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Energy Bill

moved Amendment No. 34: 34: Clause 37, page 25, line 37, at end insert ““and research and development costs involved in enabling the industry to make efficiency gains”” The noble Lord said: My noble friend Lady Carnegy has asked me to apologise to the Committee for her that she cannot be here today and that she will return to her amendment on Report. Amendment No. 34 is an examination of the provisions for research and development costs. Research and development is an essential component in the development of this most dynamic of industries. Under this amendment, the Secretary of State, when considering the banding provisions of the renewables obligation, would have one further issue to take into account; namely, research and development. The other factors set down for his consideration seem sensible. Costs, including capital costs; the income of operators of generations; who is exempted from the climate change levy; and the desirability of security long-term growth are all rightly taken into account. But if we are to meet the ambitious targets that have been set and are to encourage the growth of the renewables industry into a mainstay of our energy mix, one essential element still is lacking. With the rapid changes happening in the industry, research and development is essential to ensuring long-term growth and economy. Efficiency can be increased through R&D where otherwise, with the boom of a new market, it might not have been the primary focus. Some photovoltaic companies, for example, cannot afford to meet both the demand for their product in the short term and research for maximising their future efficiency. Research and development also allows for opportunities to increase economies of scale; for example, in discovering technologies to enable automation of production, which will help contribute to a much lower price for green energy. At the moment, especially in the solar market, research in Germany is booming, while it is still a rather fledgling affair here. A specific provision to take into account costs associated with research and development at home would help to encourage home-grown work on streamlining the industry and further innovation. The ROC system has led to an increase in renewables, but it tends to favour cheaper and more mature technologies. If we are to break out of older paradigms of energy production, this has to come with a substantial emphasis on research. The Minister in another place claimed that the Secretary of State will take into account all costs associated with the generation of renewable energy, but we need more clarity and certainty. As I have already said, the current RO favours the more mature technologies. It is essential for it to be recognised in the Bill that research and development costs will be factored in to make certain that emerging technologies have the support they need to develop properly. What reasons can the Minister give for excluding them from the Bill? Surely it would not pose any further legal problem in terms of a judicial review. The amendment would encourage the technologies that need it the most by providing the assurances that form the bedrock of progress. I beg to move.