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Energy Bill

My Lords, this has been an interesting discussion, following on from our discussion on Report. The noble Lord, Lord Jenkin, suggested that a 3 megawatt limit could be described as triangulation. The noble Baroness, Lady Young, suggested that the Government would always be in a happy position responding to a debate where two very different amendments are proposed and the Government seem to be coming down the middle. Indeed, I am in that happy position. However, there is a genuine reason for our thinking that 3 megawatts is about right. On the one hand, I echo the noble Lord, Lord Jenkin, in saying that investor certainty is essential. The last thing that we want to do is discourage decisions about investment. On the other hand, we want to encourage the small microgenerating schemes to which we see the FIT applying. We are trying to get the balance right, which is not easy. There are many considerations. Going for the 3 megawatt capacity cap, but allowing ourselves discretion to go into the detail of the different areas where we might set caps below that, is the right way forward, giving us some flexibility or ““headroom””, as the noble Baroness said, for further discussion, consultation and work, but also ensuring that the great majority of large-scale investors have certainty. That essentially is why we have gone for the 3 megawatt cap. I have been convinced that it is essential to have a cap in the Bill, because of the critical issue of investor confidence. I do not need to go into the argument as to why we think—