Speech by Phil Woolas MP to the Renewable Energy Association Conference, Said Business School - 20 September 2007
Good morning, and thank you for inviting me to speak here today. My last visit here was two months ago following the flooding which occurred only half a mile from here, to the west of Oxford. It is very appropriate then that I am here today to speak on energy policy, climate change and renewables.
Thoughts on Energy Policy
If I ever had any doubts about the seriousness of the issue of climate change, what I have learnt in the first three months in my job has both terrified and daunted me.
Last week’s IPCC Conference has continued to underline the importance of science in this issue in a very dramatic way.
Many people regard any action taken by the UK in decreasing carbon emissions as insignificant. Indeed, this is the case if we look arithmetically only at emissions within the UK. However it is important to look at the consequence of the UK’s environmental impact across the world. From this perspective we see that as much as 15% of world carbon emissions are a direct result of UK economic activity both at home and abroad.
I would suggest that the UK is seen as a leading player on environmental policy because of the high regard our scientific base of evidence is held in. In addition the increasing commitment of UK consumers to green buying patterns gives us diplomatic leverage on the world stage and puts us in a strong and credible position internationally. The Stern Review demonstrated how UK leadership can change the terms of the debate internationally. In my view a Stern Review is needed for every continent in the world in order to drive home the economics of this issue.
The UK is also showing strong leadership through being the first country in the world to propose a Climate Change Bill, with targets to reduce CO2 by 2050.
But although this was the primary intention of the Bill, it was not the only one. The fact that we have a Climate Change Bill provides us with a vital lever in international discussion by committing us to taking real action at home.
Working to secure an international agreement to tackle climate change after 2012 is a number one priority. But none of these countries will take me seriously unless they see the UK Government taking credible action at home.
The Climate Change Bill sets a clear and overarching framework. But I recognise that the next step is to have the policies in place to deliver on those targets. The Energy White Paper, published in May this year, set an important policy context.
It is crucial now to have the debate not on whether we should combat climate change, but how. Of course the debate on the size of the target is important, but in my view not as important as the process by which we reach that target. And as the White Paper highlighted, our energy policy must also be guided by a second priority, as well as climate change, that of energy security. Securing energy supplies is the pre-requisite for a strong economy, which in itself is the foundation for developing a low-carbon economy. I believe that we do not have to make the choice between economic prosperity and environmental protection.
At the core of the matter, the fossil fuels that drive our economy come from a small number of countries. And these countries are aware of the sway that they hold, and this comes with risks.
But I do not see a trade off between energy security and climate change. There are two pillars to energy policy that can deliver on both these priorities.
First, energy efficiency. It is clear to me that we must continue and accelerate our efforts to improve energy efficiency . It is the most cost-effective way to reduce emissions. There remain huge opportunities in our homes (not just newly built homes), businesses and in the public sector. And greater efficiency boosts the UK’s competitiveness while reducing the pressure of energy prices on our businesses and consumers.
The second pillar, is to decarbonise our energy supply. I firmly believe that, in the case of electricity, nuclear power must continue to have an important role. Of course nuclear power and how radioactive waste is dealt with are issues the Government is still consulting on and no decision has yet been made. And although nuclear makes up most of the column inches, it is only part of the story. Carbon capture and storage, combined heat and power and renewables all have the potential to contribute to our energy policy goals.
So energy efficiency, and more diverse, low-carbon energy sources, can deliver the twin objectives of energy security and tackling climate change.
Renewables
So where do renewables fit in?
First, can I say that this Government is totally committed to playing its part in meeting the EU’s package on renewable energy and climate change as agreed at this year’s Spring Energy Council. Despite what you may have read in the Guardian a month ago.
For renewable electricity, our Renewables Obligation demonstrates a long term commitment, and our proposals in the Energy White Paper will, I believe, allow us to triple the generation we get from renewables, including energy from waste, by 2015.
Through the RO we are also supporting anaerobic digestion and I would like to take this opportunity to thank the REA for working so closely with us and our other partners to organise and ensure the success of a recent workshop on anaerobic digestion.
Heat will be a key aspect of future UK energy and carbon policy. It accounts for almost half of UK final energy use, and 47% of our carbon emissions. We need to think about heat in any discussion of how the UK will meet both its long-term targets for reducing CO2 and the 2020 EU target for renewable energy.
