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Energy Bill

moved Amendment No. 40: 40: After Clause 41, insert the following new Clause— ““Tariffs for renewable energy Renewable energy tariff (1) The Secretary of State shall make regulations within one year of this Act receiving Royal Assent for the purpose of requiring specified energy suppliers to introduce a renewable energy tariff for a specified fixed period to specified producers of renewable energy. (2) In this section— ““renewable energy tariff”” means the specified payment level for each kilowatt hour of energy produced by a renewable source; ““renewable source”” has the same meaning as in the Utilities Act 2000 (c. 27); ““renewable energy”” means energy from a renewable source; ““Renewables Obligation”” means the obligation specified in section 32 of the Electricity Act 1989 (c. 29) (procedure for requiring a connection) (as amended); ““specified”” means specified in regulations made under this section. (3) The regulations shall specify a renewable energy tariff and may— (a) set the tariff at different levels, taking into account the type of renewable sources; (b) apply the tariff to different sizes or classes of renewable sources; (c) make different provision for different classes of energy, such as electricity, heat or gas; and (d) provide for a tariff level to be varied as specified in the regulations. (4) The descriptions of energy supplier upon which the regulations may impose the payment of a renewable energy tariff are those supplying electricity or gas— (a) in Great Britain; (b) in England and Wales; (c) in Scotland; or (d) in Northern Ireland, excluding such categories of supplier (if any) as are specified. (5) The regulations shall specify— (a) each renewable source in respect of which a renewable energy tariff shall apply; (b) a renewable energy tariff applicable to each renewable source, or to any type, size or class thereof; (c) the maximum level of energy production capacity in respect of which a renewable energy tariff shall apply; (d) the descriptions of which persons and installations producing energy from renewable sources shall be eligible for the renewable energy tariff and provisions to exclude generating stations accredited under the Renewables Obligation; (e) the contract period for which a renewable energy tariff is payable and the payment level is fixed; (f) how the amount of energy produced for which the renewable energy tariff is payable shall be measured, determined or deemed; (g) the energy supplier required to pay the renewable energy tariff and how energy suppliers shall recover the additional costs thereof, dividing such costs, where the Secretary of State deems it appropriate, equitably between such suppliers; (h) how any costs of connecting to, and of any reinforcement or extension of, the distribution system necessary for the purposes of conveying renewable energy production hereunder are to be borne; (i) provisions for the regulation of renewable energy tariff arrangements by a specified body; (j) provision for the Secretary of State to report periodically on the effectiveness of the regulations made hereunder; (k) any necessary amendment to distribution licences or supply licences held by any person; and (l) such other provisions as may be required for the efficient, cost-effective, environmentally sustainable and transparent operation of the renewable energy tariff. (6) Before making regulations, the Secretary of State must consult— (a) the Authority; (b) the energy suppliers to whom the proposed regulations may apply; (c) representatives of renewable energy producers to whom the proposed regulations would apply; (d) representatives of suppliers subject to the Renewables Obligation; and (e) such other persons, if any, as he considers appropriate. (7) Regulations under this section shall not be made unless a draft of the instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.”” The noble Baroness said: This amendment represents one of the most hotly debated energy topics in Parliament. When a similar amendment went through another place, 35 Labour MPs supported it; indeed, it was proposed by one. That amendment was lost by a very slim margin. Although this issue has generated a split in parliamentary politics, the world outside Westminster seems to be in relative agreement: this country needs a renewable energy tariff. There are some concerns, of course, which I will address. Still, out of all the briefing I have received and the meetings I have had on the Bill, this issue is the one that most people seem keen to press. It does not surprise me. The potential benefits of a renewable energy tariff are enormous. Indeed, it might not even be appropriate to speak in the vocabulary of ““benefits””. We on this side feel that it is not just beneficial, but necessary. If we expect to proceed into a century where the dual jeopardies of energy security and climate change threaten the future of our country and our planet, a renewable energy tariff must be the first step. The amendment allows for the energy revolution to begin. A renewable energy tariff is about the empowerment of citizens to abate climate change and to establish the crucial shift to renewable energy production. Although it may sound hackneyed, I believe that the amendment would bring power to the people. I want to make myself absolutely clear. The amendment is designed to encourage small-scale renewables. It is not a back-door attempt to abolish the RO and is not intended for tremendous sources of power generation. It would allow households, farmers, commercial companies and public buildings to receive a fixed amount for every unit of renewable energy they generate. This is the same mechanism that has revolutionised the German energy industry and has had similar success across the Continent. It is necessary if we are to meet our emissions targets. Currently, only 2 per cent of UK energy comes from renewable sources. A boost in small-scale renewables will go a long way to meeting the EU target, which states that 20 per cent of Britain’s energy should come from renewable sources by 2020. Energywatch has advised us that the Government’s Renewables Advisory Board estimates that microgeneration has the potential to contribute at least 22 per cent towards Britain’s target. With a tariff, and hence proper support, the contribution of small-scale generation could be much higher. Indeed, a study by the Energy Savings Trust for DBERR indicates that 30 to 40 per cent of the UK’s total electricity could come from renewables by 2050. We must agree that the potential here is great. A renewable energy tariff would also shore up our energy security. Empowering people to produce their own energy reduces our dependence on imported fuel and provides a substantial financial buffer against the volatility of oil and gas markets. A tariff could have an economic benefit. The UK renewables sector currently employs an estimated 7,000 people and in 2006 turned over £290 million. Compare that to Germany, where turnover rose by 10 per cent last year alone to an enormous €24.6 billion. Last year the employment created in this sector topped 249,000. Feed-in tariffs that empower people to take control of their energy needs will be a great benefit to the economy and play a crucial role in revolutionising how we heat our homes and power our lights. There are also potential benefits for fuel poverty. Supporting localised and individual generation drives down costs of bills. Indeed, the Government's ambitious fuel poverty targets might not be achieved unless there is some form of support for microgeneration. Feed-in tariffs provide such support. The international community has shown that renewable energy tariffs can work. Industry and green lobbies are unified behind the idea of a tariff. The Liberal Democrats support it. The group of supporters even extends to pop stars, as Alan Simpson told us in another place. The only opposition comes from the Government. I now turn to the detail of the amendment. It does not place a threshold for what counts as small-scale generation and would allow the Secretary of State flexibility to set a limit after consultation. However, we admit that that might not be the right approach. It might encroach on investor confidence, which could prevent the progress that the amendment intends to encourage. At this stage, through the amendment we are pursuing a mechanism which rewards people, communities, commercial businesses, farms, warehouses and hospitals—the list goes on—for producing renewable energy on a small scale. This is about decentralising energy and giving power to the people. The amendment would include provisions to allow support for the encouragement of renewable heat, which is an improvement on the previous version tabled in another place by a Member of the Labour Party's Back Bench. This is an improved version, because that is what this process is about—honing our amendments to perfection so that the Bill might benefit from their inclusion. I will speak frankly. I do not offer this amendment as a way of generating debate generally. We tabled the amendment with the hope that the Government will accept at some stage a mechanism which could provide for such prodigious advantages for this country and its citizens. I beg to move.