Thursday Volume 520 16 December 2010 No. 92 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Thursday 16 December 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 1025 16 DECEMBER 2010 1026 option. I am afraid that the specific measure that my House of Commons hon. Friend wishes me to warm to falls within the responsibility of the Chancellor of the Exchequer rather Thursday 16 December 2010 than that of my Department, but I am sure that the Chancellor is as mindful as I am of our commitment to becoming the greenest Government ever. The House met at half-past Ten o’clock Geothermal Energy PRAYERS 2. Sarah Newton (Truro and Falmouth) (Con): What [MR SPEAKER in the Chair] recent representations he has received on Government support for deep geothermal energy production in the UK. [30964] BUSINESS BEFORE QUESTIONS The Minister of State, Department of Energy and NEW WRIT Climate Change (Gregory Barker): My Department engages Ordered, regularly with the deep geothermal sector, and believes That the Speaker do issue his Warrant to the Clerk of the that that exciting renewable energy source has considerable Crown to make out a new Writ for the electing of a Member to unexploited potential. I shall be meeting the key players serve in this present Parliament for the County constituency of in the sector in the new year. Oldham East and Saddleworth in the room of Philip James Woolas Esq., whose election on 6 May 2010 has been declared to be void. Sarah Newton: I thank the Minister for his helpful —(Mr Alistair Carmichael.) response. Deep geothermal power could generate 10% of the United Kingdom’s energy needs. It is a tried and tested technology which provides energy in countries throughout Europe. The last Government did not support Oral Answers to Questions that type of power generation, and rejected calls for the introduction of a licensing structure similar to those of other European countries. What are the Government doing to provide support for this important energy ENERGY AND CLIMATE CHANGE sector? The Secretary of State was asked— Gregory Barker: My hon. Friend has fought a vigorous campaign on behalf of this exciting new form of energy. Bioenergy I am delighted to say that, at my direction, officials are actively examining the practical and legal aspects of an 1. Fiona Bruce (Congleton) (Con): What assessment exploration licensing scheme covering geothermal heat he has made of the potential contribution of bioenergy and power projects, which will be vital to unlocking the to the Government’s objectives for energy security and true potential of this renewable energy source. climate change. [30963] Energy Prices The Secretary of State for Energy and Climate Change (Chris Huhne): The Government believe that sustainable 3. Hugh Bayley (York Central) (Lab): When he last bioenergy, such as woody biomass, bioliquids and many met representatives of (a) Ofgem and (b) energy suppliers other bioenergy forms, could contribute up to half the to discuss consumer energy prices. [30965] UK’s target of 15% renewable energy by 2020. That would deliver a greenhouse gas saving of 20 million tonnes of carbon dioxide equivalent by 2020. It would 11. Alex Cunningham (Stockton North) (Lab): What also improve the UK’s security of supply, as bioenergy recent discussions he has had with gas and electricity is one of the few renewables that can generate energy on suppliers on trends in energy supply costs to domestic demand. consumers; and if he will make a statement. [30974] Fiona Bruce: Convert2Green, a biodiesel producer in The Secretary of State for Energy and Climate Change my constituency, produces sustainable transport fuels (Chris Huhne): With permission, Mr Speaker, I shall from waste cooking oil. Those fuels currently benefit answer Questions 11 and 12 with Question 3. from a 20p fuel duty differential which is due to be Department of Energy and Climate Change Ministers abolished in April 2012, just three months after the and officials meet both Ofgem representatives and suppliers renewable transport fuels obligation comes into effect. regularly to discuss market issues. Ofgem monitors the Will the Secretary of State consider the merits of an market closely, and reports quarterly on retail prices. Its extension of the differential until the RTFO has had a latest report shows large increases in estimated supplier chance to prove itself as a suitable support mechanism margins—that is, profits—for the year ahead, which are for the sustainable biodiesel industry? mainly due to recent price increases. I am disappointed by that development, and I welcome the announcement Chris Huhne: The Government are keen to secure a of Ofgem’s review of the retail market. We are also more rapid development of all bioenergies, and the use taking other measures to encourage new market entrants of chip fat or any other cooking oil is certainly one to provide new competition. 1027 Oral Answers16 DECEMBER 2010 Oral Answers 1028 Mr Speaker: I merely point out to the House that the price encourages investors to put money into green grouping is with Question 11 only. Question 12 has been energy and does not simply become a mechanism that withdrawn. substantially increases energy bills? Hugh Bayley: We are told that there is a global glut of Chris Huhne: That is one element of the proposals we gas. Will the Secretary of State explain why energy will be bringing forward later in the consultation document. suppliers are increasing consumer prices by two, three Indeed, we will make a statement on it. The Treasury and, in some cases, four times the rate of inflation? will consult on the carbon tax element today. It is one of What are the Government doing to protect the old and four key instruments that we will suggest should play a vulnerable during what seems likely to be one of the part in reforming the electricity market, taken together coldest winters on record? with our price support measures and our very keen enthusiasm to encourage market entrants. As competition Chris Huhne: I am grateful to the hon. Gentleman for is the best guarantee to consumers, I believe we can his question. The first and most important point is that ensure that we have the best possible deal for electricity Ofgem, as the regulator, ought to have considerable and gas supply in future. influence over the margin above the wholesale price, and that is the subject of the inquiry launched by Ofgem. If I remember the figures correctly, that margin Mark Pritchard (The Wrekin) (Con): May I congratulate has risen from about £65 or £70 on a typical bill to my right hon. Friend on his success in Cancun? As about £90, and that is what triggered Ofgem’s interest in energy and utility companies are not passing on falls in the matter and the review. I have encouraged Ofgem to energy wholesale prices to consumers, is it not time we be firm with all the suppliers as to whether such margins had a review of whether Ofgem has the powers to tackle are necessary to bring forward the investment we require those companies that seem to care very little about the in the sector, and we await with interest Ofgem’s review. poor and vulnerable, as the hon. Member for York The hon. Gentleman also asked about the vulnerable. Central (Hugh Bayley) rightly pointed out? He may have seen that we have announced support through the warm home discount scheme, which will Chris Huhne: I am grateful to my hon. Friend for his run both for the next year and the year after—and kind remarks. There was an outstanding team effort at subsequently, I hope. It will provide discounts for the Cancun. The Minister of State, my hon. Friend the vulnerable. We are also continuing to make sure that Member for Bexhill and Battle (Gregory Barker), who energy efficiency measures are available, such as by is responsible for climate change, and the rest of the extending the carbon emissions reduction target, so we team played a tremendous part in making sure the can help the vulnerable get through what I know can be outcome was much more successful than we might have a very difficult period, particularly if there is a hard hoped even as recently as early in that week. winter. My hon. Friend the Member for The Wrekin (Mark Mr Speaker: May I remind the House of my keenness Pritchard) is absolutely right to make the point he to get down the Order Paper and accommodate as made. In my discussions with Ofgem, I have repeatedly many Back-Bench Members as possible? raised the fact that we want it to be firm with energy suppliers and ensure our consumers are not being taken Alex Cunningham: According to the House of Commons for a ride. Both the chairman, Lord Mogg, and the chief Library, between 1996 and 2004 the number of households executive are very aware of that, and they are completely in fuel poverty fell from 6.5 million to less than 2 million, in line with our objective of making sure the energy but now, in the face of massive increases in energy suppliers are providing the best possible deal. The review prices, it has nearly doubled again to more than 4 is looking at precisely this issue. Ofgem does have million.