In response to this challenge we directed the Office of Climate Change, an independent cross-departmental strategy unit, to examine how heat could contribute to the UK's climate change goals. A team there has been working on the subject since January and they will report their findings to Hilary Benn, Malcolm Wicks and I shortly, including recommendations on next steps.
I know that many people here will have assisted the OCC Heat Project, and I offer them my thanks.
And when it comes to transport, next year we will introduce the Renewable Transport Fuel Obligation that will, by 2010, require five per cent of fuel sold in the UK to come from a renewable source. This will significantly increase the country’s biofuel sales which in 2006 stood at less than one per cent of all road fuel sales.
The Government is committed to ensuring that biofuels used in the UK come from sustainable sources and save as much carbon as possible, a growing debate which I welcome.
Several reports have been published recently pointing to the dangers of deforestation and of rising food prices if we increase in the wrong way the production of crops for energy. The UK Government is acutely aware of this environmental concern. I want to assure you that we take the conclusions of these reports very seriously.
20% of CO2 emissions come from deforestation so it is an issue that needs to be taken seriously. For the UK, it is not a question of deciding between fuel or forests. We want both. We are pioneering the development of sustainability standards and of carbon reporting which we will introduce in the RTFO. But this initiative will not solve the global problem on its own.
The global community must, as a matter of urgency, work towards the development of internationally recognised sustainability standards for biomass grown to produce biofuels.
But as well as sourcing bioenergy internationally, the Government is totally committed to seeing a major, sustainable, expansion in the supply and use of bioenergy in this country.
As a sign of that commitment, today, we are publishing our “1-year on” Report to the Government’s Response to the Biomass Task Force, setting out our progress against our Biomass Action Plan.
This includes the UK Biomass Strategy, published alongside the Energy White Paper. The Strategy made it clear that the technical potential is there for biomass to play a major role. It identified potential areas for increased supply of biomass through the use of unmanaged woodlands, waste timber, energy crops and organic waste.
I’m keen to develop a robust bio energy supply chain and have established the Bio Energy Infrastructure Scheme providing grants to help harvest, store, process and deliver biomass.
We recognise the need to increase uptake of biomass-fuelled heat boilers and combined heat and power plants. As part of this, Defra is funding the third round of the Bio-energy Capital Grants Scheme. We have already offered grants totalling nearly £7.3 million to more than 50 projects to install over 140 biomass boilers in the industrial, commercial and community sectors in England. We expect to allocate further grants over the remainder of the financial year.
I am also pleased to announce that the second round of the Energy Crops Scheme in England will open for applications on 1 October. This scheme will contribute to the establishment costs for short rotation coppice and miscanthus in England, and will be administered by Natural England. But by opening the scheme to applications in advance of approval, growers will be able to start the appraisal process and plan for planting in Spring 2008.
Conclusions
So the renewables scene, and particularly biomass is a busy and exciting one. And this is a testament to the work of the REA, the member companies, and others committed to developing the UK’s renewable energy.
We all know the UK has a fantastic resource of renewables, from our woodlands to our seas, from the Scottish highlands to the rooftops of our housing estates. And using these opportunities means that we can tackle climate change and enhance our energy security.
I want to touch on the implications of this, in my last few minutes, particularly on our energy markets, and on global politics.
First, on our energy markets. All of what I’ve outlined above, on support for renewables, on the need for a diverse source of energy and heat generation tells me one thing. That it’s not a question of whether the State should intervene in the market. With the Renewables Obligation, our Energy Efficiency Commitment, our support for various technologies, it already is. And we need to think of energy policy in that context.
Second, on global politics, the Climate Change Bill is setting out a path to take the UK to a low carbon economy by 2050. Implicit in that is a shift away from dependency on fossil fuels. A future with an oil-free economy will transform global politics. As oil is increasingly displaced by biofuels, hybrid technologies, and greater efficiency, it will change the balance of global power.
These implications are profound. But they are manageable. Delivering energy security whilst tackling climate change is our only option. And I know that renewables will continue to have a critical role to play. So can I wish you success for the rest of your conference.
Thank you.
Page last modified: 20 September 2007
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20 September 2007