Energy: Carbon Capture and Storage
Lord Grantchester Excerpts(8 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bourne of Aberystwyth
My Lords, I agree with most of what the noble Lord said, except about the cancellation. The cancellation was of an extremely expensive project. He is absolutely right that our role, along with others, is vital. We are a leading part of the Carbon Sequestration Leadership Forum internationally and, as I indicated previously, we are talking with key allies about what to do in this area.
Lord Grantchester (Lab)
My Lords, key organisations have written jointly to the Prime Minister deeply concerned about the Government’s decision to withdraw £1 billion of funding for CCS. This decision is no way to encourage businesses or investor confidence and is undermining the development of a low-carbon economy. Will the Government accept that they have perhaps made a mistake in axing this programme, recommit the funds and come up with a new strategy?
Feed-in Tariffs (Amendment) (No. 3) Order 2015
Lord Grantchester Excerpts(8 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Deputy Speaker (Lord Brougham and Vaux) (Con)
My Lords, I should inform the House that if this Motion is agreed to, I cannot call the Motion in the name of the noble Lord, Lord Grantchester, due to pre-emption.
Lord Grantchester (Lab)
My Lords, the statutory instrument before your Lordships’ House today is the latest in the recurring string of announcements from the Government that severely limit the UK’s renewables industry, the mishandling of which severely damages confidence among all investors in the sector. This SI contains massive restrictions in the deployment of small-scale renewables, including a 65% cut to the rate of feed-in tariffs available for small-scale solar, from 12p to 4.39p. It also contains a system of deployment caps and degressions that shackle the growth potential of what should be a flourishing new industry. The Government’s impact assessment puts the number of jobs lost at 18,700, which is half the number of jobs in the sector. This Feed-in Tariffs (Amendment) (No. 3) Order introduces quarterly deployment caps which, once capacity is filled, participants transfer to the next available quarter, with a 10% degression rate. Will the Minister explain to the House how this deployment cap will operate transparently for participants?
This is a terrible scheme. In the wake of the Paris agreement on climate change, everyone should be working together to bring forward investment in low-carbon and zero-carbon power. This sudden and severe change in policy with built-in cliff edges risks cutting the industry off at the knees rather than supporting it to get up and running on its own feet and guiding its graduation towards being subsidy-free. Your Lordships’ Secondary Legislation Scrutiny Committee drew attention to the high levels of opposition to these changes in responses to the consultation. Participants found it hard to be convinced on future deployment levels when the department was unable to substantiate its claims. Industry is losing faith with the Government on the way it is being treated.
The noble Baroness, Lady Featherstone, proposed from the Liberal Democrat Front Bench that the order be annulled. This is opportunistic posturing. Liberal Democrats can have short memories. They were willing participants in the coalition Government with the Conservatives. They had a Lib Dem Secretary of State at the Department of Energy and Climate Change who brought in the first alterations and cuts to the FIT scheme. In 2012, the then Lib Dem Secretary of State introduced changes with the following perverse logic and curious soundbite:
“By lowering the tariff we can extend it to more people—making clean, green, renewable energy available to the many not the few”.
They did not set a long-term policy outcome. They did not base the policy on the best outcome for the UK to bring forward industry in partnership.
Our Motion clearly puts on record our serious concerns about the Government’s feed-in tariff policy. Nobody can be in any doubt about that. Labour in this House seek to take on issues where we believe progress can be made within the constitutional limitations we have as an unelected revising Chamber. Furthermore, this House has agreed that it should only rarely threaten to defeat statutory instruments, as to do so would be an effective veto on the Executive Government. The Motion moved today by the noble Baroness is at least the fourth on an SI from the Lib Dem Benches this Session, and there is a fifth fatal Motion to come. If they had all been Government defeats, there would have been as many fatal SI defeats as there have been since World War II, but let us not allow that to deflect the House from the tactics of the Conservatives. At least they have been consistent in bringing forward vague manifesto commitments by putting them in Bills—for example, cuts to onshore wind in the Energy Bill presently in the other place—in contrast to the unannounced policy changes being brought forward in the negative statutory instrument we have before us today. I understand the concern expressed that this is incompatible with the recognised conventions.
When the Minister replies, will he clarify why changes to the onshore wind regime merit a few clauses in the Energy Bill with grace periods and provisions that can be amended, whereas this order on solar energy generation and the solar RO changes to come in another SI are negative instruments that cannot be amended? What are the substantial differences that merit these different approaches? I recognise that the parent Acts may allow this, but to a wider audience they are inconsistent. In view of the strength of argument against the order, will the Minister withdraw it for future reflection?
Lord Grantchester
That this House regrets that the Government intend to implement the Feed-In Tariffs (Amendment) (No. 3) Order 2015 causing significant harm to the renewables sector when there is growing concern at the lack of investment in new energy-generating capacity; and further regrets that the Order sets deployment limits that will severely impact on the size of one of the cheapest low-carbon energy options when there is urgent need for greater deployment of renewables to contribute to the security of United Kingdom power supplies, the decarbonisation of the energy sector, and the attainment of the United Kingdom’s obligations towards climate change mitigation under the Paris Agreement (SI 2015/2045).
Lord Grantchester
I thank all contributors to the debate today and thank the noble Lord, Lord Teverson, and my noble friend Lord Hanworth for their support. I was very pleased to hear the contribution of the noble Lord, Lord Robathan. I am tempted to remind the noble Viscount, Lord Ridley, that in his estimation of outcomes he omitted to recall that this measure will also cut community schemes that could help alleviate fuel poverty. However, to talk in terms of transfer from the poor to the rich, as some have done, is to misunderstand the issue and to ignore the huge impact of climate change on the world’s poor. We all want to keep costs down, including subsidies being as low as possible. We needed the wise words of the noble Lord, Lord Deben, to emphasise the bigger picture, along with the contributions from my noble friend Lady Worthington. We have had a full debate, and I detected indications of support from the Minister. I will not move my Regret Motion to a vote.
Paris Climate Change Conference
Lord Grantchester Excerpts(8 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grantchester (Lab)
I thank the Minister for repeating the Statement today. He is quite right to celebrate the agreement’s achievement and the role that all recent UK Governments have played to bring this about.
