Electricity from Renewables: ECC Report

HL Deb 05 November 1999 vol 606 cc1102-35

11.6 a.m.

Lord Geddes

My Lords, I beg to move the Motion standing in my name on the Order Paper. I, and I am sure the whole House, greatly look forward to the maiden speech of my noble friend Lord Cathcart. I know a little of what my noble friend is going through because, by chance, I opened my account in this House almost exactly 24 years ago on the subject of an energy report from the European Communities Select Committee. In my remarks, nervous though I was, I concentrated entirely on what was then called "alternative energy". There is a certain amount of déjà vu this morning.

The report, and I hope the debate, is not an exercise in nostalgia. The development of renewable energy is of vital present and, even more importantly, future interest. The report being debated today resulted from the inquiry carried out by Sub-Committee B of the European Communities Select Committee of your Lordships' House. Having had the honour of chairing that committee, I wish genuinely to thank all its members, both present and past. I am particularly pleased to see six members on the list to speak today. I want also to thank and pay tribute to our specialist adviser, Mr David Milborrow, and to not one but two clerks who assisted us sequentially, Miss Kate Ball and Mr Roger Morgan.

The report was prompted by a projected draft EC directive to set a framework for expanding renewable energy with targets for member states. The only slight dilemma we had was that the draft never appeared! We found it on the Internet. It was then withdrawn, but I shall deal with that in a moment. We took evidence during the period January to March this year and published our report in July. The Government responded in the middle of last month in—and I say now, and I shall say again—somewhat discouraging terms.

It proved to be a very large and complex subject. We had 19 sessions of oral evidence, including John Battle MP, the then Energy Minister at the DTI, and Richard Caborn MP, the then Planning Minister at the DETR. We visited renewable energy installations in the north east of England and in Denmark. In addition to our oral evidence, we received 31 written submissions of evidence. Even then, we realised that we had not done full justice to the subject.

The December 1997 Kyoto protocol set firm targets for the reduction in pollution caused by the heavy reliance on fossil fuels and the resultant consequences for climate change. In our opinion, three complementary actions are required to meet those binding Kyoto targets: reduce energy consumption; improve the efficiency in both generation and use; and increase the proportion of energy from renewable sources.

Our inquiry focused on only the last. But our report emphasises—and I want to re-emphasise it this morning—that if we are ever to come close to meeting the Kyoto targets, the development of renewables must be accompanied by action in the other two fields. For instance, this country's medium-term emissions target to 2005 is equivalent to shifting all electricity generation to the renewables. Clearly, that is totally unrealistic. However, I hope that it gives your Lordships an idea of the magnitude of the problem.

Our inquiry also focused on progress to 2010. The climate change agenda seems bound to require further action over future years; for instance—and I am sure other speakers will take up the points—nuclear capacity will need to be decommissioned in due course. That is not far away. Fossil fuels will not last for ever. That has been said again and again, but it is a truism; they will not. However, we do not know when commercially they will run out.

In our inquiry, we defined renewable energy as that derived from non-fossil fuel sources: wind, waste and other biomass, hydro, wave, tidal, solar and geothermal. We specifically excluded nuclear power. Some have taken issue with us on that point, but we did so in order to contain the magnitude of the inquiry on which we were embarking.

We examined each of those non-fossil fuel sources in sufficient depth, we hope, to make informed comment. Of course, fuller study would have been possible, and perhaps should have been carried out, or could perhaps be carried out at a later date. We acknowledged in particular some important environmental issues in anticipation of the contribution from my noble friend Lord Cranbrook, but noted that we were able to touch on those issues only lightly. There are greater environmental issues than those specified in the report.

I turn now to the targets. The UK has pledged to derive 5 per cent of its electricity from renewable sources by 2005, and 10 per cent by 2010. Those targets are very much in line with those proposed by the EC. The Government say that existing contracts and arrangements will deliver the 5 per cent target by 2005, and that the new arrangements will shortly be in place to secure the 10 per cent target by 2010.

In our report, the committee agrees that such targets are technically feasible, but we cannot share the Government's confidence that either of those targets will be delivered. I shall discuss first the 2005 target of 5 per cent. The Government imply that the UK is on track towards meeting that target because renewable generation grew from 2 to 2½ per cent of electricity supplies between 1997 and 1998. That was, in the words of the government response, due both to a recovery in output from large hydro plant and to further NFFO projects coming onstream". NFFO is the dreadful acronym for Non Fossil Fuel Obligations.

The proposed EC directive would, in itself, have excluded large hydro. The Government are in a way—dare I say—massaging the figures, because not comparing like with like gives them a 1.3 per cent start. Even so, will the Government tell the House how much of that half a percentage point increase—between 2 and 2½ per cent—from 1997 to 1998 was due to NFFO projects coming on stream, and how much was due to recovery in output from large hydro plant"? Is enough capacity really set to flow from NFFO projects to meet the 2005 target?

The Government accept that that will not happen unless the integrity of existing NFFO contracts is maintained during the upheavals of the present electricity market reforms. That is another major problem area, which I hope that the noble Lord, Lord Sainsbury, will address in his response. When will the steps that the Government are committed to taking actually take place? Will they be on time to meet those targets?

I turn now to the more long-term target of 10 per cent. Our inquiry found that to achieve the 10 per cent target by 2010 would require a seven-fold increase in the average rate of the installation of renewable energy. We checked that figure extremely carefully because it was so alarming. It is a staggering figure and we are nowhere near meeting it. The Government agree that to do so will require a new suite of policies, but in their response to our report, they do not say what those will be, nor when they might be in place.

To meet the targets, all available renewable energy sources will need to be expanded at the maximum practical rate. We came to the conclusion that the main hope must rest on wind power, particularly from offshore sites. Having said that, there will be important contributions from waste combustion and landfill gas. The development of small hydro plants will be useful, but not significant in the overall situation. We did not see a significant input from energy crops. The Government in their response take issue with us on that score.

Photovoltaics harness the sun's energy indirectly, rather than using direct solar power. We considered them unlikely to be a major source of power, certainly in northern Europe, but we saw that there were important implications in photovoltaics for British industry. In the longer term, we saw useful contributions from offshore wave tidal streams and barrages, but not within the timescale up to 2010.

A key new policy is the financial support mechanism. The effective and well-regarded non-fossil fuel obligation (NFFO) arrangements will clearly not work in the newly re-structured industry. A decision was urgently needed in that context at the time of our report in July. That decision has still not been made. The Government say that they intend, to take the broad powers to establish a new support mechanism in the Utilities Bill which they hope to announce this autumn". It is now November, and we still have not heard about it. What is that new mechanism to be? Will the Government at least say when those key details are to be announced and give the target date for their implementation?

On the report's publication, I commented that, the right words are said, but we found too little sign of these delivering the necessary action". The dispiriting dead bat of the Government's response invites the same comment, dare I say it, even more strongly. I could illustrate that point, but I shall not waste your Lordships' time. I am sure that noble Lords will have seen the Government's response. I use perhaps a slightly strong word in saying that it is woolly. It does not get to grips with any of the problems that we tried to highlight in our report. There was no mention of action—it was all words.

On the question of unit price, our report was clear that for as long as the price of electricity generated from fossil fuels ignores the external costs of pollution, renewables are being set an unfair target. That is a very important point that is continually skirted over. Again, it is not a like-for-like comparison at the moment. In their reply, the Government acknowledged that the "polluter pays" principle holds. However, they then go on to say that account must be taken of other considerations. Yes, my Lords. But where should the balance be struck? Are they content to hinder the development of renewables by retaining that price inequity?

I make one more point on the financial aspects. In our report we use some quite strong language in saying that we considered it absurd that the climate change levy might be applied to renewable energy. Others have made the same point. I hope that we may hear from the noble Lord, Lord Sainsbury, that there is some movement on the Government's part in this respect. It seems absolutely crazy to levy a climate change tax or levy on the very type of fuel which is trying to achieve the objective of a climate change to improve the climate. That is a contradiction in terms.

We were extremely concerned about the whole planning situation, particularly in this country. The Government's response seems to us to indicate that they are far too confident that the planning regime will not frustrate the necessary massive development of renewables. There is one particular remark that I should like to quote from the Government's response that will sum up this point: It will ensure that Regional Planning Guidance and development plans play a key role in fostering a strategic approach to renewable energy provision". That did not fill us with great confidence. Our recommendations for improving the planning regime and for stimulating local interest in renewable energy schemes remain just as valid today as they were when we produced our report. I particularly draw your Lordships' attention to paragraphs 216 and 225 of the report, which I shall not repeat.

At the very least, can we be assured that there will be no more—I give this merely as an illustration—public inquiries into, say, wind farm proposals, where the inspectors simply repeat often misleading statements by objectors without qualification or comment? Many people have written to me saying that their heads are becoming very sore from knocking against an extremely heavy reinforced wall. It seems desperately difficult to get the message across that the planning regime should be proactive rather than immediately giving the easy answer—"no".

