Feed-in Tariffs (Closure, etc.) Order 2018

Debate between Lord Teverson and Baroness Jones of Moulsecoomb

Monday 4th March 2019 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, my regret Motion is against the Government’s decision to scrap the feed-in and export tariffs for people who install small-scale renewable energy systems in their homes. I should declare that I have already installed solar panels on my house and am therefore not affected by this measure.

I feel so strongly that it is a bad thing to do that I wanted to table a humble address, but the clerks advised me that I would create a constitutional crisis—and we probably have enough of those going on already. I want to emphasise that the word “regret” does not come anywhere close to my feelings on this issue. The Government have behaved with economic illiteracy and I hope that, towards the end of the debate, I will hear from the Minister that they will pause in the scrapping of the tariff until they have at least determined the level and the timing on the export tariff.

The Feed-in Tariffs (Closure, etc.) Order, currently before this House, will cause enormous damage to our fledgling green economy and wreck our already too slow attempts to deal with climate change. Over the past decade, solar panels have steadily been installed on rooftops around the country. People have saved huge amounts of money on their energy bills and made a significant reduction in their personal impact on the planet. Some local authorities, following the lead of Kirklees Green councillor Andrew Cooper, have been able to use the stability of the feed-in tariff to finance mass deployment of solar panels for some of the poorest residents in their boroughs. In the process, they have created thousands of jobs in a high-skilled, well-paid industry.

It is now undeniable that the world is in a state of climate emergency. Scientists have made it clear that we now have less than 12 years to make massive changes if we are to have any hope of avoiding runaway climate change. The switch away from fossil fuels to renewables is one of the essential changes that we have to make.

The Government’s response is that they have steadily cut away at the feed-in tariff scheme and have now finally scrapped it altogether. This is, according to the Government’s impact assessment, so that we can reduce people’s energy bills by £1 per year—I repeat, £1 per year. The Government suggest that this was the plan all along, and that this is just another step towards a market-based system of renewable energy that must compete cost-for-cost with other sources of energy. That sounds perfectly reasonable—except that it is a fallacy that requires us to pretend that other forms of energy do not receive huge subsidies from the taxpayer, society and the environment. The European Commission has recently published research that shows that the UK has the highest level of fossil fuel subsidies in the EU, and more subsidies for fossil fuels than for renewables. That is shameful and certainly not fair—as well as poor economics.

Coal and oil are not new sources of energy, but they still receive enormous tax breaks to keep them in business. Nuclear energy is being paid double the going rate with government price guarantees, despite the fact that it will take decades for new nuclear power stations to be built, and despite the fact that nuclear has lost all credibility with a large proportion of the nation. Fracking, a whole new source of carbon emissions, seems to be granted new tax breaks in every Budget Statement made by the Government.

There is not a single source of energy that is not heavily subsidised—apart from renewables. Why are renewables held to a higher standard as the only energy source that needs to become financially self-sufficient, in a way that would cripple fossil fuels and nuclear power? If the Government want subsidy-free energy, at least create a level playing field and remove the nuclear and fossil fuel subsidies. Perhaps the Minister will explain to the House why renewables are singled out while the Government continue to create favourable tax incentives, easy planning rules and a strong policy commitment for the polluting energy sources. The distortionary effect of all this is enormous—a government-backed guarantee that we will be tied into fossil fuels for decades longer than the planet can handle.

Coming back to the statutory instrument and its justification, the Government are suggesting that this is just a stepping stone between the old system of support and a new system, a “smart export guarantee”, which will be based around new technology and market innovation. Again, it sounds sensible, but none of that new system exists and there is not yet a market for domestically produced green energy. The Government are doing absolutely nothing to ensure that this changes.

The stark reality is that the Government are throwing the domestic renewable industry off a cliff, with the vague promise that an ambitious new system might appear in time to save it. Plus we have no idea of the rate at which this energy will be valued. Can the Minister let us know whether there is any conclusion on that? Why have the Government decided that for an indeterminate amount of time new domestic renewable installations will have no option but to export the energy they produce to the national grid absolutely free? How that can be considered acceptable to anyone is beyond me. It is state theft and cannot be justified.

If the Government had a policy that resulted in the oil and gas industry producing for free, people would complain that we had turned into a communist country. For some reason, the exact same thing is happening with solar and wind power and it is just fine.

It is true that the renewables industry has made incredible progress in bringing down its costs and that we are approaching a point where it will be able to outcompete fossil fuels on its own. However, it is plain wrong to single renewables out as being the only energy source that should not get any subsidies or tax breaks. We need to do the opposite of this; we should be spending billions of pounds on a green new deal to create a million climate jobs and transform our economy.

Will the Minister explain to this House why the Government are not doing all they can to take climate change seriously? I ask her please not to do a Claire Perry and say how we are world leaders, that we are doing on best on emissions and that sort of thing, when we do not even count all our emissions—for example, we do not count aviation and shipping. For all these reasons, I beg to move.

