Energy Bill [HL] — House of Lords, 2015-11-04
Topic: Energy
Bryony Worthington (Labour, Centre-left): I thank my noble friend and the noble Lord, Lord Oxburgh, for tabling the amendment and for pursuing this aspect of our discussions to this point. I am very grateful to hear from the Minister what I think will be a very effective way forward in the creation of an expert group that will report to the Secretary of State. That is a very welcome development. It seems to be the season of paying tributes, and I pay tribute to the noble Lord, Lord Oxburgh, who, not just through the passage of this Bill but for many years has been a fantastic champion of CCS and the group of technologies that falls within that. I know that he is stepping down as the chairperson of the CCSA fairly soon, but he has played a pivotal role in bringing this technology to the minds of policymakers and decision-makers. I thank and congratulate him for that It is right that we have a brief discussion about CCS in this debate today, because of the Redcar situation, as my noble friend pointed out, which illustrates how important it is that we get our energy and industrial strategy right. There is a risk to dragging our feet and there is an urgency involved in sorting out our policies on how we are going to not just maintain but actively attract industrial players back to the UK to reindustrialise our nation We are home to brilliant engineers and bright graduates, and we have a skilled workforce. We have and need the infrastructure that requires us to have a vibrant primary industry. There are ways in which we can rekindle that industry, but it will not be through trying to push back the tide of green policy, trying to deny that climate change is happening or blaming green taxation for our woes; it will be the reverse. It is like a judo role. We have to go into this subject in a positive way and not just accept that we are going to decarbonise but do so with conviction. If we do that, if we embrace the fact that of course there are engineering solutions that will allow us to continue to produce steel but without the emissions, we can go forward with a positive investment agenda, attract European money and external investment, and persuade Tata that this is the country where it should be developing the steel production plants of tomorrow, now We can do that, because we can act without fear of falling foul of state aid. With every rescue package we try to put together that denies the reality of climate change or seeks to bail out companies that are failing for global trade reasons, rather than anything to do with carbon pricing, we will fall foul of state aid. If, however, we embrace the fact that we need inward investment into zero-carbon and low-carbon production, Europe will be on our side. We can then draw down funds, apply our own funds, and recycle funds out of our carbon pricing policies into an inward investment programme We have a policy tool almost readily designed to do that, in the form of contracts for difference. As they were introduced in the Energy Act 2013, contracts for difference were designed for power investment and power projects. They can be adapted. We can create a contract for difference, strike off the carbon price and make it available to industrial investors. That would derisk the investment and give a guaranteed income to people, so that they could see for certain that they will be able to come to the UK and that at least one of the factors that controls whether or not they will be profitable will be taken care of. If we move with the agenda of Europe towards decarbonisation and take CCS seriously, that is the way out of this problem. To do anything else would simply be to stick our finger into a dyke that will burst: there is no escape from the inexorable move towards a low-carbon agenda. If we want to maintain our industrial activities and investment, we have got to have technologies that allow us to do that with low carbon—and that means CCS. It does not just mean CCS on its own; it can be combined with electrification, once we have a low-carbon power system. But CCS is going to play a huge role As we have discussed previously in this debate, by CCS we do not just mean one technology. It is very similar to renewables; a whole group of technologies falls under that category, some of which produce a usable product. Carbon capture and utilisation is also grouped within this. I am very much looking forward to the creation of this expert group. We could not have chosen a better chairperson for that endeavour, and I hope that I might be able to play a part in my new role as a Back-Bencher. We can explore these issues; we have an opportunity here and should grasp it. We are almost on our own in Europe in understanding how important CCS is and having a populace that supports us in that. Germany needs it but cannot deliver it. The only other countries that are close to us in terms of understanding are Holland and Norway. We can work with them to form a North Sea alliance to make this happen. There is huge potential: the UK is blessed in terms of its ability to embrace this technology. I hope that that endeavour, led by the noble Lord, Lord Oxburgh, will lead to concrete changes in policy, a new approach, with new vigour and energy, and ultimately to UK plc becoming once again the home of industrial innovation and engineering excellence that will lift people in those communities currently suffering job losses, give them hope for the future and bring all the social and economic benefits that come from that I shall not detain the House any longer, although I am tempted because this is one of the topics I like to talk about a lot. I wish the Minister well in the remaining stages of the Bill and in the associated regulations and legislation that will come his way. There is a lot more work to be done. Some of the topics we have touched on, including the recalibration of the capacity mechanism, are urgent and outstanding areas of work. We look forward to hearing more about the CFD allocations in the autumn. There are big challenges outside the UK that the Minister and his department will be grappling with. Paris is upon us, and I am looking forward to that being a historic move forward in the world starting to take this issue seriously and moving forward on a united front. Europe has a huge part to play in this My final word is that on energy policy the best way to engage with Europe is to engage positively with new ideas, take our vision to Europe and persuade it that our technology-neutral, all-of-the-above, focus-on-least-cost way is the right way to do this. We have some great tools and great examples of policies that work. We must work with Europe and persuade our colleagues that ours is the right path. We should not seek to disengage. We can benefit hugely from Europe, and it can benefit from us. I hope that that will be the basis on which we continue. For now, I say thank you and goodbye.