Energy Spending Priorities: Investors and Consumers — House of Commons, 2016-07-04
Topic: Energy
David Mowat (Conservative, Centre-right): We can spend a long time talking about the word "commercial" in that context. The former Energy Minister the hon. Gentleman just referred to is the one I am about to talk about in the context of the third report, which was on the green deal, the energy company obligation and some of those things. I am not going to try to defend everything that has happened over the past five or six years in that area, because it has not been good and the Government must do much better. There is a big prize to be gained in energy efficiency, and the one thing we can all agree on, whether or not we agree on nuclear, CCS or anything else, is that we have to do a lot better on energy efficiency. What happened on the green deal was little short of a disaster I wish now to discuss market signals, because we have made the biggest market signal over the past week that could be imagined: we have accepted the Committee on Climate Change figure of a 57% reduction in carbon emissions by 2030, although that is merely consistent with the Climate Change Act 2008. I am pleased that we have done that, but I wish to make the point I have made previously, which is that I am worried that others around the world are not following us in the way we might have expected or hoped they would. I am talking not about China or India—these economies that must catch up—but about other countries in Europe In these debates, we sometimes gloss over the impact on electricity prices, which means fuel poverty or uncompetitive manufacturing. The Department of Energy and Climate Change website this morning showed that our electricity prices are 60% higher than the mean in the EU, and our industry’s electricity prices 90% higher than the EU mean. When the Government talk about rebalancing the economy and the northern powerhouse, I just say this: if we are serious about manufacturing, we should be aware that it is very hard to do that with differentially higher electricity prices. Some of our debates about energy and the need to decarbonise must be seen in that context, notwithstanding the merit order effect, which we have heard about tonight It saddens me that our 57% target is approximately double the European target put into the Paris commitment in the INDCs—intended nationally determined contributions. Europe’s target was a 40% reduction over the same timeframe as our 57% reduction, but that includes the UK, and if our contribution is taken out, we are talking about roughly double the rate. But these countries are not even achieving that. This year, 18 of the 28 countries in the EU increased their carbon emissions, whereas the UK managed a 3% reduction. Why is that happening? It is because they continue to burn coal at a rate that is generally very high, although it is coming down in some cases. The Secretary of State made an announcement last November that we would phase out coal by 2025, yet a week later the Germans commissioned their brand new lignite-burning, unabated coal power station. As I said earlier in this debate, Germany burned four times as much coal as the UK. But it is not just Germany; Holland, Ireland and Austria all burn significant amounts of coal. There is an issue here that has to be resolved as we make our progress towards a 57% reduction. We cannot do it on our own. Part of the UK showing leadership involves making sure that other countries come with us. China is doing a lot more than many others.