Energy Bill

Public Bill Committee, 19 February 2008.

Further written evidence reported to the House

Sir David Amess (Conservative, Southend West)

Welcome to our witnesses. I do not know whether you have attended a witness session before, but you will certainly not need that scarf on, Mr. Lee. We are going to take evidence so would you please introduce yourselves?

Sir David Amess (Conservative, Southend West)

Thank you. We have five witnesses in only 40 minutes, so I ask colleagues on the Committee to bear that in mind. If someone asks one question and we get five replies, we will not make much progress. Perhaps our Minister would like to speak.

Malcolm Wicks (Labour, Croydon North)

I will not, on this occasion, if you will forgive me, Mr. Amess.

Sir David Amess (Conservative, Southend West)

Absolutely.

Charles Hendry (Conservative, Wealden)

May I begin by asking all our witnesses their views on the appropriate remit for Ofgem and whether they believe its remit and its primary duties should be changed to include a specific duty to reduce carbon emissions? I know the Sustainable Development Commission has brought forward a range of proposals on that, but do you believe it should have equal primary duties, or should one be secondary to another?

Sir David Amess (Conservative, Southend West)

I think Mr. Hendry wanted everybody to say something.

Charles Hendry (Conservative, Wealden)

I am happy with this.

Steve Webb (Liberal Democrat, Northavon)

Could one person from each organisation give us their view of the potential of renewables’ contribution to the energy mix, both in the short term and in the long term? I am interested in your views on the upper band and on the short term prospects, as it were, with a fair wind, if you will pardon the expression. In particular, does the banding of the renewables obligation help or hinder the potential contribution of renewables?

Hugo Swire (Conservative, East Devon)

To follow that theme, do any of the witnesses feel that the increased banding will encourage the necessary levels of extra investment for marine energy to prosper? If they believe that, do they believe that investors will follow, when there is the safer bet of offshore wind available, with almost as many renewables obligation certificates available? Do they feel that if there were higher ROCs banding, and if they were given to emerging technologies, that that would harm offshore investment, taking into account the changes to the planning laws being considered?

Sir David Amess (Conservative, Southend West)

I think that Martin Horwood wants to go back to the previous question.

Martin Horwood (Liberal Democrat, Cheltenham)

I just have a quick question for Ms McCaffery. You said that 5.5 per cent. of UK electricity-generating capacity on onshore wind was “stuck” in planning. By “stuck” did you mean literally stuck as in the process has ground to a halt or do you just mean “in process”?

Martin Horwood (Liberal Democrat, Cheltenham)

But the process is ongoing in each case?

Sir David Amess (Conservative, Southend West)

Order. I think the noise we are hearing is caused by a mobile phone. It seems to have stopped. Please continue.

Martin Horwood (Liberal Democrat, Cheltenham)

I was asking what proportion of applications had ground to a halt, and whether the ones that had been going for a number of years were still in process.

Sir David Amess (Conservative, Southend West)

Before I turn to colleagues on my right, I call Mr. Hugo Swire who wanted to ask a question.

Hugo Swire (Conservative, East Devon)

I just wanted to ask whether any other witness would like to respond to my previous question.

Paddy Tipping (Labour, Sherwood)

It is sometimes argued that social tariffs and renewable obligations are an either/or choice. I was interested in Gaynor Hartnell’s point that you can do both. One criticism is that the Bill does very little to encourage microgeneration. Is the argument that feed-in tariffs are a way of increasing microgeneration?

Albert Owen (Labour, Ynys Môn)

May I go back to Miss Samuel’s and Mr. Lee’s answer on tidal energy? I am not clear whether 10 per cent. is just an aspiration or whether you think that the technology can achieve that? Was Mr. Lee saying that it could happen now but that the technology was not available or was Miss Samuel saying that there were barriers that we should be looking at in the Bill? I am not sure whether the technology is advanced enough. There is only one prototype, although there is planning permission in my area. What is the major barrier? Is it the technology or is it the regulation and things that the Bill could assist with?

