---

Planning and Energy Bill

My Lords, I had not intended to address the House so soon after the gracious welcome that I was given last week, but the opportunity to contribute to this debate was simply too tempting. I am not sure whether the kind remarks from the noble Lord, Lord Hanningfield, are sufficiently accurate in describing me as an expert, but I shall make a few remarks which I hope will relate to the issue. In time, I hope not to confine myself to energy and to contribute more widely to the work of the House, principally in three other areas. First, I hope to contribute on the European Union, as I have spent many years toiling in the vineyards of European issues, mainly on financial services and the internal market; secondly, on higher education, as I am the proud chairman of governors at the University of Brighton; and, thirdly, on broader general regulatory domains from my past experience. Giving one’s maiden speech, as I suspect most noble Lords will recall, is a somewhat daunting task, despite the gentle charm and undeserved graciousness in my own respect with which noble Lords will receive it—or, at least, I hope that will be the case. The omens for today are not so good, and Friday the thirteenth is not an auspicious day on which to start! An earlier request that I made to a cab driver to deliver me from Victoria to the Lords resulted in my belated realisation, halfway up Park Lane, that cricket rather politics was uppermost in his mind. As I stand here, I recall a Woody Allen remark which I shall adapt to avoid its more morbid overtones and which accurately reflects my feelings. Woody declared himself unafraid to die—in my case to speak—noting that the point was that he just did not want to be there when it happened. But I am here, and I should therefore turn to the Bill under discussion. I was much impressed by the remarks of the noble Lord, Lord Judd. I cannot say that I agreed entirely with him, but in my uncontentious contribution I shall step aside from making remarks that he would wish to hear from me in my professional capacity. The House does not need me to spell out the challenges that we face; indeed, the noble Lord, Lord Hanningfield, referred to them. Establishing 30 to 35 gigawatts of new electrical generating capacity in the very short space of 12 years, against the extremely demanding targets that have been set at EU and national level, will be formidable. The drive towards securing low-carbon energy sources is a background for this, and other backgrounds are concerns about the security of supply, the economic and political difficulties and whether there is the investment will to establish these developments. There is no one single bullet that will achieve such objectives. We must find ways in which to invest to develop many different energy sources. The noble Lord, Lord Judd, referred to microgeneration, distributed energy—which is the central point of the Bill—biofuels, wind power, tidal wave power and all sorts, along with the more conventional forms, if nuclear can be called conventional. It may be useful to mention to the House the current distributed energy picture. About 10 per cent of GB’s electricity supply, 10 gigawatts, is already provided from distributed energy, but the essential difference, and the reason for this Bill, is that most of that is for on-site, single-generation plants for large commercial and industrial usage. Most will not require licensing because they neither generate, nor distribute, nor supply. What is clearly missing is the contribution of the smaller, local community distributed energy generation. The debate at national level, as noble Lords have said, is already extensive, as it is at EU level. As chairman of the European energy regulators committees, I have a deep involvement in that. Although more modest in scope and indeed in its length—which is a welcome point for this House to note—the present Bill neatly combines in its Short Title both the other big brothers that accompany it on its route. I refer to the Energy Bill and the Planning Bill. One might think that both could be tucked into this Bill. As chairman of the British energy regulator, conventionally known as Ofgem, I readily acknowledge the important place that this Bill plays in the broader regulatory mosaic of our emerging energy policy. It would help to deliver and ease the passage for the delivery of the very challenging targets that have been set at the various levels. Its approach aligns well with the Government’s planning policy statement on climate change and with our own work, to which I shall briefly refer in the concluding part of my intervention. It anticipates the renewable energy strategy that the Government are apparently to make in a few weeks’ time. The Bill will help to pave the way for local authorities to set reasonable requirements for energy use and efficiency in local plans, as the noble Lord said that in his opening remarks. An important word is ““reasonable””—and it must be within the context of the overall national plan. The Bill should open the way and stimulate the development of community energy schemes. Since the use of distributed energy can be seen as an increasing part of this supply mosaic, I support the proposal. It is an enabling measure, ““necessary but not sufficient””, in the words of every well-known civil servant. I shall mention a few other arrangements that will also contribute to the adaptation of our current policy framework, to greater and more extensive use of distributed energy schemes at local level. Indeed, I could have bored noble Lords to tears if I had spent my whole speech simply going through the titles of all the activity involved in renewable energy and investments at a European and national level, but I saved them that treat because it is the 13th of the month. Ofgem has been exploring how to ease the costs of removing the complex administrative and practical difficulties of launching the scheme without, importantly, reducing the protection to consumers that is offered by our present legal regime, mostly through the licensing arrangements that we operate in the regulatory authority. I anticipate an early announcement of our conclusions, but they have been extensively consulted on, and the conclusions that have been reached will come as no surprise to those who have followed this debate. It is quite clear that we have to dismantle as many of the obstacles to entry for these schemes. If, as I hope, the Bill is used to stimulate interest, and to develop and make approaches within the broad confines of local authority plans, new schemes could well come forward, but it is not helpful if those schemes are stopped at the gate by complexity or costs. Within our discussions we found ways of tackling the present onerous and costly requirements that were designed for a past age. Indeed, the noble Lord, Lord Judd, referred to the past and the way in which our grid needs to be adapted and the whole distribution system examined. Energy is changing in its use, scarcity and costs. It may be that price levels will determine a greater interest in energy efficiency than any of the measures that we devise ourselves. While we importantly maintain the protection offered to consumers—an issue that we do not want to address by removing the safeguards in the Bill—we believe that we have developed an overall approach that will be supported by those whom we have consulted, including, most relevantly in this House, the London Climate Change Agency. The Bill opens the way to translate local authorities’ commitment to sustainable development and carbon reduction policies into practical community schemes. It allows them to impose reasonable requirements in their plans so that local renewable resources can be tapped into. It allows a practical translation of low carbon policies at local level into reality. It reinforces the vital need for energy efficiency standards to be applied to their developments. The Bill therefore has my full support.