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Energy Bill

My Lords, I thank noble Lords for their contributions to this short but important debate. In particular, I thank the noble Baroness, Lady Wilcox, for her remarks. Since I have taken part in our debates on the Bill from Report onwards, I have been struck by the constructive way in which they have taken place. Bringing this amendment to noble Lords today reflects that. I would say to the noble Lord, Lord Teverson, that even if we were bouncing back and forth, 5 megawatts would have been the settled view of the Government on the matter. I say to the noble Lord, Lord Goodhart, that we are not debating the insertion of the new clause as that went through at the previous stage; we are debating whether 3 megawatts or 5 megawatts should be the limit. I thank him and his committee for their comments. I well understand the difficulty for the committee because many amendments to the Bill were laid at a late stage. I understand that that has not always enabled the committee to report to your Lordships' House in the time that it would wish, but that has been because the Government have listened to the debates in this House and the other place. I am grateful to him and can confirm that the orders will be in the affirmative. My noble friend Lord Whitty has always preferred for there to be no limit at all, but he will know that we have always thought that there ought to be a limit if we were to introduce feed-in tariffs, because it is essential that investors have certainty. Defining an upper limit at this stage gives investors the certainty required. I know that noble Lords now wish me to fill in the details of how the tariff will operate, where the cap will be set in relation to different technologies and whether there will be specific differentiation. I hope that I am not going to give to the noble Lord, Lord Teverson, and others what the noble Lord, Lord Jenkin, described as a dusty answer. I will try to give as much detail as possible. However, a lot of work needs to be undertaken before I can give definitive answers. Very simply, the Government decided only a few weeks ago to accept the principle of feed-in tariffs. That is why we need to undertake considerable work on this matter. I very much understand the need for action to be taken as quickly as possible and investors’ need for certainty. I recognise that we need as quickly as possible to help projects that might be regarded as transitional and to tell them whether they are likely to come under the renewables obligation or the feed-in tariffs and what the transitional arrangements should be. In the first half of 2009, we are launching our renewable energy strategy. We will then submit our more detailed proposals on feed-in tariffs for small-scale low-carbon electricity and on incentives for renewable heat, which we have also introduced in the Bill. In the light of those decisions, we will be in a position to set out in detail the expected contribution of on-site generation alongside other kinds of electricity and heat generation. I well understand the need for us to give certainty in these matters as quickly as possible. It is then our intention to consult next summer on the detail of the regime, including proposals for tariff levels. In recognition of the need to make rapid progress towards the 2020 EU renewable targets, we aim to have the feed-in tariff system in place in 2010. Our ideal target is for the scheme to go live in April 2010 so that it can be aligned with the financial year of the renewables obligation. We well understand that investors and all those with an interest need speed and certainty, but delivering a fully operational scheme in a little over 16 months is a considerable challenge. We will do everything that we can to meet the target, but it is clearly important that we get the details right as well. I have found the contributions of the noble Lord, Lord Jenkin, to be most constructive and helpful, and I look forward to debating these highly important energy matters with him in the months and years to come. On Question, Motion agreed to.