Energy Costs

Mr Peter Hain (Neath) (Lab): With sky-high energy bills in Wales, which are higher than anywhere else, and a Tory-aligned think-tank saying that people are maxed out on personal debt—there are about 250,000 of them in Wales—does the Minister agree with the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), that his party is the party of the rich and that its members are seen as aliens and heartless extremists?

Stephen Crabb: The right hon. Gentleman is a member of a party about which one of his colleagues said that it was “intensely relaxed” about people becoming filthy rich. It was intensely relaxed about many families on low incomes being pushed into greater household debt. We do not take that approach; we are trying to bring down household debt.

Energy Bills – Green Levies

Mr Peter Hain (Neath) (Lab):Since two thirds of the green levies on people’s energy bills were established under this Government, why has the Prime Minister been attacking himself?

The Prime Minister: The right hon. Gentleman is wrong. [Interruption.] The fact is that many of the green levies were put in place by Labour. Let me remind him that one of the first acts of this Government was with the £179 renewable heat initiative, which the leader of the Labour party wanted to put on the bill of every single person in the country—and we took it off the bill.

UK Nuclear Energy Programme

Mr Peter Hain (Neath) (Lab): Even accepting the case for Hinkley, why is the Secretary of State not giving in-principle support to the Severn barrage, which would deliver clean green energy at half the price, at a similar strike price, over three to four times the lifespan of Hinkley and with three times the number of jobs? I just do not understand it.

Mr Davey: I am grateful for the right hon. Gentleman’s persistence in this issue. He knows that I have met him. I have looked at the figures that have been produced by those who want to see a Severn barrage created. It would not be at half the price; it would probably be at double the price; it is extremely expensive. No one would be more delighted than I if we could see tidal power coming in the Severn. I believe it will come, but the price will have to come down because we must protect the consumer.

Energy Demand

Mr Peter Hain (Neath) (Lab): Is the Secretary of State aware that the Severn barrage will contribute 5% of Britain’s electricity needs? In deciding on the Government’s response to the Energy and Climate Change Committee’s report, will he support the project in principle and treat it exactly the same as other major power station projects, such as Hinkley, round 3 offshore wind and so on, allowing Hafren Power to raise the risk finance for the necessary work on habitats, environmental impact assessment planning, the strike price and other issues? Otherwise, he might as well kill off the project now.

Mr Davey: Obviously, I shall not prejudge our response to the Select Committee, which, as the right hon. Gentleman will know, was not very positive about the Severn barrage scheme, not least because of the costs involved, but if he studies our announcements on draft strike prices for contracts for difference for renewables, he will see in there strike prices for tidal projects as well. It is absolutely clear that we will proceed only if we get value for money for the economy, the consumer and business.

Energy Bill

Mr Peter Hain MP (Neath): In achieving the Bill’s aim to deliver secure, affordable and low-carbon energy, there is no bolder delivery vehicle for a greener Britain than Hafren Power’s Severn barrage. The Severn estuary has the second largest tidal range in the world and the Cardiff-Weston barrage would generate fully 5% of the UK’s electricity need—16.5 TWh a year of low-carbon, predictable and therefore baseload energy.

The barrage will power the UK for more than 120 years, cleanly, securely and sustainably generating as much electricity as three to four nuclear reactors or more than 3,000 wind turbines. It injects more than £25 billion of private investment into the UK economy; no Treasury funding is needed at all. With the multiplier impact on the economy, that is a stimulus of about £70 billion.

The barrage will be a massive boost to the economies of south Wales and the south-west of England, with 80% of the investment being spent in the UK; other forms of renewable energy have to date imported up to 80% of their equipment and services from abroad. Some 50,000 jobs will be created during the nine-year build, also leaving a legacy of industrial, tourism and leisure jobs.

Some 1,026 turbines will be installed in the barrage—new, slow-spin turbine technology capable of being exported from Britain to the rest of the world. Gigantic caissons will be built and assembled and then floated out from its deep-water casting yard at Port Talbot, which will be transformative for south-west Wales. The other benefit is a legacy in Port Talbot of the largest deep-water port in north-west Europe, which would be ideal for the new generation of container ships—ultra-large container ships, or ULCs, which otherwise would have to find a port on the other side of Britain.

However, the barrage will not affect existing shipping to other ports, because special locks would enable ships to pass through without charge. Additionally, because of the more benign sea environment in the giant 570 sq km sea lake behind the barrage, there will be enormous new opportunities for marine leisure and commercial activity currently rendered impossible by the Severn’s fearsome current, bringing extra work to ports in both the south-west and south Wales.

Contrary to what critics have alleged, Bristol port will also benefit in other ways from the barrage. During construction over nine years, millions of tonnes of aggregate will be shipped out from Bristol and other ports including Newport, Cardiff and Barry. Compared with previous barrage projects, this one dramatically reduces the impact on fish and birds by using the latest turbine technology and generating on both the ebb and the flood tides, simulating the natural flow of the Severn estuary. There is already a great deal of engagement with wildlife groups to try to configure the barrage in a way that is as friendly as possible to fish and bird life.

The barrage will produce electricity 50% to 75% cheaper than coal, gas, wind or nuclear beyond the initial consumer support phase that all renewable technology attracts. For more than 90 years, it will be the cheapest electricity source in Britain. The barrage has the lowest levelised cost of any electricity generating source—lower than nuclear, lower than wind, lower than gas.

Hafren Power supports the new contract for difference price support mechanism outlined in the Energy Bill. That enables consumers to share in the upside as wholesale electricity prices rise. The barrage will also offset 7.1 million tonnes of CO2 per year; over its life, that has a value of £2 billion in today’s money. It will defend 90,000 properties and 500 sq km of floodplains from rising sea levels, saving the nation billions in flood damage and defence costs. It will protect Bristol, Cardiff, Newport and Weston from storm surges. A storm surge narrowly missed the Severn estuary in 2010; when it hit France, it caused $1.3 billion in damages. Those flood savings can be netted out against the cost of price support. Construction is 100% privately financed, so the barrage will cost the nation very little indeed.

The barrage is the biggest green energy project by far, enabling us to meet our renewable energy targets, as the Bill seeks. It will create jobs and investment; all in all, it should be a no-brainer for the Government. I ask the Secretary of State and the Government to make a decision in the context of the Bill, supporting the barrage in the first half of next year.