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Energy Bill

moved, as an amendment to Amendment No. 29, Amendment No. 34: 34: After Clause 40, line 14, leave out ““financial incentives to encourage”” and insert ““payment for”” The noble Lord said: My Lords, we tabled Amendments Nos. 34, 36 and 38 to 43 in this group to explore the detail of a feed-in tariff. Some concern has been expressed that the government amendment gives too little detail about the final structure of the scheme. I should appreciate it if the Minister took this opportunity to go into detail about what he envisages the final tariff will look like. He has already highlighted the necessity for proper consultation and the need for some flexibility to incorporate the necessary details from further study and of course this afternoon I do not expect him to be able to give us the final details of exactly how much the tariff will be and so on. However, these amendments highlight certain areas of concern where we feel that the Government should be able to assure your Lordships that they have a proper feed-in tariff in mind. First, can the Minister kindly explain exactly how the Government intend to interpret the financial incentives that the provisions allow for? I very much hope that he can confirm that, as in Amendments Nos. 34 and 36, he intends to introduce a scheme of regular payments set at a certain level over a certain period of time. I suggest that anything else will fail to provide the predictable level of income that any meaningful investment requires, as the Stern review made clear when it defined a feed-in tariff as a fixed-price support mechanism. Amendment No. 38 would ensure that the Secretary of State could set a certain level of payment, as well as establishing the calculation method. Can the Minister confirm that the Government intend to guarantee that the tariff payment will not fluctuate unpredictably, as it may well do if calculated solely on the basis of market conditions? Amendment No. 39 would ensure that the Government could not modify the level of payment arbitrarily. Any decrease in payment should be transparent, predictable and, above all, fully understood by any generator before it makes its initial investment. I hope that the Minister can confirm that the Government will not use the power in this paragraph arbitrarily to reduce the tariff to generators that, in good faith, expect to receive the higher tariff. Amendments Nos. 40 and 41 probe a little further the Government’s intentions on different levels of support for different technologies and different scales of plant. Amendment No. 42 seeks to clarify how this tariff will operate with the renewables obligation system. Can the Minister explain a little further how the overlap will be managed and how the Government intend that the choice will be made in the case of an investor in a plant who might be eligible for both? There will also be a necessary transition from some projects from the lower end of the renewables obligation scheme on to this tariff. Perhaps the Minister can give us more information about how he envisages the transition being handled. Finally, Amendment No. 43 was tabled to explore how the Government expect the connection costs to be handled. Do they intend to monitor the costs that suppliers impose on generators and do they have any plans to ensure that those costs are proportionate and fair? I beg to move.