All Governments have agreed to the common goal to decarbonise their economies within one generation, to limit increases in global temperatures to below 2 degrees and to target 1.5 degrees. All Governments have agreed to achieve net zero emissions before 2050 and the end of the century to cut pollution and curb carbon emissions. All Governments have agreed to review progress and raise ambitions every five years to make sure that the job gets done. Developed nations have agreed to help fund the developing nations’ transition to clean energy with a flow of $100 billion a year beyond 2020.
The commitment achieved by consensus is immense. The Paris conference witnessed the greatest get-together of world leaders, with 50,000 people in attendance and the dedications of scientists, campaign groups and interest organisations in mobilising public support to insist on an agreement being achieved. This historic achievement was won in a forum of one country, one voice; unlike other intergovernment forums dominated by richer countries, as in the G7, G20, OECD and OPEC. China, the US, the EU and India are responsible for 61% of global emissions but other nations have an equal voice at the UNFCCC. The French must be congratulated for facilitating the conference, working tirelessly to resolve disputes.
The Minister is right to highlight the role played by successive UK Governments and the British Parliament. Now that this Government are the first Conservative Government for 18 years, this is not the time to abandon that consensus. It must be recognised that scientists still point to the dangers that even a rise of 2 degrees will bring and the trajectory that the world is on.
This agreement needs to be followed up by outcomes. In this respect, I congratulate the Government on the decision to phase out coal-powered generation by 2025. Last week, the Minister stated that domestic policies do not resonate on an international stage. His Government cannot think that fine words need not be matched by deeds.
In the Energy Bill 2013, the Government refused to set a 2030 decarbonisation target. There has followed a litany of reversals to important schemes designed to put the UK on track to a low-carbon economy. The UK’s commitment to reach renewable energy targets of 15% by 2020 is in jeopardy. PWC estimates that if the renewables contributions from heat and transport remain at their present levels, the UK will need to generate 52% of electricity from renewables to meet that target.
The Government have attacked the cheapest options for achieving these targets, such as onshore wind, meaning that energy bills will increase by more than they need to. The Green Deal efficiency measures have been abandoned. Carbon capture and storage projects in Yorkshire and Scotland have been axed. Polluting diesel generators have been rewarded with 15-year contracts totalling more than £150 million in the latest capacity auctions.
The UK still requires significant investment in low-carbon technologies. Investor confidence is now undermined by continual sharp policy shifts such as are proposed in the latest Energy Bill. Friends of the Earth states:
“It will be outstanding hypocrisy for the government to trumpet the new climate change agreement unless it does a U-turn on energy policy”.
Will these green policy reversals now be reviewed in the context of the commitments given at Paris? Will the Minister ask the independent Committee on Climate Change to review the progress towards and likely achievement of the UK’s renewable generation target, and whether there should be further policy initiatives to get the UK back to achieving 15% of energy from renewables by 2020?
In Paris, the global ambition has been set to reduce temperature rises from 2 degrees to 1.5 degrees. What further measures does the Minister’s department now consider are necessary?
Lord Teverson (LD)
My Lords, what a great result for all sides of this House, for the nation and for the international community. I do not think that we can say more strongly than has the Minister how great this result is. After the pessimism—the omnishambles, we could say—of Copenhagen in 2009, this is truly a good and remarkable result. We should certainly congratulate the French Government, and Laurent Fabius in particular, on their stewardship and their achievement at this conference.
The great thing is that those of us who believe that climate change really is one of the greatest issues facing this planet can be positive again, since for the past six years we have been rather on the defensive and pessimistic about outcomes. What we have here is an agreement not just between 196 nations but an agreement particularly that China, the United States, India and Europe have agreed to. That is quite something and it would have been unbelievable just a few years ago.
We also have something else to celebrate. In 2014, the globe’s emissions were roughly the same—they levelled out for the first time during a period when there was global economic growth—and, this year, we hope that there will be something like a 1% reduction in carbon emissions. So we can move forward with confidence that we are achieving something and perhaps prove wrong the pessimists or disbelievers among us, not just through the science but by showing that real-world Governments, including in the developing world, are taking notice that this is a problem that needs to be solved.
I welcome particularly in this agreement the integration between developed and developing nations—there is not the big divide that there was under Kyoto and China’s emissions this year are falling by some 3% to 4%. I welcome, too, that we will have a proper review programme every five years, starting in 2018—we are not waiting for five years until we start that process—and that we realise that, for those island states in the Pacific and elsewhere, the real challenge should be 1.5 degrees and not 2 degrees, difficult though that will be. Those are great achievements and I welcome the Secretary of State’s Statement, and in particular her thanks to previous Secretaries of State—I think of my former right honourable colleague Ed Davey in that regard.
But we have a problem here: we need those nations to move forward on those agendas, and that includes the United Kingdom. While I agree with the Minister entirely that we have had a positive reaction in ridding ourselves of coal emissions within the next 10 years and increased investment in technology around the green agenda, so far this year we have had a reversal of a number of policies that are really important for driving our commitments forward in this area. The House does not have to believe me because the chief executives of companies such as Panasonic, BT, M&S, Tesco, Vodafone, Ikea and many others have written to the Government saying that this policy change has been in the wrong direction and needs to change. Those are real challenges.
We will come to the fifth carbon budget and I hope that the Government will move forward positively when it comes to decisions, unlike with the difficulties that there were— particularly from the Treasury—when we looked at the fourth carbon budget in the past.
On behalf of my Benches, I welcome this agreement. As the Minister said, it is not the end but it is the beginning of reaching a solution to climate change on this planet. It is the most important way of going forward. Of all the policies that are most important for implementing this agreement, perhaps the cheapest and most effective is the one of energy efficiency. The Government’s move away from zero-carbon homes for 2016 and commercial buildings for 2019 was one of the most negative policies that they could have implemented. My challenge to the Minister is to ask the Secretary of State to reverse at least that one policy so that we can start on the road to fulfilling this agreement.
Energy: Security
Lord Grantchester Excerpts(8 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grantchester (Lab)
My Lords, I thank the noble Lord, Lord Bowness, for tabling this important Question today, for his interesting introduction, and for his continuous probing into lesser-known forums for energy discussion. I endorse all of his questions to the Minister and I thank the noble Earl, Lord Erroll, for joining our debate today.
While the Energy Community is essentially an enlarged EU platform to expand the EU’s internal energy market to nine states in south-eastern and eastern Europe, the Energy Charter is an independent, international, intergovernmental organisation of 52 states in Europe and Asia, including the Russian Federation. Those can play a major role in expanding the energy borders of EU energy policy through co-operation and alignment for a more secure and resilient world. Both can focus on the promotion of investment, stable energy flows and increased energy efficiency.
