European and External Relations Committee,

Meeting date: Tuesday, May 9, 2006

Official Report 318KB pdf

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Work Programme

The next item relates to the committee's work programme for the year. We have before us a briefing paper and terms of reference for a short inquiry on energy issues. The paper lists a number of areas that the committee could investigate, but we should bear in mind our other commitments, the deadline for consultation and how many evidence-taking sessions we will be able to hold, assuming that we do not decide to schedule extra meetings, which is something that we could do if the committee is particularly keen to investigate this issue further.

I suggest that we might consider an aspect of energy efficiency and renewables, or an aspect of renewables, and aim to pick out examples of best practice and policy development ideas. Obviously, the response could be wider than that. For example, we could include some good material from the Environment and Rural Development Committee's recent report on the biomass industry.

I invite members to comment on the paper and suggest items that we could include in the terms of reference.

Bruce Crawford seems to be desperate to contribute.

It is just that I am always desperate, convener.

I am grateful for the terms of reference that are included in annex B. However, I find it hard to understand why, given that we are entering a wide-ranging discussion across the United Kingdom about our energy future—something that the European Commission is obviously interested in, as it is producing a green paper on the subject—we have airbrushed out the issue of nuclear power. Regardless of what side of the argument we might be on, we must accept that one of the most fundamental decisions that this country is going to face is whether to construct new nuclear reactors to produce civil nuclear power in the UK.

It could be argued that this issue is reserved to the UK Government and that, therefore, it should not be part of our discussion. However, as the Executive has a position on the matter—which is stated quite clearly in David Thompson's note of 12 January, which explains the partnership agreement—it would be remiss of us to fail to have an evidence-taking session on the nuclear issue. The evidence that we would gather about what lies beneath the Executive's policy and what decisions need to be taken would inform the debate at a European Union level. We should involve ourselves in this issue.

I am tempted to say that the development of clean-coal technology is another issue that we should chuck into the inquiry, but I recognise the convener's point about the scale of the inquiry and the time available. However, it is tempting to consider that issue, given that Scotland has tremendous coal reserves. It would be particularly useful if we could involve ourselves in discussions on whether the carbon that emanates from power stations could be sequestrated in redundant North sea oilfields. That could produce a net benefit because it would involve the extraction of greater resources.

Obviously, I am happy to hear the views of committee colleagues before we decide whether we need another vote.

The interesting suggestions that Bruce Crawford has made simply underline the magnitude of the task that the European Union faces. I must point out that no matter what view Scotland or the UK takes on nuclear energy, France will not be taken away from its nuclear industry, to which it is totally committed. We need to remember we are talking about a proposed EU strategy.

However, the fundamental argument for me is that energy is not an EU responsibility. I can understand why the Commission might want a strategy on sustainable energy as I can see some merit in nation states coming together to discuss that within the EU, but the Commission green paper suggests that the EU should speak with a common voice on energy. I believe that to be neither possible nor desirable, so I want to lay that down from the start.

I do not think that we want to widen the inquiry into constitutional issues.

I compliment the clerks on the paper that they have put together. The paper demonstrates that any energy strategy must go down the line not only of electricity supply, which Bruce Crawford mentioned, but of air transport and the other issues that create a problem by using up the fuels to which we have access.

As a committee, we need to determine which issues we will concentrate on. I suspect that we should focus on issues such as energy supply, electricity production and the use of gas for heating given that those issues could pose a threat to Europe's competitiveness in future.

If our inquiry is to consider renewable energy, we will inevitably need to consider nuclear energy and other means of electricity generation. It would be stupid to avoid that. We would also need to consider issues such as transmission and the free movement of products among European countries. That is a matter of real interest, given the current arguments over whether we should have a single European market in energy.

Bruce Crawford has suggested that we either expand the inquiry's terms of reference or agree to bump out one of the other issues so that matters such as nuclear and clean coal can be included. Phil Gallie has suggested that our inquiry should be focused very much on energy supply issues connected with gas and electricity. Do other members have any comments?