Albert Owen (Labour, Ynys Môn)

Are there working models elsewhere that could be adapted?

Albert Owen (Labour, Ynys Môn)

Yes.

Albert Owen (Labour, Ynys Môn)

One final point on the connections: are you not competing with offshore wind? Are tidal and wind competing against each other?

John Robertson (Labour, Glasgow North West)

Could we clear up some questions about funding? One of the complaints with renewables is that we have always put money into wind and that we have forgotten about the other kinds of renewables that we can have. I noticed that you said that you agree and get on well with each other, but are you not competing for the same money and for the same resources that you are trying to create? If not, could you tell me how you get your funding money? How much comes from Government and how much from business?

John Robertson (Labour, Glasgow North West)

How much of it is indirect?

John Robertson (Labour, Glasgow North West)

Do you think that Ofgem should get involved in this kind of discussion and have an influence?

John Robertson (Labour, Glasgow North West)

You are the first person we have had here who has said something nice about Ofgem—other than Ofgem.

Nick Palmer (Labour, Broxtowe)

The British Wind Energy Association has briefed MPs about its concerns about the RAF’s objections to a number of offshore wind farms on the basis, as I understand it, that it feels that any impact, even if small, on radar is to be objected to. What proportion of the contribution of offshore wind farms that you were describing earlier would be affected by that type of objection—all of them or a small proportion?

Sir David Amess (Conservative, Southend West)

I am going to intervene. I allowed the question, but it is very wide of the scope of the Bill; it is more a matter for a planning Bill.

Martin Horwood (Liberal Democrat, Cheltenham)

Energy from waste comes into the renewables obligation under the proposed bandings as part of the reference band. Can you tell me whether there are sufficient safeguards, under the current or proposed regime, on other environmental impacts, such as toxic waste, relating to energy from waste, and whether there is enough differentiation between types of incineration or energy from waste power generation?

Martin Horwood (Liberal Democrat, Cheltenham)

That almost sounds like an argument against banding, does it not?

Sir David Amess (Conservative, Southend West)

This may have to be the last question.

Martin Horwood (Liberal Democrat, Cheltenham)

Does the Sustainable Development Commission want to comment?

Sir David Amess (Conservative, Southend West)

Mr. Jamie Reed has been waiting patiently.

Jamie Reed (Labour, Copeland)

One brief question, aimed at Andrew Lee and Sarah Samuel principally: feed-in tariffs are something I am frankly excited about and encouraged by, but I do have real concerns about them, particularly with regards to fuel poverty. Do you have any fears that feed-in tariffs are something that only the middle classes could really benefit from?

Sir David Amess (Conservative, Southend West)

I have to interrupt you there. Finally, Dr Alan Whitehead just has a couple of minutes.

Alan Whitehead (Labour, Southampton, Test)

I have a particular question for Gordon, Maria and Gaynor about grid connections, offshore and the issues that are tackled in clause 40 of the Bill. Do you think that the mechanisms proposed to come into place under clause 40 will provide the sort of grid infrastructure that one might expect will be necessary, bearing in mind the very substantial offshore and, indeed, tidal increase anticipated?

Sir David Amess (Conservative, Southend West)

A very brief answer, please.

Sir David Amess (Conservative, Southend West)

I would like to thank the witnesses very much indeed for the evidence that they have given. Would they now swap places with our second set of witnesses?

Good morning. Could you please introduce yourselves?

Sir David Amess (Conservative, Southend West)

Perhaps I should say to everyone that this is a short session, and we do not want to have six answers to one question. I obviously want to call everyone. I see you indicating you want to be called, but it is a short session. The Minister wishes to kick off.

Malcolm Wicks (Labour, Croydon North)

Can I ask a question about carbon capture and storage, which is exciting a great deal of interest? Perhaps this is a question for Jeff Chapman, but Chris Mansfield may want to come in. First, can you, albeit very briefly, give us a quick expert overview of where you think this technology now is, worldwide? At what stage is it? Secondly, within that, where do you think that the UK is, compared with other nations, in terms of this new and exciting development?

