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Climate Change and Sustainable Energy Bill

My Lords, I am grateful to my noble friend Lord Whitty for the clear manner in which he introduced this Bill. We have had an informative and wide-ranging debate, and I would like to set out the Government’s position on the Bill. Climate change is without doubt the major long-term threat facing our planet. Melting ice caps and violent weather extremes are no longer ““possible future events””; they are happening now. Every week, authoritative scientific studies warn that, without urgent action, this may just be a taste of our future. That is why tackling climate change is a key priority for the Government. Our record on addressing the levels of harmful emissions that contribute to climate change is good. We are on track to meet our Kyoto Protocol commitments, with emissions of all greenhouse gases projected to be approaching 20 per cent below 1990 levels by 2010. But we recognise that there is more to do to meet our more ambitious target of a 20 per cent reduction in carbon dioxide emissions by 2010 and to ensure that we are on the right track to meet our long-term target of a 60 per cent reduction by 2050, which is where microgeneration can play a role. Microgeneration is a generic term for a suite of technologies that allows the production of heat and electricity in close proximity to the consumer. When we talk about microgeneration, we are talking about solar power heating our water and producing our electricity, about harnessing the wind through individual micro-wind turbines and about using the earth’s heat to heat our homes through ground-source heat pumps. These technologies could make a significant contribution to our long-term targets for reducing carbon emissions. A study by the Energy Saving Trust suggested that microgeneration could reduce household emissions by 15 per cent a year by 2050. Also, by exploiting our own natural resources, increased levels of microgeneration would reduce our reliance on imported fuel and contribute towards our objective of secure energy supplies. The Government have long recognised the potential of microgeneration. We have supported microgeneration installations by householders, communities and businesses through capital grant programmes since 2002. Our ““Clear Skies”” and PV programmes contributed £53.5 million. These programmes have been superseded by the low-carbon buildings programme, which opened for business in April this year. Initially, the programme had £30 million to allocate, but the Chancellor gave a clear demonstration of the Government’s commitment to microgeneration by announcing in this year’s Budget an additional £50 million of funds, taking the total to £80 million. Creating a sustainable market for these technologies will not be done solely through capital grant programmes, which is why we have published a microgeneration strategy. This strategy outlines a series of actions to be taken in order to remove the barriers currently preventing widespread take-up of microgeneration technologies. This Bill gives the Government the powers to take forward several of those actions in ensuring that exported electricity is rewarded and that access to renewable obligation certificates is made easier for microgenerators. Both of those will provide some monetary benefit to the microgenerator, helping to offset the up-front costs. The Bill also contains clauses pertaining to microgeneration targets. It is too difficult to set realistic targets at the moment, given the early stage of the industry, but we agree with Clause 4, which provides a period of around 18 months to take a decision on targets. This will allow time for further investigation into the effect that targets would have on the uptake of microgeneration and for an assessment of the impact that the policies in the microgeneration strategy have had. The Bill has other important clauses. It engages local authorities. Some local authorities are already exemplars in the battle against climate change—Merton, Croydon and Woking are the oft-cited trailblazers. The Secretary of State’s report under Clause 3 will arm all local authorities with the knowledge that they need to take steps to reduce emissions, to promote microgeneration and energy efficiency and to reduce fuel poverty. Clause 20 gives parish councils the powers to promote energy efficiency and microgeneration, creating the possibility of real local action. Building regulations and planning policy are key issues for microgeneration. The tougher emissions limits in the new Part L of the building regulations, together with the code for sustainable homes, will make microgeneration technologies an ever more attractive option to developers trying to meet these requirements. However, this Bill gives the Secretary of State the ability to make future regulations, specifically in relation to microgeneration. It also makes some changes to the rules governing prosecution for breaches of the building regulations, which will help local authorities to tackle the issue of non-compliance. In terms of planning policies, the Bill commits the Government to reviewing the consent regime that regulates installation of microgeneration, with the aim of removing unnecessary controls—that measure could considerably facilitate the installation of technologies such as solar panels. Clauses 15 and 16 provide flexibility in relation to future phases of the energy efficiency commitment. They will enable the Government to set wider ““carbon emissions reduction targets””, rather than the existing, narrower ““energy efficiency targets””, essentially opening the door for this mechanism to act as an incentive for microgeneration and other carbon-reducing technologies. The wider provisions will be implemented only following full analysis of the implications, and will be included in the consultation process for the next phase of the energy efficiency commitment. Dynamic demand technologies have been the subject of a couple of debates in this House. On the most recent occasion, we had the opportunity to discuss the Bill introduced by the noble Lord, Lord Redesdale, which aimed to promote these technologies. I do not want to go over the same ground today, but it is important to note that this Bill imposes a duty on the Secretary of State to publish a report on the contribution that dynamic demand technologies could make to reducing greenhouse gas emissions in Britain. The report will also address whether it is appropriate to take any steps to promote the use of such technologies and, if it is, what those steps might be. We are determined to understand what contribution dynamic demand appliances can make, and we are determined to ensure, if our report shows that work is needed to help to deliver the potential, that we can do so. The Bill also includes a number of reporting requirements. We are content to comply with such requirements, as greater transparency will help to raise the level of debate around these important issues. The final clauses of the Bill that deserve mentioning are the duties to promote renewable heat and community energy projects. We are already committed to promoting renewable heat. The Government has already supported renewable heat projects through the bio-energy capital grants scheme, the ““Clear Skies”” initiative and the community energy programme. Support for renewable heat will continue in the low-carbon buildings programme. We also recently published our response to the Biomass Task Force and committed to producing a biomass strategy, which will examine longer-term mechanisms for promoting renewable heat. Community energy schemes are an important tool in our efforts to combat climate change, and not just because they reduce emissions through the use of low-carbon forms of energy. Their real significance lies in the engagement of whole communities in the energy agenda. They can inform and enthuse communities about the benefits of low-carbon energy and the need to use energy efficiently. We are happy to continue in our efforts to promote such schemes. This is not a general energy debate—we have already had one of those—and it is not my role to respond to points about the Bill; that is for my noble friend Lord Whitty. Perhaps I could comment on two points raised during the debate that hinge on the question of why the Government are prepared to support the Bill. The first concerns comments made by the noble Lord, Lord Tanlaw. There are two issues here. The first is the Bill. I thought that his criticisms of the Bill were rather ill founded. It consists of a series of sensible steps in fields such as dynamic demand and microgeneration. Those are sensible policies to develop, and there is no point in casting doubt on the idea that those are sensible things to consider. They will involve civil servants, but all policies involve some civil servants to develop them. Their potential to help our energy policies is considerable. In particular, the noble Lord’s remarks suggesting that government actions were affected by the sponsorship of electricity companies were unfortunate. The Bill, like other parts of our policy, contains proposals about energy efficiency—this Bill addresses dynamic demand—and policies to reduce the amount of electricity that we use. It is absurd to say that we are influenced by electricity companies in not supporting the noble Lord’s Bill on daylight saving time. We are not supporting his Bill because, as I have said a number of times in the House, we do not believe that it would save energy. The one study that has been done in this country suggests that it will not. In the one example of real experience that we have—Portugal, which moved to a similar system—it was not found to reduce energy use. There are plenty of other reasons why we are not supporting that Bill, but it cannot be claimed that there is any strong case that the proposal would save energy. That is one reason why we are not supporting it.