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Energy Bill

My Lords, I have not started on CCS yet. I hope the noble Lord will allow me to pick up some of the other points. My noble friend Lord Woolmer asked whether the Government would set an obligation on supplies to source CCS electricity as they have done for renewables. We have no plans at present, and the technology is at a demonstration phase. We would expect the carbon price to drive widescale deployment of CCS in the medium to longer term. I know that there are issues about the carbon price. We are well aware of that, and I have had representations from other technology sectors about the current price. It is not long to Budget and we are publishing two pieces of work. There is, first, a roadmap to 2050 and secondly, the energy markets assessment, which will look at some of those issues and set out an initial analysis of whether further interventions are necessary. I should not say any more about that until it has been published. My noble friend asked about oversizing pipes for CO2. We are prepared to consider using the levy to fund investment in pipelines sufficient for full capacity of a coal-powered station using CCS for its entire capacity. The balance that we have to draw is that we need to limit the potential cost to consumers of CCS demonstrations. That is where we are at the moment. On the point raised by the noble Lord, Lord Dixon-Smith, the CCS incentive is specifically designed to support demonstration projects. It is not a deployment mechanism and it would therefore be used only for demonstration projects. We are talking here about the demonstration aspect of CCS. I hope that reassures him. We are not talking just about coal. I agree with my noble friend Lord Woolmer on that matter. I was glad that we made an amendment in the other place to signify that the levy could be used for gas. Given the scale of emissions from coal, we think that it is better to start with coal. However, I have no doubt that if CCS proves to be technically cost-efficient and viable, we shall seriously consider extending it to gas. I say to the noble Lords, Lord Teverson and Lord Wallace, that I understand why there is considerable interest in emissions performance standards given their direct relationship to emissions reductions. However, we think that there is a problem with taking this step now before the technology needed to reduce emissions has been demonstrated, given the impact that that would have on investment in new fossil fuel power stations. That is why we think that our approach of taking through the clean coal framework is the most effective way to deliver the emissions reductions that we need in the power sector. As I have said, if CCS does not prove to be all that we had hoped, we would have to consider what other interventions had to be made. We shall debate this on Monday in the context of the national policy statements, but it is worth pointing out that the climate change committee did not recommend the introduction of an EPS at this time. Both the CBI and the TUC have told us in no uncertain terms that introducing an EPS now would significantly undermine plans for investment in new fossil fuel generation plant. That is, and has to be, a real concern. My noble friend Lord O’Neill and the noble Lord, Lord Palmer, made some telling points about price. I would very much like to come up to the noble Lord’s modest home in Scotland. Equally, he is very welcome to visit my very draughty Victorian house in Birmingham, where, alas, our efficiency measures have not quite taken hold as they ought. The whole question of fuel poverty is very important. Rising prices have had an impact on the measures that we have taken to pull people out of fuel poverty, but without that package the number of fuel-poor households would have been around 400,000 to 800,000 higher. The agreement that we reached in 2008 with the suppliers has been valuable. The Bill allows us to give greater direction to the types of households that are eligible for support and ensures that more of the available resources are targeted at all those households that are most in need. My noble friend Lord O’Neill made a very important contribution about the people who are ill and not in receipt of benefits. I will certainly take that back and look at it with my departmental colleagues. The noble Lord, Lord Teverson, asked me what impact the measure would have on fuel poverty numbers. Clearly, it will reduce the number of households in fuel poverty but I cannot estimate the precise number until the exact detail of the policy is finalised. We will be consulting formally on the structure of the scheme in the summer. At that point we will have an estimate of the impact, but it should not be insubstantial. I say to the noble Lord, Lord Palmer, in relation to the points that he made about rural fuel poverty, that we are, of course, aware of the difficulties of people who live off the gas grid. We intend to look at those issues in the context of the consultation that will take place in the summer. I was interested in the comments of the noble Lord, Lord Jenkin, about data protection issues. My understanding is that, in order to comply with data protection principles, the sharing of data has to be proportionate and it must result in a benefit for those whose data are shared. That principle means that data matching was not considered a suitable method to find consumers eligible for assistance under, say, the CERT scheme. The primary benefit available through CERT is energy efficiency measures, and as these measures may not be taken up by those who have had their data shared, data sharing in those circumstances is less likely to be proportionate. However, the energy rebate scheme is a pilot data matching programme designed to give eligible customers an automatic benefit in the form of a rebate on their electricity bills. So the result of sharing consumers’ data in this instance is that they will receive an automatic benefit and, therefore, it is considered proportionate to share these data. I hope that is clear to noble Lords. I suggest that I write to the noble Lord, Lord Jenkin, and perhaps offer him a meeting to talk this through further because I thought he raised a very substantive issue.