persuade industry of the benefits of conservation, not only for themselves but for the country and the environment.

In conclusion, I very much welcome the report. I am sorry that I have spoken for so long—probably too long—about it; but it is an important matter. It is a vital matter, and I hope that the Government will take serious notice of the recommendations and get on with the business of substituting alternative energy for existing forms of energy production.

4.14 p.m.

Lord Ezra

My Lords, I should like to join the noble Lord, Lord Stoddart, in expressing our appreciation to the noble Lord, Lord Shepherd, for the work he did in guiding our committee on which I had the honour to serve. I am glad to see him here today although he could not speak to us. I am most grateful to the noble Lord, Lord Renwick, for the excellent speech which he made in introducing this important report. I am glad that after I have spoken we shall hear from the noble Lord, Lord Gorell, in his maiden speech. He has very considerable international energy experience from which I am sure we shall benefit.

I have been in the energy industry for many years. One thing I have noticed about it is that not only is it unpredictable but that public attitudes and perceptions of energy change over the years. When I first joined the coal industry in 1947 the public perception was one of doing everything conceivable to get enough energy. When we moved into the 1960s with the oil arriving, the problem was that there was almost too much energy. Then we had the oil crises of 1973 and 1979 when we were all obsessed with the question of moving away from oil. Now without any doubt, as the noble Lord, Lord Stoddart, has indicated, the public perception of energy is that it poses an environmental issue. The environmental aspect has quite rightly now become uppermost in people's minds. Our aim must be to live in a better environment and get all the other benefits we need which are consistent with that.

It is with that in mind that I should like to start my remarks, as the noble Lord did. I very much fear that although we are talking about the environment, the action being taken to deal with it, especially in relation to energy, is a bit unco-ordinated. Some have one view on how to deal with it, and some have another. Things are not happening on a carefully thought out basis. This is not just an economic matter which can be settled in the market place. It is a major social issue which requires careful working out.

Therefore, I should like to recommend right at the start of my remarks that we should have what might be called an environmental energy policy. We should comprehend within that all aspects of the energy problem which bear on the environment. I include three essential parts in that. The first leg is to minimise the noxious emissions from the use of fossil fuels, which I believe can be done. We shall be using large quantities of fossil fuels for many years ahead. There is no way round that. Nor do I think that we should attempt to do away with fossil fuel tomorrow, even if that were possible. However, it is possible to use fossil fuel in a way that is much more environmentally acceptable than it is at present. In that connection, I was disturbed to learn that in the coal industry at the Grimethorpe project—with which I was much involved when I was at the Coal Board—the work being done to develop the pressurised fluidised bed combustion system, which would retain the sulphur in the ash, is likely to be discontinued. It is to be discontinued at the very time when I believe that it could have succeeded. Indeed, I hear that other nations are looking at the possibility of picking up this research. I very much hope that we shall not let that happen and that we shall not diminish our successful research efforts in general merely because of the costs involved.

Secondly, as the noble Lord, Lord Stoddart, mentioned, there is the question of energy conservation. The Government have in the past paid a considerable amount of attention to this aspect. Mr. Peter Walker, when Secretary of State for Energy, spent time going round the country tirelessly and most effectively persuading people to save on energy. However, unless I have it wrong, there seems to have been some diminution in the ardour since Mr. Peter Walker has turned his attentions to Wales. His successor does not seem to have the same interest as he did. Of course his successor is much taken up with the privatisation of electicity, the results of his labours being available in the Bill today. Nevertheless, I feel that energy conservation is part and parcel of the environmental issues raised by the usage of energy. Indeed, the best way of cutting out the adverse environmental impact of energy is to use it more efficiently, and I make that the second leg of the exercise.

The third leg of the exercise brings us to the report which is now before us. It is the increased development and use of alternative energies with reduced environmental impact. I say "reduced" advisedly because almost every form of energy has an environmental impact. Wind power has such an impact because of the noise and appearance of the machines. It is a question of weighing one form of environmental impact against another and achieving the best balance.

I now turn to deal with the role which alternative energy might play as part of the overall environmental energy policy. The trouble is that we start with certain difficulties. The uncertainty faced by alternative energy may indeed be made worse by the publication today of the electricity privatisation Bill. I should like to develop that thought. Some of the points are raised in the report now before your Lordships.

First, we have the question of the rating structure. The private generation of electricity is at present rated more highly than CEGB's generation of electricity. Paragraphs 77 and 78 of the report point out that a private generator pays in rates approximately 1.1 pence per kilowatt hour, selling that electricity at approximately 2 pence. Therefore more than half is spent on rates, whereas the CEGB's generalised rate is 0.1 pence. There is a 10-times disadvantage.

The Government have said that they will put that right. I hope that we shall have confirmation of that--and the sooner the better. I believe that a number of private generators, who are keen to start contributing to the network in the expectation of privatisation, have found difficulty because, among other issues, there has been the rating problem.

Secondly, there is the question of the buy-back arrangements. In 1983 1 participated in the debates on the Energy Bill which was subsequently enacted. I know that the noble Lord, Lord Stoddart, also participated as did a number of your Lordships. It was intended to stimulate the development of the private generation of electricity, particularly combined heat and power. Unfortunately the buyback arrangements—which laid down that the purchase by the electricity authorities should be based on the avoided-cost principle—made it virtually impossible for people to enter the business. It meant that all fixed costs were ignored, yet the private generator has as many fixed costs as does the CEGB. To ignore those in the pricing arrangements made it virtually impossible. Those rules still apply. However, what will be the arrangement under the new Bill? That is a question which we must debate.

Then there is the question of the pay-back period. Many of the projects—for example, the Severn Tidal Barrage to which the noble Lord, Lord Stoddart, referred—have a long pay-back period, but they have a long existence. The Severn Tidal Barrage could have a century's existence, far surpassing any other form of generation of electricity. Therefore I believe that such matters must be examined.

The question of the pay-back period is linked to the discount rate. As can be seen in paragraph 87 of the report, if the same discount rate as is at present applied within the public sector were applied to some of these projects—for example, wind projects—then on a favourable wind farm, one could have a better rate of return than Sizewell. The questions of the pay-back period, the rate of return, the rates and the buy-back arrangements come into the issue. In my opinion, they must be sorted out before we can talk about comparing alternative energy with other forms of energy. So long as there are such administrative impediments which are fully discussed in the report, I do not believe that we can make proper comparisons.

I now turn to government funding. There are certain areas in which government funding is necessary. The Government have accepted that to be the case in respect of certain forms of energy. As has been pointed out by the noble Lords, Lord Renwick and Lord Stoddart, there is a massive discrepancy between the funding of one form of alternative energy, which is nuclear, and the other forms of alternative energy about which we are speaking. It is a difference of between £172 million in the year ended 1987—88 and £15 million.

Should there be more funding? Nobody will suggest that there should be more funding of alternative forms of energy if it is not justified. The report makes clear the fact that in a number of cases there is justification for greater funding. and that is pointed out by the Commission. That applies to biomass, for example, and there is also the question of wave power. We could increase the funding for wind power and so forth. In various parts of the conclusion of the report an indication is given that more effort could be put into such alternative forms of energy.

We asked the witnesses who came before us what contribution they thought such alternative forms of energy could make to the energy supply of the United Kingdom during the years ahead. The noble Lord, Lord Renwick, has made it clear that the general consensus was that in the period up to the year 2000 it would be very little. However, I was slightly confused by the feeling that thereafter it could rise quite rapidly. I did not think that that made much sense. Why should we assume that in 10 years' time it will suddenly take off if the effort is not put in today? Surely there must be a progressive development. If there is scope for a contribution of approximately 18 per cent.—which was the figure mentioned—we ought to build up to that. With that objective in mind, we should begin now and put in more effort.

We can not sit back today and put what appears to be minimal effort into such alternative energy sources and believe that a miraculous change will occur in the year 2001. We cannot believe that we shall then suddenly race ahead, and 20 years after that have an 18 per cent. contribution from that source. It is not feasible. If we believe that it should be a contribution in the years ahead, we should be working on it now.

I shall not speak to your Lordships about any particular aspect of alternative energy. The noble Lords, Lord Stoddart and Lord Renwick, have referred to many, and I am sure that other noble Lords will do so. I conclude by saying that our attitude to alternative energy ought to arise from a concerted policy to reduce the environmental impact of energy as a whole. It should play its part in such a concerted policy.

I believe that having reviewed the policy for reducing the environmental impact of energy, we shall find that alternative energy has a major part to play and that additional resources should now be devoted to achieving greater results later. In order to make it an effective contributor, we must remove the fiscal and administrative barriers to which I have referred.

I fully support one of the major recommendations in the report to which the noble Lord, Lord Renwick, referred. It is that there should be established a body with specific responsibility for the promotion of alternative energy.

4.29 p.m.

Lord Gorell

My Lords, I first took my seat in this House a considerable number of years ago but this is the first time that I have had the temerity to address your Lordships. I shall hope only for your Lordships' indulgence. If a small douceur is needed, I shall try to provide it by being short. I shall also try to be adequately non-controversial without reaching the point of inanity.

I had the privilege of serving on the sub-committee under the able chairmanship of the noble Lord, Lord Shepherd, and it was very interesting. The noble Lord, Lord Renwick, has thoroughly covered the whole ground of the report. Perhaps I may be permitted to give a few general thoughts all relating to alternative energy and try to stay within that track.