It is clear from the clerk's paper that, as Phil Gallie pointed out, the danger is that we will have an inquiry that is so wide that we become the energy committee rather than the European and External Relations Committee. I was particularly brought up short when I read the suggestion that the call for evidence should ask for written submissions to be sent to us by 23 June, which is one week before the recess. The clerk's paper says:

"The consultation period for the Commission's Green Paper ends on 24th September 2006. The Committee will aim to finalise, submit and publish its submission within that timetable."

That will be a tall order if our inquiry goes too wide.

Having looked through the paper to consider how to narrow down the inquiry's remit—I am interested in most of the issues, so I would probably not be unhappy with whatever we decided on after our debate—I suggest that we consider energy efficiency as a discrete issue as that would enable us to get away from the arguments over generation. In particular, I note that, as part of the action plan on energy efficiency that the Commission is due to produce, a system of "white certificates" is being proposed. The clerk's paper suggests:

"The Committee could consider how effectively such a system could operate in Scotland."

An inquiry on that issue would be pretty focused. It might do something worth while, rather than touching on so many different issues that it fails to consider anything in detail.

For information, I remind members that the Executive is to produce an energy efficiency plan as well. It might be worth while for the committee to judge whether the Executive is doing enough.

Phil Gallie is right—energy is a huge area. I also agree with Jim Wallace: if we end up talking about every aspect of it, there is a danger that we will become an energy committee, get bogged down and not make a lot of progress.

Paragraph 6 of the paper outlines the six issues on which the European Commission thinks that action is necessary. Whether we focus on those or take up Jim Wallace's suggestion, we need to lay down some parameters to make our task manageable. However, the parameters must make sense. There is no point in being arbitrary and saying that we will consider one or two aspects of energy production but not the others.

I have an open mind, but perhaps we should consider the six areas that are mentioned in paragraph 6. That would at least have the merit of responding to the issues that the Commission identified. Phil Gallie is right—what the EU says about energy is not the last word—but, given that he is someone who supports market forces, I presume that he would like an internal market to be completed in electricity and gas.

As I said, we must try to define some parameters to make the task manageable.

Strictly speaking, the matter is one for our colleagues on the Environment and Rural Development Committee, but we have a European energy green paper, and rightly so. Security of energy supply is a prerequisite for stability in Europe. If there was a shortage of electricity in Europe, for example, that would give rise to all sorts of difficulties for industries, social unrest and so on.

Scotland is a significant energy exporter in terms of oil, electricity and so on, so energy is a significant part of our economy. I suppose that the big questions are whether we want that to continue and, if so, in what form. Some energy sources are going up, some are going down and some are flatlining. We certainly need to be better at energy efficiency and to have better insulation. We will probably use less coal in future; we are not producing as much of it now because there are no deep mines and people are rather hostile to opencasting. What will happen to our electricity generation industry? That matters a lot to me because my constituency contains old plant that will have to come out. Will it be replaced?

We could take a broad-brush approach and consider the scale of the main energy sectors in Scotland, such as oil and electricity. Would we be content for the electricity generation industry to be scaled down and for Scotland to become more dependent on imports instead of exports? Obviously, I have an opinion on that, but it is a strategic issue that the committee could usefully consider. If we went into the minutiae of the benefits of different types of renewable energy, we would be on a hiding to nothing, given the timescale.

I think that there are two schools of thought in the committee. It seems to me that if we do what John Home Robertson suggests—consider energy supply and whether we should be a net exporter of energy—we would have to consider nuclear energy as well.

Yes, but in the broadest possible sense.

Yes. That brings us back to what Phil Gallie and Bruce Crawford said about supply and about taking a broad view of the energy issue. I suspect that if we started considering that, it would grow like Topsy. We will have to be extremely tight if we do such a piece of work. I ask the committee again to bear in mind the constraints and the pressure that we are under in gathering evidence and holding committee meetings.

