Combined Heat and Power (Hansard, 23 February 2004)

§ Lord Ezra
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest in the small-scale generation of electricity.
The Question was as follows:
To ask Her Majesty's Government what are the prospects of achieving 10 gigawatts of combined heat and power by 2010.

§ The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)
My Lords, before I answer this Question, I am reliably informed that today is the birthday of the noble Lord, Lord Ezra. I am sure he will ask this Question on subsequent birthdays up to 2010.
Although this is a challenging target, 10 gigawatts remains achievable, and we will set out our full range of measures in the Government's strategy for CHP to 2010, which we intend to publish after the Easter Recess.

§ Lord Ezra
My Lords, I thank the Minister for his kind remarks about my birthday. I shall certainly continue to ask Questions about CHP until the year 2010 and well beyond.

Noble Lords
Hear, hear!

§ Lord Ezra
My Lords, coming back to the present, is it not regrettable that in spite of the obvious benefits of combined heat and power in greater efficiency and reduced emissions compared with normal generation, the target set for the year 2000 of 5,000 megawatts, or 5 gigawatts, has still not yet been achieved? Is it not a fact that three or four reports prepared by well known economic establishments have estimated that there will be a shortfall by 2010 of some 2 to 3 gigawatts? In those circumstances, should the noble Lord not indicate to us in advance of what the Government may or may not say in due course what measures they intend to take to put this matter right, bearing in mind that at the recent discussions on the subject at the Committee stage of the Energy Bill, a number of proposals put forward by these Benches and the Conservative Benches were all turned down by the noble Lord? Is it not time that the Government came forward with their own proposals?

§ Lord Whitty
My Lords, I accept that the achievement on CHP has not been as rapid as originally hoped, although the latest estimates for 2010 indicate a central achievement of 8.1 gigawatts. Further measures, including those which were announced in the White Paper, in particular the emissions trading scheme, will raise that level further and make it closer to the 10gigawatts target. It is still a difficult target and the Government may need to introduce further measures, some of which may well be referred to in the statement after Easter that I mentioned.

§ Baroness Gardner of Parkes
My Lords, how many national health hospitals have introduced CHP? When asking the Minister a question on this subject on a previous occasion, I mentioned that some have. Has there been an increase in the number of hospitals introducing CHP, given the great financial saving that will result for the National Health Service as well as the provision of extra power?

§ Lord Whitty
My Lords, I regret that I cannot answer that question in numerical terms. I am aware that at least two hospital complexes in the past few years have introduced CHP. There is general encouragement of the National Health Service, as in other parts of government, to look positively at CHP installations.

§ Lord Woolmer of Leeds
My Lords, I declare an interest as the chair of the energy forum of the Yorkshire and Humber Regional Development Agency. Will my noble friend confirm that a major combined heat and power scheme is due to come onstream on Humberside next year? Further to the previous question, what is the Government's view on micro combined heat and power schemes, not only in hospitals but in commercial, industrial and, indeed, domestic, use?

§ Lord Whitty
My Lords, micro CHP is an exciting new technology that the Government wish to encourage. Field trials and tests are being carried out and we believe that micro CHP could, towards the end of the decade, make a significant contribution to the achievement of the target. On the major CHP installation coming on stream in the course of the coming year, the Conoco complex at Immingham will greatly raise these figures, which will therefore look better this time next year. However, there is still a challenging target to be met.

§ Lord Tanlaw
My Lords, what is the present output of CHP to the grid? In Energy 68, it is estimated that, in 2010, 20 gigawatts will be required and 6.5 gigawatts will be required for wind energy. Only 0.6 gigawatts of wind energy is available now, so it must be increased by the power of 10. What is the ratio for CHP? Is the Minister sure us that planning permission will be granted, even for the schemes that are the basis of Energy 68 programmes?

§ Lord Whitty
My Lords, the wind energy ratio of current generation compared with where we expect it to be in 2010 is somewhat higher than that for CHP—roughly a trebling of CHP generation by 2010. The noble Lord referred to planning permission. Although there have been some minor hiccups on CHP, planning permission for CHP installations has not generally been a problem. However, it is a live issue in some parts of the country in relation to wind farms.

§ Baroness Maddock
My Lords, perhaps I may press the Minister on the Government's targets for their own estate. He will remember that, during the passage of 7 the Sustainable Energy Bill, the Government set targets for their own estate—the only target in the Bill. Why, since that time, has all the National Health Service estate been taken out of the government estate for the purposes of that Bill? How big is that proportion of the total that the Government promised in the Bill?

§ Lord Whitty
My Lords, the references in the energy White Paper and in the discussions on the Sustainable Energy Bill were to the central government estate. As the noble Baroness will know, the National Health Service is, by and large, an NHS trust rather than part of the central government estate. In response to the noble Baroness, Lady Gardner, I indicated that the NHS itself wishes to encourage the use of CHP, but that does not alter the commitment that we made in relation to the central government estate during deliberations on the Sustainable Energy Bill. The target has been announced and will no doubt be mentioned in the statement to which I referred in answer to the question asked by the noble Lord, Lord Ezra.

§ Baroness Platt of Writtle
My Lords, what arrangements are the Government making to allow for the CHP installations, which are small and will probably connect to the distribution system rather than the transmission system, sometimes to put power in and sometimes to take power out? That has not been the case in the distribution system in the past.

§ Lord Whitty
My Lords, I agree that it is important that CHP installations, which are primarily for local use, also have additional power to feed into the grid either through transmission or distribution. It is true that, at one point, the regulations were hostile and charges were a disincentive to CHP. The subsequent modifications that Ofgem has made in the regulations make them more neutral and therefore more favourable to CHP than was the case a couple of years ago. We need to see the full effect of those changes in encouraging such use of CHP.