The Energy Community has an interesting approach to its various categories of membership: 19 of the 28 EU member states are participants, including the UK, while four EU neighbours—Armenia, Georgia, Norway and Turkey—are observers. Georgia has applied to join the Energy Community as a full member. Will the Minister comment on the fact that not all of the EU member states participate? Do the Government consider that this non-participation of some member states reduces the influence and work of the Energy Community? How do the Government approach the question of whether Georgia should be granted full membership against the background of turbulence in Ukraine and Crimea?
The Energy Community is taking the EU-model approach to a wider area. While this should perhaps not be interpreted as a precursor to widening membership of the EU, it nevertheless establishes a wider commonality of approach in this vital area of energy policy, decarbonisation and climate change. It is good timing by the noble Lord, Lord Bowness, that he has initiated this debate while the climate change talks were taking place in Paris. The Energy Community is tabling various EU directives and seeking application to eastern Europe through timed convergence within the region. For example, on electricity, community directives set minimum requirements for the establishment of competitive markets, including the development of coherent, transparent and non-discriminatory security of supply policies.
On the gas sector, the Energy Community is seeking the unbundling of transmission system operations over the next two years. On the environment, directives are identifying and assessing the environmental consequences of projects before any building or operation permit is granted. The Energy Community is presently preparing for the adoption of directives on energy efficiency, setting energy-saving targets into the future. Similarly, contracting parties of the Community are under an obligation to introduce rules to place competition on three pillars: first, the prohibition of anti-competitive agreements; secondly, the prohibition of abuse of a dominant position; and, thirdly, the prohibition of state aid. The Energy Community is also replicating EU policy with binding national targets for renewable energy in the electricity, heating and transport sectors, and with binding sustainability criteria for biofuels. The lessons of these developments of the EU policy have very much been learnt, with sustainability criteria to be verified by a dedicated body according to the rules.
On bringing coherency to a wider region, the Community is reviewing its dispute settlement mechanism. Four dispute settlement cases are currently open, and another 11 cases have been brought forward. To help implementation and enforcement mechanisms, the Energy Community has established a high-level reflection group to overcome shortcomings. Does the Minister agree that this should improve the effectiveness of the Community, and which states are members of the group?
I ask the Minister to expand on the questions posed by the noble Lord, Lord Bowness, in the Written Questions he referred to in his speech which were answered by the noble Baroness, Lady Verma, in March this year. The Answers suggest that the UK uses its influence only indirectly as a member of the EU, and it is the EU collectively, through the Commission, that engages with the Energy Community. This must surely dissipate the UK’s voice. Yet in another Answer the noble Baroness, Lady Verma, suggests that an official from the Department of Energy and Climate Change represents the UK at the annual ministerial Councils. Would the Minister clarify this position, and tell us what grade of official would undertake this assignment? Would ministerial attendance enhance the UK’s role at these meetings?
The Minister of State for Energy and Climate Change in the other place attended the European Energy Council in Brussels at the end of November. Discussion items included energy labelling regulations, electricity market design, the role of smart meters and a possible further EU-level instrument to address any anticipated shortfall against our 2030 renewable energy target. Many or perhaps all of these items could be of significance to participants in the Energy Community. How does dialogue at Energy Council level feed into the operations of the Energy Community? The development of interconnectors between supply grids is increasingly important to the security of supply, bearing in mind the high import dependency of many members of the Community. Interconnectors are regarded as key components of a national infrastructure. Do the Government consider the legal basis underpinned by the Energy Charter sufficient to provide jurisdiction between states?
The Energy Charter treaty plays an important role as part of the international effort to build a legal foundation for energy security. The noble Lord, Lord Bowness, said in his introduction that this treaty is acceded to by 52 states, the European Community and the European Atomic Energy Community—EURATOM—totalling 54 members including the Russian Federation. Observers to the recent conference included many more, such as the United States, China, Saudi Arabia and the UAE, among others. There is now a clear conviction among the contracting parties that the Energy Charter treaty is set to become an important instrument for global energy governance. The Astana Declaration of the Energy Charter Process for Global Energy Architecture is a political document which will guide the conference over the coming years. The conflicts in Crimea and south-east Ukraine have grave political consequences, with a negative impact on energy co-operation and will reshape relations between the EU and the Russian Federation. The resulting sanctions and the development of a mechanism for amicable dispute resolution must enhance the authority of the charter.
Bearing in mind that the 26th charter conference, which took place on 3 and 4 December, coincided with the Paris climate change conference, can the Minister confirm whether the UK, as a member state, attended, and was this at official level? As the EU is also a member, what representation was there in that regard and how do the UK Government make their voice heard through this participation? Will the Minister provide the House with a report on that conference? Did it decide on any new instruments and joint initiatives within the charter framework? What approach are the UK Government taking towards the Energy Charter activities?
Here in the UK the Government are resetting their energy policy and causing considerable anxiety. They have scrapped their flagship Green Deal home improvement fund and the zero-carbon homes policy. They have been warned that premature cuts to renewables subsidies have created a climate of uncertainty for renewable energy. Indeed, the CBI has recently condemned the Government’s policy-making for destroying investor confidence and blocking low-carbon energy infrastructure, while encouraging high-polluting diesel generators to enter the capacity market. At a time when stability and coherence is so needed at the international level and these new cross-national developments need careful support and guidance, the UK Government need to be aware of not diminishing their voice on the international stage.
Labour would argue that the UK needs to develop and implement a long-term energy plan. The UK faces a huge challenge to its energy supplies as sources of power come to the end of their useful life. We need a diverse energy mix, balancing the dilemmas of affordability, decarbonisation and security to power the economy and ensure the transition that meets climate change targets. The noble Lord, Lord Bowness, has highlighted the important frontiers of EU energy competencies in which, we believe, the UK should play its full part.
Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015
Lord Grantchester Excerpts(8 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grantchester (Lab)
I thank the Minister for his explanation of the regulations. He has explained the Government’s approach to providing added protections and assurances relating to the major public concerns regarding fracking in environmentally sensitive areas around water catchment zones, national parks, areas of outstanding natural beauty and world heritage sites. We regard this as largely beside the point, though, so we have severe reservations about these regulations.
