Energy Bill [HL] — House of Lords, 2015-09-14
Topic: Energy
Matthew Ridley (Conservative, Centre-right): My Lords, I kept my powder dry on the general points until now, which ran the risk that some of the points I would like to make have been made, particularly by my noble friend Lord Howell, and very eloquently. I would like to encourage the Minister to stick to the manifesto promise to get rid of onshore wind subsidies, to stand up for consumers and not to do the bidding of what is, effectively, a crony capitalist industry addicted to state subsidies The Government wish to pursue decarbonisation without making energy either unaffordable or insecure. We have heard this many times as the principle behind both the Government’s and the Opposition’s stance, but, like the Minister, I am curious to know what the Opposition’s stance will be after this weekend. Wind simply does not help in this regard; it is not solving the trilemma at all. It is putting up energy costs, reducing energy security and failing to make a significant dent in emissions The fact is that the increased onshore wind production of recent years has failed to make any measurable reduction in carbon dioxide emissions, due to significant, intractable problems of intermittency, location and energy density. We know that the best way of cutting emissions is for gas to replace coal and, indeed, for coal to go to supra-critical use, which is much more efficient. That is not happening in this country because nobody wants to invest in new up-to-date combined cycle gas because wind is dumped on to the system at zero marginal cost. As a result, no new CCGTs are being built because the economics of operating them has been destroyed. I challenge those who support these amendments to give me a number in tonnes or percentages of emissions that have been reduced as a result of the wind power that has rolled out already. I cannot find such a number and it is impossible to say that it is significant at all I, too, like the noble and learned Lord, Lord Wallace of Tankerness, had a letter from a wind company saying that wind energy is clean, affordable and secure. I am sorry, but I do not think it is any of those things. It is not true to say that it is cheap. The industry keeps saying that it is the cheapest form of renewable energy, but that is wrong. We know hydro is cheaper, as the noble and learned Lord, Lord Wallace, said Besides, a lot of the cost of onshore wind is still hidden. The Department of Energy and Climate Change has not used a total-systems approach in its cost modelling. In other words, it does not factor in the costs of transmission, grid integration, back-up during periods of intermittency, and so forth. The department appears to understand this as it has recently commissioned Frontier Economics to undertake a study into the true costs of energy generation by wind. It would be wise for the Government to wait for the outcome of this research before providing any more financial support to onshore wind The wind industry is, as my noble friend Lord Howell said, a Hood Robin industry: it takes money disproportionately from the poor, for whom energy bills are a larger proportion of spending, and gives it largely to the rich, in the form of landowners or investors. A lot of the money in wind is sheltering from inheritance tax through business property relief, as we learnt in this morning’s papers, which is something only rich people need to do. Does the Minister share my amazement that this monster of regressive redistribution was invented by Ed Miliband, encouraged by the Lib Dems and may or may not be supported by Jeremy Corbyn’s Labour Party? This is yet another case where the Conservatives are standing up for ordinary people, while the left looks after the interests of the metropolitan rich It is just not true to say that onshore wind is clean. True, it emits no smoke or effluent here, but the rare earth metals in a wind turbine’s magnets, roughly a tonne of neodymium per turbine, are mined and refined in China in one of the most polluting industries on earth, and the steel in the turbine’s tower can only be made using coal We have not solved the problem of adding an intermittent source of supply to the electricity grid. The very large amounts of wind generation currently being added to the system are not solving the security problem. In fact, they are the problem. In other words, the greater the percentage of electricity from wind in the system, the more some other kind of quick-response generation is needed, and this often means keeping old, fossil-fuel stations going. It is worth reiterating that the Secretary of State has confirmed that the UK has enough onshore wind projects in the pipeline to meet the 2020 renewables targets, so there is no need to offer any further financial incentives Finally, the noble and learned Lord, Lord Wallace, and, with respect to the previous amendment, the noble Lord, Lord Cameron, said that the wind industry needs certainty. Like me, the noble Lord, Lord Cameron, is a farmer. Farmers would have loved some certainty about the wheat price earlier this year. It plummeted, and we had no warning at all. To argue that this industry peculiarly needs certainty when others do not is not fair. Once a subsidy is in place, it should be possible to withdraw it. Otherwise, if we say that we are going to withdraw a subsidy, people will always respond that they have not had time to adjust to that. I hope the Minister will confirm that he will stand firm against this attempt to keep electricity more expensive, more unreliable and probably no less carbon-intensive.