This whole problem is not about modest incremental change. The climate change imperative requires some dramatic action. New means must be found for achieving the necessary ends. I give a small illustration regarding the Ministry of Defence. We particularly included a comment about the, again, dead hand of the MoD. The Government say that work is in hand to codify measures to mitigate the impact of wind farms on radar reception. Phew! When will that be finalised? It has gone on for years and there is just a blockage. When will the MoD look seriously at this problem in order to try to help the development of renewable energy, not hinder it?

On embedded generation, we recommended in our report that work should be done to establish the relatively high limits of embedded generation with which the National Grid could cope. The Government agreed that that was an important issue which "needs to be addressed". But when, and how will it be taken forward?

We recommended what is known in the trade as "net metering". Some of your Lordships may not be aware that at the moment an extraordinary system exists which affects those who are doing their best. I think particularly of a house just outside Oxford, which was built specifically for photovoltaic power. Taking account of the different levels of demand for electricity within that house, there are occasions when the owner exports electricity to the grid and occasions when the owner imports electricity from the grid. That is fine. The problem is that presently the owner is paid 3p for the electricity going to the grid and has to pay 7p for the electricity coming from the grid. There is something wrong there. We strongly advocate net metering so that there is an equality in electricity going both in and out of the grid.

At the end of our report, we invited the Government to, declare unequivocally that the 'target is to achieve 10% of the UK's electricity supply from renewables by 2010'—and their determination to reach that target". In response, the Government restate the formula we criticised. They say that they have the, intention of working towards the aim of achieving 10%". with only the hope of achieving that by 2010. That is not good enough. We have gone past the stage of words. We must have action. Can the Government today be firmer on the date and strip out at least one of those temporising words in their reply?

As so often happens with reports in your Lordships' House, we acknowledge that the debate concentrated mainly on this country, rather than on the European dimension, because of the pure practical fact that witnesses tend to be local. However, we were conscious of the European dimension. The intended EC directive that inspired the inquiry was, as I have said, withdrawn after pressure from some member states. However, we have just heard that a revised directive is about to be published. We hope that the Government will do their utmost to ensure that the momentum is maintained at EU level.

Few things of such long-term importance as the climate change agenda are before us. The development of renewable energy is an integral part of that. The Government acknowledge that achievement of the targets will require coherent policy action and a sustained drive and leadership. They say they intend to provide that drive and leadership. However, I make no apologies for repeating that action is needed now. We have gone past the time of words. The Government may say that they are doing their best. However, I end by reminding them and your Lordships of Winston Churchill's wartime saying: It is not enough to do one's best. Sometimes one has to do what is necessary". I commend this report to the House.

Moved, That this House take note of the Report of the European Communities Committee on Electricity from Renewables (12th Report, HL Paper 78).—(Lord Geddes.)

11.28 a.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Lord, Lord Geddes, for introducing with the greatest clarity the report of his committee. First, I have to declare an interest as a vice-president of the Campaign for the Protection of Rural Wales, known as CPRW.

I noted that the three members of the committee also declared an interest. What worried me slightly was that the specialist adviser, who was praised so fulsomely both in the report and by the noble Lord, Lord Geddes, is himself technical consultant to Windpower Monthly. I am not saying that he behaved with any impropriety, but that perhaps explains the central flaw in the report, which is that it is too bullish about onshore wind power.

I also regret that the submission which was made by CPRW, both by e-mail and hard copy to the Clerk of the committee, was not apparently read by the committee. It certainly is not recorded in the report and it was not even acknowledged. As Wales is part of one of the most contentious areas for onshore wind power, I believe that it would have been good if the CPRW submission had been read. Had the committee in fact gone to Wales, members would have benefited from seeing some of the developments there and I believe they might have been a little less emphatic in their belief that it is a vocal minority which is opposing wind power schemes in Wales; and I believe they might have been less emphatic in their view that visual intrusiveness is on the decline or is overstated.

On some of the substantive issues, I agree very much with what the committee said. I agree with what the noble Lord, Lord Geddes, said about energy efficiency. It is vitally important to make sure that the cake does not grow larger and larger simply because people burn too much fuel, too much electricity.

I also agree with the tenor of the remarks of the noble Lord, and certainly the remark of Professor Fells in his evidence to the committee, that to reach the target set by the Government—5 per cent from renewables by 2003 and 10 per cent by 2010—requires action on an "heroic scale". That is what Professor Fells said and I believe that is what the noble Lord was saying today. Unless such action is taken, the targets are simply pie-in-the-sky; they will not be met.

I hope that my noble friend the Minister in his reply will take up this point and explain what the Government propose to do now to meet these targets. In particular, can he explain what, in the Government's response, is meant by protecting the "integrity of existing contracts"? I thought contracts were meant to have integrity anyway. We did not get much enlightenment from the Government on that; nor indeed from the committee.

On the various forms of renewable energy, I found the arguments that the committee produced against the Severn barrage to be rather less than convincing. The base load for the grid, of course, is nuclear. The flexible load is fossil fuel generating stations, which can be brought in and brought out of use as required. The tide is predictable, so a tidal barrage, like the Severn barrage, will produce electricity at a given and predictable time. That means that fossil fuel stations can be phased in or phased out, or reduce their output as the tidal barrage comes in.

Like all renewables, the problem is connection to the grid. It is extremely expensive to connect any type of large producer of electricity to the grid, but those costs just have to be faced. I accept that there is a financial problem with the Severn barrage. The return on investment is unlikely to be very high. Nevertheless, if we do nothing about climate change the return on investment will be even worse. I believe that is the sort of action on a heroic scale about which Professor Fells was talking.

I also believe that there is much more potential for photovoltaics than the committee and the noble Lord indicated. I was rather disappointed by their treatment of photovoltaics. There are only two paragraphs on solar energy. The problem is that the technology in that area is difficult. Although the technology is developing and developing quite fast, as the October issue of Electricity UK states: It comes down to a classic chicken and egg problem. As long as demand is small, production of solar energy will remain small scale and expensive, and as long as production is small scale and expensive, the price will remain high and demand small. Catch 22". I believe that at some point one has to break through that.

I turn to wind power. The technology for offshore wind power is not entirely proven. It is developing quite fast, but again the problem is the economics. The connection of large offshore wind power stations to the grid is very difficult and very expensive, but, again, it will have to be done.

Of course, onshore wind does not replace nuclear or fossil fuel generated power. It only displaces it when the wind happens to be blowing at approximately 11 mph, which is the cut-in speed, and lower than 55 mph, which is the cut-out speed. That, of course, is unreliable. So we have to keep fossil fuel stations going as back-up. Wind power will not replace fossil fuel power stations.

I understand that Denmark is well advanced in onshore wind power. I understand that 5 per cent of the electricity output of Denmark is produced by 4,700 turbines. The population of Denmark is 5.5 million; the population of the United Kingdom is 58 million. So arithmetically, if we want to achieve the same proportion of our electricity output by onshore wind power as the Danes, we would need some 45,000 wind turbines in this country. I really do not believe that that would be acceptable to public opinion. If all the wind farms in the whole world were put on to the South Downs, they would generate only 5 per cent of the total demand for electricity in the United Kingdom. Of course, we are not going to put them on the South Downs.

If the Government's figures are right—here I concede a point to the noble Lord, Lord Geddes—it means an enormous increase in the production of renewables and in their output. But this is a local problem. I am sorry that the committee did not visit Wales to see what the problem is. In Wales the most attractive places for wind farms—if one can call them "farms"—are the tops of hills. The most visually intrusive places for putting wind farms are the tops of hills. So the planning process is absolutely vital to make sure that we do not destroy our beautiful countryside in Wales.

I am sorry to say to the noble Lord, Lord Geddes, that the planning process is working very well as it is. Local people can give their views; councillors can give their views; people can get elected, or deselected on that basis. That is the way you have to proceed because you cannot force these things down people's throats, as sooner or later they will rebel. I applaud the Government's response in not changing PPG22.

There is one point on which I agree with the noble Lord, Lord Geddes. If the Government are serious, action needs to be taken now, but action needs to be taken on a very wide front. It is not just a question of one type of renewable; it is not just a question of two or three types; it is a question of getting to grips with energy efficiency and all the other things that the noble Lord spoke about, and of developing at speed the technologies which are environmentally friendly. Personally I believe that the Government should start the Severn barrage now. That would be an indication of how seriously they take this matter.

Again, Professor Fells said—I come back to where I started—that action is needed on an "heroic scale" if the Government's target is to be met. In my view, the committee has highlighted the problem, but has not produced a satisfactory solution.

11.38 a.m.

Lord Methuen

My Lords, I thank the noble Lord, Lord Geddes, for introducing the debate. It was a most fascinating inquiry and one that is highly relevant at this time. The noble Lord has been a most able chairman of our sub-committee and it has been a real pleasure to work with him during the time that I have served on the sub-committee.

The subject of our inquiry was limited to the generation of electricity from renewable sources. The technologies involved will be even more relevant to future generations. It is perhaps interesting to remember that our forebears, before the introduction of the steam engine, were perfectly familiar with and totally dependent on the use of renewable energy and its technology in the form of windmills and watermills.

