10 March 1998

Tim Boswell MP (Con. Daventry) Shadow Energy Minister

Conservative energy policies

There may be some change of emphasis in Conservative policy since the election, but it is a continuity of development.

I think there is an immediate problem. Most of the industry and energy policies seem to divide into a time scale between the various options and possibilities. There is an immediate possibility at the moment, triggered partly by the expiry of the electricity generating contracts with the coal industry. They effectively find themselves with a very sharply reduced market, and nothing has yet been finally resolved about it.

When I say that there is, to some extent, a change of emphasis it is because of this immediate coal industry problem – both in securing a reasonable spread of supply, and different types of supply at the moment, vis a vis gas for example, and also because there are some human and potential redundancy problems for coalfield companies. We are looking at that, both in terms of trying to encourage the Government to find ways of retaining a reasonably economic coal burn, whilst at the same time making sure that coal costs come down.

John Redwood (Shadow President of the Board of Trade) was talking last night (10 March 1998) in the Fossils Fuel Bill on the possibility of extending the levy exemption to coal gasification operations. Of course that has not yet been developed but there are one or two people who have (gasification) schemes and we would be looking in terms of exempting them from the fossil fuel levy. That is the immediate problem. It is a market problem and it is also an emissions problem. While it is CO2 which everyone obviously thinks about, it is also sulphur dioxide. The environmental agency has just published a consultation with some very hard standards indeed.

More market intervention to address emissions?

I think Government has to find mechanisms which may well involve the use of market mechanisms to produce a reasonable security and spread of supply of major fuel sources. They have to ensure, at the same time, that this is not on a blank cheque basis, without any regard to cost or the possibility of cost reduction. I should say that overrides an interest in improving emissions, for example. The two have to be balanced.

An energy strategy?

Our change of emphasis goes right through opposition policies generally, not just on energy. Obviously we need some time to reflect on these things in the light of changing circumstances. So too is the Government reflecting because we have been asking ministers whether they have got an energy strategy and they began by saying they did not really need to. Then they said they were reviewing it, and indeed they are. They have four or five, or even six separate reviews which bear on the coal industry at the moment, both in terms of things like emissions but also what to do about coal contracts and electricity generation. They will have to take some decisions, and in the light of what they come up with we shall no doubt respond, I hope, constructively.

The need for renewable energy?

Very much depends on the time scale. We began this with the NOFFO (Non-Fossil Fuel Obligation) process. There has been a gradual growth in renewables and that has been very welcome as they are generally benign uses. On the planning side – the physical planning side – there are some concerns centering for example around wind farms and their vision impact, but certainly if one can continue to encourage benign uses that is something we would very much welcome. That has a benefit, not only in the UK but also, of course, as a centre of British technology in terms of overseas exports. It just so happens, my last ministerial job was in the Ministry of Agriculture, and I was responsible there for most of the green side of it. One part of this was green energy from bio-mass. I was looking, for example, at willow as a possible local fuel source. Certainly this will develop, but it is not cost free, you have to balance it, and certainly we have a continuing interest in developing it. The only thing I would say, in the short to medium term, it is not wise to be over starry-eyed about it. We are talking about very small percentages at the moment. Though it is increasing and will, I hope, continue to increase.

Can Britain become a world leader in alternative energy technology?

In principle that is important. One of the major assets we have – I know from my previous ministerial work – in agriculture and education is our brain power, our ability to think of packages and approaches. What I cannot do is identify myself with a particular technology now, because I am not sure that I would be qualified to, or that it had been tested. But of course we are interested in longer term developments. I have not mentioned anything that might arise in the long term, in terms of the ‘hydrogen economy’. At the moment it is clearly, hugely expensive, but it may well become more feasible in the future. It may possibly, for environmental reasons, become more necessary. Certainly, we are prepared to look at that, and if it sounds sensible it is something we could possibly embody in the range of sticks and carrots to encourage it to come along.

State investment into renewables?

Some levers are there in terms of international obligations, like Kyoto and what follows from that. That is the driver, if you like. My personal inclination is to say that I think it would be better, with the experience of the post war nuclear programme, if some of the capital investment was not up front and there was rather more intellectual investment before the capital investment took place. Put another way, it would be better if we had more regard to the coefficients of variation and variables and changes in circumstances, which mean that we need to be more flexible than we were then. But I do agree that, given the importance of energy to governments, it is something they should reasonably be thinking about and stimulating where it seems sensible to do it.

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