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Energy Bill

My Lords, as it is presumably a question of just power generation companies and not companies in general, I will save time and move on. Many noble Lords mentioned feed-in tariffs. It is true that Germany has been successful in deploying renewables by using a feed-in tariff, but at a very high cost. It cost €68 billion between 2000 and 2012. There are 500 different types of tariff, with 150 added every year. It is a regulatory nightmare, and extremely expensive. And, let us not forget, they have had that regime in place since the 1990s; comparing our levels of renewable energy with that regime is like comparing apples with pears. We have to get this into context. If we were to change now, we would destroy the consistency and stability that business craves and private sector investors need, and we would increase the delay and the cost. I am grateful to my noble friend Lord Birt for the geographical context in which he put this situation. He raised a list of issues which will prevent the UK meeting its renewables target, including planning, radar issues and grid updates. On behalf of the Government, I wish to reassure noble Lords that we fully recognise that those are major factors. We are actively working with all the relevant parties to resolve those issues and we are making good progress. The financial framework must be consistent to ensure investor confidence at all times. That is why it is vital that we remain committed to the renewables obligation. Indeed, my noble friend said that the Government need to do more to support renewables. Too true—we have always said that we need to do more. That is why we are bringing forward the renewable energy strategy next spring. But we must implement the important changes to the RO in this Bill now. Indeed, the Bill will make the renewables obligation 30 per cent more effective. My noble friend also said that we need to do more to support combined heat and power. Renewable CHP is already supported by the RO—the new planning policy statement on climate change will, I hope, help promote that even more. During the coming months, we will be examining how to make further use of combined heat and power, including heat in a carbon context and a greater use of waste heat. I am very grateful to the noble Lord, Lord Jenkin of Roding, not only for his contribution today but for giving me prior notice of the issue he was going to raise concerning Energy Solutions, Inc. We will take that up over the next two or three days, but I can assure the noble Lord that if its solutions and ideas can be proven to be of use in what we are seeking to achieve, then yes, we are flexible and open to change. I would say that, wouldn’t I? I am one of the most passionate believers in an open market and in the free market working to bring in speedy innovation. I assure the noble Lord that I will get back to him on the specifics of Energy Solutions, Inc. The noble Lord spoke about energy companies not being able to deal with the vulnerable. He also mentioned fuel poverty, as did so many of your Lordships. I guess that it would be seen as running away scared if I pointed out the obvious—that that is outside the scope of the Bill. If noble Lords wish it to come within the scope of the Bill, I presume that they will put down amendments with the aim of doing so. But the Government are not sitting back and doing nothing. We have spent £680 million more in the current CSR than in the previous one, especially on the initiatives of Warm Front and CERT. I said at the beginning of my remarks that I heard some things from other Benches that made me think, ““You have a nerve””. Before 1997, I did not exactly hear the Conservative Government give fuel poverty the attention they feign for it now. But it is one of the blights on the fifth biggest economy on earth and I am grateful to my noble friend Lord O’Neill for his passionate and clear description of the issue. I do not believe that there are 6 million people living in fuel poverty. We have got that figure down from 1997—it now stands at 2.5 million but, frankly, that is 2.5 million too many. It is very important not to ignore it, especially at a time of rising energy costs, and given the lack of education and investment there is regarding insulating homes.