§ Lord Campbell of Croy asked Her Majesty's Government:
§ What encouragement they are giving to the development of wind turbines to generate electricity.
§ Lord Cavendish of FurnessMy Lords, as on a previous occasion, I have to declare an interest to the extent that a family business with which I was connected instituted a wind project.
Nine wind energy projects were contracted under the first renewables order of the non-fossil fuel obligation and provision will be reserved for wind energy projects in a second order this year. The Department of Energy is also pursuing an expanding programme of research, development and demonstration or wind energy in collaboration with industry for which this year's budget allocation by the department is about £6 million.
Lord Campbell of CroyMy Lords, I thank my noble friend for that encouraging reply. Why is there a requirement for a certain amount of electricity to be taken from renewable sources in England and Wales but not in Scotland, where appropriate conditions, including high winds, are easily found and where there are likely to be fewer difficulties for the environment?
§ Lord Cavendish of FurnessMy Lords, I acknowledge that there is a large capacity for renewables in Scotland, but there are complications. The inter-connectors between England and Scotland are used for electricity trading in both directions. Against that background the Government have taken the view that electricity traded over the inter-connectors would not qualify for inclusion in the non-fossil fuel obligation in England and Wales because it would not meet the "will secure" test, which is the requirement under the legislation that capacity contracted within the NFFO should be securely available to the RECs on which the NFFO is placed. However, I am alive to my noble friend's concern and the Government are aware of the situation regarding renewables generators in Scotland. I can assure my noble friend that we are actively considering what can be done.
§ Lord Hatch of LusbyMy Lords, can the noble Lord tell the House what annual resources are provided by the Government for the development of wind power and for nuclear power? If he has the figures, can he also give the House the figures relating to the provision of research in all renewables and how they compare with those for nuclear power?
§ Lord Cavendish of FurnessMy Lords, I gave the noble Lord, Lord Hatch, a reply to that question on 23rd October 1990, at col. 1245 of Hansard. The answer is no different. In 1988–89 R&D was £132 million for nuclear power and £17 million for renewables. In 1990–91 the respective figures were £129 million and £20 million.
§ Lord Hatch of LusbyMy Lords, can the Minister isolate the figures for the provision of research on wind power?
§ Lord Cavendish of FurnessMy Lords, over £35 million has been invested in wind energy research, development and demonstration and the budget allocation for this year is about £6 million.
§ The Earl of LauderdaleMy Lords, does my noble friend agree that one of the problems with comparing wind power with nuclear power is that nuclear power is suited to base load whereas wind power depends on the weather?
§ Lord Cavendish of FurnessMy Lords, I have to agree with my noble friend. There is no reason why expenditure on research and development on renewables should bear any proportional relationship to expenditure on nuclear power.
§ Lord Mackie of BenshieMy Lords, I should perhaps declare an interest as I have a kinsman who put up a windmill eight years ago. It cost £30,000 and has brought a gross return of about 10 per cent. Therefore, anyone can calculate that once depreciation is taken into account it is not a very profitable investment. That is partly due to the fact that the Hydro Board pays my kinsman only half of what he pays the board for electricity. If the Minister wants to encourage alternative methods of energy saving, does he not agree that there is a case for considering more generous treatment of those people who use wind power?
§ Lord Cavendish of FurnessMy Lords, I understand what the noble Lord said, but we have to bear in mind the consumer and projects must be assessed on their viability.
§ Lord Stanley of AlderleyMy Lords, like my noble friend I must declare an interest in that a wind farm is proposed on my farm in Anglesey, where we have just as much wind as my noble friend Lord Campbell of Croy! Bearing in mind that so far all planning applications have been turned down, thus delaying the start of the projects, will the Government consider extending the contract period beyond 1998? My other question concerns a matter which my noble friend has already mentioned. Can he tell the House the long-term potential for wind power in the United Kingdom?
§ Lord Cavendish of FurnessMy Lords, for some time Ministers have said that despite the restrictions on 1998 the legislation provides the regional electricity companies (TRECs) with the flexibility they need to be able to offer bankable contracts. That has been amply confirmed by the 40 or more entirely new projects that TRECs have signed in fulfilment of their obligations under the first order. The department is confident that TRECs will also have the flexibility they need this 1159 year. For the time being, although the matter will be kept under review, the adjustment will be through the price rather than through the time.
With respect to the second question, it is envisaged that by the year 2025 renewable energy might provide up to the equivalent of around 24 per cent. of current electricity supply requirements if technologies can be proven and applied commercially. About half of that may come from wind energy.
§ Lord Stoddart of SwindonMy Lords, can the noble Lord say whether, within the research programme, attention is being given to the possible provision of vertical axis wind machines off-shore where, first, the environmental impact might not be so great as for wind farms on land and, secondly, wind speeds are higher and more constant than they are on-shore?
§ Lord Cavendish of FurnessMy Lords, there is no aspect of renewable energy that has been shelved entirely. I think I am right in saying that the vertical axis wind system off-shore at the moment presents problems so far as concerns capital cost. But it is still under consideration.
§ The Earl of LauderdaleMy Lords, can my noble friend tell the House whether there is any research being undertaken into the problem of storing electricity provided by renewables, whether it is wave or tidal power or whatever?
§ Lord Cavendish of FurnessMy Lords, beyond pump storage I know of no project in relation to storage at the moment.
§ Lord PestonMy Lords, perhaps other noble Lords have questions to ask.
§ Lord PestonMy Lords, perhaps I may simply be allowed to say that I was desperately trying to be courteous to a noble Lord on the opposite side of the House. That is why I did not rise more quickly. I dislike being called to order when I am trying to be well mannered.
§ The Lord Privy Seal (Lord Waddington)My Lords, perhaps it would be convenient to your Lordships for the noble Lord on the Opposition Front Bench to be allowed to put his question. We could close the matter at that stage and go on to the next Question.
§ Lord PestonMy Lords, it is most kind of the noble Lord. I still feel in some way that perhaps the noble Lords opposite have not had their fair run. However, I understand that the noble Lord's department is engaged in some economic studies in order to reduce the economic uncertainties involved in this situation. Is he able to tell the House when those economic studies will be published? Secondly, I understand that his department is rather optimistic and has talked about 10 per cent. of our electricity needs being met by wind by the year 2025, which I must say I find encouraging. Is it still his department's view that such an optimistic outcome is likely?
§ Lord Cavendish of FurnessMy Lords, I am afraid that I cannot give an answer on the timing of the findings of the reviews. It is a very active department 1160 and no time will be lost in producing them. On the second question, it would be optimistic to assume that everything goes well, but it is possible to envisage that that might be the case. We are working towards it.