One point that was specifically excluded from our inquiry, though mentioned in passing, was energy conservation. I felt that was a pity because electricity from renewables and energy conservation go hand in hand. Indeed, when we were in Copenhagen we were shown a graph which indicated that the Danes were expecting to reduce their energy consumption by 10 to 15 per cent by 2050. If we consider the likely demise of our nuclear power plants, the need to conserve energy becomes even more paramount. It may need to be achieved by long-term changes in our working lifestyle by such things as telecommuting with only occasional visits to the office. I do not usually use the M4, but the other day I got stuck in a traffic jam there. I was appalled to see that virtually every car alongside us had just one person in it. That is the type of energy conservation that needs to be emphasised at all times.

I was disappointed in the Government's response to our report. They need to get their act together if there is to be any hope of meeting their targets for the provision of electricity from renewables. The public have to be brought round to see the benefit of locally sponsored wind farms, from which they themselves will derive benefit, and thus defuse the NIMBY attitude which is so prevalent. I accept the comments of the noble Lord, Lord Williams, in relation to Wales. I have seen wind farms only in Cornwall. I live in Derbyshire and we have many sites there too which could be useful as wind farms, though I do not believe there are any at present.

It is crazy when we have probably the best environment in Europe for wind generation, both onshore and offshore, that we have such a poor success rate in the installation of wind farms. The planning regime has a significant part to play in our failure to install them and there need to be changes to ensure that a greater success rate is achieved. Success in this field could lead to significant industry in manufacturing wind turbines, creating tens of thousands of jobs and export opportunities. The same can be said for photovoltaic. We saw an active system in the University of Northumbria which was effective even when there are overcast skies, as there were when we were there.

Mass production can bring dramatic cost reductions, as we have seen in the personal computer industry. Again, there are vast overseas market opportunities. But for PV in this country we need to solve the net metering financial hurdle, as mentioned by the noble Lord, Lord Geddes, where electricity is bought and sold at vastly different figures. There are also certain technical problems to be overcome, such as "islanding", when a house is isolated in a small area and we try to feed all the neighbours rather than their obtaining their electricity from a distribution company.

I want to comment briefly on biomass. We saw examples of this both at a straw-burning plant in Denmark and in Northumberland where they were growing and using willow. Both installations were out of action when we visited due to corrosion problems, and there is obviously a lot of development necessary before they become realistic and practical installations. But with that development work, success should be achieved. However, we must remember that we have to move the biomass to the plant and we must be careful to ensure that the energy costs of transportation do not exceed the benefits of the electricity. In Denmark huge straw bales were being taken over significant distances to the plant.

I should like to comment on system distribution problems. Due to the intermittent nature of many renewable energy sources, the technology used in the generator and the often remote locations of generation sites, the operators of the grid transmission system and local distribution companies have serious anxieties with regard to system stability and frequency control. Problems may occur when the intermittent sources of supply begin to become a significant portion—say, 25 to 30 per cent—of the supply total. I understand the Danes have already experienced problems at times of low demand.

In committee we considered the Severn barrage for some time. The general opinion was that it was one of those projects that was always being put back because it was too expensive. But if it had been put in place 20 years ago it would by now be cost-effective and the initial amounts would have been written off. The noble Lord, Lord Williams of Elvel, overestimates the problem of connecting to the grid system. There are large, 400 kilovolt power lines which cross that area and I should be surprised if integration with the grid system was any problem at all.

Finally, the Government have to do much more to meet the targets which have been set and more joined-up thinking is required in these matters. I commend the report to the House.

11.45 a.m.

Earl Cathcart

My Lords, it is a great privilege to be addressing your Lordships' House in its current form. Indeed, I may well be the last hereditary Peer to make a maiden speech in your Lordships' Chamber. My maiden speech will be an easy day for me to remember as it falls on the anniversary of the Gunpowder Plot; but let me assure your Lordships that my speech will contain no fireworks, though wind maybe.

I too offer my congratulations to the Select Committee, in particular to my noble friend Lord Geddes, on its excellent report which I found informative and easy to comprehend. I live and farm in Norfolk. I am a district councillor on Breckland council. I am a member of the planning and development committee and the environment scrutiny panel, and I recently co-wrote a policy paper on the environment.

The whole subject of renewable energy should be viewed as an important part of the drive for sustainability which has been adopted wholeheartedly by government, both present and past. The Select Committee identified various features of the government and regulatory systems in this country which impact on this subject, and I have chosen to concentrate on just one or two of those.

First, I want to comment on the difficulties in obtaining planning permission. It is not the planning system that is obstructive to the development of renewables, but those who determine the planning process. Local difficulties exist when specific applications are considered. After all, all installations have an environmental impact. In Breckland, my local authority, we have a policy which positively encourages such development. The results are there to be seen in the electricity generation from poultry litter at Fibro-Thetford and the new wind turbine at Swaffham, both the largest of their kind in Britain.

Breckland has taken the view that we must contribute to global issues. Our policy is one of encouragement rather than obstruction. Sadly, not all councils take that view. Some authorities have policies which seemingly support renewables, but in practice create insurmountable obstacles to development. For example, one council encourages wind turbines—provided they are at least five kilometres from any built-up area. Just by looking at a map one can see that that becomes very restrictive, if not impossible.

As we have heard already, the report mentions the defect of planning inspectors' reports running counter to government planning policy guidelines—a clear case of a lack of joined-up thinking. So I submit that it is not the planning system which is obstructive, but the attitudes of those who determine the planning process. This report advocates more action to raise awareness of the need for renewable energy and I fully concur with that.

As my noble friend Lord Geddes said, a key feature which is impossible to disentangle from that of energy generation is energy conservation by that, I mean its frugal and responsible use in industry, public and domestic settings. Are we doing enough to reduce our energy consumption? I think not. Do we offer incentives which make a real difference? Again, I think not.

The many tried and tested ways of reducing energy use could make a significant contribution to the reduction in the greenhouse gas emissions. If these were adopted, the need for more power-generating capacity would be removed. Estimates range from 5 per cent to over 20 per cent of our energy consumption being removed by the adoption of better conservation practices. Let us compare this to the target of 10 per cent of generating capacity from renewables.

At the beginning of my remarks, I said that this subject is a sustainability issue. The thrust of sustainability is to ensure that decisions are no longer taken in isolation. The Government have described this process using the term "joined-up thinking". But the report concludes that as far as electricity from renewables goes, there is a decided lack of joined-up thinking. Indeed, many witnesses testified to their feeling of frustration at the fragmentation in the UK Government's policies.

The report recommends the establishment of a renewable energy agency, with real teeth. This is crucial if we are to have a co-ordinated approach to this whole subject and any chance at all of delivering our target, a target, agreed by the Government, that 10 per cent of the UK's energy requirement will be met by renewable energy by the year 2010.

It is this aspect of the report that I found most disappointing and indeed depressing. I did not have to read far, for on the first page of the report it states that although these targets are "technically feasible", the committee did not see them being delivered under present government policies.

But why not? Why are these targets not going to be met? There appears to be a lack of resolve on the part of the Government, whereas in other areas of planning targets have been set and the necessary procedures put in place to ensure that they are met. In particular, I am thinking of the Government's desire to have 4.4 million new houses built by 2010 (coincidentally, the same date as the renewable target). Each county was given its quota, which was then allocated to each district within the county.

In Breckland, our allocation was 10,000 new houses, and we are on target to achieve this. Surely it is not beyond the wit of man, or government, to apply a similar determined approach to renewable energy. If it can be done with housing, why can it not be done with energy?

If a renewable energy agency is to be formed, it can allocate targets to regions, as recommended in the report, via the regional development agencies. They, in turn, can then allocate to counties, and then on to districts. This would have the effect of making councils clearly accountable for the progress towards their target.

I would suggest that targets should be expressed in terms of the number of megawatts generated, rather than be too specific. This flexibility would allow each region and, indeed, each district to construct generators most applicable to its area. The UK's target by 2010 is technically achievable. What is lacking as the co-ordination and the resolve to do so. I do hope that this Government will have the courage to react positively to this report.

11.54 a.m.

The Lord Bishop of Hereford

My Lords, it is a great pleasure for me, on behalf of your Lordships, to congratulate the noble Earl, Lord Cathcart, on his notable maiden speech; indeed, a truly excellent speech, full of wisdom and interest and based on his first-hand experience in Breckland. I was particularly impressed by what the noble Earl said about the need for the conservation of energy and interested by his brief reference to the combustion of poultry litter, about which I should like to have heard more. I served my curacy in Breckland, so I can envisage those places where people are working so hard for energy conservation and renewable energy.

I warmly welcome the Select Committee's report on this immensely important matter. I have enjoyed reading it and I agree with much of it wholeheartedly. But I must first declare an interest on two counts. First, I am joint patron of Country Guardian, the organisation which opposes the large-scale development of wind turbines in sensitive landscape areas (though, I should add, not in a dogmatic or irrational way). Country Guardian is keen to see appropriate small-scale use of wind power in inconspicuous places. Secondly, I am county president for Herefordshire of the Council for the Protection of Rural England and, therefore, have another role in seeking to safeguard beautiful and precious rural areas.