Sir David Amess (Conservative, Southend West)

I know that you all want to say something, but if I allow that, we will never get through the session.

Charles Hendry (Conservative, Wealden)

May I follow that with three specific questions on carbon capture and storage? First, when is the earliest time that CCS could be up and running commercially in the UK? Secondly, do you think the opportunities here are equally great for pre-combustion and post-combustion? Thirdly, what do you estimate to be the necessary cost of carbon in euros per tonne, in order for CCS to be economically viable in this country?

Steve Webb (Liberal Democrat, Northavon)

Just to press you further on what you have just said, which was very helpful, my perception is that the competition that the Government have established has picked a technology and you are saying that the other technology is very important, could lead to a hydrogen economy and has been put on go-slow because of the Government favouring one over the other. Is it your view that, for example, there should be another competition for pre-combustion technology? Are you worried that the time scale for the competition that we have got is unnecessarily slow and that we need to get on with these things faster?

Jamie Reed (Labour, Copeland)

I do not think there is any doubt that every Member of this Committee and of the House wants to see us succeed and succeed quickly in carbon capture and storage; it really is that imperative. I have three quick questions. How is CO2 actually stored? Over what time frame is it envisaged that it will be stored? What will CCS do to the generating cost of oil and gas electricity?

Jamie Reed (Labour, Copeland)

The point I was making was: which companies are going to look after the deposited CO2 in these aquifers, for how long and how much is it going to cost?

Anne Main (Conservative, St Albans)

I want to go back to a comment which I think I heard Dr. Chapman make. I think he said that if we did not go down the cleaner technology and hydrogen economy route, we would be building more coal-fired power stations.

Anne Main (Conservative, St Albans)

Do you feel then that a push to perhaps having more coal-fired power stations as part of the mix would divert some investment in CCS?

Anne Main (Conservative, St Albans)

So, it is not a diversion. Similarly, do you not feel that going to post-combustion is a diversion either?

Paddy Tipping (Labour, Sherwood)

We have heard a lot about carbon capture and storage from the Carbon Capture and Storage Association. Would colleagues from the oil and gas sector talk to us about the timetables involved, because there are enormous opportunities for you as well, but significant difficulties too? Give us a snapshot of how you see it.

Paddy Tipping (Labour, Sherwood)

Give us some indications of the time scales.

Sir David Amess (Conservative, Southend West)

Would any of our other witnesses, who have not spoken, like to comment? No, so I call Dr. Alan Whitehead.

Alan Whitehead (Labour, Southampton, Test)

Witnesses from both the Carbon Capture and Storage Association and the oil and gas industry have mentioned the importance of meshing in carbon capture and storage to the continued supply of gas and oil—particularly gas for power stations—and we have mentioned coal for power stations. Do you see any compatible or additional role for heat capture in power supply? What time scales would you put on those processes? For example, do you see that the current applications for new coal and gas power stations might reasonably—in terms of their CO2 content—have a heat capture obligation placed on them in advance of any requirement to develop carbon capture and storage, so that we can have a seamless low-carbon future for both sources of energy?

Alan Whitehead (Labour, Southampton, Test)

I wonder whether I could press our witnesses from Oil & Gas UK on the inevitability of problems arising from the very high carbon content of continuing to supply gas to the UK energy production market. Bearing in mind what we have heard about time scales for carbon capture and storage, do you consider any moves from the gas supply industry to register concern about or action on the fact that, in addition to carbon being captured, the heat that is produced—usually wastefully as a result of gas being used in power station supply—might be regarded as part of the process in future, particularly in terms of what we have heard about the development of combined heat and power plants, for example?

John Robertson (Labour, Glasgow North West)

I wonder whether I could get some information about abandoned wells. In clause 70 of the Bill, the Secretary of State demands information from the people who do the drilling. Do you see any problems with this clause, in terms of the Secretary of State receiving the information or the person who would be held accountable for not supplying the information?

John Robertson (Labour, Glasgow North West)

Why do you think that clause is there?

