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903 National Policy Statements 1 DECEMBER 2010 National Policy Statements 904 Tessa Munt: Thank you. Will that investigation examine the cost of under-sea infrastructure as well? I understand that the project will look at networks not just underground, but under-sea. Is that correct? Charles Hendry: That is my understanding of the report. We are all keen to have a fact-based scientific assessment of the relative costs. I know that in the hon. Lady’s constituency and many others there has been great concern and a need to know the costs of different ways of dealing with the issues, so I hope the report will examine the under-sea aspects as well. Tessa Munt rose— Dr Thérèse Coffey (Suffolk Coastal) (Con) rose— Charles Hendry: I will give way to my hon. Friend, who has some issues in Suffolk. Dr Coffey: Thank you. We do indeed have issues in East Anglia, and in Suffolk in particular. We have an enormous number of offshore wind farms, yet the green impact of pylons across our countryside is hardly palatable. I welcome the changes being made, and hope that we will have more detailed calculations of the costs and the impact of the benefits. Charles Hendry: I shall give way again to the hon. Member for Wells and deal with both issues together. Tessa Munt: How can I and my constituents be assured that the study is wholly independent and is not in any way informed or directed by National Grid? Charles Hendry: I would hope that the nature of the Institute of Engineering and Technology, and its track record for independence and fact-based assessment, would be sufficient to assure everyone that a thorough approach will be taken. There is no doubt in any of our minds that if anybody tried to steer its conclusions one way or the other it would publicly require them to go away. I am absolutely satisfied that the process will be independent and robust, but in due course the institute will publish the full report so that it can be peer-reviewed. Dr Alan Whitehead (Southampton, Test) (Lab): Before the hon. Gentleman leaves EN-5, will he reflect on the question that he raised previously about investment in new infrastructure through the electricity markets as they stood, and the extent to which that investment stayed in existing equipment to shore up the electricity market? In the new circumstances, where investment in infrastructure will increasingly be required before the replacement of plant, will EN-5 reflect that change fully? If not, could the energy market reforms that he will undertake shortly inform a revision of EN-5 to take those new circumstances into account? Charles Hendry: We have to see the national policy statements as part of the process. They are an integral part of an improved planning process, but they are not the full package. Electricity market reform will also be a key element in incentivising people to invest. Let me give an example of how things are changing. I was recently with Ofgem launching the second round of offshore grid transmission infrastructure bids. More than 100 different organisations, most of which were new players in this area, were keen to take part in that process, which was started by the previous Administration. A number of new organisations—new financial institutions—want to invest in our energy infrastructure, which is extremely encouraging, but to see the full package of these measures it will be necessary to ensure that they see the planning changes and the funding mechanisms that will drive it forward. Andrew Percy rose— Charlie Elphicke rose— Charles Hendry: I shall take a couple of interventions and then seek to conclude my remarks. Andrew Percy: While we are on the subject of new players coming into our energy industry, I invite the Minister to visit north Lincolnshire and the site of the South Humber Gateway project, where we hope to cluster a number of offshore wind farm manufacturers with the potential to create 5,000 jobs initially, possibly rising to 20,000. It will be incredibly important to our region, so I invite the Minister to join me and my hon. Friend the Member for Cleethorpes (Martin Vickers) on a visit some time soon. Charles Hendry: I know that both my hon. Friends have done sterling work in pushing the case for the South Humber Gateway. I would be delighted to see the planned work to get a clearer understanding of the ambition. It is typical of many of the ambitions of people who see a fantastic new opportunity emerging in the energy sector, and we are keen to encourage that. I imagine that my hon. Friend the Member for Dover (Charlie Elphicke) will make a similar plea for a visit. Charlie Elphicke: I do not wish to trouble the Minister to come down to east Kent, but for the benefit of the House will he say how many power stations were brought into operation during the last Parliament? The only one that we in Kent can recall is the dirty Kingsnorth power station. On the need for more funding and the need to build infrastructure and green infrastructure, I recall that during the last Parliament not many power stations were brought on line. Charles Hendry: A number of gas powered plants were brought on stream. The last nuclear power station was Sizewell in the 1990s. There has not been a new clean coal plant yet because people need to know how the carbon abatement technology will move forward. Gas has been the fuel of choice: 60% of the consented plant—12 out of 20 GW—is gas. What people want to build remains to be seen, but there is significant interest. We now need the policies to drive this forward. I want rapidly to conclude my remarks with a few additional points— Christopher Pincher (Tamworth) (Con) rose— Charles Hendry: An enormous number of colleagues are keen to speak in the debate, but with your forbearance, Mr. Deputy Speaker, I will allow my hon. Friend to intervene as he is a member of the Select Committee.