I do not underestimate the very great seriousness of the problems caused by climate change and the urgency of the need to reduce greenhouse gas emissions. It is imperative, as the committee says, that we develop a clear, coherent, long-term energy policy, including the proper part to be played by renewable sources of power. I am glad to see in the report the rather chilling phrase: We have hardly begun to appreciate the difficulties that the future may bring". The overriding need is to reduce greenhouse gas emissions, and that should be the overriding objective of government policy. In seeking to meet our Kyoto commitments, and, I am sure, the very much more demanding targets which are bound to follow in the next century, the greatest emphasis must be on energy efficiency, on a reduction in the use of fossil fuels and on a complete transformation of our cavalier and self-indulgent use of road and air transport. The electricity industry is doing its bit in this regard, as is clear from the fact that, despite an increase in electricity consumption of 13 per cent between 1990 and 1997, overall emissions from electricity generation decreased by over 25 per cent in that same period—thanks to a greater emphasis on gas and nuclear as generating fuels, and much higher efficiency. If those improvements had been accompanied by a reduction in demand for power rather than an increase (and that could in fact have been achieved if we had been serious about energy conservation) emissions would have fallen even more dramatically.

So I want to set my comments on this report on renewables firmly in the context of the need for a coherent energy policy, for a proper emphasis on conservation and efficiency (and that implies, among other things, a radical change to the absurd policy of charging VAT at 17.5 per cent on insulation materials) and a serious attempt at reducing CO₂ emissions from road and air traffic.

Within that context, what part have renewables to play, in what timescale and in what proportion as between the various sources of renewable energy? These are serious and urgent questions, and I am grateful to the committee for having addressed them with such care and thoughtfulness. But I am sorry that the committee seems to have been driven to an unacceptable degree, in coming to its conclusions, by the target of achieving 10 per cent of electricity from renewables by the year 2010. That is, frankly, an arbitrary target. We have already heard that the consultation document has not yet been published. It is a target which has been plucked out of the air in order to show that we are serious about renewables and prepared to play our part properly in a European energy strategy.

The trouble with the 10 per cent by 2010 target is that it has inevitably led the committee, despite its scepticism as to whether the target is attainable, to place disproportionate emphasis on those renewable technologies which are at present most highly developed and able to deliver electricity at something very close to the market price—that is to say, wind power and energy from waste. I agree that if we were seriously to try to achieve the 10 per cent by 2010 target we would have to rely considerably on those two sources, despite their high environment cost. But I want to suggest that the environmental cost of straining every muscle to reach that target is too high. I wish that the committee had recognised that and concluded that the right way forward is to concentrate very much greater investment on research and development into the environmentally more benign forms of renewables—at present our research and development budget is preposterously small, despite the recent modest increase—so that by, say, the year 2030 there would be a good chance of a huge increase in the contribution from renewables, even as much as 30 per cent. of our by then reduced demand for power.

The long-term possibilities which look really promising in terms of generating power to feed into the grid are tidal, stream and marine current energy, more efficient and pollution free energy from waste, and possibly offshore wind, although by that I mean really offshore, over-the-horizon offshore wind, for otherwise we merely transfer the awful visual consequences of wind turbines from landscape to seascape sites.

The second hopeful approach is to reduce the degree of our dependency on the grid—although we shall of course still have to maintain it essentially as a national system; that is quite clear—by encouraging many more small-scale, local uses of renewable energy, so that many more people need the grid only as a fallback source of supply. Small-scale wind turbines in remote communities, much more domestic use of solar and photovoltaic power, much more local exploitation of energy crops, all these can make a significant contribution, in each individual case small but in aggregate of real value. I am sorry that that point was not made more powerfully in the report, though I recognise that it does recommend support of community-based energy proposals.

I comment briefly on one or two particular issues. I warmly welcome the suggestion that we should press forward with an integrated policy to encourage waste combustion, together with the exploitation of landfill gas. But I recognise the need for some convincing reassurance for the public over safety issues, for great sensitivity in the siting of waste combustion projects and, of course, for an even more vigorous policy of recycling to reduce the need for landfill sites in the first place.

I am sorry about the rather negative tone of the report in its treatment of energy crops. I am glad to see the robust response by the Government. The possibilities are, I believe, considerable, from coppiced wood in particular. There is a splendid example of this not far from Hereford in the large village of Webley, where two schools, a secondary school and a primary school, share an energy efficient and environmentally benign heating system fuelled by locally grown coppiced wood. This has provided local employment and a sense of pride and achievement in the community and has led to real environmental benefits with fuel "miles" down to a maximum of four or five as the coppiced wood is brought in from local woodlands behind a tractor.

I have already mentioned tidal power and I hope to see a much more enthusiastic government response on this. It is truly shameful that this area is not being properly funded in terms of research. I share the doubts expressed in the report about the practical difficulties and the serious environmental consequences of tidal barrages, despite their enormous potential in terms of power generation. Here I differ from the noble Lord, Lord Williams of Elvel. I know that the noble Lord knows the Welsh highlands well but he does not live on the Severn Estuary. The environmental consequences of tidal barrages are serious indeed.

Finally, I turn to wind power where I declare my particular interest. I am deeply concerned by the committee's criticisms of the planning process in relation to the development of new wind turbine installations—I shall not call them farms—and by the decisions of some planning inspectors. I am appalled by the suggestion that there should be, a presumption in favour of wind farm proposals". I am pleased to note the Government's robust and absolutely correct rejection of these criticisms in paragraphs 12 and 22 of their response. I warm to the vigour with which the noble Lord, Lord Howell of Guildford—I am sorry to see that he is not present today—described the lamentable environmental damage inflicted on central Wales and Cornwall when he stated, Visually these things are quite horrific, and are widely complained about, and I think rightly so". There are places where even quite considerable numbers of wind turbines might be sited without undue environmental damage. Blyth Harbour, which is mentioned in the report, is a case in point. Even the installations in Anglesey are not intolerably intrusive in a fairly flat and already quite developed landscape. But to contemplate the ruination of any more of our lonely and so far unspoilt hill country or coastline simply in order to meet this 10 per cent by 2000 target would be environmental vandalism of a disgraceful kind which we would live to regret.

As the committee observes, no method of energy generation is totally benign". There have to be compromises, but they must be sensible ones, not driven by panic or by an unrealistic timescale. I very much prefer the DTI's cautious and considered statement that, the Government intend to work towards the aim of achieving 10 per cent. of the UK's electricity supply from renewables", to the rather strident demands in the committee report for an unequivocal commitment to the target and determination to reach it by the implementation of "all necessary policies"—those are sinister words.

I am glad that the Government are playing a "dead bat". If it is a woolly dead bat, I know that it will not score many runs. But I hope that the woolly dead bat may be concealing a time for proper reflection and eventually the production of wise policies which will not be panic driven. By all means let us pursue a coherent, long-term energy policy and see the long-term potential of renewables, which is enormous. However, I am fearful of the prospect of what the committee calls for; namely, a renewable energy authority with real teeth". That might be a dangerous animal, especially if it sought to dismantle or override existing planning processes. I hope that the noble Lord, Lord Sainsbury of Turville, will be able to reassure us of the Government's strong commitment to well targeted research into renewables and of their continuation of their tough line on planning which is so encouragingly taken in their response to the committee report.

12.6 p.m.

Lord Paul

My Lords, I start by declaring an interest. I am chairman of Caparo Group, a company involved in manufacturing industry and, as such, a user of energy. I also wish to take this opportunity to thank the chairman of the sub-committee on which I had the pleasure to serve, the noble Lord, Lord Geddes, for his excellent leadership. Because of the rules governing committees, we shall lose our chairman at the end of the Session. However, as a result of the elections of last week, the House will continue to benefit from the noble Lord's presence. I also congratulate the noble Earl, Lord Cathcart, on his excellent maiden speech. I am sorry that we shall lose the noble Earl but we enjoyed his speech.

It is abundantly clear that one of the major issues of the coming century will concern the uses of energy. For most of the 20th century humankind has consumed energy with reckless profligacy and wanton disregard for the environment. Unfortunately the consequences of the past now demand a price and the circumstances in which we have to pay it are not the most favourable. In short, we have to find ways rapidly to reduce our use of fossil fuels, reduce our emissions of greenhouse gases and increase our use of sustainable sources of energy.

In any circumstances this is a heavy task. But we have to do it at a time when global population is both increasing and increasing its use of energy. That means questions of entitlements, social justice and all the other debates and demands that currently define the global energy-equity discussion. That larger context gives our deliberations today a certain urgency. As members of the European Union and in our sovereign capacity, we have undertaken commitments to conform with the Kyoto Protocol of 1997.

In conventional perception, the Kyoto Protocol may be just another international agreement—a set of guidelines produced by conference diplomacy. To my mind, however, it is much more. It concerns the future of Planet Earth and symbolises our participation in a covenant to sustain human life. Perhaps your Lordships may feel that I overstate the significance of Kyoto, but anything to do with the preservation and improvement of the quality of human life is surely of transcendent importance.