John Robertson (Labour, Glasgow North West)

It is one for the Minister, then. Do you think the Bill provides sufficient powers to enable the Secretary of State to ensure that licence holders fulfil their duties under the licences?

John Robertson (Labour, Glasgow North West)

So do you think that is increasing the burden and making it more complicated, or is it less complicated?

Brian Iddon (Labour, Bolton South East)

I have a couple of questions. One is about enhanced oil recovery, coupled with gas—for example, carbon dioxide storage. How intimately are these connected? Does the enhanced oil recovery help significantly to keep the cost of CCS down?

Brian Iddon (Labour, Bolton South East)

My second question concerns liquid natural gas brought in by shipping, compared with gas brought in by pipeline. Could the gas people tell us something about the competitive economics of that, and the advantages or disadvantages of each of those methods of importing gas?

Brian Iddon (Labour, Bolton South East)

So what are the advantages of importing LNG if it sits in a higher price band?

Charles Hendry (Conservative, Wealden)

Can I ask a question specifically about gas storage? My understanding is that we typically have about 12 winter days’ supply of gas stored, compared to other European countries where they would have 60 to 80 days’ storage. Do you believe that a target should be set for how much gas storage we have in this country, taking account of the fact that we also have LNG facilities and the pipeline infrastructure? Do you believe that the Bill would be an appropriate vehicle for bringing forward such a target?

Sir David Amess (Conservative, Southend West)

I would like to thank our witnesses for their attendance this morning and for the evidence they have given. Would you now please swap places with our final set of witnesses?

I welcome witnesses to our final session. Kindly introduce yourselves to the Committee.

Charles Hendry (Conservative, Wealden)

Can I direct this question to the Minister? In his evidence, Andrew Lee, director of the Sustainable Development Commission, said he thought that the Bill was a missed opportunity because it left out changing the agreement of Ofgem, because it did nothing about regulation of heat and because it did nothing about smart metering or about fuel poverty. Would the Minister tell us why those elements have been left out of the Bill and whether he is prepared at this stage to reconsider them?

Charles Hendry (Conservative, Wealden)

The Minister will have heard, both on Second Reading and also in Committee, that issues such as smart metering have a considerable amount of support on both sides. From what we understood of the evidence of Alistair Buchanan of Ofgem, is that an issue on which we might get a statement from the Minister? Can we expect something on smart metering in particular in time for the rest of the Bill’s Committee stage?

Alan Whitehead (Labour, Southampton, Test)

The provisions for the rebanding of ROCs, as far as I understand the legislation, will be based jointly on material in the Bill and subsequent secondary legislation to secure the content of the banding. Do you think that, in itself, is sufficient to deal with all the various aspects of renewable energy at various stages of development, particularly microgeneration, that will come forward? Are there other measures to think about, particularly concerning microgeneration, which could complement reform of the renewables obligation to ensure that microgeneration is brought forward?

Brian Iddon (Labour, Bolton South East)

Minister, I am particularly concerned about the competition between pre and post-carbon capture and CCS technology. As a chemist, I am particularly concerned to get maximum output of chemicals from burning fossil fuels and, therefore, I support pre-carbon rather than post-carbon capture. I am dismayed that the competition has not been a parallel one and, as we have heard from previous witnesses this morning, we may lose the impetus with pre-carbon capture. Why have we not had a parallel competition between pre and post-carbon capture?

Steve Webb (Liberal Democrat, Northavon)

The energy mix is, I am sure, something you think about a lot, and you must have done some scenario planning of different energy mixes in the medium term. Given that the Secretary of State, when he made his statement about new nuclear, more or less explicitly said that he was not mandating new nuclear—he was just trying to remove hurdles—it is presumably not inevitable that new nuclear will come on stream. The Government want it to, I believe, and want to clear the way for it to happen, but could you or your officials tell us about the scenario planning you have done—if, for example, the private sector were to decide that new nuclear were not viable or not attractive? What other strategies have you looked at for meeting our energy needs?