The other school of thought is that we should focus on something that the Executive is already considering, so that we can judge what it is doing as well as what is happening in Europe. I might be wrong, but it seems to me that public procurement in particular and energy efficiency trading might well be the subject of directives from Europe. There is a lot to consider. Bruce Crawford opened the discussion about widening the remit. Having heard the discussion, what do you think, Bruce?

I was taken by the arguments that Jim Wallace made about the need to consider a more specific area. The EU wants to consider improving the sustainable energy mix at a strategic level, which I suppose is what John Home Robertson was referring to. We could contain an inquiry into that, which would make it worth while. The Commission wants to increase the use of clean and indigenous low-carbon energy sources. What does that mean for Scotland? Is that the direction that we should be going in? If so, is the best way to achieve that by having new nuclear power stations or using clean coal technology? That is one of the key areas for us to consider. I wonder whether we can boil it down enough to make an inquiry a worthwhile piece of work. I have to say that that will be pretty hard.

That is my feeling.

Given that something definitive is coming from the Executive, it might be more achievable and appropriate to do what Jim Wallace suggested. Can this committee ask the Environment and Rural Development Committee—or whichever is the appropriate committee—to examine the relevant pillar, given what the Commission is saying about the sustainable energy mix? That certainly needs to be done, but it might be more appropriate for another committee to do it.

I was about to ask Dennis Canavan to play devil's advocate, given that he has not said anything yet.

I have not said anything because I am sceptical about whether we will have the time to do justice to such a huge subject. If we decide to embark on an inquiry, we will have to slim down the proposed terms of reference, not broaden them out.

Yes. Given what I am picking up from members, I suggest that we focus on energy efficiency and forget about renewables.

I go along with what members have said. We have now recognised the extent of the subject. We should analyse what is the most important thing, Europe-wise, for us to consider. Energy efficiency is certainly important, but so is security of supply and resources, which John Home Robertson mentioned. I remind everyone about the requirements of the Lisbon agenda; security of supply is a top priority.

Perhaps we could cope with analysing the availability of electricity, gas and biomass and assessing the potential for all those energy sources in the future. There is an awful lot of information that we could pull together in the short term. We could perhaps form opinions relatively quickly on the risk to future supply in all those areas. We all acknowledge that major problems with the gas supply lie ahead, but it might not be all that difficult to analyse what those problems are.

Other committees, such as the Environment and Rural Development Committee, have considered a number of things. We would have to make ourselves aware of the work that has already been done before we launch into another inquiry. We have to decide today what the terms of reference for our inquiry are so that we can issue calls for evidence and meet our timescales.

Phil Gallie is right, but, given the scale of that job, I am not sure we could do it justice and form an opinion that would contribute to the debate. Where would we start with the security of supply issue? Scotland produces seven times more gas than it needs. Where would we begin and end the argument?

It would take six months to a year for a proper inquiry to examine the details and get at what is really going on, particularly with regard to transcontinental issues and the Ukraine and so on. We would then have to apply that to Europe and to what Europe is trying to achieve by way of an internal market, as well as consider security of supply issues and common pricing. It is a massive exercise.

I accept that, but bearing in mind what Jim Wallace referred to as the tight timescale, if we analyse everybody's comments maybe we have already carried out part of the project, just by identifying the magnitude of what is being asked. Trying to consider the issue in the timescale would be totally irrational and illogical.

Could I try again?

Why? Did you get it wrong last time?

Almost certainly. I want to get better focus this time.

I agree with colleagues that it is not possible to have a colossal, wide-scope inquiry into the relative merits of different sources of energy for transport, electricity and so on. However, within the framework of the green paper on self-sufficiency and where we are going on energy, the big issue is whether Scotland continues to be an exporter, whether we want to become self-sufficient or whether we would be happy to be net importers. That is a fair question to ask. We are a major net energy contributor to the United Kingdom and other parts of Europe. It would be a good idea to carry on doing that; others might think that it would be more appropriate to scale the whole industry down or that we should be self-sufficient. That is something to which we could usefully apply our minds, but if we try to assess different types of alternative energy and different types of conservation, we will get nowhere.