That is why the report of the Select Committee, of which I had the honour to be a member, is deeply disturbing. The report makes it evident that, with business as usual, we simply cannot meet our commitments to the targets set by the Kyoto Protocol. Those targets are not exceptionally excessive. With appropriate action, they are well within our capability. If we fail to meet them, that will tell us something disquieting about our own society; our commitment to the human prospect; our ability or inability to mobilise ourselves for tasks of high purpose; and our willingness to keep our sovereign obligations. In many ways, our response to Kyoto is more significant than Kyoto itself.

The report makes several recommendations that will enable fulfilment of our undertakings, which will get us from here to there. On balance, the proposals are not radical, but they do require that we urgently advance the development of several known sources of renewable energy—perhaps green energy is a more descriptive term.

Britain's target is to have 10 per cent of our electricity from renewables by the year 2010. To reach that figure will require accelerating the average recent rate of installing renewable electricity generation by a factor of about seven. On the surface, extrapolating current trends, that may seem difficult—but with policy changes and vigorous implementation, it should be well within our reach. I say that because of two intangible imperatives that are not easy to quantify but which will certainly have an impact—the velocity of technology and Britain's unequalled ability to mobilise in a crisis. That was how this country won the Second World War. We now have to understand that the challenge of energy and the environment is part of the challenge of sustaining life and ultimately is as critical as winning that war.

The Government's response to the report is encouraging, to the extent that it is almost in complete concurrence with the findings and recommendations of the Select Committee—with only one serious difference. I hope that concurrence will translate into vigorous implementation. Generally, I am not a very ardent proponent of greater government intervention—yet in matters such as these, only the momentum of government-supported efforts can provide the required co-ordination, incentives and public mobilisation. Naturally, there will be some policy and political pitfalls along the way.

Questions, such as how much the polluter should pay and what special treatment, if any, renewables should get are controversial. But we are a society that has come to realise that environmental relationships imply a balance between current costs and future benefits. What alternative have we, other than to move ahead?

Both the report and the Government's response mentioned the need for enthusing the public, which is essential. No policies and programmes in this area can work effectively without public endorsement. I am convinced that if we have the political will to proceed with resolution and despatch, we can secure that endorsement. Moreover, I see green energy and emission reduction as a category where private and public investment can engage in joint enterprise, underwritten by community involvement. It is an opportunity for an environmental compact that can be a model for sustainable development.

The report reminds us that we will not be alone in that effort. Many other responsible nations will be engaged in meeting their own targets. If those nations and our own are successful, this will be an environmentally safer world. That is surely a goal worth striving for.

12.16 p.m.

The Earl of Stair

My Lords, the Select Committee is to be congratulated on producing an excellent report. The requirement for the reduction in polluting emissions is long overdue. It is encouraging that the Committee is convinced that the United Kingdom can fulfil its obligation of 10 per cent energy from renewable sources by the year 2010. However, I agree with the statement in the report that reminds us—as did the noble Lord, Lord Geddes, in his introduction—that there is a long way to go to increase the use of renewable energy by seven times to approach that figure.

The summary to the report gives guidance, so I will not touch on that aspect further except to endorse the Committee's comments at paragraph 394, concerning the agencies that will have to co-ordinate and co-operate.

Several years ago, I conducted extensive research into the gasification of wood chips and other biomass for industrial use as steam. At that time the fuel was not competitive against hydrocarbon fuels because they were much cheaper and considerably easier to handle. Biomass has the disadvantage that the higher the moisture content, the more energy is used in the gasification of the biomass to expel the moisture and still produce a relevant energy output. The second big disadvantage is the large volume of low-density material that has to be moved from the forest or field to the factory. That increases the cost in direct relation to the distance of haul. At that time there was no Kyoto Summit and no environmental price was put on emission pollution from hydrocarbons.

The report investigates all currently feasible forms of renewable energy. I am encouraged that there is a perceived use for most of the by-products of our wasteful life. It will be a considerable improvement if, by reusing some of that material to generate electricity, we will be left with a negative CO₂ gain. It shows a good example of planning, if we can combine landfill sites with electricity generation—perhaps fuelling the generation by combustible rubbish and using the domestic waste to generate methane in a dual-fuel furnace.

If such waste processing schemes are to work, the important parts will be planning and public relations in regard to the environmental impact that the plants will have. Scare stories and rumours, particularly about dioxins and heavy metals, can cause serious delays in the development of power systems.

While wind generation is seen as an immediate opportunity, I am disappointed that the outlook for energy crops is not so encouraging. In line with the European reorganisation of the CAP, this would have been the perfect opportunity to encourage fuel crops on surplus agricultural land.

Forestry timber in Scotland has suffered a drop in market sales of 37 per cent over the past two years, due partly to the strong pound, but also to the mass import of cheaply produced timber from eastern Europe. There is a tremendous resource of timber and timber residues that could be converted to fuel for regional power plants; making use of the report's suggested assistance from the Government to start the system off.

The report implies that energy crops are more expensive than others, such as landfill and wind power. However, with sympathetic planning that could be improved. First, much of the cost for energy costs lies in the transport distance the material has to be taken by road to a power plant. If the exemption on tax which is currently applied to agricultural diesel was extended to renewable energy supplies and restricted to specified vehicles on the road, the price would be dramatically reduced. Secondly, if a 0.6 pence per kilowatt climate change levy were to be removed, the price would be further reduced. The report suggests several ways in which this can be achieved through community incentives. I do not wish to go into them any further at this stage.

Wind turbines have recently been one of the most controversial forms of renewable energy. Without doubt, wind farms are extremely unattractive because the only place they are remotely efficient is on the top of hills. It is of relatively little relevance that they have become quieter with recent development. There is a further unknown impact on the populations of bird life which live in the vicinity of these farms.

However, I agree that offshore wind farms should be developed. The only doubt I have is that these sea-borne units will hot be sufficiently high above the surface to make efficient use of the wind flows. I suspect that, from an environmental aspect, anything involving the sea or tidal flows will prove too controversial, too expensive and too complicated in the short term.

The report is very interesting. It gives great encouragement to getting under way some environmentally beneficial power generation. On the continent—especially in Scandinavia—localised power generation has been actively encouraged for many years. I hope that the Government will be able to facilitate the development of renewable energy in line with the report's recommendations.

12.22 p.m.

Lord Berkeley

My Lords, in the past few days, many noble Lords may have seen in the press quite a lot of discussion about the Kyoto targets. I recall reading that my right honourable friend the Deputy Prime Minister was slightly critical of the United States for not doing more to play its part in reducing the targets. There has been a big debate between the developed world, developed nations, and the third world as to who should set the example. This provides an opportunity for the member states of the European Union to set an example. We may be wobbling a bit in our targets—to which I shall come later—but we are doing quite well. It is terribly important that the United States plays its part as a demonstration to the rest of the world. There is total agreement that the targets have to be met or bettered.

I have the honour to be a member of the committee. I congratulate the noble Lord, Lord Geddes, on chairing it fairly, with humour, on keeping us moving and on stopping us from developing our own pet projects—some of which will probably emerge during the debate. But that is what these debates are about.

My feeling about the subject is that we do not need to be so cautious; the technology is there for many of the systems, as we have heard this morning. We can argue about which technologies, but, taken in the round, they are all there or can be developed quite quickly in a process which will reduce their price. We have heard an awful lot about technologies which are good or which are bad. We could move towards the stage where we say that all these technologies are fine—we want the electricity—but we do not want it generated in our backyard because our backyard is nice. It could be on the end of a jetty in Blyth; not many people live there and it does not matter so much. It could be out at sea, provided we do not see it.

When I was much younger I worked briefly on the Severn Barrage. I was interested to hear what my noble friend Lord Williams of Elvel said about that. There are, equally, environmental pressures and problems for the bird and marine life connected with that scheme.

We must not forget that there are environmental pressures with regard to greenhouse gases—which is where we started. If we do not want to have any electricity generators, that is fine, but we have to balance these matters. One could call the reasons for global warming "environmental vandalism", as the right reverend Prelate said. We have to balance all these matters—but it is a question of how we do so.

I believe that wind technology is proven. The committee saw it in operation in Denmark; it is quiet. I believe that there is a place for it, but I accept that it should not be on the tops of beautiful mountains. I see also a role for wind generators— if that is what we like to call them—on some of the structures that litter the Thames estuary, which the people who live there probably see. Many are relics from previous oil or gas explorations or from wartime defences. They do not look particularly nice and one could probably build on them.

Offshore technology for wind generation is exactly the same as that for onshore generation, except that the wind probably blows more constantly offshore and there may be more problems with connecting to the grid. But the technology is there and should be looked at. We have talked about tidal power. A lot could be done also with the photovoltaic in the longer term. I shall return to that matter shortly.

My general conclusion is that renewables can achieve the target. The question is which ones—it is probably several—and how. The report went into whether the target could be achieved with a number of small projects developed locally. I hope that the Government will pick this up; their response was not quite clear. Again, we saw this in Denmark. It is not a question of which project but of local communities having ownership of whatever is the plant or facility. That ownership can be financial ownership, community ownership or a kind of technical ownership. The community gets something out of it—which may be reduced costs for electricity, pride in what they have achieved or a benefit to the environment, whatever it is.

