HL Deb 19 February 1998 vol 586 cc309-11

3.22 p.m.

Lord Ezra

asked Her Majesty's Government:

Whether the European Union gas directive, as redrafted, contains a discrimination against combined heat and power, and, if so, whether this is in contradiction with declared European Union policy in favour of combined heat and power.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis)

My Lords, the policy of the Energy Council is to support combined heat and power and we will promote it under our presidency as a means of contributing to renewable energy objectives. The proposed gas directive allows member states an option to establish a consumption threshold to determine the eligibility of combined heat and power producers to benefit from gas competition where it is necessary to safeguard the balance of their electricity market. It was not the council's intention to discriminate against combined heat and power or to contradict European Union policy in proposing this provision, but to permit member states a means to prevent distortion of their electricity markets where incentives or preferences are already provided to promote combined heat and power projects.

Lord Ezra

My Lords, I thank the noble Lord for that Answer. However, I should explain that for many years I have been a strong advocate of combined heat and power and at present am connected with a company that operates such schemes. In spite of what the Minister said, does he agree that it is a little unfortunate, coming so soon after the Kyoto Conference, that the EU should appear to be speaking with two voices about one of the most effective means of reducing energy consumption? In that connection, will he confirm that a draft directive is now being considered by the European Parliament? If the parliament was to come forward with revised wording for the directive which would lessen the adverse impact on combined heat and power, can the Minister say whether the Council of Ministers, over which the UK currently presides, would look favourably at such an amendment?

Lord Clinton-Davis

My Lords, I am well aware of the noble Lord's commitment to combined heat and power, a commitment which, as he knows, I have shared for a long time. The Government share that view also. Indeed, only yesterday the fuel efficient CHP generating plant at the British Sugar Plc factory at Bury St. Edmunds, Suffolk, was the first to be given government consent while the review of energy sources for power generation is under way. That is encouraging and shows the Government's commitment. I do not accept that the EU is speaking with two voices. It is a matter of interpreting what was said by the council. I am aware that the European Parliament is to deliberate on the matter. I do not want to enter into hypothetical questions in relation to what the eventual conclusion may be, but the presidency and the Commission will take serious account of anything that the European Parliament says.

Lord Hardy of Wath

My Lords, given the huge and increasing volume of coal-fired generation on other continents, would it not be sensible for Europe and preferably Britain to ensure that research and development into clean coal combustion in association with combined heat and power would be both nationally and internationally relevant?

Lord Clinton-Davis

My Lords, that is a matter for the presidency and the Commission. I have taken strong account and note of what my noble friend said.

Lord Razzall

My Lords, without wishing to provoke an intervention from the noble Lord, Lord Bruce of Donington, does the Minister agree that that was a somewhat shabby compromise by the Council of Ministers in order to protect the interests of Spain? Would it not have been better for it to have been dealt with by giving Spain a derogation? Can the Minister confirm that the policy of the United Kingdom Government is to use their influence in the European Parliament to ensure that the correct result is arrived at in order to give Spain the protection it needs without at the same time going against the principle of combined heat and power?

Lord Clinton-Davis

My Lords, I do not accept that it was a shabby compromise. In fact, the agreement that was reached sought to take account of the requirements of various countries. The role of the United Kingdom in the presidency is to advocate that specific arrangement and the role of the EU Parliament will be to investigate the whole process. It will not be of use for me to speculate as to what the outcome will be, save to say, as I indicated, that the presidency and the Commission will take serious note of the European Parliament's view. Of that I have no doubt at all.