Alternative energy, particularly renewable energy, has a very attractive sound about it, almost like perpetual motion. I believe that it would be reasonably clear to most people that in current circumstances, to the extent that it can be commercially developed on commercial terms, that should be encouraged and artificial barriers or legal problems, some of which were referred to by the noble Lords, Lord Ezra and Lord Renwick, should be demolished.

It seems to me that the more difficult the question is how far governments should be pushing public money into major projects which commercial ventures are not prepared to undertake. I suppose that there are basically three objectives for doing that: to cover a future possible deficit in traditional supplies, to alleviate price increases in traditional supplies or to assist in reducing pollution.

I venture to suggest, not controversially, that it is reasonably certain that non-traditional energy will not make a major impact in the foreseeable future unless and until we can develop new ideas and new concepts. It sounds quite big, but 18 per cent. of electricity requirement is 6 per cent. of' energy consumption. It will clearly not be a panacea for those three problems which one might wish governments to put money into.

One then has to recognise that, although fossil fuels are finite, they are still abundant, and indeed the surplus of petroleum producing capacity mostly in the Middle East—and I say "capacity" not "potential"—is likely to hand over the market to the end of the century and probably beyond. For some time thereafter there will be no shortage. I am not saying that there will not be interruptions in supply, but basically there will be no lack of resources.

That leads one to the fairly logical inference that it is unlikely that prices of fossil fuels—although they may fluctuate and there may be a crisis as in 1973 and in particular 1979—will rise very greatly on a sustained basis in real terms for some time. Of course that has implications for alternative energies.

Finally I believe that everybody recognises that pollution, in its widest sense, must be reduced, but one cannot expect alternative energy to do very much about that in the time in which people are now expecting it to be done. Therefore one has to tackle the problem in a more direct fashion. There are things to be done on the supply side without opening the Pandora's Box of nuclear energy. More clean gas could be burned instead of oil or coal. That is abundant throughout the world. There are probably as many reserves of gas as there are of oil. Of course there is energy efficiency, energy conservation and reduction of emissions. I suggest that that will cost the money and that is where the money first needs to go.

If one takes those considerations together, one comes to the question of whether governments should launch into heavy subsidisation of major projects, some of which are as yet physically unproven and some of which are economically unpredictable. The future is unpredictable and there is ample history of people misforecasting just because they foresee a trend. One example was the prediction that the streets of' London would be clogged up with manure through more and more horses. Nobody foresaw what the motor car would do for us.

However, lead times on these technologies are very long, which may be something of an answer to the noble Lord, Lord Ezra. Development to inter-commercial production takes time. suggest that it must be prudent to follow that course. We must not pay an overly burdensome premium in order further to research existing possibilities and to prove, up to at least prototype stage, projects that have reached that stage.

We can then establish the facts. There is a lot which is theoretical but which is not yet known. Of course one must look for new concepts. I believe that that was basically the thrust of the sub-committee's deliberations and of the report and recommendations. If it is not controversial for me to say so, that is why I support the report.

4.36 p.m.

The Earl of Lauderdale

My Lords, the House has just listened to a maiden speech of quite outstanding merit, if I as someone who hardly got a degree may use the word "merit" in referring to that which we have just heard. It was a speech of intellectual clarity bearing on energy strategy and policy in the round as the context for our debate today and of knowledge backed by considerable experience in the oil world in South-East Asia and South America, to say nothing of the noble Lord's work as co-ordinator of policy in Shell in the Middle East. To survive being a coordinator of anything in the Middle East and to live to tell the tale speaks for itself. I am sure that your Lordships will join me in hoping that many times again we shall hear from the noble Lord, Lord Gorell. It was an interesting, stimulating, incisive and illuminating contribution and we shall look forward to further occasions when he may even dip his toes into the waters of controversy.

Like the noble Lord, Lord Renwick. and others, I should like to thank the noble Lord, Lord Shepherd. It seems a pity that he sits there silent. I am sure that there are many things he would like to say which were not said by the noble Lord, Lord Renwick, but we look forward to the noble Lord's full recovery of voice and vigour in due time. We are indebted to the noble Lord, Lord Renwick, for a speech which left us very little to say because it was so cogent, so complete and so useful. He and the noble Lords, Lord Stoddart and Lord Ezra, mentioned, as I shall choose to focus on, two particular points; namely, biomass and wave.

As a young newspaperman—and 1 was young once—I learned two things very early on. First, if one goes to look for a story, almost inevitably one finds quite a different one and very often it is better. Secondly, I was told as a young newspaperman by a crusty, cynical old stager who had been at it for years, "Never believe a story 100 per cent. until it has been officially denied". I shall return to the second point, but as regards the first I must say that I, and I believe other members of the committee also, were intrigued by what we heard about biomass as a source of energy that I believe most of us had not really given our minds to very much hitherto.

We found a firm called Farm Gas Limited that has—without any official, let alone EC, funding—over about 13 years developed anaerobic digestives. They are for smell control in treating noxious wastes such as those from farm slurry, manure, silage effluent, sewage sludge, abattoir waste and waste from food processing. One would have thought that that was a good contribution to the environment, but the company has done more than that. It has turned the waste into energy of a kind able to motivate the plant concerned and provide a surplus of energy as well.

One of the examples is so striking that, rather than expecting your Lordships to read the report, which is nearly one inch thick, I must pick it out. A single plant at an Irish monastery treating the waste from 300 beef cattle, 22,000 broiler fowls and the relevant farm silage effluent achieved three things: it saved the monastery £1,000 per month in energy costs; it earned the monastery nearly £17,000 a year in compost sales; and, finally, it produced nutrient-rich residue to fertilise a good crop of wheat and oats. It is a fantastic story.

The same firm has made and sold about 50 plants with about 18 cubic metres capacity. These together will shortly have achieved a saving of more than 6.5 million cubic metres of gas, which is equivalent to rather more than 4 million litres of diesel oil. That is given on page 133 of the report.

That is in itself a striking story but it suffers from the difficulty that all sorts of different interests are or could be affected. Therefore, with the Department of Energy having the official oversight, and while the Department of the Environment has a direct interest. with the Department of Agriculture, Fisheries and Food, the Department of Health and the Department of Trade and Industry for exports, we not unaturally asked our witness about the co-ordination among these five departments. We were told that there is no single co-ordinating effort to advance a development that can only become more attractive with the privatisation of water and the raising of water purity standards.

Therefore, at paragraph 131 our report insists that it is urgent—we use the word "urgent"—that there should be an interdepartmental review. I stress now, taking the words from the report, the urgency of this. The Government have had our report for nearly six months and I have to ask my noble friend who is to reply what the Government have done about it.

Perhaps this is the moment to say what I intended to say at the beginning of my speech—how greatly we welcome the appointment of a Minister from the Department of Energy to assist this House. We particularly welcome the noble Baroness, who has made a great friend of herself everywhere—she could charm the birds from a tree. She has to "charm" ESI privatisation as well, but she can do it. However, we wish her the best of luck and I am sure that my colleagues will join me in saying that we will not bowl fast halls. We are greatly indebted to the Government for appointing my noble friend and to her for accepting the appointment and coming down to join us today.

Earlier I hinted that my well-developed respect for a story, once it is officially denied, had been reawakened. Indeed, it was sharply re-awakened by what we learned of the way research and development in the offshore wave power business was suddenly killed in favour of wind power, where the best hopes also seem to be offshore. At paragraph 143 we record a "serious" conflict of evidence. That is the phrase we use and I stress it because my noble friend Lord Renwick dealt with the whole report with such genial diplomacy that I am striving to underline this point.

We found a "serious" conflict of evidence between the Department of Energy and its consultants, Rendel, Palmer and Tritton, on the one hand, and the offshore wave pioneer. Professor Salter on the other. I am delighted to hear from the Benches opposite that my noble friend has seen Professor Salter, but I still believe that it is important to put on record, and to stress, what comes out of our report. It boils down to the way that offshore wave energy costs were estimated against those for wind energy.

It was plain to us all that there is no dog-in-the-manger attitude towards wind power on the part of the wave power enthusiasts. They wish wind a fair wind. They did not in any way complain that wind was getting some of the swag and wished those involved the best of luck. We could detect no jealousy at all but there was an argument that something had gone seriously wrong. From the 20-odd pages of documentation three points emerged.

First, Rendel, Palmer and Tritton maintained (at page 200) that a certain method for judging costs to which Professor Salter objected had not been used until after the decision had been proposed by ACORD that the wave study should be brought to an end. However, Mr. Gordon Senior—this is the second point—who was one of those personally involved with Rendel, Palmer and Tritton, says (page 204) that it was being used at the time and provided grave distortions.

Finally, we learned that after a direct reversal of one of the technical recommendations involved the maker of that recommendation (pagragraph 10, page 204) was actually blocked until too late in his endeavours to see how his report had been stood on its head. Therefore, we found more than a mere whiff of intellectual and professional skullduggery about the Department of Energy's decision to end offshore wave power research.