There needs to be a mechanism to encourage this practice. The Government have said they will do so through the regional development agencies. Whether targets are the right solution—as the noble Lord, Lord Cathcart, said in his excellent maiden speech—should also be looked at.

Let me now turn briefly to the photovoltaic question. It was mentioned by the noble Lord, Lord Geddes, in his opening remarks. I believe that the technology is proven. The noble Lord spoke about the house in Oxford which some of us visited. I know of another project which, sadly, illustrates a similar problem.

Greenpeace sponsored a demonstration in three houses on the Peabody Estate in Silvertown, east London. A very small installation of slightly more than a kilowatt was situated on top of each roof at a cost of approximately £6,000. The objective was that the tenants should save £60 a year in electricity costs. In that kind of estate, £60 a year is quite a saving. It is more than half of the cold weather payment that we were debating recently. The problem was that they met the same obstruction—I use the word advisedly—from the electricity board as happened in Oxford. It took a year to negotiate the contract. The board sold at 8p and bought at 2.9p—which are figures similar to those mentioned by the noble Lord, Lord Geddes. The board required the tenants to hire a special new meter; they could not buy it. In Oxford, the board reserved the right to read the meter every 30 minutes while the exporting was going on, and it was going to charge £26 for every reading. In both cases this would have resulted in the tenants paying the electricity board for the privilege of exporting power. The board came up with many technical reasons to hide behind what I believe are straight bullying tactics.

Net or revenue reverse metering, as the report said, is feasible for quite high levels of inputs, and is applicable to photovoltaic, small wind powers and small hydro powers. I believe that the public, investors and developers are hungry to participate in using renewables of whatever kind. However, they need a policy and incentives. They also need to feel that they are being fairly treated. Projects like the photovoltaic cells used in Silvertown, if installed widely in affordable housing, could greatly assist in reducing social exclusion at a very low cost. However, they must be able to sell back the electricity.

I must say that I was very unimpressed with the evidence presented to the committee from the regulators. They did not seem to believe that net metering or helping small-scale installations had anything to do with them. They felt that it comprised a great number of little people who were trying to dribble back into the grid and that the big boys would not like it. But lots of dribbles make a river and that river could significantly contribute to the 10 per cent target. For that reason, I hope that the Government will provide instructions to the regulators to change their policy on the matter.

Perhaps I may say a few words on jobs. Power for the New Millennium: Benefiting from Tomorrow's Renewable Energy Markets is an interesting report produced for Greenpeace by Forum for the Future. It points out that five to 10 times more jobs would be created in the construction and operation of renewables than are available today with gas-powered stations. My message to the Minister is that I do not see a downside in opting for renewable energy sources. It is a win-win situation. I hope that the Government will have the courage, in the best sense of the word, to move a little faster on the issue.

12.31 p.m.

The Earl of Cranbrook

My Lords, like other speakers, I congratulate my noble friend Lord Geddes and his committee on producing a powerful report. I also welcome the maiden speech of my noble friend Lord Cathcart. It was a thoughtful and profound contribution in many ways.

Not only is it Guy Fawkes Day today, as has been drawn to our attention by the noble Lord, Lord Berkeley; it has been the week during which we had the fifth meeting of the parties to the Convention of Climate Change. In preparation for that, the Hadley Centre for Climate Prediction and Research prepared an updated paper for the conference of parties. The paper has been available on the Web for a little time, and has been published by the Department of the Environment, Transport and the Regions under the title Climate Change and its Impacts. The foreword written by the Deputy Prime Minister must be one the gloomiest that has ever been written over the name of a Secretary of State for the Environment. I am sorry that the right reverend Prelate has left the Chamber because the Deputy Prime Minister says here that: without action to curb emissions [of greenhouse gases], many parts of the world will suffer severely from the effects of climate change in the lifetime of many people alive today … even stabilising carbon dioxide at twice pre-industrial levels, which is the EU objective—and which represents a considerable challenge—will nevertheless entail significant damage". He goes on to list the severe damage that may occur in many parts of the world under the latest Hadley predictions. The only totally bizarre point here is that the right honourable gentleman Mr John Prescott has chosen one of his "chubby cherub" photographs to head the piece. I strongly advise his public relations team to acquire a much more set-jawed, determined and resolute image to accompany such serious and gloomy messages. This is a very real and serious issue.

In paragraphs 248 and 249 of the report my noble friend Lord Geddes makes it clear that "renewables" in the terms of the committee's report and under the terms of the United Kingdom targets do include municipal wastes. At the same time as Sub-Committee B of my noble friend Lord Geddes was conducting this inquiry, Sub-Committee C, which I chair, was examining the proposal for a Council Directive on Incineration of Wastes, COM(98)588 final. Our report was ordered to be published a fortnight earlier than that for my noble friend Lord Geddes—we just beat him to the post—but the Government have been much more laggardly in their reply, which we received only on 29th October. However, I have given notice that today I shall be speaking on matters of cross-interest between the two reports.

As has been indicated in the Government's reply to the report on the incineration of wastes, progress on the waste incineration directive has been diverted by action in the European Parliament, by decisions taken at the June 1999 Environmental Council and by the publication of an amended waste incineration proposal by the European Commission. Furthermore, the whole issue is now under review by the new European Parliament. For that reason, my intervention today does not preclude a much fuller debate at a later date when a clearer picture emerges on the question of incineration processes. However, particular attention will need to be paid to wider aspects, including the position of incineration in an overall strategy for wastes management, emission standards and public health issues. However, it is appropriate for me to thank our specialist adviser, Professor Judith Petts, who is now deputy director of the Centre for Environmental Research and Training at the University of Birmingham. Furthermore, I thank the witnesses who assisted us and my fellow members of the committee who took part in the inquiry.

Wastes are substances that must be destroyed or disposed of under safe conditions. One disposal route that can be taken is incineration under controlled conditions. In whatever form it re-emerges, the revised wastes incineration directive will surely contain the requirement that best endeavours must be made to utilise the resultant energy. For that reason, the key point for today's debate is that wastes can substitute primary fuels in thermal processes for the production of energy. In that way, the incineration of wastes can lessen the overall production of carbon dioxide, which is the most abundant of the greenhouse gases to threaten the world's climate.

The debate today is focused on electricity generation, but it is actually far more efficient to make direct use of the heat of combustion. The members of Sub-Committee C were impressed by the extent to which cement kilns in particular can directly use the heat from burning certain wastes with or without pre-treatment. That process is known by the general name of co-incineration. The committee firmly recommended that so long as it is possible to comply with emission standards, all opportunities should be seized for the increased use of co-incineration. Co-incinerated wastes include treated liquid wastes which are marketed as secondary liquid fuels. In paragraph 85 of its report, the committee recommended that no barriers should be put in the way of continued use of secondary liquid fuels except those that can be justified on health and environmental grounds.

Our attitude was the same towards co-incinerated solid wastes; for example, arisals from carpet manufacture and so forth. In Belgium, I have seen problematic wastes successfully co-incinerated in cement kilns; for instance, sewage sludge mixed with sawdust from furniture manufacturers.

I therefore welcome the Government's positive response to the committee's set of recommendations on co-incineration—and I shall quote from the government response to the report from Sub-Committee C— properly regulated, this technology can recover significant value from wastes, displace the use of fossil fuels and help to reduce fuel costs for businesses". In their response the Government added their views on the treatment of used tyres for incinerated waste. The European Union directive will ban whole tyres from landfill by 2003 and shredded tyres by 2006. That will create a very considerable problem for the disposal of useless and worn tyres. In their response the Government have stated that they, consider that recovery in properly controlled cement kilns will have a key and increasing role to play". In that context, I presume that "recovery" means energy recovery. I hope that when he replies the noble Lord, Lord Sainsbury, will assure us that there will now be a strong government effort to promote such disposal routes through co-incineration with the direct recovery of energy.

The Government's response also supports the conclusion of both committees that in a system of sustainable waste management there will be a need for modern municipal waste incinerators with tight emission controls to protect the environment and public health. Furthermore, it may provide combined heat and power where practicable. In this area the government response is somewhat defensive. It attempts to defend the UK record for combined heat and power from waste. However, the figures speak for themselves. There are only two schemes in Sheffield and Nottingham. What should be the flagship scheme, the south-east London SELCHP scheme, is a misnomer because of failure to agree by the local authorities involved which it would serve. There is no combined heat and power being provided by SELCHP.

Sustainable waste management will give proper emphasis to the waste hierarchy. The prior objectives, as the right reverend Prelate said, must always be for waste reduction, recovery and recycling. The key question posed by Sub-Committee C is: what additional capacity will be needed? In this country only 10 waste incinerators are currently in operation, disposing of about 7 per cent of national waste arisings. The noble Lord, Lord Geddes, referred to a déjà vu experience. I, too, have a déjà vu experience. In 1989 I chaired the precursor of Sub-Committee C on the issue of incinerators. At that time we warned against the loss of existing incineration facilities. They were lost and difficulties are now being encountered in restoring them.