905 National Policy Statements 1 DECEMBER 2010 National Policy Statements 906 Christopher Pincher: I am grateful to my hon. Friend for being so generous. May I take him back to his earlier remarks about energy security and how the national policy statements will feed into our energy security? Energy security not only relates to the Department of Energy and Climate Change, but has an impact on the Ministry of Defence, the Foreign and Commonwealth Office, the Department for International Development and the Department for Transport. How do the threads in our national policy statements interweave to ensure that across all those Departments we have a holistic approach to energy security? Charles Hendry: One thing that has struck and impressed me most as an incoming Minister has been the extent to which Departments work constructively together, with information shared appropriately and buy-in from every Department on policy proposals. My Department clearly leads on the energy market and the Treasury is critically involved in setting a carbon price, which we believe is part of the process, but there is a holistic approach and investors are looking at that to make sure that there is joined-up government. I want to close, so perhaps I can respond in my winding-up speech to any additional points about the exact way in which we will take the process forward. Having spoken for the best part of an hour, I feel that many hon. Members on both sides of the House will wish to have a chance to contribute fully to the debate. In conclusion, our reforms of the major infrastructure planning process will ensure much greater democratic accountability. Ministers will be responsible for decisions to consent to or refuse major infrastructure development, and there will be a binding vote in the House on whether to approve national policy statements. Our debate today is about whether the House has considered the matter of the draft energy national policy statements, and I look forward to listening to it and having the chance to hear the expertise that so many hon. Members have to offer. Several hon. Members rose— Mr Deputy Speaker (Mr Nigel Evans): Order. As the Minister says, a number of Members will be trying to catch my eye during this debate. Therefore, I am introducing a seven-minute limit on speeches. 5.31 pm Huw Irranca-Davies (Ogmore) (Lab): Thank you, Mr Deputy Speaker. I have indicated to you through the usual channels that, if it is your wish, I am more than happy to forgo any concluding remarks so that more people have time to make their contributions. I welcome this general debate about national policy statements, which is timely and necessary. I thank the Energy and Climate Change Committee for its continuing effort and expertise and, of course, the Committee on Climate Change for its recommendations and analysis. We share much of the Minister’s analysis of the challenges, but that is not surprising because, as I say with some humility, my predecessors laid the groundwork that he is continuing. We are glad to see him and his colleagues taking up the baton with such relish, because they do so at a critical juncture, when delay and dithering would be terminal to investor certainty, UK energy security and our low-carbon future. There is a real need to get on with that work. On that thought, the shadow Front-Bench team and I—and I am sure the whole House—send our best wishes to the Secretary of State and his team on their negotiations in Cancun. In government, Labour adopted the world’s first legally binding framework to cut emissions, by 80% by 2050, signalling our clear intent and leadership on tackling climate change. My right hon. Friend the Member for Doncaster North (Edward Miliband) played a difficult hand with some great skill and not insignificant personal commitment at Copenhagen when he was Secretary of State, and although the job has not become any easier, we hope that the new Secretary of State will keep the momentum going. Let us reprise where we are, as laid out in the documents before us. One quarter of the UK’s generating capacity will close by 2018, and as much as 30% will need to be replaced by 2020. Without prompt action we face an electricity generation gap in the next 10 to 15 years as our nuclear and coal-powered stations are retired. World energy demand is rising and often highly politicised; as North sea reserves decline, we are increasingly reliant on imported oil and gas; and, as the Minister says, electricity demand is forecast to double over the next 40 years. That will require rapid decarbonisation of the electricity sector, diversification of the energy sector with a decreasing reliance on fossil fuels and unabated combustion, and an increasing reliance on renewables, low-carbon energy and decentralised energy. We will also require development of carbon capture and storage and renewables technology for the UK and for international markets. We will need to create sufficient capacity to meet electricity generation needs at all times, and we will need to put the necessary supply chains in place. I will not go over the issue of Sheffield Forgemasters again, as it has been well aired already. We will require the development of smart grid and electricity networks to meet the needs of a reconfigured, smart and diverse electricity infrastructure and, of course, investment in gas infrastructure. Ian Lavery: The doubling of the electricity recovery rate over the next 40 years is vital. As was mentioned, the first phase of the four demonstration plants will cost up to £1 billion. Does my hon. Friend agree that it is essential that funding is found from somewhere to fund phases 2, 3 and 4 if we are to meet our electricity requirements over that period? Huw Irranca-Davies: Yes, I agree entirely. It was wonderful news that after a slight delay to do with the coalition agreement, getting things in order, and some wrangling with the Treasury, we had the announcement that £1 billion would be available—the commitment that the Labour Government had made to the first phase of CCS on a commercial scale. However, it is equally essential that we have phases 2, 3 and 4. I am sure that the Minister is committed to continuing that wrangling with the Treasury to ensure that we find the mechanisms that will allow that to happen, and promptly. We need it for coal, but we also need it for gas. I welcome the in-principle announcements that have been made about phases 2, 3 and 4, but what we are waiting for, as with so much else, is the detail to make it certain.
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