However, since our report was written we have heard from Professor Denis Mollison, holding the chair of applied probability in the Department of Actuarial Mathematics at Heriot-Watt University, who makes a serious allegation. He wrote that the difference between the Norwegian costings and the UK costings on wave energy done by Rendcl, Palmer and Tritton were, largely in the politics of direction and assessment". He continued—and it is important to put this on the record— I have been collaborating with Professor Salter's Wave Power Project since its inception in 1974, and was closely involved in the various assessments of the project, including that by Rendel, Palmer and Tritton in 1981–83. While I was not privy to every detail, I can confirm that Professor Salter's account is true in every respect with which I am familiar". I repeat: is true in every respect with which 1 am familiar"— and that comes from a fellow professor at the university— and is indeed a restrained account of the process". He continues: The costing process has included horrors such as, most recently, replacing detailed costings with simplistic 'generic' costings, which compare wave with wind and other renewable energy devices by costing them at so much per ton of metal, concrete or electronics". He writes in brackets: (imagine estimating the costs of ships using costs per ton for helicopters!)". He continues: The use of costings has included taking a straight average of the cheapest 4 pence per kilowatt and the most expensive 12 pence per kilowatt of a range of quite different designs to yield a definitive cost pence per kilowatt for wave power, for use in official projections to the year 2025. Such crude assumptions are particularly objectionable when, as here, they are not stated openly, just implied in an obscure paragraph of a report; and a report at that which has been rightly criticised for being made public too late for any public discussion of it before the decision to close the UK wave energy programme was taken". Much more can be quoted on what Professor Mollison describes as "statistical illiteracy". This story as it stands is not good enough. It cannot be left where it is; it just will not do. That is why the committee expressed firmly but modestly and discreetly, its "unease" and called for an independent review. Perhaps I may say that when that review is held it will have to be seen to be wholly fair and independent to carry conviction.

4.52 p.m.

Viscount Hanworth

My Lords, I had better take the precaution of saying that possibly 1 may be unable to stay to the end of the debate because I have a long-standing dinner engagement; in fact, with British Nuclear Fuels. I was a member of Panel B which produced the report and I do not disagree with the findings as far as they go.

The lobby against nuclear generation I personally believe is largely emotional and logically mistaken. With acid rain, the greenhouse effect and other undesirable products from coal-fired electrical generation which include the distribution of toxic heavy metals and radioactive fallout, nuclear generation is probably a cleaner answer. It has less attributable deaths and early deaths even allowing for another smaller Chernobyl which may well occur sooner or later. But the disadvantages from both these methods of generation mean that we should push forward other ways of meeting our heat and electricity needs. Unfortunately, with exceptions that 1 shall mention later, they cannot economically contribute more than a few per cent. individually—I said "individually"—to our energy needs. There is nothing on the horizon to alter that view. I wish protagonists of alternative energy would come to terms with this fact and not produce unrealistic scenarios because that does not really help what we are all trying to do which is to push forward these possibilities.

The front runner of alternative energy at the moment is wind power. Theoretically it could provide more than 20 per cent. of our energy needs without seriously affecting the generating system. Some people quote a higher figure, but the usefulness of wind generators en masse falls off badly due to their variable output. That depends, incidentally, on the cube of the wind speed. To equal the output of a 1,000 megawatt power station it will probably require 1,000 wind turbines occupying an area of 200 square miles. In this context it should be remembered that our total generating capacity is roughly 50,000 megawatts. That is 50 times greater than the example 1 have just given.

I simply do not believe for environmental reasons that more than 5 per cent. of our electrical needs can be met by on-land wind turbines. I may be wrong, but good windy sites are limited. We must await the public reaction to the three wind farms that the CEGB is now proposing to build. Each will have 25 wind turbines with a maximum capacity of 8 megawatts. The alternative is to put wind turbines out to sea. The Wash is an obvious possibility. Only practical experience will show what the extra cost will be for construction and maintenance under harsh, corrosive sea conditions. A reasonable guess is that power will cost at least 30 per cent. more than at present. The interesting question then is how much more the public can be persuaded to pay for their electricity on the grounds of future environmental considerations and the possible greenhouse effect which would have consequences not for them but for their children.

The biggest potential for meeting our future energy needs lies in energy conservation. To my mind that is a vital one. Here we are talking about a 20 to 30 per cent. saving. Domestic energy requirements are around 30 per cent. of the national total. Domestic heating alone accounts for more than 20 per cent. of our energy consumption. Of the 20 million homes in Great Britain, less than 15 per cent. are thermally insulated to standards now required of new houses; over 13 million have poorly insulated roofs.

The possible energy saving by improving insulation of existing houses far exceeds any contribution which is likely to be made by alternative methods of generating electricity in the near future. The potential saving would be about £1.5 billion a year or the equivalent of 15 million tonnes of coal. The cost of such an improvement would probably be around £5 billion which could conveniently be spread over a 12-year period. This is not too bad an economic proposition as it stands, but there will be other direct financial savings, such as on social benefit payments for heating, running at £400 million a year, and probably the cost of one large new power station of, say, —1.25 billion since on-peak electricity provides some of the domestic heating. There will also be other indirect advantages in benefits to health, the prevention of condensation and mould growth in some buildings, and unemployment.

Much research has been done to develop energy-efficient new houses. They cannot have much effect on the present energy situation, but they are vitally important for future generations who will have to live in them. Yet the Government have signally failed to promote that development. They refuse to follow the Danish example, and I understand the EC wishes to give energy efficient ratings for at least new houses and preferably for all those on sale. For several years and until recently, I campaigned for better insulation of new houses. The reply from the Government has always been that it was for the marketplace to decide. What nonsense! The market place, that is the buyers, did not realise the financial advantages of paying, for example, £300 more for their house with the amount paid back by reduced heating costs in two or three years.

The Government have done something to try to improve the efficiency of industrial processes, but they now seem to be cutting hack on this. The potential savings in energy are still at least 20 per cent. Why have the Government cut back?

Another major energy-saving possibility is combined heat and power (CHP) for domestic heating in large cities. Conventional electric power stations are at best only about 36 per cent. efficient; most of the energy goes out through the cooling water at low temperature. However, if the station is so designed and adapted, it can provide hot water at some small decrease in the electrical output and produce an overall efficiency approaching 80 per cent. The problem in implementing this is the long lead time: digging up the roads for laying the heat lanes and getting consumers to change over to the new heat supply.

On the Continent they started out with many district heating schemes and it is relatively easy to connect these to accept hot water from electrical generating stations. In Finland 40 per cent. of domestic heating is supplied by district heating and 55 per cent. of this is produced from CHP plants. The figures from Denmark are very similar. The Atkins Report named nine major cities here where CHP could be an economic proposition. It is estimated that CHP could save 14 million tonnes of coal annually. This represents more than 10 per cent. of the coal that we use for all purposes.

What is required is substantial government support for one or preferably more lead schemes. Bearing in mind the capital that they will obtain from privatisation of the electrical industry, one would have thought that some of it could be ploughed back in promoting such desirable schemes, which will of course include the Severn barrage.

Leicester is often quoted by the Government as a town which is going to have CHP, but it is a quite small scheme and it is largely directed to industrial use. It is in no way the lead scheme that I am advocating.

The Severn barrage could supply about 6 per cent. of our electrical requirements. Even in present circumstances, it is thought to be nearly economic; but without government financial help or assurances for such a long-term project, it is most unlikely that it could be financed solely from private capital. Like all construction projects, it would have some undesirable environmental side effects.

The other possible tidal barrages—for example, the Mersey—would only produce a relatively small amount of power, at the best one-tenth of the Severn barrage. Already from France we have all the necessary technical expertise to construct the Severn barrage if we wish to do so. There is no necessity to start with a smaller scheme.

The panel was concerned about some evidence it received about the Salter docks scheme. This has already been gone into by other speakers and I will leave it at that. My own view is that provided that there was a reasonable chance of one of the wave generators proving fairly economic, it should have been taken to the prototype stage and not suddenly dropped.

What about the fusion process? Even if it now goes well, it will be 50 years at least before it could make any worthwhile contribution. No one really knows whether practical large-scale generation would be possible.

I am frankly shocked by the idea of running all except very small power stations on natural gas. It may be less polluting than coal, but it is a rapidly wasting asset and much more valuable for other purposes.

To summarise, I believe that we should press forward in developing all alternative forms of electrical and heat generation, even if, by today's standards, they are marginally uneconomic. We must realise that coal and nuclear generation are the only two which can provide our main requirements in the foreseeable future.

5.5 p.m.

Viscount Mersey

My Lords, I must first congratulate the noble Lord, Lord Gorell, on a quite excellent maiden speech. I should like to thank my noble friend Lord Renwick for initiating this debate, and Sub-Committee B in general for producing a report which is quite fascinating to an outsider. Dealing as it does with renewables it is extraordinarily diverse, as diverse as shoes and ships and sealing wax and cabbages and kings.

I should like to confine my remarks to three renewable areas. One of those areas is in the original European Communities report: it is the wind. The other two are not in the report but I feel that they must be discussed. They are fusion and fast breeder reactors, which the noble Viscount, Lord Hanworth, has just mentioned.

I had not appreciated the complexities of wind power until I read this excellent report. The area needed to produce power equal to that of a 1,000 mW power station is at least 200 square miles. The noble Lord, Lord Stoddart, mentioned that. The CEGB put it even higher, at 400 square miles. That is 400 square miles covered with machines greater in height than the pylons of our supergrid. Each machine would make a noise like a helicopter, though some witnesses claim that it would make a noise like a rather quiet helicopter. However, that still means that on wind farms we are talking of thousands of quietish helicopters, at most a mile distance from each other and, incidentally, interfering with television reception.

Furthermore, I note that one of the witnesses, Dr. Challis, stated that the reliability of the wind turbines in California had been simply appalling. Elsewhere, Dr. Lindley stated that two-thirds of the 17,000 Californian wind machines were graded less than good and only one-third were graded as reliable. We must therefore guard against building machines that are doubly unreliable. It is inevitable that a wind turbine will be singularly unreliable since the driving force behind it, the wind, is itself unreliable. It is intermittent.

