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Energy Bill

A few questions arise under the clause stand part. I apologise to the Committee that I did not table amendments, but I did not expect to be here for most of the afternoon and so I did not think that I would be able to speak to them. However, as I am, I shall just raise a few points. I gave the Bill team late notice of my questions. On page 21, in Clause 32A(4), reference is made to the ability of the English, Welsh, Scots and Northern Irish to have schemes whereby the renewables obligations will apply only if they are earned in the relevant country and sold on behalf of the customers in that country. They will have to sell electricity in that country and earn the renewables obligation in that country. That raises interesting questions about Scottish oil being for Scotland and Scottish wind generation being for the Scots as well—and the same for the Irish and Welsh. So it is an extremely interesting clause. First, I should like to ask what lies behind this. Is it currently being implemented or is it expected to be implemented? If not, why is it there? Secondly, would it be within the power of the Scots Parliament to invoke that power in the Bill without requiring the approval of the United Kingdom Parliament at Westminster? That is clearly another important issue. Could Scotland unilaterally declare independence on Scottish wind and renewables? Thirdly, if that system came into operation even in one country, would that not mean that renewables obligation certificates would not be tradable between different parts of the United Kingdom? You would not be able to buy a surplus Scots renewables obligation certificate because it could be used only to offset requirements in Scotland. That raises some very important issues. I am glad to see my noble friend Lord Puttnam, who spoke eloquently on carry-back and carry-forward, is here. New Section 32A(5) of the Electricity Act 1989, to be inserted under Clause 37 of this Bill, gives the power to carry back and to carry forward. What percentage of obligations are expected to be permitted to be carried forward and carried back? New Section 32G(2)(a) concerns the buy-out. Can the Minister throw any light on the expected price of the buy-out? What is the buy-out under the current renewables obligation? What are the principles behind that? I do not think that the Minister will want to address in any detail today the relationship between the buy-out rate for renewables obligation certificates and the buy-out rate under the carbon reduction commitment. What is the connection between those and the European ETS carbon price? One of the important problems is that there are different schemes, prices and incentives for reducing carbon. I am sure that it would be helpful for the Committee and for the wider public to understand this and to see whether there is a connection between them. On renewables obligations, which obviously are slightly different to renewables obligation certificates, what proportion of renewables obligation units are currently traded and what proportion are bought out? It would be helpful to know how significant the buy-out clause is expected to be. Is it really a big let-out for meeting obligations or is at the margin? The inflation index for the buy-out price—the ability of the regulator to adjust the buy-out price over time—is clearly very important. In the energy markets, prices have been, to say the least, volatile and surging upwards. The question of the index that would adjust that buy-out price is not necessarily self evident. It certainly is not the retail prices index, as any average household will tell you. What is the thinking about the index that would link the buy-out price for the ROCs? Finally, buy-outs raise revenues. New Section 32H(1) hands back those moneys. I assume that that money goes back to electricity suppliers, or does it go to generators? What are to be the criteria for allocating money under that system? As I understand it, moneys collected, as it were, through penalties for not meeting the obligations, are not a source of revenue for the Government: they go back into the sector. Who gets the money? Is it the generators or the electricity suppliers? On what basis will it be allocated? Will those companies that have not met the obligations get some money back, or does the money go back only to the good boys—the people who have met their obligations? I apologise to the Minister for throwing many questions at him. I had given some notice, but if he is not able to answer all of them now, I would be most grateful for a response in the usual way.