The point is that from the passage of the Infrastructure Bill earlier this year in the other place the outlined areas were thought to have been excluded altogether from fracking explorations and production. As has been said, the Secretary of State is quoted as agreeing that there will be an outright ban on fracking in natural parks and these other environmentally sensitive areas. This is rightly leading to grave public concerns. It cannot be bypassed by, in these regulations, permitting fracking to proceed with only the added conditionality of being driven further underground. Quite simply, there was agreement that there would be no-go areas within which fracking would not take place, and with these regulations the Government are now backtracking.
Furthermore, the Government have not gone to consultation on the regulations. This has rightly become the subject of the eighth report from your Lordships’ Secondary Legislation Scrutiny Committee. The Minister’s department refers to consideration of the Infrastructure Act as justification for there being no public consultation about the definitions within these regulations. The Committee takes the opposite view that both public consultation and a ministerial Statement could be justified.
Are the Government trying to avoid embarrassment and controversy? Are they once again trying to put forward measures that they want through secondary legislation that cannot be amended? Instead of public consultation, the Government have merely consulted the environmental regulators on the proposed definition of “protected groundwater source areas” so that their proposal of excluding depths of above 1,200 metres was workable in light of the existing groundwater regulatory practices. I also express concern at the exclusion of SSSIs from the definition, as has already been expressed by the noble Baroness, Lady Parminter.
Can the Minister state the evidence that 1,200 metres is the correct extra precautionary level? The Environment Agency and Natural Resources Wales refer to sensitive areas for groundwater sources as source protection zones. These regulations will now provide a formal definition of how deep beneath the surface these SPZs extend, where before there was none. Can the Minister provide the Committee with any consideration or comments given to this specific depth by the regulators? Can he also clarify that these regulations would also apply to Scotland, in that the Scottish Parliament does not yet have legislative competence on this issue?
There is the further point of where the proposed wellhead of a fracking operation may be situated. These regulations do not prevent a fracking well being drilled from within the protected zone. Present guidance to planning authorities suggests that developments in these sensitive areas be refused unless demonstrably exceptional circumstances exist and they are in the public interest. Can the Minister confirm reports that the Government will consult on the question of whether wells can be drilled from the surface of natural parks and other protected areas? If these drills located outside protected areas can proceed down to 1,200 metres before changing direction and then cross underneath the surface of a national park, is this provision largely irrelevant? There will be understandably grave misgivings regarding the integrity of drilling levels should wellheads be situated within striking distance of national parks and other protected areas.
These serious issues, and others expressed around the Committee today, translate into our view that these regulations should not be proceeded with. We believe that Britain must pursue a socially just energy policy that is sensitive to the impact on the environment and climate change and how it impacts people’s lives, as well as the need for secure, affordable energy. These regulations should be deferred for further consideration by the Government. Indeed, that seems to be the Government’s position at the moment in the other place, where they have deferred further consideration on these regulations.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have taken part in this debate and I will endeavour to cover the points that they have made. I shall address myself first to the points made by the noble Lord, Lord Judd, who, in a meeting yesterday evening in a corridor, did indeed tell me that he was going to be raising issues today. I have looked closely at what he said last night and have listened carefully again to what he said today. We have followed a precautionary principle: 1,200 metres below the surface is well below where normal drinking supplies will be sourced from in protected areas. The noble Lord might be making a point about these regulations being ultra vires or not within scope or perhaps running contrary to the national parks Act regarding access. I think I am right in saying that the deepest pothole in the UK is 198 metres, so there should not be any issue about access to 1,200 metres below the surface. That is not what was envisaged then or indeed feasible now, so I do not think there is an access issue relating to the areas that we are talking about in national parks.
What is happening in the regulations and the statement that we are making about surface developments is that there can be no development on the surface of a national park, as it were; any drilling has to come down and then across, and it has to be at that depth. I am able to offer that reassurance and say that, like the noble Lord, I am a great fan of national parks, particularly the Peak District, where I walk frequently. I do not pothole, but I would not be able to pothole at a depth of 1,200 metres anyway because that is just not feasible.
Renewables Obligation Order 2015
Lord Grantchester Excerpts(8 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Moynihan (Con)
My Lords, I find it difficult to believe that it was 25 years ago when I was the Minister responsible for energy that I introduced the first non-fossil-fuel obligation, which has subsequently moved into an excellent series of initiatives that I very much support.
I have just two comments. The first picks up on the capacity market, which the Minister has just raised, and which the noble Lord, Lord Teverson, referred to in the context of interconnections. I understand from what the Minister has just said that renewable technologies will certainly be able to bid into that.
I have a question on sovereignty with regard to the development of interconnections. A country just across the Channel will face similar weather conditions to ourselves, and we are focusing our capacity market not only on bitterly cold weather but when the wind is not blowing during that bitterly cold weather for an extended period of time. That is more than likely to be the same in the neighbouring country, which will no doubt have a high level of demand for energy in its own right. How will the Government address the question of sovereignty over contractual arrangements?
My second question is a specific one from the recent consultation on adjustments to sustainability and reporting provisions for biomass. I note that the majority of responses were very positive to the Government’s proposals but there was one exemption to that, which related to the exemption from the land criteria on the timber standard when a number of respondents suggested that the exemption should be applied to a wider range of wood and wood residues. In that context, I see that the Government rejected that series of representations and I wonder if the Minister could give the Committee a little more detail on the reasons for that rejection.
Lord Grantchester (Lab)
I thank the Minister for his explanation of the order. It is not particularly controversial. The Minister underlined that the RO scheme has been particularly successful in increasing the level of renewable electricity from the 3% generated in 2002 to 25% today. It is helpful that the order will consolidate into one document the Renewables Obligation Order 2009 and the orders that have since amended it, and that it will be the main instrument underpinning the RO, thus making it more accessible. We should perhaps note that the Renewables Obligation Closure Order 2014 remains valid pertaining to the closure of the RO to onshore wind in particular, something that the Government have been keen to amend through the Energy Bill that was recently in your Lordships’ House. The Renewables Obligation Closure (Amendment) Order 2015, regarding solar renewable electricity, also remains pertinent.
This order also implements outstanding policy decisions that were subject to consultation in 2013 and 2014, predominantly concerning biomass electricity generation—not only in consolidation, as I said, but also in regulations relating to its sustainability. We welcome the fact that the order should ensure the sustainability of biomass throughout the chain of biomass procurement, transport and production. Providers will now be eligible to enter the capacity market through giving advance notice to Ofgem that they have complied with the list of requirements concerning specific land criteria and other issues. This has been admirably developed from engagement with interest groups, taking account of social, economic and environmental aspects. Co-firing is also within the order, which is welcome.