It seems that we may become even more daring than the Californians so far as concerns the wind. As other noble Lords have mentioned, we could site wind farms offshore, thereby avoiding environmental nuisance. No one else has yet done this and I gather that we would be at the leading edge of technology. The piece of sea that I have seen recommended in this report is the Wash. The disadvantage of it not being as windy as many sites off our west coast is outweighed by the advantage of its shallowness of 10 to 15 metres.

Even then, the foundation of each turbine must be far more elaborate than would be the case on land. There is the problem of corrosion by salt water, not just of the turbines themselves but also of the submarine cables that carry the power to land. In order to equal one big power station we would need at least 1,500 turbines. They would occupy the whole of the Wash. Maintenance would be a problem. Engineers could only get to them in good weather windows (as they call them on the oil rigs). We could enlarge those windows by equipping each turbine with its own helicopter platform; but that would be expensive. I note the forecast cost on a marine wind farm of 8p per kwH without helipads. That figure of 8p compares badly with the 2p, 3p or 4p that it costs to produce electricity from conventional stations.

I am sure that everyone in this House welcomed my right honourable friend the Prime Minister's green speech to the Royal Society last September and that we all share her worries about the greenhouse effect of fossil fuels. She asks us to look at alternatives, including nuclear power. There are two types that can fairly be called renewable, the fast breeder reactor and fusion. Fusion is a natural phenomenon. We see a large scale example of it every fine day when we look up at the sky some 93 million miles away. I think that it is realistic to regard the Tokamak at Culham as a miniature sun. This splendid machine has already exceeded all that it is targeted to achieve. It is therefore sad to learn that funding at Culham is to be cut back. There will be no experiments in the Tokamak with the deuterium tritium mix, and no research at all in other fields—for instance, nothing in that key area known as reverse field pinch.

I do not understand how my right honourable friend the Prime Minister's enthusiasm for nuclear power squares with government cut-backs in their funding both of fusion for the distant future and of the fast breeder reactor in the middle future. Here the cutbacks seem to be worse—a reduction in Dounreay funding from £50 million to —10 million. That is not just a reduction on the fast reactor, which admittedly has had quite had teething problems; it is a reduction in funding the Dounreay reprocessing plant and a reduction in long-term R&D funding. The cost effectiveness of our nuclear R&D is very good. The International Energy Agency in Paris has drawn up a league table of countries showing the nuclear energy generated in each divided by the total amount invested in R&D. We have come out high, well ahead of the USA, France and Germany and second only to Canada. The R&D total includes our spend on fusion too. It is not too surprising that the chairman of the UKAEA, Mr. Collier, has said: I think we can say that we have had good value for money from our nuclear R&D in this country". I must ask my noble friend this basic question: how does she reconcile government enthusiasm for nuclear power with government cuts in funding it? There is one area in which it is hoped that she will be able to offer a crumb of comfort. Can she confirm that we will make a full contribution to the European collaborative programme on a fast reactor? I know that the Government have just agreed to sign the programme agreement. I believe that the countries involved are Belgium, the Netherlands, France, Germany, and of course ourselves; and the relevant areas are fast reactor R&D and industrial collaboration on all fronts. The outcome should be a European fast reactor, an amalgam perhaps of all that is best at Dounreay in Scotland and Super-Phenix in France.

I know, as my noble friend does, that there is increasing opposition to nuclear power since Chernobyl. The British people are nothing if not realistic, as evidenced in a recent MORI poll, where 70 per cent. of those questioned said that Britain's need for nuclear energy would increase.

If I may quote Mr. Collier again, he said: On the technical front progress remains excellent and I reiterate my view spelt out last year that the fast breeder reactor remains the best bet for economically secure and environmentally acceptable electricity supplies throughout the next century. The increasing public concern about the greenhouse effect only serves to reinforce that view To reinforce my own view, I implore the Government not to be seduced by the romantic notion of the god of wind, Aeolus, blowing a fair zephyr over a forest of wind machines in the Wash. The most that Aeolus can produce is a supplement to our requirements. His technology is untried, and he is likely to be very expensive. A more practical god for our baseload is he who lives beneath us, Pluto, and the metal that bears his name. There is nothing romantic about Pluto or plutonium, especially when the god and his metal become debased and depleted, for at Dounreay they use depleted plutonium 239. Surely in the longer term we must rely on the god of fusion, who is clearly the Egyptian sun king, Ra. I ask my noble friend to keep the gods in their places, to assign to Aeolus and indeed to Neptune a supplementary role but to leave the main role to the god of the underground and to the god of the sun.

5.15 p.m.

Viscount Hood

My Lords, I add my thanks to my noble friend Lord Renwick for so fully and admirably dealing with the whole scope of this long, complicated and most interesting report. For my part, I should like to speak briefly on the part that alternative sources of energy may play in the current and vital programme of increased generating capacity in England and Wales. Some reference has already been made to the programme, which started at 13,000 kW and, I understand, has risen to 15,000 kW. My noble friend Lord Lauderdale in his important speech on Tuesday referred to this and to the delays that are occurring. The noble Lord, Lord Stoddart of Swindon, made further reference to it today. Of this great programme, non-fossil fuels are to make up 20 per cent. under the Government's policy. This means that of new construction a much higher percentage will have to use non-fossil fuels because the total includes phasing out the Magnox sections with about 4,000 mW of capacity.

There are three sources of non-fossil fuels: the nuclear stations, additional stations in England and Wales, and imports and alternative sources of fuel, which we are debating today. In these I think that one must distinguish—and I support all my noble friends who have spoken so far, in that there must be more effort on the part of Government and private sources to this end—between sources such as solar energy, biomass and geothermal energy, which I should have thought were unlikely to play an important part in the current programme. Hydroelectric power I believe is already fully developed in the United Kingdom.

That effectively leaves wind and tide as the sources of alternative energy upon which reliance will have to be placed in the current programme. The current programme provides for 12 years to build and 30 years of useful life thereafter, which carries us to the date that appears in much of the literature, 2030 or thereabouts.

As to wind, this indeed may be economic already in the right areas. Reference has been made to California. It is a particular area: it has desert and mountains, it is relatively close told great populated areas and it has a growing economy. There is plenty of wind, of course, but it is not necessarily in the right places.

The Central Electricity Generating Board is pursuing this. It has a number of sites. It is perhaps interesting to note that Richborough, a development of the CEGB currently in the course of construction, aims at producing 1,000 kW compared to 1,200 kW from Sizewell. Surely the problem with wind is the environmental one. We were told in evidence that it required 400 square miles to produce the necessary power equivalent to a major coal station. If one extrapolates from this figure, it would take about 250 square miles to provide the power that will be generated by Sizewell or Hinkley Point. This is a terrifying thought in England. The area where the power is required is the South to balance the generating capacity in the country as a whole. Therefore, I find it very difficult to believe that, within the span of time with which I am concerned, wind will play a very important part. The view of the CEGB is that there might be a 1 per cent. contribution by the end of the century, and it believes that that is optimistic. The CEGB's estimates rise quite a lot thereafter. I noted the reservations expressed by the noble Lord, Lord Ezra, as to why there should be a great rise in the contribution of wind and other alternative energies beyond that point.

I turn now to the subject of tide. The site of the Severn Barrage is, I am told, most favourable; indeed, it cannot be equalled in Europe. But any tidal scheme has the great disadvantage of being intermittent. Tides have their floods and their ebbs. The plan is now being investigated by a committee which will no doubt deal with many subjects, including the environmental problems about which I do not think there is yet much information.

However, there are some basic figures; namely, that the installed capacity should be 7,200 mW. The firm power would be one-sixth of that amount. Seven thousand two hundred mW is six nuclear stations; firm power of 1,200 mW is one nuclear station. The cost we were given by the committee is 11 billion. That is based on 1984 values but with escalations and interest charged to cost, on a basis comparable to the figures used for the Channel Tunnel, it is seven nuclear stations.

We were not given any figures on cost. It is evident that this must necessarily depend upon the degree to which the use of power would bridge the gap between the installed capacity and the firm low. However, from those figures 1 cannot believe that it would be anything approaching the low cost of Sizewell, Hinkley Point or an efficient coal station.

There is yet a further point. It is a huge scheme and one which could, conceivably, be undertaken by government. I ask the Minister whether there is likely to be any possibility of such a scheme being undertaken by private enterprise.

The major generating company is a big company. But this is a colossal scheme—two Channel tunnels and probably more. And the cost will probably escalate. If so, it does not seem to be a realistic proposition within the span of time about which I am talking. It may have a hundred years of life, but with interest rates climbing from 13 per cent. upwards the useful life beyond, say, 30 years will play no part in costs.

I have reached the conclusion that development of alternative sources of power must continue evidently financed by private and governmental sources. These sources should aim at meeting the needs of the long term beyond 2030. For the current programme minimal reliance can be placed on alternative sources of energy. Only limited reliance should be placed on imports. After all, French power may be cheap today, but it may not be so in 10 or 20 years' time—within the span about which I am talking.

Therefore, it follows that by far the greater part of the non-fossil fuel generation must be met from nuclear generation. There seems to be no possible alternative. It is to be hoped the public will accept this, as my noble friend Lord Mersey, said. It is also to be hoped that steps can be taken to prevent the planning difficulties which would hold up the programme and lead to a great shortage of power for future generations.

5.24 p.m.

Lord Rea

My Lords, noble Lords will be relieved to hear that I do not intend to make a speech but more a point. I am sorry if I am repeating what has been said by several noble Lords. However, I think it is sufficiently important to bear some reinforcement.