Anne Main (Conservative, St Albans)

I have three brief questions. First, given the evidence we have heard this morning on carbon capture and storage particularly from Dr. Chapman, do you feel that there is perhaps a missed opportunity in the Bill? Given that the retrofitting of carbon capture and storage facilities is extremely expensive, perhaps there has been a missed opportunity regarding the meshing-together of technologies that he seemed to suggest would be worth while?

Secondly, I note you said in response to my colleague that not including smart metering and fuel poverty in this Bill was not necessarily missing an opportunity, but that it was just not necessary to do it in the legislation. Yet we have heard that the various fuel companies themselves are not being very proactive in operating social tariffs and ending fuel poverty. Perhaps you would like to reconsider, given the prominence in the White Paper that was given to fuel poverty and that its absence from this Bill sends a message to many people who are in fuel poverty that the Government are not taking it seriously enough, because they are not dealing with it through legislation.

With regard to the smart meters that you said you were committed to, are we talking truly smart meters, not the electricity display devices that were referred to in the Communities and Local Government Committee when we had a submission from DBERR? Which smart meters are we talking about, given that there is such a wide range?

John Robertson (Labour, Glasgow North West)

Minister, this question is probably for your experts. I asked the oil and gas people about clause 70 on the decommissioning of wells and what the purpose was, but they did not know, so perhaps one of your experts could tell us.

John Robertson (Labour, Glasgow North West)

I am concerned about the phrase “when the time comes”, because if someone is allowed to invest in sinking a well or whatever, and they do not have financial backing, how far down the line do you check? Do not you check at the beginning rather than at the end?

John Robertson (Labour, Glasgow North West)

Minister, we all know there is going to be an energy gap around 2015, when we will be waiting for new power stations to come on line, and for renewables to give us a return. How do you propose filling that gap?

John Robertson (Labour, Glasgow North West)

Could that mean, then, that CO2 emissions at that time would not go down, and the level would remain as it is at that point and that we may be in danger of not hitting our targets for 2020?

Paddy Tipping (Labour, Sherwood)

I would like to return to the discussion you were having with Steve Webb about nuclear. The Government have made it very clear that the funding for new nuclear will come from the private sector. The private sector will have to invest big time to achieve this, and will need some confidence about financial return. The key to that is the pricing of carbon, and a carbon market. The carbon market is still in its infancy. What work have you done to assure potential investors that, when the day comes, the EU emissions trading scheme really is going to have a high and sustainable price of carbon sufficient to bring new investment? Secondly, what about that curious phrase in the nuclear White Paper, which seems to suggest that if there is not an EU scheme, there could be some possible underwriting here in the UK?

Paddy Tipping (Labour, Sherwood)

What are the key dates on this?

Paddy Tipping (Labour, Sherwood)

If there was a specific UK scheme, how would you tackle the charge that this was a subsidy, an underwriting, by another name?

Paddy Tipping (Labour, Sherwood)

So the promise in the White Paper is meaningless?

Hugo Swire (Conservative, East Devon)

This is for the Minister and the civil servants. In your long list, Minister, of how we would bridge the gap that Mr Tipping referred to earlier, one thing you left out was non-energy crops. I wonder whether you or your Department could enlighten us as to your thinking behind the assertion that the imposition of ROCs for non-energy crops will result in less biomass being burnt and therefore more CO2 being released into the atmosphere. Would you look at the inclusion of these caps in the Bill and if you are not prepared to remove these caps, will you make it clear later, ahead of the drafting of the renewables obligation order, that you will not pursue such a cap?

Hugo Swire (Conservative, East Devon)

May I ask what conversations your Department has had with DEFRA, who have in the past encouraged farmers to grow fuel suitable for co-firing?

Hugo Swire (Conservative, East Devon)

I totally agree, but that is slightly at odds with what your civil servant just said, which is that he has not talked to DEFRA officials about the implications of such a cap, given the fact that the farmers have been encouraged by DEFRA over the past few years to grow energy crops.

