I think that we are all quite relieved to have reached our last day in Committee on the Energy Bill. I would like to thank everyone who has contributed to our debates, and I thank the Minister for her responses and for all her correspondence, which has been very useful.
Amendment 55ALA is designed to provide an opportunity to discuss an element of the Bill which has not had much attention so far, and that is the financial investment enabling investment contracts. Our amendment would provide a sunset clause to this aspect of the Bill such that it would no longer be part of the mix of policy two years following the legislation being given Royal Assent. We have tabled this as a probing amendment because we wanted to give the Minister an opportunity to provide some background information and clarity on the thinking behind the investment contracts element. When the draft Bill emerged, it was clear that quite a high degree of emphasis was being placed on a provision to enable the Secretary of State to enter into contracts for difference with investors ahead of all the detail of the Bill being worked through. The most significant difference is that this would be a contract between the Secretary of State and a party who wished to develop low-carbon electricity, not an enabling counterbody. The rationale was that such a counterbody would not be in existence, so it would be a direct contract with the Secretary of State.
It is fair to say that there has been considerable interest in these FID-enabling contracts. We were grateful to receive information from the department about the number of applications that have been submitted to date in relation to this element of the Bill, which now total 57. I note that that is just the number of applications that have come from renewable energy. The table we have been given does not indicate the level of interest
that has been expressed by CCS or nuclear. Obviously the FID-enabling process is there for all technologies and yet the supporting literature and table show that while we have a lot of information about the renewables aspect, very little is supplied in relation to the other two major categories of low-carbon electricity. Can the Minister provide a bit of background information in relation to those nuclear and CCS projects which may have expressed an interest? Have there been any? If so, how many, and at what level of gigawatts? That information would be very useful and it is pertinent to the discussions around investment contracts.
It was my understanding that the FID-enabling contracts were necessary in order to prevent a hiatus in investment, but that is the least of the problems with regard to the renewables. Renewables have an existing support mechanism and we have already discussed in Committee the transitional arrangements that are in place for that. We have some concerns, but in general there is a transfer and crossover period for renewables that is clear. However, CCS and nuclear will be embarking on a completely new policy of support; I would have thought that those are the projects which need early sight of and access to the contracts, yet we are not being given much detail at all. That strikes me as odd. Perhaps the Minister can give the Committee an update on where we are in relation to being able to arrive at strike prices for those two technologies. It is important that the strike prices are subject to parliamentary scrutiny. We have been given an awful lot of information about renewables, but not about the other two technologies.
It will be increasingly important to treat these three diverse groups of technologies as similarly as we can, given that that is how we will be able to argue that our measures are subject to competition and to comparisons that will enable the least cost and the most sensible decisions. I am sure that that will be of great interest to state aid discussions. One of the main rationales for EMR intervention in the first place was that we were seeking to treat low-carbon electricity providers equally, yet still we seem to be proceeding in a fairly unequal way, with renewables being treated separately from CCS and nuclear. There is a great dearth of information on CCS and nuclear.
The state aid question is important, of course, for this section of the Bill. The rationale is that these investment contracts can be signed. I note with interest that the latest investment contract allocation update from the department says that they will not be signed until March 2014. Previous timetables implied that that would happen in autumn this year and that they would be subject still to state aid clearance. I struggle to see how this whole jigsaw will fit together. How will the investment contracts be able to be assessed for state aid if the remainder of the Bill is not yet worked through? Is it realistic to think that by March 2014 the Secretary of State will enter into contracts before the Bill has been approved or signed off in its detail?
As I have said, this is a probing amendment. It is specifically designed to try to elucidate more information in relation to these contracts. I note that it seems to have gone very quiet on the negotiating front with
EDF. I saw today that in a 17-page press release, EDF found no space to mention Hinkley Point in the update on its results. I do not want to be overly pessimistic; however, if this is a really serious negotiation that is of material interest to its investors and people interested in its company, it seems odd that there was no mention of Hinkley Point. Perhaps I may end by asking that we have as much of an update as the Minister is allowed to give on that process of negotiation and when we might have more transparency around its terms. I beg to move.