[Lord Teverson (LD)]

My Lords, I thank the noble Baroness, Lady Jones, for raising this issue and bringing it to the Floor of the House. I commend her passion about the subject; it is completely justified. We should remember that feed-in tariffs have been amazingly successful. As we see from the Explanatory Memorandum and the commentary from the Secondary Legislation Scrutiny Committee, some 800,000 feed-in tariffs have been applied over the period in which they have been in force. One of the great things about them is that they democratise the fight against climate change. Whether they are microschemes or smaller schemes, they allow households, communities, small groups and small businesses to participate in providing renewable energy to the energy system and decarbonising our economy.

I am proud to say that FiTs came in in 2010 and were implemented by the coalition Government as part of the work of the previous Labour Government. The announcement that they would end came in 2015—a dreadful year for climate change—when the Conservative majority Government took over and we had announcements about this, the end of carbon capture and storage experiments, the end of zero-carbon homes and many other examples of decarbonisation and “all that green crap” disappearing from our legislation and our climate change targets.

As was shown during the coalition period, Liberal Democrats agree as much as anybody else that renewables and the public money put into them need to provide value for money. I have no problem with tariffs being brought down to reflect cost levels, as long as that is done in a smooth way that industry can predict, whereby the rate of return remains sensible for investors, whether they are firms or households.

What we have here is the stopping of the system altogether. Once again, it is an example of the green vandalism we have seen so much of in renewables, affecting jobs and green industry. There has been a failure to provide continuity of employment and skills, and no growth of private-sector green businesses. This secondary legislation is an example of that. We have taken away one of the ways in which communities, households and small businesses can participate, resulting in another body blow to the small-scale renewables industry.

The noble Baroness referred to the export tariff. I find it unfathomable. Claire Perry, the Minister for climate change, said that there will be export payments, but there was a major gap between that and the original announcement of this government policy. That meant the industry had a major shock, and only later was that repaired by some very vague references. The consultation period has not ended. We come to the end of FiTs on 31 March, and we are bound to have a gap during which the industry will not know what is happening. I do not know what went through BEIS’s mind as a department. From 1 April—very appropriately—consumers were going to give free energy to major energy companies. This was one of the greatest ironies and a huge political mistake. Yes, the department has decided to change that, but very late and leaving a gap. We still do not know what the change is.

International Solar Alliance: Framework Agreement

Debate between Lord Teverson and Baroness Jones of Moulsecoomb

Wednesday 24th October 2018 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I feel that I should do something that Ken Livingstone told me never to do, which is to start with an apology. I feel the Minister might not have expected to deal with this particular issue; I gather it is quite unusual to table a debate on a treaty like this. I thank the Government Whips for allowing this to happen; I know we are always short of parliamentary time, so I am very grateful to have this opportunity.

I felt compelled to bring this debate when I saw the Government’s accompanying notes to the International Solar Alliance Treaty. At first I was excited; it looked like a very positive step forward. However, that excitement gave way to disappointment and now I almost feel despair. It was bad enough getting the UN report this month about having only 12 years to make a difference to our future as humanity, and I feel the Government are not acting in the best interests of this country or indeed globally.

My excitement came from the ambitions of the International Solar Alliance. It is an international agreement, formed at the United Nations by treaty between 121 states. Importantly, the alliance is being led by India, which makes it the first large-scale climate initiative to be led by a developing country. Together the signatories seek to raise $1 trillion US dollars for investment in solar power, and by 2030 the treaty aims to provide affordable green energy to a billion people who do not currently have any electricity. These are lofty goals and a considerable source of excitement. They demonstrate an understanding that green investment gives the opportunity to significantly increase the living standards of the world’s poorest while protecting the ecological resources on which all our livelihoods depend. So far, all good.

However, my excitement gave way to disappointment when I read the Government’s Explanatory Memorandum to the treaty, written by the Secretary of State for International Development. Those notes celebrate the UK’s involvement in the alliance but then nakedly expose the true lack of ambition behind our involvement. It is stressed that our membership,

“places no legal or policy requirements on the UK”,

and that,

“initial UK ISA collaboration will be through existing UK government funded programmes”.

The focus is placed on developing our bilateral relationship with India, with this being a nice green gesture to move that along. It seems to me that the largest contribution that our Government will be making is creating new commercial opportunities and investment opportunities for UK business. My conclusion from the Explanatory Memorandum is that we are signing up to yet another impressive-sounding green initiative but then doing absolutely nothing of substance. I find this deeply disappointing and a continuation of this Government’s “promise big; deliver disaster” approach to green issues.