Martin Horwood (Liberal Democrat, Cheltenham)

My questions are to Dr. Walker and Dr. Higson. A quick one to Dr. Walker: if the Minister was so minded, on reflection, to think that the Government had made a bit of an error on carbon capture and storage competition, is there nothing in the Bill that would prevent that being rethought and reorganised?

My question to Dr. Higson is on funded decommissioning programmes. A number of questions to witnesses threw up possible doubt over some of the liabilities, which followed on from what Mr. Tipping was saying. There has been the cost of very long- term storage—and Dr. Roxburgh from the Nuclear Decommissioning Authority said that you will have to ask the Government about that—and the cost of the decommissioning authorities and the nuclear installations inspectorate. Are they are going to be recovered from the funded decommissioning programmes? Then there is the issue highlighted in your own impact assessment: if the companies concerned go into liquidation or are restructured, will the funds cease to be available for these funded programmes? Are these liabilities still there for the public purse?

Martin Horwood (Liberal Democrat, Cheltenham)

Well, substantial, but not total protection. If operators are, as you say, dependent on cash flow to build up a contingency fund, a company could go into liquidation or be restructured to the point where funds were not available before a fund was established to protect it against such long-term liabilities.

Martin Horwood (Liberal Democrat, Cheltenham)

So the fund has to be established, with all the long-term costs built in, before the first day of operation of the nuclear power station?

Martin Horwood (Liberal Democrat, Cheltenham)

Will the cost of the inspectorates and the Nuclear Decommissioning Authority be recovered through the funded programmes?

Martin Horwood (Liberal Democrat, Cheltenham)

And the cost of the very long-term storage, which Dr. Roxburgh asked us to ask you about? In other words, what would happen thousands of years into the future if these sites were not completely—

Martin Horwood (Liberal Democrat, Cheltenham)

Dr. Roxburgh from the Nuclear Decommissioning Authority.

Martin Horwood (Liberal Democrat, Cheltenham)

Without any maintenance or security?

Martin Horwood (Liberal Democrat, Cheltenham)

You are talking about it being capped without the possibility of access?

Martin Horwood (Liberal Democrat, Cheltenham)

So you have not actually taken the decision on whether the site should be accessible and, therefore, whether there would be long-term costs in terms of security and management?

Jamie Reed (Labour, Copeland)

I shall spare you, Minister, and colleagues from any personal nuclear discourse, which I shall save for the Committee stage proper, when Mr. Horwood and I will go at it properly, I am sure. However, I think that the Bill is genuinely radical, and many people, me included, come into politics to push this kind of Bill through the House. It is exciting; it looks to the long term; and it looks after future generations in a truly comprehensive way, but it cannot do that unless it brings into question any doubt about whether we can do what we say we want to do through the Bill.

My concerns are about CCS. It appears that we want renewables to work, and we are committed to that. Yes, we want nuclear to work, and we are committed to that. Yes, we all want CCS to work, and we are committed to that. However, if CCS does not work, I do not see how we can secure our twin aims of reducing our CO2 emissions and establishing security of supply in the way that we want. To what degree are we betting the house on CCS working?

Albert Owen (Labour, Ynys Môn)

Just on the nuclear issue, I think that Mr. Higson has dealt with the waste aspect, although I feel that many members of the Committee will not be satisfied with that, and will take the opportunity later on in Committee to discuss it further. I understand why there was a delay, because of the court case, with regard to the announcements on new build, but why could we not have a neat package, saying yes for new build to go ahead? The strategic site assessment is complete and the waste issue has been dealt with, so that many of those people who are feeling uncomfortable with the latter two could understand the way forward and the Government’s thinking.

Albert Owen (Labour, Ynys Môn)

So this has been going ahead while the other work has been held up—

Albert Owen (Labour, Ynys Môn)

And is the industry, in your opinion, confident that it is getting the information that it needs if it wants to invest?

