Energy Bill

There was a crucial moment when the development of CCS technology was very important to this country, and the Government goofed—big time. We were ahead and now we are behind; we were way ahead of the pack on CCS and now we are not. That brings me to my next point, which is about the climate change levy. As the Secretary of State has just said, nuclear power is not carbon-emitting—so why is it subject to the climate change levy, which is effectively a tax on carbon? That illogical taxation structure has to change if the Government are to give a proper structure to their energy policy. In a press release that accompanied the Government's competition on CCS, we were informed that the winner would be chosen by the end of June 2009. However, it is clear from the small print that the Government have already pretty well picked the winner by supporting one small post-combustion project rather than opening the competition to all the other CCS technologies. At the time, the Secretary of State noted that post-combustion was the most relevant technology, considering that, as he may well have seen for himself in the past week, China opens an average of one coal-fired plant every four days. However, that misses the point: a number of companies, including Centrica and Scottish and Southern Energy, have proposals for more advanced—and arguably, cleaner—pre-combustion CCS projects, which have now been put in jeopardy. With so much of our current capacity due to be decommissioned, the UK should not be confined within the mindset of only retrofitting. China, India and other heavy coal addicts will look for retrofit CCS, but the real future and potential for CCS is in making it integral to the original power plant design. We must ensure that we can also use the technology at home to minimise the carbon impact of any new fossil fuel capacity planned for the future. Given that tomorrow the European Union will publish its proposals for expanding CCS technology in Europe, we have concerns that the Bill merely sets out a framework for its own CCS competition rather than attempting to stimulate wider investment across the market. Moreover, it is not clear whether the Bill establishes provision for liabilities. The permanence and safety of the CO2 stored in geological reservoirs need to be independently monitored and verified by a competent third party to check for leakage. We have anxieties that such safeguards are not in the Bill. Like many of the Government's proposals, the Bill leaves a lot to secondary legislation. CCS is all well and good, but it is not a limitless solution—it is only as good as the capacity of the hole in the ground to take the CO2. We must turn to the renewables industry to find a safe, clean and reliable energy source.