HL Deb 16 October 2002 vol 639 cc851-3

2.50 p.m.

Lord Ezra

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I wish to declare an interest in small-scale electricity generation.

The Question was as follows:

To ask Her Majesty's Government what efforts they are making to promote clean energy, in addition to renewables.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)

My Lords, the Government believe that it is important to promote clean energy as well as renewables and we are therefore supporting a £17 million programme of R&D and technology transfer for cleaner coal technologies as well as developing a project to support retrofitting of a supercritical boiler in an existing power station. In this year's Budget we exempted both good quality combined heat and power and coal-mine methane from the climate change levy. Following on from the Chief Scientific Adviser's review of energy research and the PIU's energy review, we are also investigating the feasibility of CO2 sequestration, which should benefit all forms of power generation using fossil fuels.

Lord Ezra

My Lords, I thank the Minister for that Answer. Does he accept that the amount of support given to renewables is much more than is given to other means of producing clean energy? Is he aware, for example, that new projects in combined heat and power have recently dried up because of lack of sufficient support, even though the Government favour that type of development? Is he also aware that more effort could be put into the recovery of methane from coal mines and into small-scale combined heat and power, all of which can contribute substantially to cleaner energy?

Lord Sainsbury of Turville

My Lords, as regards energy, we need to look at the whole range of options. With the review that has been undertaken by the Chief Scientific Adviser on the R&D side, we are beginning properly to align larger amounts of support and R&D with the opportunities which exist in each different kind of energy resource.

Lord Jenkin of Roding

My Lords, is the Minister aware that, welcome though it was, the exemption from the climate change levy for coal-mine methane did no more than cancel out the effect of the reduction in electricity prices? Is he also aware that if there is to be any significant increase in the entrapment of methane from that source, contributing massively to the Government's environmental objectives, the equivalent of the renewables' obligation must be extended to the operators of coal-mine methane extraction?

Lord Sainsbury of Turville

My Lords, we made the exemption from the climate change levy because we were asked to do so. It seemed to me entirely right that we should. The electricity price has gone the other way, but that means merely that the market price for energy has gone down, and rightly so.

We have debated previously whether coal-mine methane is a renewable and it is quite clear that it is not, under any of the definitions. Therefore, it is not appropriate that we should put it in the same category.

Lord Avebury

My Lords, the Minister says that coal-mine methane is not a renewable, but why is it not exempted from the climate change levy when landfill methane is so exempted? Furthermore, why in Germany are both types of methane exempted? Why do we not follow the same pattern?

Lord Sainsbury of Turville

My Lords, the simple answer is that the Germans have got it wrong. There is a clear distinction between methane that is produced by landfill, which is entirely renewable, and methane that is produced by coal, which is not renewable. Therefore, if one included methane from coal, how does one keep coal from being renewable? Clearly, on that ground the position is in danger of becoming ridiculous because we would put everything in the category of renewables. That is why a line must be clearly drawn between those two sources of energy.

Lord Hodgson of Astley Abbotts

My Lords, in the light of the Minister's replies, in which he stresses the importance of clean energy, will he explain to the House the logic behind the decision of his colleague, the Secretary of State, not to exempt British Energy from the climate change levy when British Energy, as a nuclear generator producing about one-fifth of the nation's electricity, makes no climate emissions at all?

Lord Sainsbury of Turville

My Lords, perhaps I may first welcome the noble Lord, Lord Hodgson, to the Front Bench.

Noble Lords

Hear, hear!

Lord Sainsbury of Turville

My Lords, after his distinguished performance in the House last night, I am sure that he will be equally distinguished on the Front Bench. The answer is that we have taken no final decision on British Energy; we have simply given it a loan up to a date in November. Those issues will be covered in the White Paper.

Lord Hardy of Wath

My Lords, will my noble friend accept that methane is at least 20 times more noxious than the normal gases which people associate with power stations and with the clean technology that the Government are pursuing?

Lord Sainsbury of Turville

My Lords, that is correct, and that is why we made the change which I have mentioned to the House. However, I still do not believe that it makes a difference to the question of whether it is renewable.

Lord Elton

My Lords, does not the Minister's answer in regard to Germany make one wonder whether other countries in the European Community are better at getting it wrong than we are? Perhaps we should sometimes get it wrong in our own favour, too.

Lord Sainsbury of Turville

My Lords, it is always nice to hear praise from that side of the House of any country in the European Union.