My disappointment then gave rise to despair when the International Panel on Climate Change published its report this month. These are the world’s leading climate scientists, who have been asked to give an authoritative review of the world’s climate future. It makes grim reading and, frankly, blows the ambitions of the International Solar Alliance out of the water. The IPCC report sets out the devastating scientific consequences of what will happen if global temperatures rise by more than 1.5 degrees Celsius, which at current rates is likely to occur between 2030 and 2050, well within the lifetime of our children and grandchildren. The report makes clear that limiting temperature rises to 1.5 degrees will expose 10 million fewer people to the impacts of rising sea levels, particularly in small island nations such as the British Overseas Territories. They are why we are involved in the alliance in the first place; we would not normally merit being included, but we are because of those territories.

Fish stocks, which Brexit has suddenly got so many people passionate about, will be devastated if temperatures rise beyond 1.5 degrees. Other risks of climate change, such as drought, crop failures and disease, will all be lessened by keeping temperature changes below that amount. Even someone like me, who has spent most of my life warning about the dangers of climate change, was deeply depressed to see all this written in one place and to be reminded of the rate at which we are hurtling towards climate breakdown. The IPCC report tells us that even the best-case scenario is bad. A 1.5 degree change will still wipe out 70% to 90% of the world’s coral reefs and lead to the displacement of millions of climate refugees. Importantly, though, the panel tells us that that limit is achievable with the right mix of political will, financial resourcing and international co-operation.

This is where the International Solar Alliance, and our Government’s attitude towards it, are really exposed. The ambitious $1 trillion investment by 2030 is pennies when compared to the $2.4 trillion that the IPCC says must be invested in clean energy each and every year to avoid catastrophic climate change. More than 2% of world GDP must be invested in avoiding climate change if we are to keep within safe limits. The report also highlights the importance of tackling global poverty and reducing inequality. Put simply, we cannot save the planet unless we significantly improve the livelihoods of the world’s poorest. When I talk about saving the planet, I do not mean the planet itself because the planet will survive whatever we do to it. What I mean is preserving the ecosphere that we as a human race need to survive.

It is noteworthy that the very reason why we are able to sign up to the International Solar Treaty, whose membership is limited to tropical nations, is because of our territories that lie in the tropics. It is those overseas territories, most of which are small islands and coastal nations, that are most exposed to the risks of climate change.

Before I conclude, I want to stress how much our domestic energy policies are undermining any possibility of showing climate leadership on the world stage. This Government have decimated subsidies and support for domestic solar panels and made new onshore wind power virtually impossible. The 10:10 Climate Campaign says:

“Incredibly, the government is now planning to stop guaranteeing that people will be paid for the surplus energy their solar panels produce. Instead, in effect, the power will be donated for the energy companies to sell on. People installing solar after March next year will be left empty handed. Meanwhile millions of pounds go to fossil fuels. That isn’t just unfair. It’s quite literally daylight robbery—and it’s terrible news for the solar industry”.


We seem to have completely abandoned financing for energy efficiency and insulation schemes. The Green Deal was a failure and nothing ever replaced it, and of course our Government are obsessed with fracking to open up a whole new source of fossil fuels right at the time when we should be locking carbon up in the ground. I do not see how anyone can take us seriously when they see such anti-green policies in the UK.

Those are the reasons why I have called this debate today. I challenge the Government to increase their ambition on the global stage. We really ought to be making green investment the central plank of our international aid and development efforts. I want to give Ministers the opportunity to clarify their dismissive approach in the Explanatory Memorandum and set out a pathway for rapidly increasing our investment in the alliance.

Lastly, I ask the Minister to set out the Government’s analysis and response to the IPCC report, as we are reminded that climate change is the most pressing—and depressing—issue of our time. We all want to avoid climate catastrophe. I beg to move.

[Lord Teverson (LD)]

My Lords, I declare an interest, which will become apparent later, as a trustee of the Green Purposes Company, which holds the green share in the Green Investment Bank.

I welcome this debate. I do not think the noble Baroness should apologise at all because I do not think I would have been fully aware of this treaty if it had not been for this debate. I am going to take a rather different approach but I agree with the vast majority of what she has just said. We probably need Claire Perry from the Commons rather than the Minister here to answer some of these questions, although I am sure he will answer them very adequately.

I thought that this alliance and the agreement itself were good news globally at a time when we have bad news in terms of climate change, with the international consensus rather falling apart in this area. I also welcome the fact that India is the leader in this. I have to say that the history of India in climate change talks internationally has not been great. In fact the country was a blocker of some of the earlier global agreements on climate change—for good reason, in many ways, in that as a developing nation it sees the problem is one that has arisen from industrialised, developed countries and one that we are now throwing back to economies such as India to help us to solve, having been profligate in terms of our emissions in the past. Indeed, as the memorandum states, there are still issues in India with regard to the development of solar through protection in tariffs and in terms of wanting, understandably, to have its own internal solar industry rather than rely, as much as the rest of the world does, on China’s production.