I was not a member of your Lordships' committee, but I have read the report with great interest. It stands in a line of excellent reports and is much to be commended. However, I must declare an interest in that my eldest son cut his teeth as a mechanical engineer in wave power. It is that subject which I wish to discuss briefly.

As an aside, I should say that since the funding of wave-power research dried up, my son has had to change direction. But his training has been useful. Instead of turning waves into power he now, as a sideline, turns power into waves. He has now designed a wave-making machine for surfers to be installed at a leisure complex in Florida.

Paragraph 143 of the committee's report is concerned, as the noble Lord, Lord Renwick, pointed out. about the sudden ending in 1982–83 of significant support for wave-energy projects. It refers, as the noble Lord has already said, to, a serious conflict of evidence which only an independent review could resolve", between the evidence of Professor Salter and the evidence of ETSU and the Department of Energy. That has already been discussed by several noble Lords.

However I should like to draw attention not only to Professor Salter's evidence, which is reproduced in full in the report, but also to that of Mr. Gordon Senior—already mentioned by the noble Earl, Lord Lauderdale—who was an independent consulting engineer appointed by Rendel Palmer and Tritton (otherwise abbreviated to RPT) the main consultants appointed by the Department of Energy to look into the wave-power projects.

I should like to quote two passages from the evidence. They are not those quoted by the noble Earl, Lord Lauderdale; so if noble Lords will bear with me I shall read them. This independent engineer appointed to assess the work of the wave-power project in Edinburgh and other places, says on page 204, paragraph 7: The use of parametric costings by RPT and ETSU", that is the energy technology support unit of the Department of Energy— in the interests of achieving consistency between the costs of the different devices produced gross distortions in the case of the Duck"— that is Professor Salter's device— as Professor Salter has indicated in his evidence with which I agree". Incidentally, that quote was elaborated in much greater detail by some evidence which the noble Earl, Lord Lauderdale, gave us earlier.

On the same page at paragraph 10, Mr. Gordon Senior says, with regard to his section of the consulting engineer's final report to the Department of Energy, that: I found that most of the text of the report was as I had drafted but the key conclusions had indeed been changed and even reversed. I objected and asked for my views to he made known to the DEn hut was told that this could not be done and that I was hound by client confidentiality to RPT not to reveal my disagreement. I was also advised not to have further contact with the device team.

It was and still remains my considered opinion that some of the conclusions in the report on the Duck device as submitted to the DEn cast unfair doubts on its long term viability". I think that those two quotations would seem to fit in with Professor Salter's view that there was, to put it kindly, a "massaging" of technical information, so that wave energy appeared considerably more expensive than the other technologies, especially wind power.

The successful Norwegian shore based project may have persuaded the Government to back the project of Dr. Whittaker, of Queen's University, Belfast, on Islay—although as the noble Lord, Lord Renwick, remarked, the funding seems hesitant and uncertain according to the evidence which was given to the committee.

Although the project is small, it looks like being a success, with wide applications for remote or island communities throughout the world. It has great export potential. It is clear that offshore wave energy projects, as compared to the smaller onshore projects, present more complex technical problems, but the potential benefits are much greater. In his evidence Professor Salter said that at a depth of 100 metres the average energy of a Hebredean wave was 70 kilowatts per metre of wave front compared with only 6 kilowatts at 10 metres of depth as it approached the shore. No noble Lord who has sailed in the open ocean can doubt the tremendous power held in ocean waves.

Professor Salter and others in wave energy development do not claim to have solved those tremendous technical problems, but they can report substantial and rapid progress. I feel, and I hope that the noble Lords will agree, that they should have a chance to build and monitor pilot devices and put them to work in true ocean conditions. I wonder whether the noble Baroness can assure us that the Government will give serious consideration to reopening discussions on wave energy, as the committee suggests in its recommendations.

5.31 p.m.

Viscount Chilston

My Lords, I should like to congratulate my noble friend Lord Renwick on the way he stepped into the breach at such short notice to introduce the debate with such panache. We are discussing some seven or eight separate sources of energy, some as diverse as my noble friend Lord Mersey's cabbages. They happened to have been classed together as alternative energies perhaps because in only 12 years' time, by the year 2000, they might together produce some 2 per cent. to 6 per cent. only of the nation's energy needs. That small proportion may not even be economic and most of it will provide only an intermittent supply of electricity; for example, when the wind blows.

Put that way, it seems that your Lordships arc debating something trivial; on the other hand, as regards past research, renewable energy is the baby in the energy family. My noble friend Lord Renwick reminded us that £16 million is being invested in that energy, but nonetheless it is the baby of the family.

The senior citizens of power generation will not last for ever. The noble Lord, Lord Gorell, told us that we have 100 years left. Long before the last lump of coal reaches the surface and the final barrel of oil is brought ashore, they will both be far too precious to burn. They will be needed as chemical feedstocks.

That is the scenario so often described by the proponents of nuclear power and of course it is a relevant one. However carefully the nuclear environment is controlled, there will be setbacks. I am sure that most of them will be negligible, but how can we anticipate how public opinion will react? The noble Lord, Lord Ezra, with his vast experience of energy matters, told us how much life had changed in the energy world. The noble Lord, Lord Stoddart, told us that a year is a long time. An illustration of that, and one about which the noble Earl, Lord Lauderdale, will not be surprised, is that in the United States today biomass out-performs nuclear with some 4 per cent. of the nation's electricity. Holes in the atmosphere, leaves off the trees, melted icebergs and tar in the lungs could all have similar effects upon oil and coal-fired power stations in Europe.

Somewhere between those two options lies the true relevance of renewable energy. The EC initiative to encourage the exploitation of alternative energy is therefore vital. Unlike many EC initiatives that we have discussed in the past, where the Community imposes its bureaucracy upon commercial sectors which operate efficiently without Euro regulation, many renewable energy resources, being highly capital intensive, need huge amounts of R&D funding. Development times are long and funding would on the whole not be forthcoming from industry or the private sector.

In the United Kingdom, privatisation, we are told, will benefit independent generators by allowing them improved access to the grid and a more viable commercial price for the electricity that they provide. Conversely, as the noble Viscount, Lord Hanworth, reminded us, it will make long-term investment in capital-intensive generating plant of unproven performance even less forthcoming than it is at the moment. In other words, yes, I can see that small producers of electricity generated by renewable means, most notably wind, could have a thriving commercial environment in which to operate; but much larger projects such as tidal and wave-powered generators need the type of imaginative long-term finance that has not been forthcoming from state-owned monopolies, let alone smaller profit-oriented businesses.

It is for projects of the size, novelty and durability of the Severn Tidal Barrage that we need funding on the grand European style. My noble friend Lord Hood reminded us how it will outcost the Channel Tunnel. Yet tidal power, and incidentally wave power, are not on the Commission's list of approved renewable sources. It claims that those resources are of sufficient interest to Great Britain and one other country only—France; Ireland; or is it Spain or Portugal?

Similarly, solar-generated electricity is a nonstarter in Britain and yet on a recent visit to the northern frontier district of Kenya I noticed a small house with an agricultural garage and workshop—the type of thing one sees in every village in Africa—equipped with lathe, drills and arc-welding equipment. They were all powered by a score of car batteries connected to a bank of photoelectric cells the size of a door. It is of course a sunny spot, but I mention it because I was told that the generating equipment was supplied by a firm, not in North West Keyna, but North-West England, which is arguably the most overcast area of Europe.

Selling technology, know-how and renewable energy developments and products to third world countries especially, but exports in general, all helps the European balance of payments as well as providing vital experience in those new technologies. Renewable energy developments are carried out typically by small companies and so there is great scope for reducing unemployment.

Biomass crops research could lead to new uses for redundant farmland. They are all valid reasons for Euro support. Apparently the EC hands out aid on the merits of the project, irrespective of the state or geographic area in which it happens to be. One would presume that any resolution to encourage the exploitation of renewable energy should not be limited to any list of sources. The field should be left open to scientists and engineers. Presumably there are still as yet untapped sources of natural or renewable energy on the planet. How about background radiation or the electrical discharge one sees in storms and so on? I am not a scientist.

Limiting the areas of research to specific sources supported by the EC not only censors the scope of engineers and scientists, it artificially boosts one source against another; and because the list is based, presumably, upon the self-interest of individual states, it goes against the spirit of the Community.

The committee heard much evidence from Professor Salter in support of wave power research, despite the Department of Energy's sudden reduction of support of some £13 million between 1979 and 1983 to a mere £500,000 for the period 1984 to 1986. It is currently down to £100,000 a year. The department claimed that no offshore devices offering economic electricity had emerged.

Professor Salter and other proponents of wave power claim otherwise. My noble friend Lord Lauderdale sold his case extremely well to your Lordships' House this afternoon. However, supporters of each and every one of the renewable sources claim impressive potential performance figures. As a proportion of the UK's present needs for electrical power, supporters of biomass claim a possible 10 per cent.; wind, 17 per cent.; hot dry rocks, 15 per cent.; the two tidal projects of the Severn and the Mersey alone, 10 per cent. Funnily enough, the most unpopular one of all, wave power, claims a potential 25 per cent.

That adds up to 77 per cent. of the UK's present needs. That is not counting the energy saving requirements which the noble Viscount, Lord Hanworth, and the noble Lord, Lord Stoddart, support so strongly. There is also the contribution of the energy saving of heat and power schemes and the estimated reduction of a third from the refurbishment of old buildings to take advantage of passive solar power.

