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Energy Bill

My Lords, I have no financial interest to declare on this matter, but I have added my name to the amendment because I feel strongly about the issue discussed by the noble Lord. I tabled an amendment in Committee to make the same point, my own Member of Parliament, the MP for Angus, having raised the matter in another place and having received a not very satisfactory answer from the Minister. In the event, I could not be present when my amendment was called, so the Minister here has agreed that I can pursue the matter on Report. What the noble Lord has said is of the greatest importance to certain firms, particularly those involved in the research and development of deep-sea wind and wave generation projects off the north-east coast of Scotland, in the Pentland Firth and elsewhere around our shores. Should the Bill stand as drafted, a number of vital, innovative projects may never happen at all. What the Government are trying to do in the Bill may be logical for many renewable energy projects: the availability of various grants from various sources has been added to by the new system of banded ROCs in the Bill. It could be argued that, in some cases, a firm should not benefit from both and that they should not be paid twice over. As the noble Lord, Lord Wallace, has just said, it is possible to invoke European rules on that. However, there are notable exceptions to that argument. Research and development when the sea is deep and the weather wild are exceptionally and unpredictably expensive. Such programmes are often attractive to firms only if they have some initial capital grant help to construct and deploy equipment and subsequent income support for the operation itself and for learning from it. Both grants and banded ROCs may well be needed in some cases. It must also be noted that research grants are not necessarily retained in their entirety, as the noble Lord, Lord Wallace, explained. Whoever awards a grant can claw back a considerable proportion of the money generated during the grant period and subsequently. Europe’s rule does not apply or, at most, only sometimes applies in these cases. The Government constantly talk of investing when they really mean spending. The Minister who is to respond to this debate is among those who do that most of all, I think. The money put into research and development is surely proper investment in the strict sense of the word. The problems of achieving sufficient land-based wind and river generation in these crowded, environment-aware islands are daily more apparent. Offshore shallow-water generation has its limits too. We must now encourage the move further out to sea. There is plenty of deep water out there where waves, currents and winds abound, but research and development are central to that and are mightily expensive. To limit incentives as the Bill does is short-sighted, to say the least. I hope that the letter from the Minister that the noble Lord quoted indicates that the Government will accept the amendment, or something like it, because it sounded as though both ROCs and grants will be permissible in these circumstances. I support the amendment.