There seems to be a choice between a short inquiry on the huge issues, which will be limited by the timescale, and focusing on a specific aspect such as energy efficiency or renewables. I am looking for agreement throughout the committee. No one feels strongly enough about the issue that they want to get into a real argument about it. Gordon Jackson has not said anything yet. Say something!

I have no real expertise on the issue, but some of what has been suggested sounds unrealistic. If we try to do a huge inquiry, what we produce will not be worth tuppence. At the end of the day, it would go in a bin somewhere. Such an inquiry could focus on renewables or whatever, but what we really have to do is to pick a topic and consider it. Otherwise we will do nothing.

Convener, you mentioned energy efficiency and renewables. The committee papers mention the other area in which we have a free hand, which is climate change. Point 5.4 in paragraph 6 of the paper strikes the right balance.

So we are talking about the energy efficiency and renewables aspects. The question is which to focus on.

It seems paradoxical that most aspects of the energy debate are reserved matters but that we have a free hand to talk about climate change.

We should boil it down even further and do what Jim Wallace suggested. Renewables has been done to death. We could boil it down to energy efficiency—something that Scotland has badly needed to do for a long time. I wish we could do what John Home Robertson wants to do, because that is the job that really needs to be done, but we would be scratching the surface.

I will go even further than that. Although I completely agree with Jim Wallace, I know that when you start something like this it just gets bigger and bigger.

I would like us to pursue the issue of energy efficiency, which might mean deleting certain paragraphs in the paper. After all, public procurement and energy efficiency trading will be important issues, because we have to know whether European directives will oblige us to carry out some of these things. Heating is an obvious cover-all heading for those two matters. I am not convinced that we should spend a lot of time on transport—indeed, we should ditch that element altogether—although I suppose that the issue of finance could be dealt with alongside energy efficiency trading and public procurement.

Let me boil this issue down even more. Where are the big gains and where do we need to put the money?

If we pursued the transport question, a certain parliamentary committee might feel that we were treading on its toes.

I was about to make a suggestion along the lines of what the convener proposed, because if we get involved in transport issues we will simply open things up again. As someone said—and as the paper makes clear—energy is not just about electricity generation, but the transport issue could well form the basis of a Local Government and Transport Committee inquiry. The convener's suggestion, which links with Charlie Gordon's comments, could focus our efforts. After all, a key priority area is tackling climate change, and the matters that we have concentrated on form a subset of that wider issue.

They certainly do.

Have we reached a consensus?

I think that we have exhausted ourselves into a consensus.

Why did you not make that proposal at the very beginning, convener? We could have avoided all this agony.

If I had done so, you would have argued about it. You have to pick your moment, Bruce.

Convener, can you repeat what we are supposed to have reached a consensus on?

Mr Canavan is about to open up the argument again.

Are we completely knocking renewables out of the inquiry?

We have agreed that the inquiry will focus on energy efficiency and that our terms of reference will include heating, public procurement, finance and energy efficiency trading, with the catch-all that Bruce Crawford mentioned. It was a great sentence, but I cannot quite remember what it was.

It was what are the big gains and how do we make all this work?

In the spirit of consensus, I will go along with the proposal, but the European Commission produced this green paper on 8 March 2006 and it is totally unrealistic to ask people to make worthwhile responses on such a timescale. Perhaps the committee could take that on board. Indeed, every comment that has been made this afternoon has made that feeling clear.

If you feel strongly about that—and if the committee agrees—our report could reflect that comment.

It is possible that greater minds than ours are already applying themselves to the problem.

The consultation continues until the end of December.

I say to Mr Gordon that our input is as valuable as anyone else's.