If all that happens then renewables alone could give the UK a massive 16 per cent. of surplus power. So the long-term relevance of renewables lies, I believe, somewhere between the 2 to 6 per cent. of Britain's needs for the year 2000 which I mentioned at the beginning and that apparently attainable proportion of 116 per cent. The noble Lord, Lord Ezra, says, "Start now". I entirely agree with him. My noble friend Lord Renwick suggested to the House a body with specific responsibility for alternative energy and again I entirely agree with that. Let us support the EC proposal, but please let us not leave out the power from the sea, whether it be wave, tidal or even ocean thermal.

5.42 p.m.

Lord Williams of Elvel

My Lords, we have had a very interesting debate. We are grateful to the noble Lord, Lord Renwick, for introducing the report of the Select Committee in a very eloquent manner. I am sure that your Lordships are also grateful to my noble friend Lord Shepherd who chaired the committee in such a distinguished manner.

One of the features of the reports of your Lordships' Select Committees, which I always find extremely interesting and valuable for the record, is that the evidence is set out in great detail and printed in great detail and that it is on the record. This full copy of the report which I have in my hand may contain a certain amount of "biomass"—if 1 may use that expression—but it sets out exactly who said what, where and on what basis. I think it is very useful for that to be on the record. Therefore I congratulate the Select Committee on a thoroughly researched, properly developed investigation as well as an elegantly written report.

The background to our debate today was set out not only by the noble Lord, Lord Renwick, but also by the noble Lord, Lord Ezra, and my noble friend Lord Stoddart. The whole attitude towards the generation of energy, particularly the generation of electricity, which is what we are talking about, has changed over the past year or 18 months. We are now much more concerned about environmental problems. Recently there have been both regional and global concerns on the consequences of electricity production. In the case of nuclear power, the problems include the risk of major accidents. We all remember the Chernobyl incident; radioactive discharges from Sellafield; decisions over the disposal of radioactive waste. Coal-fired power stations, which were at one point thought to be the answer, currently emit sulphur dioxide and nitrogen oxides which are causing the acidification of lakes and streams, not just in Scandinavia but also in our own country. A variety of environmental effects are linked to that phenomenon.

A more recent concern has been expressed by the Prime Minister herself on the effects of fossil fuel combustion on the global climate. The greenhouse effect threatens to raise the temperatures of the world, affect weather patterns, sea levels, agricultural production and so on. All these issues have come to the forefront of a debate about energy.

Secondly, I think we are now much more concerned about another aspect. I must pay tribute to the noble Lord, Lord Ezra, who, if I may say so, has ploughed a fairly lonely furrow on this issue in your Lordships' House over the years. We are much more conscious of the need for energy conservation and better use of the energy we have. This was a point that the noble Viscount, Lord Hanworth, illustrated very effectively. After all, with a simple light bulb we can save 60-80 per cent., if we get it right. With a simple refrigerator, we can save up to 50 per cent. of energy. With a simple vacuum cleaner motor, we can save something like 15 per cent., and in homes with proper insulation, as the noble Viscount pointed out, we can save perhaps more than 50 per cent. of the energy consumed. That is the second background against which this debate has taken place.

Then I take issue with some points made by a number of noble Lords. Thirdly, we have the problem of what I would call the nuclear issue. It is perfectly clear from the evidence that has been given that the CEGB has a programme and I think the noble Earl, Lord Lauderdale, referred to this on Tuesday. That programme calls for some five new nuclear power stations and four new coal-fired power stations during the 1990s. By the year 2025 it calls for some 45 large power stations to be commissioned. I understand that that is the programme.

Sir Frank Layfield, who was the inspector at the Sizewell inquiry, stated quite clearly that in his view the CEGB in its present form—let alone a privatised form split up between one or two or even more organisations—cannot manage the construction of more than one major power station at any given time. In other words, the problems of a new power station—the environmental impact assessment which is now required, the time delays, the inquiries—the difficulties are such as to make the high-tech, high output programme that the CEGB had advanced quite difficult to imagine in real life. It is against that background that we have to consider alternative energy and your Lordships' Select Committee report.

I shall not spend much time on the EC draft recommendations. I believe them to be vague and that noble Lords have been right in drawing attention to the lacunae in the recommendations, that they do not cover wave and tidal power. After all, those are part of our heritage in our island, but they may not be so relevant in Frankfurt, Munich or Milan. Nor, I am bound to say, do I have much time for the Government paper on renewable energy. In my view it shows a rather obsessive belief that the private sector in some manner or other can fund what are essentially long-term, long pay-back projects of doubtful viability. We must accept that. It also shows that the Government are proposing to opt out of expenditure on R&D on renewable energy by the end of the 1990s. That comes out very clearly from the report at figure 1 on page 3.

I confess to a suspicion that the Government are somewhat obsessed by the idea of the nuclear power programme. It is not simply the public statements of the Prime Minister or of the Secretary of State for the Environment that have caused that suspicion in me, it is the general tenor that is offered to us in statements which suggest that that is really the only way to move forward.

It may be a quite unjustifiable suspicion, but I also suspect that that is fundamentally at the bottom of the dispute (which I would call a flaming row) between Professor Salter and the Department of Energy and others about "nodding ducks", where it is suggested that if one does not like something, one cooks the figures and loads the dice against it. The noble Earl, Lord Lauderdale, was quite right to point out that problem, and to say that there must be some kind of independent body to show that there is no cooking of the figures and that there is a realistic assessment of what is going on.

The Earl of Lauderdale

My Lords, that assessment must not only be independent, but be seen to be independent.

Lord Williams of Elvel

My Lords, I am grateful to the noble Earl for that remark. There was a day when a Government inquiry was seen to be independent; but I am afraid that day is long over. We must accept, as the noble Earl says, that no government review is independent, therefore we must establish something that is independent and which is seen to be independent.

I know that when the noble Baroness replies, she will say that £132 million has been spent by the Government since the start of the Department of Energy's Renewable Energy Programme. But, after all, that is lower than the 1988 to 1989 estimate for research and development into nuclear power. Just one year's R&D into nuclear power exceeds all that has been spent up to now on renewable energy. We are told that in the current year the £144 million which is to be spent by the Government on nuclear R&D compares with something like £10 million on renewable energy. That is 7 per cent. of what is spent on R&D in nuclear power. I think that gives a start of an indication of the priority that the Government give to the object of your Lordships' Select Committee's report.

We have had a good debate and I do not want to take up your Lordships' time. Therefore, I do not propose to go into the different methods of generating energy which the report describes in very great detail. That was done by my noble friend Lord Stoddart of Swindon. I broadly agree with what he said. For me the most interesting figure in the whole report came on page 28. That was the CEGB's estimate of the potential contribution of offshore wind power to our energy requirements. That estimate was 100 per cent. I remember the days when I used to work in BP in the very early 1960s. All of us in BP knew that there was a great deal of oil at the bottom of the North Sea. Everybody knew that, but we were told time and time again by our specialists that the technology simply was not there to recover the oil from the bottom of the North Sea. The noble Viscount, Lord Hood, who is I believe, the chairman of Petrofina, and the noble Earl, Lord Lauderdale, who is a director of Elf UK, will remember that period. We all know the oil was there, but we could not get it out.

Then 10 to 15 years later we started to get the oil out. I respond to the noble Viscount, Lord Mersey, by saying that we should not be discouraged by the difficulties posed by submarine cables or the difficulties posed by rusting turbines in offshore wind. We must move forward and consider whether there is a serious possibility that that could contribute to our future energy needs. We must put the money and the resources into that area to discover whether we are right or wrong.

I support of course the recommendation that there should be some kind of co-ordinating body for renewable energy after privatisation. I have always regarded privatisation as a pretty futile exercise. The noble Baroness will hear me say that more often than she will like. I cannot believe that privatisation will lead to more research and development in renewable energy. That was one of the major jokes of the year which was produced, I believe, by a Government Minister. All I would say is that if the Government are committed to continuing research in renewable energy after privatisation, they should produce a document which is rather more convincing than the document that they produced in June of this year.

It is not just a question of the energy at the margin; it is a question of how we treat our environment. It is not just a question of where we find our power; it is a political question of what the people of this country will put up with in the way of nuclear power stations in the future and fossil fuel power stations in the future. If the Chernobyl incident showed us one thing, it is that an incident like that—the Three Mile Island incident in the United States was equivalent—really moves votes.

I understand that at the moment the Government are not prepared to engage in a major energy conservation programme. I do not think I would do that if I were in government. After all what are the Government supposed to do? Are they supposed to say, "We are extremely rich. We are all well off. We have plenty of North Sea oil and buckets of coal. We have everything we want. But by the way, friends, we do not want you to have more than six inches of water in your baths, and we want you to turn the lights out". That sounds like a programme for poverty. That is of course quite contrary to what the Government are putting forward at the moment. But, nevertheless, I am afraid that is one of the essential steps that is necessary if we are to get the balance right.

Renewable energy is, as I think all your Lordships have agreed this afternoon, a very long-term business. It involves a long pay-back period. I believe that was the expression used by the noble Lord, Lord Ezra. The Government admit that if the Severn Barrage is ever built, it will not produce a return immediately of a very high rate. The Government admitted that that project could not be financed easily from the private sector. Only the Government can undertake such a project. The private sector cannot and will not do it. Our very real concern is that the Government are so mesmerised by privatisation that they cannot lift their eyes to the further horizon, to which the noble Viscount, Lord Chilston, referred. But that is what is needed. The message must be that there are long-term projects, such as, for example, not necessarily onshore but offshore wind power, and wave power. After all, Norway has produced something on a UK design which is now feeding electricity into the Norwegian grid.