When we took evidence from the Minister, the right honourable Michael Meacher, the departmental estimate was that between 28 and 165 new incinerators would be needed in the United Kingdom to meet the targets of the landfill directive. As a committee, we were astonished at the imprecision of those predictions and we commented: We have been offered no indication where these plants might be sited, or their capacity". The answer, in the Government's response of 29th October, when one finds it, is quite simple. The Government state that: it will never be possible for the Government to suggest an exact number of facilities". Sub-Committee C also said: We find it inconceivable that, without direct government intervention, as many as 165 plants would ever receive planning permission". The role of the planning system has been a prominent feature of the debate so far. The report of the noble Lord, Lord Geddes, deals in some detail with the difficulties that are encountered in planning permission for renewable energy installations and recommends that the national policy for renewable energy should be an integral part of planning guidelines. What happens at present? As the noble Lord, Lord Williams of Elvel, indicated, there is considerable opposition to, for instance, wind farms. I notice that the Council for National Parks, which is an organisation I support, listed as one of its three main achievements of the past year successful opposition to a proposed wind farm fought against through a long and expensive public inquiry. In another context, some other local action group or NGO may well be boasting of its achievement in beating off a CHP incinerator for municipal waste.

Denmark has been widely quoted. Denmark has a high level of municipal incineration providing combined heat and power. When we visited West Jutland recently on another committee visit we found that some 10 per cent of the power supply is already provided by wind generation and there is a target there of 50 per cent, apparently with full public consent.

So the United Kingdom has fallen behind. Whatever one may say about our planning system, one has to face up to the fact that it is incurably adversarial. A solution must be found to shorten the process and to eliminate the resentment and the reaction that inevitably arise after huge contested inquiries where one party always feels aggrieved and resentful.

I agree with the Government in rejecting the solution put forward by Sub-Committee B that there should be a general planning presumption in favour either of wind farms or waste incinerators. There are important planning conditions in both cases. But the Government's response to the report is dead bat and is woolly. There are seven paragraphs of total obfuscation and obscure jargon ending up with the rather extraordinary sentence that this process will, encourage regional planning bodies to set targets in RPG, where sensible to do so, for the structure plan and UDP areas within the region consistent with the regional target provided by the regional framework. Advice on this will be in the final version of PPG11, due to be issued later this year". We must wait for that with bated breath. In Wales there is separate planning policy guidance and in Scotland we are told that the promotion of renewables is devolved to the Scottish Executive and is an issue of considerable interest to the Scottish Parliament. The only catch phrase I do not see is "world class benchmarks".

The response to the committee's report is weak and temporising. Something has gone wrong. When these targets are achievable, as the noble Lord, Lord Berkeley, said, and when there is a great variety of ways in which renewable energy can be obtained, why cannot we get our act together? I believe that one of the problems is the mixed and uneven devolved constitutional structure that has been put in place. That lacks the defining federal centre with the obligations and the powers to take a lead on critically important global and national issues. It seems to me that the United Kingdom Government, which we have to distinguish quite frequently from the administration of England—although it is the same people at different levels—have abdicated entirely the role of national government in an important area. We are left with a system which is so devolved that it lacks the ability to come together in a coherent way.

The solution proposed by the committee for the establishment of a dedicated agency has been rejected by the Government but I am pleased to see that the Government have accepted the committee's recommendation that they should undertake an authoritative public attitude survey. But I think that much more than that is needed. What I should like the Minister to say is that he will commit the Government immediately to a national consensus conference sponsored by the Government and clearly led by central government but without preconditions and involving, if I may use the jargon, all the stakeholders, including the NGOs, the energy producers and the vast range of people who have a special interest in different renewable processes. We need an immediate focus because the problem is urgent. We need to determine what renewable facilities are needed, including wind farms and waste incinerators with CHP, and where they will be placed. Let us predict in advance where these will be needed and where they will be acceptable so that the process can march on with the speed that is necessary.

It has already been said in the debate that action is needed on an heroic scale. The Government cannot opt out of the national duty of governance that will be sorely needed with regard to the global disasters that are predicted by the Secretary of State for the Environment, Transport and the Regions and the Deputy Prime Minister in his foreword to the Hadley Centre report. Those disasters can only be alleviated because, as the report makes clear, many of them can no longer be averted.

12.46 p.m.

Lord Brooke of Alverthorpe

My Lords, as a member of the European Communities Committee, I pay tribute to our chairman, the noble Lord, Lord Geddes, for the excellent leadership which he gave us throughout this complex inquiry. I express gratitude, too, to our specialist adviser, David Milborrow, and our clerk, Roger Morgan, for helping us to produce a wide-ranging but coherent and constructive report on this important topic. I should also like to thank the many witnesses who gave evidence to us. I hope they feel that their efforts were worth while. I should like to thank the Government for responding to our report. We had a quite lengthy response from them. Notwithstanding the length, I have to join previous speakers in expressing a shade of disappointment with what they have had to say. I rather suspect that many of those who gave evidence will share those feelings.

Why do I say that? I sense that as time has passed there appears to have been some weakening of the Government's manifesto commitment to a new and strong drive to develop renewable sources of energy; specifically, achieving 10 per cent of UK electricity requirements from renewables by 2010. Further qualifications of this target seem to appear every time another review or statement on renewables is made. The statement to us in October reads: Development of renewable energy, along with the promotion of improved energy efficiency and CHP, is an essential component of any cost-effective climate change strategy". We have no problem with that. It continues: A combination of all these factors will be needed". We have no problem with that in the committee. The statement goes on: The Government has announced its intention of working towards the aim of achieving 10% of the UK's electricity supply from renewable sources". That was quoted by my noble friend Lord Geddes. However, he missed something out. The statement went on to say, as soon as possible". So in fact a further qualification has been added to that.

That hardly sounds like a firm and ringing recommitment to the 2010 target for renewables or indeed to the 2003 target. Moreover, our confidence in that has been further undermined by the Government's announcement that another statement on renewables will come some time next year after a new draft climate change programme has been published around the turn of the year. The latter, we are, told will recommit the Government to ensuring that the UK meets its climate change targets. That is good news, as is the subsequent distribution of the Kyoto target in the European Union. The Government state that there will only be moves towards meeting the more challenging domestic goals for renewables. As I understand it, that represents a shift in policy position since the Government first talked to us on the matter 12 months ago. I should be grateful if my noble friend would tell me whether I am right or wrong. I must say that I should prefer to be wrong.

Will my noble friend tell the House when the renewables statement is likely to be made? Will it be a programme with targets, and if not, why not? Is he aware that doubts are beginning to arise, and also within the renewables industry, about the Government's ability to deliver their target of 5 per cent of electricity from renewable energy sources from 2003? That is worrying. While the 2010 target has always been stretching, so far there has not been the same amount of questioning about delivery of the 5 per cent target for 2003. That depends significantly on presently developing, and existing, contracts for electricity from renewables being maintained. As regards contracts reached on the non-fossil fuel obligation (NFFO) arrangements, with the restructuring of the electricity industry the NFFO support mechanisms are likely to go. So there are understandable fears that renewable contracts could be at risk. In turn, the 2003 target could be at risk. Like other speakers, I ask my noble friend the Minister to endeavour to assuage the fears, particularly in the industry, and at least recommit the Government firmly to the 5 per cent target for 2003.

The Government have already said that that is, critically dependent on maintaining the integrity of the existing contracts through the reform process currently under way in the electricity market". Will my noble friend indicate how they intend to achieve that? Does he foresee the plans being acceptable to existing contractors? If not, will my noble friend listen to their concerns and meet with them?

I apologise for rather labouring these points and concentrating almost exclusively on the issue of targets—I was pleased to note that the right reverend Prelate took up the same point; indeed, he voiced criticism—but unless there is a firm commitment in relation to those targets, the many statements that we have made in the report and the recommendations in other areas are worth nothing. We really must stick with the attempt to obtain firm commitments from the Government.

On the positive side, I welcome the lead role that the Government adopted at Kyoto. The UK accepted that urgent action is required on global warming and climate change. As we heard today, the Hadley Report re-emphasises the fact that there are even greater problems ahead, that there is no time to be wasted and that we must move quickly. I am pleased that the Deputy Prime Minister has taken the matter on board promptly.

The UK adopted more onerous greenhouse gas obligations than most of our European partners, and we set internal targets that go well beyond even those savings. The committee believes, as I do personally, that we should stick to them. This is a global issue. There is no escape from the consequences of our failure, or that of others, to act. We must use our influence with other countries within the EU, and especially with the USA, to encourage an adequate level of commitment and a sense or urgency— and in China also. The best approach is to set a good example by doing it ourselves. Our report sets out a way forward based on that example. I commend it to the House.

12.54 p.m.

Lord Lucas

My Lords, I congratulate my noble friend on the production of this excellent and timely report. I, uniquely among speakers so far, remain a sceptic about global warming. If we manage to double the level of carbon dioxide in the atmosphere, my judgment is that, with luck, it will postpone the onset of the next Ice Age by 200 years, and I am in favour of that. In the meantime, it will help my garden grow, and I am also in favour of that. If anyone is listening, we could do with a bit of global warming in the Chamber at the moment. I do not know whether there is a tap that can be turned, but I have been getting very cold sitting on these Benches.