I ask the Minister for further clarification concerning compliance with mandatory greenhouse gas emissions. To be able to receive financial support, biomass must deliver emissions savings in comparison with fossil fuels. In the submission of sustainability and emissions reductions, are the criteria likely to be accumulative throughout the chain? Will there be a total score to be complied with, in addition to providing evidence of sustainability at each stage? I ask this because it could be envisaged that further development of the methodology could be incorporated through amendments to the order at a later date, or even that greenhouse gas emissions relative to fossil fuels could be tightened further, beyond the level that the Minister stated. Perhaps the Minister could outline whether Ofgem will provide guidance on this issue, especially in relation to EU directives on biofuels. Is the Minister satisfied that there is no formal sanction for not meeting sustainability criteria beyond the so-called “acts of God” that he outlined?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on the draft order. I seek to deal with the points raised by noble Lords in the order in which they were raised.
I turn first to the points raised by the noble Lord, Lord Teverson. I thank him for declaring his interest in his own coal-fired facility—I apologise: I meant to say “wood-fired facility”. We are indeed tightening the definitions of what is eligible. The audit process is significant. First, there are some de minimis exceptions for small suppliers; I shall write to noble Lords who participated in the debate to outline what those exceptions are. Secondly, I think that the noble Lord was making the point that enforcement overseas is more difficult. We require limited assurances in relation to what is happening overseas, and once again I will write with details of that process.
I move on to points raised by my noble friend Lady Byford in relation to the standard that we are setting. I think it fair to say that we are ahead of the game, but for a good reason: the European standard will almost certainly be the same. Work on that is going on at the same time as on our own domestic standards. It is just that we are there first, so we do not have to catch up; we are ahead of the game. My noble friend noted that she does not have a wood fire. The noble Lord, Lord Teverson, will have picked up that point and will no doubt want to ask her over to experience his. I am glad to be able to bring them together in this way.
I turn to points raised by my noble friend Lord Moynihan. I thank him for his early pioneering work in this area, which we continue to take forward. He made a fair point about the interconnections and the weather effect on the continent, which is likely to be the same as here. That is absolutely true. This is only one factor that influences the capacity issue, although it is a significant one. An interesting issue that we are researching arose recently in one of the Sunday newspapers: to switch to double British summer time. Not only would that reduce demand per se, it would put us out of line with peak demand on the continent. That is something worth looking at. It is an indication of the imaginative ways in which we can do fairly painlessly the things that we are looking at.
My noble friend Lord Moynihan also raised the issue of the range of woods required to be reported on in relation to the tightened requirements. It is true that some people suggested tightening that range while others wanted the requirements not to be so tight. All these things are a question of balance. One issue that was raised in the consultation on the tightening grip of requirements, and I will give more details on this in the letter, is that this reporting requirement is quite a burden for some businesses, so we are trying to get the balance right there.
I thank the noble Lord, Lord Grantchester, for his comments on the consolidation and in general on biofuels and the tightening of the conditions in relation to this area. I will write to him on specifically how we deal with the supply chain, because that was a fair question that demands a fuller answer. In relation to fuller answers, my officials were delighted with the question about the formula on page 75, so we will ensure that the noble Lord receives a fuller response on that if he really requires one.
Motion agreed.
Electricity Capacity (Amendment) (No. 2) Regulations 2015
Lord Grantchester Excerpts(8 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Byford (Con)
I should like to make two observations. The Minister has said that the vast majority accept the proposals, so which respondents did not? I have no difficulty with the proposed change from five working days to 15, but there has been a suggestion in the public domain that electricity supplies could be fairly fragile in the coming months, particularly if we have very cold weather. How has that been built into the system? I am glad that feasibility studies were done and were accepted, but what is the comfortable margin of security of supply in the months ahead? Those are my questions: who did not support these proposals, and what do the Government consider a comfortable margin of security supply?
Lord Grantchester (Lab)
I thank the Minister for his introduction of the regulations. The amendment they contain is minor and uncontroversial, extending to carbon capture and storage the possibility that it could participate in the capacity market. The Government now seem to recognise the potential of CCS, as evidenced by the amendments recently agreed in the Energy Bill, now passed to the other place. They had previously not considered CCS as sufficiently relevant operationally to the capacity market, and this amendment allows that CCS projects which will in the first instance have received grant support or funding arrangements for early stage developments can now qualify for participation in the capacity markets. The essential feature is that this early stage support should not materially put the provider at an unfair advantage compared with others without that support. The greater matter is that any provider that can shift demand away from periods of greater stress without detriment should be encouraged.
I am content that this proposal was overwhelmingly supported by respondents to the consultation. Will the Minister clarify the Government’s intention a little further? While it is true that there is not as yet any deployed carbon capture and storage in this country, is it intended that CCS will eventually pre-qualify for capacity auctions in its operational phase?
It has been understood from the Government’s scoping document earlier this year that the operation of CCS plant operational support would take place through a form of modified contracts for difference rather than through capacity auctions. I would be grateful if the Minister could signal the Government’s intentions as early and comprehensively as he can to provide certainty about the direction of travel to developers. This amendment, and future intentions, could begin to allow the development of an industry that could be very valuable for the long-term use of fossil fuels. The noble Lord, Lord Teverson, has congratulated the Government on their plans to phase out coal generation, and we certainly support this direction of travel.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lords, Lord Teverson and Lord Grantchester, for their kind words regarding the speech given by my right honourable friend the Secretary of State, Amber Rudd, last week in relation to the withdrawal of coal-fired power stations, with the aim of doing that by 2025. It was most kind and gracious of them to say what they did.
I turn first to the questions raised by the noble Lord, Lord Teverson. Yes, we are looking at interconnectors, I think to Norway and Ireland, in addition to the existing interconnectors as part of the capacity issues that we are addressing, and we are looking at the possibility of them elsewhere, including Iceland. That is a large part of what we are doing.
The Statement on coal was of course subject to a consultation, as the noble Lord will know, which opens in spring next year, I think, subject again to ensuring that we have the necessary capacity in relation to gas-fired stations coming on stream. Still, a clear market signal was given in the speech. Demand reduction is a significant part of what we are doing, and of course there will be a demand response auction as well in the new year.