There are projects which we should be pursuing in our national interest. The Government are the proper body to pursue them. Those projects could lead to immense rewards, not just economically in the safety and security of energy supply, but in remedying the desecration of our environment that has been going on for far too long. That is the challenge that I put to the Minister and to which I ask her to reply. I think that the Government are copping out. I should like the noble Baroness to be able to meet my challenge.

6 p.m.

Baroness Hooper

My Lords, as frequently is the case in your Lordships' House, the task of winding up a debate during the course of which considerable expertise and background knowledge of the subject matter has been evident is a daunting one. This is the first major debate on energy in which I have been involved since my appointment to the Department of Energy. I believe that that is also true in the case of the noble Lord, Lord Williams of Elvel, in his position as chief Opposition spokesman on energy. It is fortuitous that the renewables, or alternative energy sources, form part of my departmental responsibilities, and I have therefore listened to the debate with particular interest.

I should like to add that during my former life as a Member of the European Parliament 1 was well aware that this is an area in which European cooperation is very appropriate. I little thought then that I should one day be winding up a debate on a report of your Lordships' Select Committee on the European Communities, but I know that House of Lords' reports are always received with considerable interest and respect and frequently quoted, not only by British Members of the European Parliament but also by those of many other nationalities.

I should like therefore to join the noble Lord, Lord Williams of Elvel, and others in congratulating the noble Lord, Lord Shepherd, on his committee's report. 1 echo the remarks of my noble friend Lord Renwick in welcoming the noble Lord's presence in the House in spite of his recent illness, although I understand that he has not felt well enough to stay until the end of the debate.

I am also delighted to note the expertise of the noble Lord, Lord Gorell. In congratulating him on a notable Maiden speech perhaps I may also say that I hope that he will contribute to many more such debates in the future.

I am grateful to my noble friend Lord Renwick for introducing today's debate and for setting the tone for the many interesting and constructive contributions that followed. Publication of the committee's report followed by just one day the publication of the Department of Energy's long-term strategy paper for renewable energy sources, Energy Paper 55—Renewable Energy in the UK: The Way Forward. That paper set out for the first time the development paths and their cost for each of the renewable technologies felt to be appplicable to UK conditions. I am sorry that the noble Lord, Lord Williams of Elvel did not find it convincing. I hope that he is very much in the minority.

The paper encompassed many of the concerns expressed in the Select Committee's report, notably our commitment to resolve many of the institutional and environmental barriers which may inhibit commercial take-up. That should ensure that renewable sources of energy make a full and effective contribution. For those renewables applicable to electricity generation, we believe that the privatisation of the electricity industry offers an unparalled opportunity. Indeed, the Bill makes specific reference to renewables to ensure that intermittent renewable sources of generation are given their full weight in fulfilling the non-fossil obligation. It is the first time, I understand, that renewables have been mentioned in legislation.

The publication of Energy Paper 55 is a clear indication of the Government's commitment to developing renewable energy sources. Over £132 million has indeed already been invested, and over the next three years a further £50 million will be spent. We cannot do this alone and over the next few years an increasing proportion of funding to develop technologies such as wind, biofuels and tidal energy are expected to come from the generating industry and manufacturing industry. Already around 20 per cent. of our programme costs come from external sources, including the European Community, and we have already announced this year collaborative projects worth over £40 million, with more to follow.

Since I took on responsibility for the renewable energy sources I have had the opportunity to see for myself the excellent work under way in the UK on technologies such as geothermal hot dry rocks, wind energy and landfill gas. I look forward to seeing more at first hand. I feel that we can be proud of the impact that has been made by British scientists and engineers in those and other areas in developing the research, development and demonstration programmes of both the Community and the United Kingdom. We also must not forget the pioneering work being undertaken by UK industry in developing markets for those new technologies. In the field of wind energy a small number of companies are successfully developing overseas markets notably in the United States. Their experience in that area will greatly assist the commercial exploitation of the UK wind resources.

The alternative or renewable energy sources are already making an important contribution to Europe's energy supply, mostly from hydro-electricty. That is expected to grow over the next decade with wider application of technologies such as those mentioned—wind and use of waste materials. There are already a small number of wind farms in Europe and in collaboration with the CEGB we are planning to build three experimental wind farms in the UK at a cost of £28 million which are expected to be operational by the early 1990s.

We share with the European Commission the aim of developing the alternative energy sources to their fullest practicable exent and we have already implemented most of the 14 specific recommendations made by the Commission. I am grateful to the noble Lord, Lord Stoddart of Swindon, for his recognition of the progress that has been made.

While we have our own major research and development programme, currently made up of over 250 projects worth £70 million, it is important that we collaborate with others where there is advantage in doing so. In addition over the past few years our R&D programmes have included joint projects in collaboration with the Commission's R&D programmes, notably on wind and solar energy biofuels and geothermal hot dry rocks. That collaborative effort has been extremely beneficial to the development of the UK programme.

I understand that the Commission's new non-nuclear energy programme—known as JOULE—will, at the suggestion of the United Kingdom, include studies evaluating tidal and wave energy resources. I believe that that answers a question raised by my noble friend Lord Renwick and others.

The Commission's own demonstration programmes are also a good example of the way in which both sides have benefited over the past few years through collaborative effort, particularly industry, which has been the main beneficiary of the Commission's support offered to the UK in that area.

I should like to take this opportunity to mention that the Commission has recently announced a further call for applications for grants for energy demonstration projects. This is the last one under the present regulation and covers projects for the demonstration of alternative energy sources as well as a wide range of energy-saving technologies and use, liquefaction and gasification of solid fuels. The Commission has set aside about —70 million for this call and will particularly welcome projects involving collaboration between the institutions and industry of different countries within the EC. Grants worth up to 40 per cent. of project costs are available under the scheme. Applications have to be made by 14th April 1989 and my department will be happy to give advice to anyone considering applying for grants. My noble friend Lord Chilston may like to bear that in mind in view of his plea for new ideas and projects.

Our own market research on the value of the Commission's demonstration programmes has shown that the projects in which we have collaborated have generally been very successful. Over the past 10 years UK industry has been offered grants of nearly —35 million. A wide range of companies and public bodies have found the scheme a simple and effective way of making a reality of their ideas for new energy technologies.

Significant grants have been made to the public sector, such as British Steel and British Coal, for process control and to local authorities, mainly for the conservation of energy in schools and other public buildings. The scheme has also supported and developed the concept of low energy hospitals. That has undoubtedly given UK industry a strong lead in the world market for the management of energy in buildings by computer control. I very much hope that British industry will respond enthusiastically to the present call for projects. My department will be ensuring that the availability of Community funds is publicised widely.

Confidence born of experience is an essential element in getting the promising alternative energy sources into the market place and I hope that your Lordships will join me in encouraging United Kingdom industry to apply for support under this latest call by the Commission.

I shall now try to respond to some of the specific points that have been raised. My noble friend Lord Renwick asked me to reply to a large number of specific questions. Wind energy was one of the subjects raised. It has been described as the front runner, although my noble friends Lord Mersey and Lord Hood were perhaps somewhat sceptical about it. We believe that the main task of the current phase of the wind programme is to estimate the potential contribution of wind energy to large-scale electricity production—for example, to the existing grid and distribution networks—taking into account all technical economic and environmental constraints. Current expenditure on the programme is over £4 million per annum.

One of the principal objectives of the wind farm programme to which I have referred is to assess the acceptability of wind farms to the general public, whose views will be canvassed as part of the programme. As regards offshore developments, offshore wind is being studied as part of the programme. However I am sure that noble Lords will appreciate the need for priorities and the intention is first to prove the technology onshore.

The noble Lord, Lord Renwick, referred to a legislative framework to clarify wind rights. This is a new but important issue and is certainly something that we shall have to consider in due course, because the experience in the United States has shown that problems can arise. We shall be looking at this matter in the context of the wind farm experiments.

As regards landfill gas, we see this primarily as a waste disposal method. The Government are fully aware of the potential dangers of pollution by all landfill sites and are preparing stricter guidelines for the operation of those sites in consultation with the industry. Landfill gas, as has been said by many, is not only a useful energy source but its collection and use as a fuel is the best way of controlling it. In this regard we see no conflict between energy and environmental considerations since both require a high standard of landfill management. Energy producers and the waste disposal authorities are indeed being brought together by the Government as a consequence of their Waste from Energy Programme, which is part of the biofuels programme.

As for the hot dry rock project in Rosemanowes in Cornwall, this is one of the projects supported by the Government and one that I was most interested to visit. The future programme strategy developed during a major programme review in 1987 involves the step towards a prototype deep HDR project over the next three years. During 1990 a decision will be made as to whether the technical and commercial prospects of the technology are sufficiently good to justify an expanded programme involving the creation of a commercial prototype to generate electricity.

As regards solar energy the aim of the Government's passive solar programme is to encourage the use of passive solar design in buildings where appropriate and current expenditure on the programme is over £1 million per annum. The Government recognise the potential export market. For example, the DTI has funded work on photovoltaics with a view to exploiting overseas markets. To those who sought to compare the support given by the Government to renewables with that given to nuclear research, I would say that each energy technology—whether it be coal, oil, gas, nuclear or renewable sources of energy—requires a different level of investment both to carry out the necessary R & D and for its development for commercial use. Even within the broad range of renewable energy technologies some technologies require greater funding than others and some have a longer lead time than others, as the noble Lord, Lord Gorell, pointed out. For example, as regards the work on passive solar energy or biofuels, it currently requires around £2 million per annum to conduct the necessary research. Other technologies such as the goeothermal hot dry rocks and wind energy sources require more funding, respectively about £4 million and £3 million. The nuclear R & D programme is itself effectively a collection of disparate technology sub-programmes with different levels of investment required for each.