Regardless of matters of timing, and however relevant or irrelevant the quota for Kyoto, it is clear that the fossil fuels that we are using will run out and that there will be a need to develop other means of supplying energy. In the process of fossil fuels running out, we shall at one time or another encounter some pretty severe shocks in regard to supply and price, which, if we have not prepared for them by putting in place a good quantity of renewable energy, will be much more damaging for this country than they need be.

We face a future that is unpredictable in the long term. The Government and successive governments must approach the matter with determination and consistency. The first thing that a government must do—more so than the present Government are doing—is to provide for research. That is a long-term area, and one where there are a number of possible solutions, none of which yet seems likely to be "the one". We cannot see where that is likely to happen. It is essential to keep research going on a broad range of activities, and not be put off by my noble friend's pessimism about the possibility of agriculture providing some of the sources of energy. We must look broadly and widely, and make sure that we do not attempt to back individual horses at this stage.

The Government must also develop the technologies that are beginning to look promising, and must support their early commercial development. Too many technologies have had their birth in this country but have gone on to be developed elsewhere because we have not allowed them to begin their commercialisation here. When we come to technologies such as photovoltaic, in which we have a major company as a world leader, it is essential that we continue to provide opportunities in this country for that technology to be used.

One crucial thing that the Government can do in that connection is attempt to remove some of the distortions that are present in the system. Net metering has been referred to by many speakers and it is mentioned in my noble friend's report. It is an enormous disincentive to people trying out small projects on a local basis. At present, the grid can clearly afford inputs from such sources without incurring any great costs or distortions. It is essential that we should allow those types of projects to go forward on the most profitable and commercially sensible basis by offering net metering and not imposing on them the extraordinary costs that the generators seem to want to impose.

We must also concentrate on storage. I have not seen that mentioned in the report. I declare an interest. Local schemes, particularly those that rely on intermittent sources of energy, require methods of storing that energy so that it can be dispensed over the period in which it is likely to be used locally; otherwise, we need to rely on a National Grid into which the energy can be fed. One of the principal contenders in that area, although it is not the only technology by any means, is the use of fuel cells to produce a hydrogen-based economy. Intermittent power is used to produce hydrogen, and the hydrogen is converted into power as required. That kind of avenue and that type of technology should come within this area. We are some way away from major commercial possibilities; however, the Government should not neglect that method when considering renewables. Sources of energy produced locally have many advantages. They can use local types of fuel, initiative and labour that are not available on a larger scale. If ways can be found to use those energy sources locally rather than transport them long distances, it is more likely that they will be commercially viable.

This report comes at a time when it appears that the Government are flagging in their resolve. Although I do not share the great fear of global warming that appears to motivate so many people in this area, I believe that it is something on which the Government must press ahead. They must make clear their planning policies and support for small-scale renewable energy initiatives so that they do not run into difficulties of the kind which mean that in the end we lose out on this technology.

1 p.m.

Lord Judd

My Lords, at the outset I must declare an interest. Apart from my membership of various environmental organisations, I am an honorary vice-president of the Council for National Parks and serve on the north west regional committee of the National Trust. I am also fortunate to live in a national park. Tribute should be paid to the noble Lord, Lord Geddes, supported by the members of the committee, for this interesting report. If it is in order, tributes should also be paid to others, such as the noble Earl, Lord Cranbrook, under whose distinguished chairmanship I have been privileged to serve on Sub-Committee C, for all that they have done on kindred committees.

Sometimes I feel that committees of this House which deal with environmental concerns haplessly struggle to contain the consequences of a situation that is out of our control and that we are fiddling with detail while a potentially terminal environmental crisis gathers momentum. Whether it be waste management, biodiversity or power, we could yet be damned by history for masking the symptoms of a fatal social disease; namely, that our present style of materialist growth simply cannot be sustained. If we do not look out we shall bury ourselves in our own waste, irreparably harm the globe's ecological systems, destroy biodiversity and eliminate the space and aesthetic balance, not least the beauty of our countryside, without which the wellbeing of our species will undoubtedly be damaged, perhaps fatally.

Remember, all the warning signs are there, not least on global warming and its devastating consequences. While a mere 25 per cent of the world's population continues to consume 80 per cent of the world's resources, God knows what will happen as the excluded demand their fair share. We simply must reduce the waste that we produce, limit the energy that we consume, protect the open spaces—the lungs of humanity—stop talking about agricultural policy with certain environmental responsibilities and begin to talk about environmental management, of which agriculture is merely a part. These are the urgent realities.

The truth is that a grip on environmental strategy is central to any kind of relevant politics. That raises the most immense issues of access, equity and justice. Without this priority becoming a constant, evident reality for the United Kingdom, and the international community as a whole, all our work in Select Committees may add up to nothing more than occupational therapy for those of us who do it—card playing while the "Titanic" sinks.

For all those reasons, I am 100 per cent in favour of producing energy from a variety of renewable resources. Among them I welcome wind power, but I favour it as a means to a decent, balanced and sustainable society. Wind power, or any other alternative power, must be planned in such a way that it does not destroy what it is there to serve. That is why much clearer guidance is needed on where wind power developments in either onshore or offshore locations are environmentally acceptable and where they are not. There is an urgent need to use stakeholder inputs to regional, county and district planning in order to identify the most environmentally suitable areas for the development of renewable energy in general and the wind energy resource in particular.

There are indeed places where wind and other renewable energy generation can be developed in an environmentally benign way. The coast north of Workington, Liverpool docks, or Blyth Quay, to which the report refers, are all examples. Renewable energy strategies, such as those pioneered in Cumbria and Cornwall, are needed to guide developers to such places. Their preparation should involve full public consultation and participation by local communities. However, we must beware of putting all the load on the relatively disadvantaged, creating new social sinks where we expect to find the power generation, the incinerators, the sewage works and the poor.

When we consider future planning for renewables it is essential that some kind of environmental appraisal is built into the incentive process. This will help to weed out the most environmentally questionable applications. I think of those on the fringes of national parks that keep being refused but will not take no for an answer. For example, there is a proposal for a wind power station at Mynydd Cilciffeth on the edge of the Pembroke National Park which I understand has recently raised its head for the third time in three years. Such an appraisal will also help to direct developers towards more environmentally acceptable locations, thereby reducing delays in the planning system.

Government guidance should make it much clearer where such developments are acceptable and where they are not. Nationally designated special landscapes and their fringes need stronger protection within planning policy guidance on renewables. Planning policy guidance in this context should underline that national parks are afforded the highest status of protection for landscape and scenic beauty: It is essential that planning guidance is not weakened to secure permission for developments that would otherwise be unacceptable, particularly in designated areas.

By being clearer on the appropriate siting of wind energy developments and in future introducing a form of prior environmental appraisal, the planning system would hold the key to the Government's policy on renewables. It would enhance countryside protection, increase public support for renewables and direct developers to environmentally more acceptable locations. It must be recognised that the sensitive boundary zones around the national parks are under great pressure from large-scale wind energy development.

Considerable pressure is being exerted by developers. The boundary zones of the Lake District, Snowdonia, the Pembrokeshire coast and Yorkshire Dales have been particular targets. As turbine size increases, the visually sensitive zone around the national parks will obviously become enlarged. For all those reasons, financial support should be given to a wider mix of renewable technologies, such as photovoltaics and solar energy. That will increase the choices available to the public and local authorities in deciding what renewables are appropriate for their areas.

The non-fossil fuel obligation inevitably encourages developers to target the economically most advantageous sites. As my noble friend Lord Williams of Elvel powerfully argued, this means that areas of greatest landscape sensitivity are the preferred choice for developers because that is where the highest wind speeds are to be found. NFFO's narrow focus on cost has encouraged the insensitive siting of wind turbines in or near nationally recognised landscapes. I believe it is highly questionable to claim that NFFO has been a considerable success because of the environmental benefits of the wind energy projects that it has supported. Surely, financial contracts for new wind power developments should take account of a range of environmental considerations, including the landscape and wild life impacts.

I should like to put five specific questions to my noble friend. First, does he agree that policies for renewable resources should be set within a strategic framework for energy policy, with emphasis given to measures to promote a reduction in energy consumption and efficiency? Secondly, does he agree that public policy guidelines should be speedily reviewed with a view to giving clear strategic guidance on developing regionally based policies for renewables and stronger protection for national parks and their sensitive fringes? Thirdly, does my noble friend agree that the planting of large-scale energy crops and the deployment of offshore wind turbines should be brought under the control of the local use planning system? Fourthly, does he agree that financial support should be made available for a portfolio of renewable technologies, including small-scale and community-based schemes? Fifthly and finally, does my noble friend agree that projects should be required to obtain planning permission prior to receiving a financial contract, and there should be a sustainability appraisal for each round of contracts under the future support arrangements?

Wild landscapes are a valid and genuine sustainable development issue. Future generations will need clean energy, but they will also need open and wild countryside. I believe that if ever there was a dimension of human affairs where the drive and rules of the market must be balanced by intervention for the common good, unarguably this is one.