Tim Yeo has given a speech in London on energy policy (Telegraph coverage here). Here is the text.
Two hundred and fifty years ago, Britain sparked the first industrial revolution.
By harnessing the force of fossil fuels like coal;
Enterprising British engineers were able to deliver astounding innovations in industry and travel;
Creating huge wealth and prosperity as they forged the modern world.
In the first half of the 20th century, Britain built the first integrated national electricity grid in the world;
Powering millions of homes and factories by connecting them to network of enormous coal burning power stations.
Forward-thinking legislation had laid the framework for a cutting-edge nation-wide electricity system that would be copied the world over.
In the eighties, Britain led Europe in liberalising its energy markets;
By breaking up the out-dated nationalised utilities and introducing competition;
The Government created an electricity market that, for all its imperfections, still delivers cheaper energy prices than on much of the continent.
In those days Britain was not afraid to lead!
Now in the 21st century, tremendous technological changes are again sweeping the world.
Information technology and social media is revolutionising the way we do business and organise our lives
Exciting new energy technologies could bring equally radical changes to the way we power our homes and businesses.
But instead of being out in front again, leading the green industrial revolution Britain risks being left behind.
Our competitors... China, Japan, Germany and the US are pushing ahead on clean new technologies;
Only last month, the UK fell from fifth to sixth place in the renewable energy attractiveness rankings globally.
China is at the top and shows no signs of slowing down its low-carbon investment.
When my Committee visited China earlier this year we saw the incredible innovations they are making in this area first hand.
Its current five year plan is reducing the carbon intensity of its economy, delivering a new climate law and introducing carbon trading.
Germany - the industrial powerhouse of Europe - now gets 25 per cent of electricity from solar, wind and biomass and has set a target to get 80 per cent of its power from renewable by 2050.
In Germany last year, there were around 380,000 jobs in the renewable energy sector, and this is expected to increase to 500,000 or 600,000 by 2030.
By contrast, both the last UK government and the present one have been dithering and indecisive on energy and climate change policy.
Despite a decade of chatter and promises not a single new nuclear power station has been started.
Incentives for low carbon renewable have been chopped and changed, sometimes with little warning.
The step change in energy efficiency that even climate change sceptics support has been the subject of more rhetoric than action.
Setting a target for emissions from electricity generation as recommended by the Climate Change Committee has been put off until 2016, prolonging the political and regulatory uncertainty that is killing investment.
The choice we face
The Government's new Energy Bill presents Parliament with an opportunity to put an end to this uncertainty and set the UK on course to become a true world leader in clean technology.
Worryingly however, the Chancellor's new gas strategy is being interpreted by some as being at odds with this aim.
If this interpretation gains credence it could undermine the confidence of clean energy investors and make the Government's commitments on climate change hard to fulfil.
As Chairman of the Commons Energy Committee I think the choice facing Britain is clear.
We can embrace the technology of the future, set a target to reduce our present heavy dependence on fossil fuels and upgrade our electricity system.
Or we can cling to the combustion-based technologies of the past, gamble the future on assumptions about the availability of abundant cheap gas and slow down the process of decarbonising our economy.
Britain must look forward, or risk getting left behind.
The argument
Lumbering the UK economy with a centralised power system largely reliant on gas, would be like running an office using a fax machine in the age of the iPad.
Gas does have a significant role to play as we make the transition to a low carbon economy, but it would be rash to bet the future on one fuel or energy source.
It is time to upgrade our electricity system to 2.0.
Super efficient solar cells, anaerobic digestion, wind power, new nuclear reactors, wave and tidal power and carbon capture and storage - these are the technologies of the future!
Smart meters, new grid technology and increased interconnection across the continent will lead to a new ‘energy internet' ; decentralising electricity generation, giving consumers much more control of their use of energy, and empowering people and businesses, both large and small, to produce and sell electricity back to the grid themselves.
The dynamic demand management allowed by these new technological developments will help to address the problem posed by increasing proportions of intermittent generation in the system;
Gradually reducing the amount of gas back up that is needed.
And, as wider deployment of low-carbon technologies enables economies of scale to be achieved, the up-front capital costs of many of these systems are expected to come down.
In contrast, the dash for gas would be a gamble, because it is by no means certain that gas prices are going to come down.
Let us be clear here. My Committee was one of the first to call for Britain to exploit its shale gas reserves.
Personally I welcome anything which reduces our growing dependence on imports.
It is possible also that if the recoverable reserves are sufficiently large we may be spared some of the effect of the likely upward pressure on the gas price.
My Committee is currently examining the impact that shale gas could have on energy markets.
Abundant shale deposits in America have pushed US gas prices down, but it remains to be seen whether there are enough reserves in the UK and Europe for it to be a game-changer on this side of the Atlantic.
A robust regulatory framework and a clear system of community benefit will also be needed to make fracking publically acceptable and politically viable in a country like Britain where population density is much greater than in those parts of the US where the most rapid expansion of shale gas development is occurring.
In reality therefore, prudence suggests we should avoid staking the game on one particular energy technology.
To be fair, DECC has ensured that the Energy Bill does not do this. It is designed to deliver a diverse energy mix that lowers carbon emissions.
To put Britain at the forefront of this new industrial evolution however, the Bill should be more ambitious and set a clean energy target to cut dependence on fossil fuels for electricity generation by 2030 - as the Government's own independent climate advisors have recommended.
Arguments against
Some people believe that we should simply exploit the cheapest forms of energy available to us - regardless of the consequences in terms of climate change.
They complain that low-carbon energy needs subsidies that increase bills.
And say that we should forget a target to phase out fossil fuels from electricity, because exploiting our gas reserves will bring gas prices crashing down.
In answer to the clean energy sceptics...
Financial support for low-carbon technologies is needed to accelerate their development and deliver the economies of scale that will bring costs down.
What many forget is that these costs will not continue indefinitely.
Giving these technologies a short-term boost will soon lead to costs coming down.