With regard to the system margin causing concern, there is a trigger for this. At the moment we are very confident of the 5.1% margin with regard to the announcement of the most recent one. To the noble Lord’s suggestion that a 20% margin is more than we need, I suppose the answer must be yes—that must follow. However, obviously one wants to stray on the side of safety so we are seeking to address this. Although the margin is comfortable, we have to look ahead. The next few years look comfortable but we need to bring on the new nuclear and look at other forms, such as small modular reactors and so on. That, too, is important.
I turn to the questions raised by my noble friend Lady Byford. First, on the consultation, I think I am right in saying—the team behind me will correct me if I am wrong—that out of the 22 responses, 21 were supportive.
Energy Bill [HL]
Lord Grantchester Excerpts(8 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Maddock (LD)
My Lords, this group of amendments highlights something we have already raised today: a lot are technical, they are quite long and we had very little time over the weekend to get round to looking at them in detail. It is not very satisfactory. However, we on these Benches certainly welcome consultation. It is something we have always supported. I am surprised that these amendments dealing with co-operation with other nations with regard to gas and oil were not in the Bill originally as co-operation is rather key. Earlier in the proceedings, I asked whether we are looking at the way Norway operates. I am sure that when it is looking at these matters, it takes them into consideration. I have raised this concern, as have other people, during the passage of the Bill. We find it very difficult to scrutinise properly, in the way this House should, when we get information so late. I shall probably not speak again tonight, but we have another day on Report on Wednesday, and we will be in exactly the same position.
Lord Grantchester (Lab)
My Lords, I thank the Minister for explaining these amendments, which reshape disclosure into a separate chapter in the Bill. They all seem reasonable enough, but they give rise to consideration of why they are now being so adjusted. I follow the noble Baroness, Lady Maddock, in her comments about the short notice and the comments made earlier by my noble friend Lady Worthington regarding the future prospects of the OGA and the Government’s intentions regarding it. One wonders whether something has happened. Can the Minister inform the House whether attention has been drawn to them so that they get consolidated? Can the Minister confirm that the Data Protection Act applies to the ODA with regard to information generally and to disclosure? Will he clarify the position and provide some assurances about questions that come to mind in relation to disclosure to third parties? We would support sharing information with other government departments and agencies, including the devolved Administrations, for the purposes of their functions, as the OGA will need to be able to work collaboratively with the different departments and the department itself.
In relation to third parties and foreign Governments, care certainly needs to be exercised and precautions taken with regard to possible unintended consequences. Will anything appear in the public domain regarding the nature and frequency of the sharing of information with foreign Governments? The Minister will be aware that there could be many agencies, especially regarding the environment, where the Government could come under scrutiny in how they handle sensitive information, and where any secrecy between Governments could be misconstrued.
On another point, is the Minister satisfied on the question of the Secretary of State undertaking a review into these matters? Will the Secretary of State have any oversight and details of the information shared by the OGA? Would there be any independent oversight of disclosures regarding legal proceedings and foreign Governments? Could the Minister give an example of the information that might be requested and then shared in relation to these amendments? That would certainly help to settle any disquiet that these powers could give rise to. Meanwhile, the amendments seem well balanced and reasonable.
Lord Oxburgh (CB)
I thank the Minister for his comment earlier on Amendment 72. I have a specific question on Amendment 64. It relates to Clause 31(3)(b), which says that disclosures may be made to the National Environment Research Council,
“or any other similar body carrying out geological activities”.
My question is simply what those other similar bodies might be. For example, would they be universities carrying out geological activities?
Lord Bourne of Aberystwyth
My Lords, I will speak to government Amendments 46, 48, 53, 55, 56 and 57. These amendments make minor changes to Chapter 5 of Part 2 of the Bill to harmonise the provisions relating to appeals against the OGA’s sanctions with the procedural rules for the General Regulatory Chamber of the First-tier Tribunal. The procedural rules are made by the Tribunal Procedures Committee. These rules govern the practice and procedure in the First-tier Tribunal and Upper Tribunal.
Amendment 55 deletes subsection (2) of Clause 49, which has the effect of removing the 28-day period for bringing an appeal against the OGA’s sanctions. The time period for bringing an appeal will therefore revert to that set out within the tribunal procedural rules, which is also set at 28 days but which allows the tribunal discretion to extend that time period beyond the 28-day period.
As a result of Amendment 55, Amendments 46, 48 and 53 make consequential amendments to the clauses dealing with financial penalty notices, revocation notices and operator removal notices, which currently cross-refer to the existing 28-day period referred to in Clause 43(2). This ensures that, notwithstanding the deletion of this 28-day time period, a financial penalty notice, revocation notice or operator removal notice still cannot take effect until 28 days after the relevant sanction notice was given. This ensures that, regardless of the removal of the 28-day period referred to in Clause 49, a person is still given an appropriate opportunity to appeal before a sanction takes effect.
Amendment 56 amends Clause 49 to make it clear that, where an appeal is made to the First-tier Tribunal against a sanction notice and the sanction notice ceases to have effect, the effect of that suspension lasts until the tribunal confirms, varies or cancels the notice.
Amendment 57 adds a new subsection to Clause 49 to provide that, where an appeal is brought against a sanction imposed by the OGA, either the First-tier Tribunal or the Upper Tribunal may further suspend the effect of that sanction for the duration of any further appeal to the Upper Tribunal. I beg to move.
Lord Grantchester
I thank the Minister for providing the details of the amendments. They seem minor in nature and largely clarificatory—that is rather a long word at this time of night—and therefore they should raise no objection.
Lord Bourne of Aberystwyth
My Lords, I am most grateful to the noble Lord. It is a long word at this time of night or indeed at any other time.
Energy Bill [HL]
Lord Grantchester Excerpts(8 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grantchester
“Renewable and other technologies
Within six months of the passing of this Act, the Secretary of State shall publish an assessment of the progress towards decarbonisation of energy supply, including a strategy for the development of renewables and a strategy for energy efficiency within the supply system.”
Lord Grantchester (Lab)
My Lords, I rise to propose Amendment 35 and declare an interest, in that I am undertaking a planning application with regards to solar technology.
