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Green Energy (Definition and Promotion) Bill

My Lords, on the face of it this is a simple Bill designed to clarify and help the move towards a low-carbon economy, principally at the local and decentralised level, with various forms of microgeneration. It is a simple Bill, but the background is huge. The largest problem facing humanity is the challenge of climate change and how we mitigate and adapt to that challenge. The Bill provides a smoother path for mobilising small-scale technologies to make a contribution to this greatest of all challenges. This Bill has been skilfully taken through the Commons by Peter Ainsworth MP and was subject to fairly detailed scrutiny. In its present form, it received all-party support, including invaluable engagement by the Government themselves in the form of DECC Ministers and officials. It has also received considerable support out there from the industries involved, from agriculture and landowning interests, and from the campaign groups involved in greener energy. However, it is important to note that in some ways it is still a modest Bill. Some interesting and more contentious propositions were originally included, but they do not form part of the Bill now before your Lordships and therefore it represents a high degree of consensus. The prize is huge. The Micropower Council and others involved in this field can see major applications of microgeneration helping towards the climate change targets for 2020 and 2050. If we are able to remove the inhibitions from the introduction of microgeneration, there is a possibility that by 2050 over a third of the UK’s total energy supply could be met by it. That in itself would contribute a 15 per cent cut in overall carbon emissions. Even if the achievement is somewhat less than that, a 5 or 10 per cent contribution by microgeneration would be a major breakthrough and would reduce significantly, although obviously not eliminate, the need for new power in large-scale generator forms such as nuclear power, large-scale wind and marine engineering projects, and schemes for carbon capture and storage. Economically as well as environmentally, households, farms and businesses could all profit and benefit from cheaper decarbonised energy, but we need to simplify the bureaucracy and the process in order for the whole sector to be stimulated and come into effect. The Bill essentially consists of four substantive clauses. Clause 1 deals with definitions, Clause 2 with microgeneration strategies, and Clauses 3 and 4 with planning for domestic and non-domestic property. Clause 1 defines "green energy" as electricity or heat generated from renewable and low-carbon sources and energy efficiency measures. This reflects the need to recognise the contribution of low-carbon measures as well as 100 per cent renewable feedstocks. This helps technologies such as combined heat and power—here I declare my own interest as honorary president of the Combined Heat and Power Association—which still in part may use fossil-fuel feedstocks, but by reusing the heat greatly reduce the total carbon effect. It also emphasises the importance of energy efficiency measures, particularly in buildings, that will reduce final demand for energy and thus indirectly contribute to carbon saving. Indeed, energy efficiency is or can be by far the most cost-effective way of reducing carbon emissions, thereby reducing the total demand for energy in the first place. The clause then defines the size and market we are talking about—up to 5 megawatts for electricity generation and 5 megawatts thermal for the use of heat. This will enable consistency of approach to all measures designed to produce low-carbon decentralised energy. These measures would help to ensure that the energy efficiency of our buildings is improved so as to make a considerable contribution to tackling carbon emissions and thus climate change—not by making changes to the fabric of a building but to the sources of generation themselves. At the same time, they will contribute to the achievement of other energy policy objectives aimed at reducing fuel poverty in the medium term and providing greater diversity of energy sources, thus enhancing energy security. Clause 2 deals with the issue of the microgeneration strategy already required by statute as a result of the Energy Act 2004. Microgeneration in the Bill is based on the definition in Section 82 of the Energy Act and covers biomass, biofuels, fuel cells, photovoltaics, wave, tidal, solar, geothermal and CHP, while Clause 3, which I will come on to, extends this to air source heat pumps and micro wind turbines. This clause amends the capacity limitation on heat from 5 kilowatts to 300 kilowatts, thereby enabling a wider range and greater volume of micro-level cogeneration or trigeneration. We have made a good start on the micropower strategy. I understand that there are now over 100,000 installations and the number of different models that have come on to the market has tripled. But everyone still recognises the need to upgrade the strategy, and the Government themselves have indicated that more needs to be done to help increase the uptake of microgeneration. In promoting the case for microgeneration, the Secretary of State is also required to consider the broader aspects of energy policy such as fuel poverty. Clause 3 deals with installing microgeneration in dwelling houses as defined here and in Clause 5. Some 27 per cent of all emissions come from houses and flats and there is significant scope for the greater uptake of microgeneration in those households. The clause deals with the permitted development order already in legislation, which allows the use of certain microgeneration technologies by extending it so that proposals for air source heat pumps and small-scale wind turbines can be added to the 2008 definition. This will remove discrimination between different sorts of green technologies and contribute to the 10 million tonnes of carbon emissions saveable from dwellings in the domestic sector, as recently estimated by the climate change committee. Air source heat pumps in particular will be a relatively cheap and convenient way of installing microgeneration and thereby saving carbon. They were not included in the 2008 definition because at that stage the standards had not been sufficiently advanced. They now are and, while there may be a limited number of situations in which they would not be appropriate, in general they can be of significant benefit to households. The main objection raised in this context has been on the grounds of noise, but the industry looked at a number of situations in which noise might have been a factor and has found that none of them created problems if they had been properly installed. Indeed, the 45 decibel threshold in the permitted development order would be a tighter restriction than is often the de facto position in individual planning authorities. Clause 4 would extend the permitted development criteria to buildings other than dwelling houses, such as farms, commercial premises and public buildings. This seems eminently sensible, subject to the same limits and safeguards being applied as for domestic property. The Government will have to bring forward appropriate regulations in relation to both these clauses. In the case of Clause 4 where there is no existing list, the rest of the clause deals with the process of consultation on that amendment. Clause 5 deals with interpretation and Clause 6 with timing and the Short Title. To clarify the reference to territorial extent, I should say that the Bill will be part of the law of England and Wales but its effect would be only in England as matters of energy efficiency are devolved to the Welsh Assembly. As I have said, this is a modest and clear Bill that fills a gap and should speed up the adoption of microgeneration in buildings, thus allowing it to make an important contribution towards the climate change and carbon saving targets for 2020, and a very significant contribution indeed to the targets for 2050. I beg to move.