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Energy Bill

Lords amendment No. 65 is decidedly good news and amendment (a) simply seeks to put a time frame around its implementation. The reason I say that it is decidedly good news is that there has been a very important shift in the thinking about how we deal with the heat part of the energy agenda. For a long time whenever Members approached Ministers on the issue, we were given the rather intriguing assurance that the Department had a ““team on heat.”” This may have raised some eye-watering prospects as to what life was like in the then Department for Trade and Industry or Department for Business, Enterprise and Regulatory Reform, but it was not clear whether this team on heat was delivering anything. One of the problems was that the efforts at that time were centred on trying to find an equivalent of the renewables obligation for heat. The good news about the amendment is that it represents an abandonment of that search in favour of a feed-in tariff arrangements; a production tariff, the like of which we can see in operation in other parts of Europe. I welcome that, and the important thing for us to address now is the time scale and the significance of the measure in connecting with other parts of the renewables agenda that we have already debated this afternoon. I would like to give just a couple of examples of why it is important that we get the time frame right. Perhaps I should say in parentheses that I welcome the fact that the Government have accepted that there should be no threshold in relation to heat generation. That is a definite good move that allows us to bridge the gap that currently exists between ourselves and, for example, Germany in relation to the generation of heat from renewable sources. In the UK at the moment there are 17 biodigesters producing gas and heat. In Germany, there are 5,500. The reason for that is the German system already has a production tariff, which allows the system to work in ways that direct heat to off-grid communities and/or to the fuel poor, while allowing it to connect to the use of biogas for electricity. That is why it is important that the Government synchronise the timetables for the introduction of this renewables-intensive programme, and that we set in the cross-party amendments the same sort of time frame that we wanted to see in place for the introduction of feed-in tariffs for electricity. Let me give some examples as to how that makes sense. First, if a hospital, as in my own city, is considering investing in the construction of a biodigester that would take hospital waste, including food waste, and some of the biodigestible waste from other parts of the city, it will want to use that waste to create biogas, to increase its quality to biomethane and to use it to provide direct heating. In parts of the summer, when it might not require heating to the same extent, the obvious answer is to turn the excess heat into electricity. So there is an overlapping purpose: connection to the renewable energy agenda makes sense for the renewable heat agenda. The same applies to off-grid communities and the fuel poor. I brought representatives of one of the German companies across to explain that to officials in my own city. Some of the officials in Nottingham struggled to grasp the scale of what was on offer. The Germans were able to say that, in respect of fuel poor, they could offer fixed gas prices for the entire contract period for the disposal of the biodigestible waste. In an era of ever-spiralling gas prices in the international gas market, everyone who can offer, in real terms, fixed gas prices by taking what is currently a problem—biodigestible waste—and turning it into a fixed-price resource is almost offering a winning lottery ticket. Against the criteria of how we address the needs of the fuel poor and those of off-grid communities, such schemes in many respects offer a potential that is at least as large as the capacity to generate renewable electricity and place it in the context of renewable gas and heat. The point of amendment (a) is simply to say that, if we seek to remove confusion, it would be phenomenally helpful if the schemes for both could be synchronised. I do not want to be dogmatic given that, if I were to turn the argument around slightly, it would be disastrous to hold back one scheme just because the final details were not in place for the second. However, it is still legitimate for us to say that, as we think about the time scales for electricity, it makes sense for us to try to synchronise them with the time scales for the introduction of renewable heat incentives. In many cases, the same companies, communities and localities will be at the heart of that investment planning. So if we are to offer a genuinely joined-up approach to our renewables strategy, it would be helpful to have the same sort of time scale according to which we seek to deliver them. I do not want to go into the arguments that we have rehearsed in relation to the details of the scheme and the tariffs that would apply, but the principle of synchronising timetables is one that, I hope, we can commit ourselves to, and I hope that the Minister, even if he cannot accept amendment (a), can give assurances that that is the Government's intention as they seek to motor on both of those important fronts.