The Energy Bill is largely focused on securing the value of energy supplies of oil and gas in the North Sea through the creation and operation of the Oil and Gas Authority. It is encouraging and positive. In contrast, the final two clauses bolted on to the Bill do the exact opposite. They seek to bring onshore wind to an early closure, dismantling the least costly form of renewables technology. They undermine investor confidence, as others have stated already tonight and as Ernst & Young reports in its research. They raise alarm bells throughout the renewables sector. These clauses raise wider questions and concerns regarding how wind power, and indeed other renewables, will feature and impact on an overall energy strategy.
Just recently, the Minister’s department issued a further consultation on the feed-in tariff regime for solar power. All this is against the back-cloth of the European Commission’s report in June, which highlighted that the UK is falling behind the trajectory necessary to achieve the UK’s national renewable energy targets, which are so necessary to achieve substantial decarbonisation of the energy supply.
On transport, the aim is for 10% to come from renewable sources by 2020. At present, the UK is at only 3.5%. On heat, the target is for 15% to come from renewables; at present, the figure is only 4.9%. While the electricity sector may presently be on track, there are misgivings that its renewables element will continue slowly to fall following this Bill. Quite simply, this Bill is moving in the wrong direction on both fossil fuels and renewables. It facilitates recovery of oil and gas for generation while reducing support for one form of renewable energy, onshore wind, making more difficult the installation of the cheapest form of renewable energy. This legislation will increase consumer bills.
The help for operators recovering oil and gas in the North Sea is said to include substantial tax breaks. Can the Minister confirm that private contracts between operators and HMRC are being drawn up and include offsetting decommissioning costs against previous tax payments? That is a worrying development set against reduced support for wind renewable technology.
The amendment would require the Government to give an account of how their carbon reduction programme is progressing. They must set out the pathway to achieve the 2020 targets for carbon reduction, for renewables use and for energy efficiency—the so-called 20-20-20 strategy. Discussions are continuing on the EU target for 2030, which is to be set out in Paris at the end of the year. Discussions are focused on a single target for 2030 rather than on several targets. While this is recognised, we nevertheless need to understand that strategies will still be required to meet the overall reduction in a co-ordinated way through carbon reductions in supply, heat and transport and efficiency. While the Government may claim that they can meet their 2020 target, they are certainly unco-ordinated and unclear about what happens beyond that.
The impact of recent government decisions is to reduce support for renewables—onshore wind in this Bill; solar in changed arrangements for that sector—while making it easier to use North Sea oil and gas and easier for fracking ventures. The direction of energy policy in relation to energy decarbonisation is further shown through measures on onshore shale gas and oil, giving rise to considerable doubts about the Government’s overall intentions. This is aggravated by the reported delays in bringing new nuclear power capacity into the system, given the problems at Hinkley Point with EDF. Of considerable concern is the position in relation to state aid. Existing clearance was predicated on the basis of technology-neutral auctions. As the Government no longer appear neutral, is this in jeopardy? Can the Minister confirm that DG Competition, in the Commission, could re-examine their judgment?
All this raises doubts about the trajectory of decarbonised electricity. It is therefore important that as early as possible in this Parliament, the Government make clear their decarbonisation strategy and how far it is working. Let us see their analysis and how they can be so confident that the targets will be met, while they tie the hands of very successful aspects of the renewable energy industry. This amendment would require the Government to produce for Parliament an assessment of their strategy and progress towards decarbonisation of electricity supply. The report should include the Government’s assessment, first, of the expected contribution from renewables and, secondly, of measures designed to improve the overall energy efficiency of the electricity supply, reducing demands for carbon in this manner.
Such an assessment should also cover the broader aspects of energy efficiency—commitments notably absent from this Bill and from government pronouncements since the election. I accept that this is beyond the scope of the Bill and, hence, it is not referred to in the amendment; I therefore refer explicitly only to energy efficiency within the supply system. Energy, and hence carbon, is wasted at each stage: in generation, transmission, distribution and use. In reality, to be comprehensive, such an assessment would also look among other things at the contribution of both nuclear power and demand reduction and redistribution technologies, but this amendment confines itself to those aspects covered by the remit of the Bill.
The objective of the amendment is that Parliament receive a report within six months of the passing of the Act, which will enable us to assess the progress of and plans for decarbonisation of the electricity supply in a holistic manner. If the Government are not prepared to accept the amendment, I would expect them to tell the Climate Change Committee how they propose to report to Parliament about the impact of the Bill and other policy changes on the difficult aim of decarbonising electricity supply. I beg to move.
Lord Grantchester
My Lords, I thank the Minister for that reply and for being keen to hear about our policies. I was questioning only whether state aid issues could be re-examined by the commission if the UK appeared to divert from its stated neutrality towards renewable technologies. I am heartened by his reply, notably that the Committee on Climate Change will press forward with its annual reports to which the Government are mandated to reply. On that basis, I beg leave to withdraw the amendment
Energy Bill [HL]
Lord Grantchester Excerpts(8 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grantchester (Lab)
My Lords, energy policy and its development are necessarily long term, with objectives that endure through many Parliaments across all shades of Government. The UK faces a huge challenge to its energy supplies as sources of power come to the end of their useful life, to which Governments must respond with new sources and new infrastructure. The Energy Bill before your Lordships’ House today reflects both these elements and I thank the Minister for his comprehensive introduction and explanation.
I somehow sense that the Minister is already on the back foot, as he spent the first four minutes of his remarks putting up defensive statements around renewable energy policy. However, there is much in this Bill that is to be commended and has our support, helping as it does the UK oil and gas industry prolong the benefits of North Sea oil reserves. Industry has widely welcomed the OGA proposals. However, we believe that more could be done. With respect to the other main provision of the Bill, regarding a new energy source of onshore wind generation, there is much in the Bill that we believe spreads alarm and fear across the renewable energy market.
The main provisions of the Bill implement the recommendations of the Wood review by putting the Oil and Gas Authority on a statutory basis to maximise the economic recovery of petroleum from the UK’s continental shelf. We agree with this and welcome the MER—maximising economic recovery—strategy.
Part 1 of the Bill relates to the OGA and its core functions. Clause 4 will provide for matters to which the OGA must have regard when exercising its functions. The Bill lists five: namely, minimising future public expenditure, securing the UK’s supply of energy, collaborating with government and industry, encouraging innovation in technology and working practices, and maintaining a stable and predictable system of regulation. We contend that another very important aspect should be added, namely that the OGA must have regard to environmental impacts of activity in tandem with the Climate Change Act 2008. We will want to examine this in Committee.
