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Energy Bill

My Lords, I thank noble Lords for their interesting comments. I cannot apologise for the vague provisions, but I understand why noble Lords would like some more information on how we will go forward. In a sense, that is the hardest information to share with noble Lords tonight. To start with, I reassure noble Lords that we see the renewable heat incentive as an important measure and, therefore, want to introduce it as soon as possible. On FIT, I have already said that we hope to start by 2010, although I cannot guarantee that. I cannot say the same about the renewable heat incentive, but I can say that we intend to set out a more robust timetable in the new year. The noble Lord, Lord Teverson, has already raised one or two complex issues. As the noble Lord, Lord Oxburgh, said on Report, it is important that we get it right. It is unwise for me to go any further in terms of providing a timetable. The noble Lord, Lord Teverson, is quite right about small applications. I reiterate that under the heat incentive scheme that we will produce we want a set rate for each unit of renewable heat energy produced. We expect those opportunities to exist at all scales, from large industrial sites down to the smallest household level, with all scales eligible to receive support. He goes on to ask whether I can tell him some more about some of the practical issues. No, but I acknowledge that he is right: clearly there are practical issues that we will have to work through over the next few months. The noble Baroness, Lady Wilcox, has done a great service in tabling her amendment and asking her question. I of course understand that some sectors will argue for different treatment under the heat incentive. I know that there are some concerns that my amendment may disadvantage fossil-fuel CHP operators. I would say to the noble Baroness that the levy proposed would apply to suppliers of fossil fuel to consumers for the purpose of generating heat and not directly to consumers—that is, the owners of the CHP plant. I know that the powers in the government amendment are broad, but that has one advantage. As we develop the regulations and the consultation, we can take into account the argument put forward by the noble Baroness and the organisation that has talked to her. Provision to designate fossil-fuel suppliers will allow the Secretary of State to exempt certain classes of fossil-fuel supplier if, after sufficient analysis and evidence, we believe that there is a disproportionate negative impact on any particular sector. A renewable heat incentive is designed to incentivise renewable heat. It is right to focus on that mode of heat. I assure the noble Baroness that we think that heat pumps are covered and that a renewable heat incentive will cover that technology. The noble Lord, Lord Teverson, mentioned domestic-scale renewable, which we intend to be covered. I hope that I have reassured the noble Baroness on that point and that noble Lords will support this group of amendments.