Lord Williams of Elvel

My Lords, is the noble Baroness saying that those different subtechnologies in nuclear require 14 times the level of civil R&D invested in the different renewable energies?

Baroness Hooper

My Lords, I am saying that every type of technology requires a different level of investment in order to make it possible to make commercial use of it.

I finish by observing that the United Kingdom expenditure on renewables research compares favourably with expenditure by many other countries. My noble friend Lord Mersey raised questions with regard to fusion and the fast reactor. I should like to reassure him by saying that the United Kingdom is certainly not abandoning fusion. Far from withdrawing from the Joint European Torus project at Culham, we have agreed with our European partners to extend its life by a further two years to 1992.

So far as our national programme is concerned, the United Kingdom Atomic Energy Authority will continue to carry out R&D in support of JET but will concentrate their efforts more tightly on the Tokamak route to fusion. The commercial requirement for fast breeder reactors in this country is likely to be some decades away. It was therefore right to trim resources and put the Dounreay project on the hack burner to meet a longer timetable. The objective is to retain a position in the technology at an economic cost. We shall continue our support for the existing collaboration between European countries on fast breeder reactor research. I am grateful to my noble friends Lord Mersey and Lord Hood for their acknowledgement of nuclear power as a necessary component of our electricity generating programme.

Many of your Lordships, and the noble Viscount, Lord Hanworth, in particular, referred to energy efficiency, which indeed has a role to play in helping to meet future UK energy needs. In fact it is another of my departmental responsibilities. However, I should like to emphasise that it should not be regarded as an alternative to investment in energy production. I believe that both are needed.

The Government are committed to the promotion of cost-effective energy efficiency. Environmental arguments form only one of the numerous advantages of adopting efficient management of energy. In general, the best way of promoting energy efficiency is to encourage consumers—each of us individually to be responsible and to make our own decisions based on adequate information and in the light of our own circumstances. Thus the Energy Efficiency Office is directing its efforts at high energy industrial users and, for example, at encouraging the development of commerciallS5LV0502P0I0262.jpgy based energy labels for houses on a voluntary basis where demand for this can be shown. But it would not be acceptable to compel people to invest significant sums of their own money in order to obtain an energy audit of their home; nor, we believe, would public subsidy of such audits be an acceptable alternative.

The Government have consistently encouraged the development of higher standards of energy efficiency for new houses through building regulations, and we shall continue to do so. We are also continuing to encourage householders to improve the energy efficiency of existing housing stock. However, we recognise that in some circumstances further help is needed. The Homes Insulation Scheme provides funding for local authorities to pay grants to low income households in order to meet up to 90 per cent. of the cost of loft and pipe insulation. Since the scheme was introduced in 1978, 3.5 million grants have been paid and the number of homes with loft insulation has risen from 60 per cent. to over 90 per cent. In addition, the Government-funded community insulation scheme provides a draught-proofing service for low income households. Over half a million homes have now benefited from this scheme. There is a great deal of other activity in this area.

On combined heat and power, the Government agree that CHP can offer a versatile and highly efficient use of fuel to provide energy. By virtue of its inherently greater fuel efficiency as compared with separate heat and electricity generation, the Government recognise the positive contribution that CHP can make to the quality of the environment. Its implementation can lead to very significant reductions in atmospheric emissions because of the reduction of primary energy burn. This environmental attraction of CHP holds good for all sizes of plant and all fuel types, including renewable energy sources such as landfill gas, domestic waste and other forms of biomass. The Government want CHP-DH schemes to go ahead where economically viable. We believe that their future development should lie with the private sector. Our general approach has been to ensure that there are no legal, financial or institutional barriers which prevent its development. In making proposals for the privatisation of the industry, the Government will ensure that all private generators have fair and equal access to the grid and distribution system. For example, the Bill provides that licensees may be given special powers in relation to the laying of pipes and other installations. I hope that this goes some way to reassure the noble Lord, Lord Ezra.

My department has provided substantial funding towards studies to evaluate the feasibility of city-wide combined heat and power/district heating. Noble Lords may wish to note the independent effort of Sheffield Heat and Power Limited, which is already using municipal waste as a source of heat in a district heating scheme serving 4,600 domestic dwellings.

A number of noble Lords, and in particular my noble friend Lord Lauderdale and the noble Lord, Lord Rea, referred to wave energy and to the offshore project known as Salter's Duck. I have considered the committee's comments very carefully and met with Professor Salter and Mr. Senior, one of the consultants involved in the wave power assessment. It is inevitable that in the early stage of R&D on a technology, judgments have to be made in the absence of developed hardware which can be costed with confidence. It is unusual for all professional people to agree on the merits of some proposed technical system. There is often considerable and prolonged argument. The Advisory Council on Research and Development, whose membership included many distinguished industrialists and academics, considered the wave power programme in each of its annual reviews between 1980 and 1984. Thus a very thorough decision-making process was gone through in deciding the future of this programme. Indeed, ACORD's advice to Ministers was published on 27th April 1982. I am satisfied that all those involved acted responsibly and completely refute any suggestion of cooking the books.

Looking forward, I have agreed with Professor Salter that there is little to be gained by reviewing events of five to eight years ago and that we should concentrate on the future. I am sure that the policy being pursued on wave power is correct.

The most promising technology for shoreline wave is being developed, as has been mentioned, on the Island of Islay. This device also has features which could be applied in some technologies offshore but avoids many of the difficulties, uncertainties and costs of some of the devices examined earlier for offshore use. We shall continue to develop this technology while it seems promising, and to examine new prospects as the proposers bring them to us.

It is also normal procedure to review each technology periodically. We have begun updating our overall appraisal of R&D published last year under the title Energy Technologies for the United Kingdom. This is a substantial exercise and will take some years. However, I shall ensure that future prospects for wave power are thoroughly reviewed as part of this process and that Profesor Salter and other interested parties are consulted.

Lord Williams of Elvel

My Lords, I am sorry to interrupt. I know that time is running out. Does this mean that the Government are turning down the committee's suggestion that there should be an independent review?

Baroness Hooper

My Lords, 1 have said that we considered very fully the suggestions of the committee; that we believe a further review will take place in the normal course of events; and that it will be adquate because all the interested parties will be involved.

I am afraid that time and tide are running out. On tidal energy, the Government are certainly aware that the Severn and Mersey estuaries are two of the most promising sites in the UK. Studies are currently in hand on both projects. I cannot promise the noble Lord, Lord Stoddart, that an announcement will be made by the end of this year but I can say that the studies on the Severn are due to be completed by the end of this year and on the Mersey in 1990. I understand that construction is already exciting private sector interest and, for example, that MANWEB—one of the designated area distribution companies—already has a stake in the Mersey Barrage Company.

The Earl of Lauderdale

My Lords, before the noble Baroness leaves that point, perhaps I may ask this question. I do not wish to embarrass her. I wonder whether she would consider writing to the chairman of the committee more fully on the subject than she has had time to speak on it with regard to the way that offshore wave energy is to be treated. There will be some on the committee who I believe will be very unhappy at the phrases that she has used so far. I do not wish to embarrass the noble Baroness; she knows that. However perhaps she might consider writing either to members who have shown an interest or to the committee chairman.

Baroness Hooper

My Lords, I can assure my noble friend that I do not feel in the least embarrassed. I am sorry that I have not been able to convince him that very thorough consideration was given at the time that the decision was made and of course within the department we shall look at the comments made in the course of the debate, together with the recommendation of the report. However, I cannot feel that time and energy should be wasted in looking into the past when what we clearly need to do is to look to the future in this respect.

I realise that 1 may not have dealt with every single point that has been raised. I shall of course scrutinise the record of the debate. If there have been any omissions I shall write to the noble Lords concerned. I have no doubt that other questions will be raised again and discussed during our debates on the electricity privatisation Bill during the course of this Session.

Perhaps one of the conclusions that we can draw from this, however, is to say that all these forms of alternative energy, as well as a variety of fossil fuels, nuclear energy and a good programme of energy efficiency, are necessary for the very good reasons of conservation of resources, other environmental factors and security of supply. These facts have certainly been taken into account in drafting the electricity privatisation Bill. This debate has been a valuable opportunity for the House to examine in some depth a subject to which the Government, and indeed the wider world, attach great importance, and one which will, if its promise can be realised, make a significant contribution to Europe's energy supply in the future. I am confident that this debate will make an important contribution to the raising of awareness of the potential of the renewable energy sources.

6.29 p.m.

Lord Renwick

My Lords, I am very grateful to the Minister for much of what she has said. I shall have to read the detail in Hansard to see exactly to what extent there will be a need to follow up some of our stronger recommendations that may not have been answered. One recommendation proposed the establishment of a body with specific responsibility for the assessment of alternative energy sources. That appears in paragraph 148.

I am also grateful and feel very humbled by the enormous expertise around me on all sides of the House. This is one of the subjects where this House excels in background information and personal and practical experience. We heard a remarkable maiden speech from the noble Lord, Lord Gorell.

I should like to say how grateful I was for the opportunity, in sad circumstances admittedly, to take the part I did in the debate on behalf of the noble Lord, Lord Shepherd. I am sure we are all grateful for the stimulating afternoon and evening that his report has given us.

On Question, Motion agreed to.