Other measures in the Bill regarding the OGA provide additional powers in relation to its necessary activities between government, the Secretary of State and the wider industry of licence holders and operators. The Minister has outlined these provisions expertly. However, it is important to recognise that the North Sea supports hundreds of thousands of jobs—more than 400,000. We must look to the future of the North Sea, beyond extracting the last useful drops of oil, and to what employment it could provide. The Bill contains no measures to ensure that infrastructure is not lost when companies decide to abandon their operations. Either to salvage important assets or to stifle potential exploitation by others in the future, companies may well take infrastructure assets with them, making it all the more difficult to establish future projects.
The UK continental shelf supply chain is an integral part of a valuable industrial sector, which generated a turnover of more than £35 billion in 2012—including exports worth £15 billion per year—and which has historically been the largest contributor to the Treasury. The OGA, together with the Oil and Gas Environment and Decommissioning Unit, should ensure continued economic activity in the North Sea. This could include ensuring that infrastructure assets that could be reused later are preserved. Much of this infrastructure could be used in the storage of carbon dioxide. The Bill gives the OGA powers to license sites for CO2 storage but does not do nearly enough to ensure that the necessary infrastructure to transport and store CO2 remains in place. This is happening as part of the Peterhead CCS project.
The Constitution Committee of your Lordships’ House has drawn attention to the retroactive aspects of the Bill at Clause 58, which would validate fees already charged by the Oil and Gas Environment and Decommissioning Unit. Although retrospective provisions are generally to be avoided at all times, the Constitution Committee recognises that these provisions do not retrospectively criminalise any conduct or seem to unpick any judicial decisions. The provisions cover the levy of a narrow set of fees and the Minister has given further reasons today in his remarks for the need to retain the fees already levied. I thank him for that.
Although the majority of the Bill is devoted to providing certainty of benefits for investors in offshore oil and gas, the two clauses that deal with onshore wind as a future energy source do the exact opposite for investors in renewable energy. These changes to the financial support for onshore wind threaten the future of 19,000 jobs supported by that sector. These changes certainly curtail future development of the lowest-cost source of low-carbon power, and by setting dangerous precedents for other renewable sources of energy, investor confidence in a stable UK business environment is being shattered.
The first of the two clauses on wind power devolves the decision-making on planning applications for schemes larger than 50 megawatts to local authorities. This is all very commendable and, so far, we can all agree—except when it is put against guidance issued by DCLG on 18 June that local authorities may only issue planning permission for sites “already identified as suitable” as part of a local or neighbourhood plan. Several authorities, such as Mid Devon District Council and North West Leicestershire District Council, have indicated that this means, far from local authorities being consulted, they will have to reject outright any applications for onshore wind farms, as they have no sites allocated in their local or neighbourhood plans.
The second clause puts an end to public subsidies for new onshore wind farms under the renewables obligation one year early. This sudden change to the renewables obligation is particularly damaging. Closing it one year ahead of schedule means projects that have already received investment and incurred expenditure may not now go ahead. The last Government brought forward plans to close the renewables obligation in 2017, and no indication was given that it would be closed any earlier. Indeed, the noble Baroness, Lady Verma, told the House in a Written Answer in January this year:
“No further comprehensive banding review is planned for the RO scheme”.
The Independent Renewable Energy Generators group estimates that members in the advanced stages of projects have aggregate onshore wind investments of £1.2 billion, with sunk costs either already spent or contractually committed totalling £350 million. A sense of dismay is felt throughout the renewable investor market that this Government cannot be relied on.
The Minister stated that there will be a grace period with three key criteria to enable projects to qualify, namely that a development must have received planning consent, accepted a grid connection offer and have a land lease agreement in place. However, the Government have not specified dates nor taken the lead to contact the estimated 250 projects affected. That this number is put forward would suggest that the Minister’s department has done a jobs and supply-chain sector impact assessment. Can the Minister say whether the department did undertake an impact assessment before the announcement of 27 June? It would an astonishing omission if an impact assessment had not been undertaken, which would be the inference without an answer from the noble Lord. If he can confirm that an impact assessment has been made, will the Minister publish it?
The lack of clarity in the timescale and other important elements of the grace period mean that project financing and development may be delayed, potentially causing eligible projects to fail. The knock-on effect on the confidence of renewable investors into other areas is extremely damaging. As the company E.ON said:
“This jeopardises the reputation of the UK as a stable and attractive market to invest in”.
Long term, that can only be to the detriment of the UK citizen. However, to undermine the future role that onshore wind can play is not inevitable. Although we share the Government’s desire to reduce the costs, we believe that it can be achieved without deterring investment. Companies could still make positive investment decisions based on the grace period proposals with some modest government actions. Will the Government come forward with reassurances and proposals?
These changes make it all the more difficult and expensive for the UK to meet international obligations on renewable targets. In June, the European Commission released a report showing that we are falling behind the trajectory necessary to achieve the UK national target. This comprises three elements: heat, transport and electricity. On transport, the aim is for 10% of transport fuel by 2020 to come from renewable sources. The UK is at present only at 3.5%. On heat, the target is 15% from renewable sources, when the present level is only 4.9%. Yes, on electricity the UK is on track. Yet the Bill may well jeopardise that achievement. What assessment have the Government made of the likelihood of achieving a virtually carbon-free electricity sector by 2030 following the impact of the Bill?
What estimates have the Government made of the effects of these changes on the overall cost of creating a carbon-free electricity sector by 2030? Will the Government commit to maintaining support for onshore wind through the contracts for difference scheme and feed-in tariffs up to the end of 2020, although at a reduced capped price of £80 per megawatt hour? At this price, the Committee on Climate Change has stated that onshore wind could be deemed to be subsidy free when compared with the full cost of unabated gas. By reducing the rollout of onshore wind, meeting 2030 and 2050 decarbonisation objectives will require alternative technologies, which may well ultimately increase costs for consumers given that onshore wind is one of the most cost-effective energy technologies. In contracts for difference, onshore wind has a strike price of £95 compared with £155 for offshore wind.
The Bill severely limits the cheapest way of meeting UK targets. The Bill will increase consumers’ bills and make it more expensive for the UK to decarbonise. The Bill represents a potential wrong turn. The Government must work hard to bring forward the necessary investment still so needed to transform the UK’s energy sector. The Government must not let this become a missed opportunity.