Steve Webb (Liberal Democrat, Northavon)

Just on this CCS competition issue, I am not aware—I apologise for my ignorance on this—how much the Government are putting into the demonstration project. What is the taxpayer’s commitment, if any? Linked to that, I have a general concern about inactivity. The Minister sits there and implores companies to come on board. Although we are not betting the whole house, whether we can make carbon capture and storage work is fundamental to the planet’s future. He just hopes that companies will do it out of good will and in the name of corporate social responsibility. Is there not a disconnect between the scale, magnitude and seriousness of the problem and the Minister saying to energy companies, “Be good chaps and give us a few more million in social tariffs.”? Is more direct Government intervention not needed?

Steve Webb (Liberal Democrat, Northavon)

Steve is fine.

Steve Webb (Liberal Democrat, Northavon)

How much?

Steve Webb (Liberal Democrat, Northavon)

Orders of magnitude?

Steve Webb (Liberal Democrat, Northavon)

What scale? I have no idea of the scale. Are we talking about £1 million, £10 million or £100 million—how many noughts?

Steve Webb (Liberal Democrat, Northavon)

At the other end of the scale, you very profoundly and rightly, in my view, said that any sensible approach to energy has to start with energy efficiency. Here we have a complete energy Bill that seems to have nothing to say on that subject. Are you saying that no more legislative action is needed to drive forward energy efficiency?

Charles Hendry (Conservative, Wealden)

Can I pursue that point further, Minister? Some 40 per cent. of our housing stock in this country is properly insulated. We have not made much progress in that area. Earlier on, the Minister spoke about new build and the Government’s zero-carbon programme in 2016. However, new build represents 1 per cent. of the housing stock every year. If we are really going to make progress on energy efficiency, we must do much more about the existing housing stock. Is he really saying to us that nothing more is needed to drive that programme forward?

Charles Hendry (Conservative, Wealden)

But in other parts of the world—notably the United States—supply companies are required by law to work with their customers to reduce energy demand. If they reduce demand, they share the dividend, so the customer gets lower bills and some of the saving goes back to the companies. Does the Minister believe that there is some merit in looking at a legislative approach to require the supply companies to do more than they are currently doing?

Paddy Tipping (Labour, Sherwood)

You talk about the responsibilities of energy companies. Of course, a high and sustainable price of carbon would force CCS development.

Let me turn to the social responsibilities of energy companies. Some of them do pretty well—EDF, E.ON—but others such as npower and Scottish and Southern Energy, although they have low prices, do not do very much on social tariffs. On Second Reading, the Secretary of State made it clear that he was still open-minded about whether social tariffs should be made mandatory. Is that the still the position? Are you saying to the companies that you meet regularly, “Look, unless you perform and do more, we could introduce legislation.”?

Paddy Tipping (Labour, Sherwood)

That is what Fabian socialists do.

Sir David Amess (Conservative, Southend West)

I have three colleagues who still want to ask questions and five minutes left.

Alan Whitehead (Labour, Southampton, Test)

We have heard a great deal about the idea that perhaps new gas or coal-fired power stations would be required to be CCS-ready if permission is given for them to proceed, presumably on the basis that if one simply contemplated a whole new generation of gas and coal-fired power stations coming on line without any mitigation whatsoever, we would simply miss our CO2 targets by a mile. You have recently given permission for two power stations to go ahead provided that they are CHP-ready. As we discussed in relation to carbon capture and storage, are there any other measures that you think should be undertaken to make the idea that power stations might be CHP-ready a reality?

Sir David Amess (Conservative, Southend West)

Can I ask our two colleagues who still want to ask questions to put them one after the other, and then perhaps the Minister can quickly reply?

Brian Iddon (Labour, Bolton South East)

My question is about the national grid. Clause 40 is about granting licences to develop offshore electricity transmission; but with different and changing pressures, with installations closing and new installations opening, is the national grid fit for purpose at the moment? If not, what must be done?

Sir David Amess (Conservative, Southend West)

You have just the one question there.

Sir David Amess (Conservative, Southend West)

My thanks to the Minister and his officials for their evidence to the Committee.

Further consideration adjourned—[Alison Seabeck.]