HL Deb 10 February 1992 vol 535 cc448-51

2.42 p.m.

Viscount Hanworth asked Her Majesty's Government:

Whether there are at present any renewable sources of electricity generation which could meet a substantial part of future energy requirements without greatly increased cost to the consumer.

Lord Cavendish of Furness

My Lords, the renewable energy sources likely to become competitive for electricity generation in an open market in the near future include the biofuels—landfill gas, biogas and waste incineration and hydro-electricity. Others such as wind, energy crops and tidal energy have prospects for the future.

Viscount Hanworth

My Lords, I thank the noble Lord for that reply. Does he agree that for major generation in the immediate and foreseeable future, there are only about three choices? One is coal with, one hopes, the prospect of greater efficiency and cleanliness. Another is gas, which is a diminishing resource. The third is nuclear fusion. Although we might try to increase energy efficiency and so forth, that is unlikely to be sufficient to meet future carbon-dioxide constraints. Therefore, will the Minister give consideration to the use of combined heat and power for the domestic requirement of cities? That would create a tremendous advantage.

Lord Cavendish of Furness

My Lords, the noble Viscount is correct in saying that in the short and medium term the bulk of our electricity generation will be from the conventional sources that he mentioned and for the reasons that he mentioned. However, it is important that renewables are given an opportunity to compete in those niches where they can be economic in the short term and allowed to develop to become competitive in the longer term. The Government promote combined heat and power under the best practices programme of the Energy Efficiency Office. The prospects for such power are extremely encouraging. My department's latest survey of independent generation indicates that combined heat and power capacity could double to 4,000 megawatts by the year 2000.

Lady Saltoun of Abernethy

My Lords, are the Government funding research into nuclear fusion as a source of energy?

Lord Cavendish of Furness

My Lords, yes.

Lord Dean of Beswick

My Lords, the Minister in his original Answer used the term "market forces." During the past two or three years debates in this House and Select Committee reports have drawn attention to the alarming diminution of global energy resources at a time when the need for further increase in energy resources should explode upwards. Bearing in mind that power station builders here have a history of providing energy on a large scale for other countries as well as for our own, are the Government prepared to continue to try to maintain our position as an international exporter of energy resources and plant?

Lord Cavendish of Furness

My Lords, I am not sure that I have entirely understood the noble Lord's question. I do not believe that I mentioned the word "market" in any significant form in my Answer. I believe that there should be a lack of government interference. If the noble Lord was referring to coal, I can tell him that we are fortunate in being able to develop diverse fuel supplies. Coal will have a key role to play, together with nuclear, gas and renewable sources of energy. I believe that too much interference in any of these industries will not lead to a sensible energy policy or to conservation. Indeed, past interference has had the opposite effect.

Lord Ezra

My Lords, will the Minister indicate whether in assessing the costs of electricity generation from renewable sources full account is taken of the environmental advantages which can be derived from those processes? Will he indicate whether the Government have given any thought to prolonging the arrangements under the non-fossil-fuel obligation beyond 1998?

Lord Cavendish of Furness

My Lords, we give consideration to the environmental issues mentioned by the noble Lord, Lord Ezra. The Government are in touch with the European Commission about the possibility of extending the fossil fuel levy and making the next renewables order in respect of a period that will extend beyond 1998.

Lord Mackie of Benshie

My Lords, the Minister mentioned hydro-electric power in his original Answer. Does he consider that there are any considerable opportunities left in this country for the development of hydro-electric power?

Lord Cavendish of Furness

My Lords, hydroelectric power is mature technology in the UK and accounts for about 2 per cent. of the total installed generating capacity. Small-scale hydro—by which I mean 5 megawatts—has the potential to provide 0.5 per cent. of the total electricity generated in the United Kingdom. The programme aims to encourage the implementation of small-scale hydro technology by encouraging, where possible, the removal of non-technical barriers and the use of established technology in the market place.

Lord Williams of Elvel

My Lords, on two occasions today the Minister mentioned the lack of government interference as being some kind of virtue. However, he also spoke about the non-fossil-fuel obligation, which is a clear case of government interference. Does the Minister accept that it is the Government's duty to ensure that considerations about the environment and about future sources of fuel are borne in mind when determining energy policy for the next century? Those are long-term issues and it is up to the Government to ensure that we have a proper balance in the next 20 years.

Lord Cavendish of Furness

My Lords, I agree entirely with the noble Lord, Lord Williams, that the considerations are long term. In the light of advancing technology it is impossible to foresee events too far ahead. The UK accounts for only 3 per cent. of CO2 emissions in the world. If one were to distort the market too fast it would have the effect of moving industry away from competitive industrialised countries, which aim to reduce CO2 emissions, to countries using less-advanced technologies.

Lord Williams of Elvel

My Lords, the Minister has admitted that in certain cases government interference is desirable. Is it not in fact more desirable than simply hiding behind the idea that market forces will handle everything? Will the Minister admit clearly, plainly and honestly that it is up to Government to get it right rather than to leave the matter to the industry?

Lord Cavendish of Furness

My Lords, I accept that both have a role. The non-fossil-fuel obligation is a way of helping renewables and and non-fossil fuel operations to come into the market place. It is the distortion of the management of energy that does the mischief.

Viscount Mersey

My Lords, will my noble friend agree that trees are a cheap renewable source of energy? Will he offer any encouragement to those who grow timber for firewood?

Lord Cavendish of Furness

My Lords, that is true. Of course, the coppice energy fuels are being looked at closely by the Government as something that could apply in this country.

Lord Hylton

My Lords, the noble Lord referred to small scale hydro-electricity. Have studies been made of radial turbines in British rivers for generating electricity?

Lord Cavendish of Furness

My Lords, I am unable to say but I shall look into the matter and write to the noble Lord.