Energy Bill
Debate between Baroness Clark of Kilwinning and Luciana Berger
Luciana Berger
I thank the Minister for his intervention, and hope he will lay before the House the rules governing those auctions so that we can properly scrutinise them. We hope they will be forthcoming.
I was disappointed by the Minister’s response to the amendment proposed by my hon. Friend the Member for Southampton, Test (Dr Whitehead). I echo the Minister’s words that my hon. Friend, as the whole House will know, has long-standing expertise and considerable experience in this area. His amendment 35 would require the Secretary of State to establish
“a scheme…to make payments for the purpose of rewarding…energy saving measures”
and to do so “within one year” of this Bill becoming law. That would introduce clear, simple payments for households and businesses, and it could start immediately, with no wait for a capacity crunch to trigger an auction. I understand that the majority of respondents to the Government’s consultation favoured a premium payment option along those very lines, but we did not hear from the Minister the rationale behind the Government’s decision to reject that option and favour instead incentivising demand reduction through the capacity market.
Let me touch briefly on amendment 47, also proposed by my hon. Friend the Member for Southampton, Test, which would establish a green power auction market, or GPAM. This would combat a significant issue. The UK needs to invest £75 billion in new renewable generation by 2020. Analysis of DECC’s own figures has shown that the Government are currently relying on 35% to 50% of this investment being delivered by independent renewable energy generators, or the “disruptive new entrants”, as the Minister referred to them on a number of occasions. Their current route to market is dependent on long-term purchase power agreements with the big six. A green power auction market of the kind my hon. Friend proposes could open up the market to new suppliers, increase competition and potentially deliver a cash saving to consumers of £2 billion. Although I welcome the Minister’s saying that he wants to address this sector and that a real issue is at stake, I sincerely hope that a viable solution, which he said would be forthcoming, is in place in time for the allocation of the first CFDs in 2014.
I conclude by dealing with our amendment 1 on community energy, which stands in my name and those of my right hon. Friend the Member for Don Valley (Caroline Flint) and my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex). Speaking as a Labour and Co-operative Member, I am very proud to speak to this amendment. It would appear that the Minister and I agree that community energy schemes deliver enormous benefits to our country. They bring diversity, resilience and security to the energy market. They boost our economy by attracting new sources of investment, and they help to tackle fuel poverty through a strategy for generating and saving energy that is owned by local people.
I recently saw that first hand when I visited Brixton Energy, an award-winning solar project run by Repowering South London. It is the UK’s first inner-city co-operatively-owned energy project, and I urge hon. Members to pay it a visit if they have not already had the pleasure. As well as offsetting 28 tonnes of carbon every year, the project is providing invaluable work experience opportunities for young people. There are many other fantastic community energy projects throughout the country: Westmill wind farm co-operative in Oxfordshire, Neilston community wind farm near Glasgow and the Lochcarnan community wind farm—the list goes on. There is a risk, however, that as drafted the Bill could stop these types of larger community schemes ever happening again. That is why we need to amend it today.
The Secretary of State has said that he
“wants nothing less than a community energy revolution”,
but those words ring rather hollow when we examine how this Bill fails to address how community energy schemes can compete with large-scale commercial generation. The issues have been well summarised by Cornwall Energy, when it said that the high degree of technical knowledge needed to participate in the system is a barrier for many smaller generators, and that the proposed CFD system does not compensate smaller generators for the lower market prices they receive for their power. With the end of the renewables obligation, the Bill provides no incentive for suppliers to purchase renewable electricity from independent generators.
Katy Clark
I congratulate my hon. Friend on the way in which she is putting forward her case. She will be aware that many of the successful community generation projects—those that really laid down the way forward—were in Scotland, and particularly in the island communities where there is a very strong sense of community and a wish to have a sustainable future. If we look around Europe, we find that this is also very common—in Germany, Scandinavia and Greece, for example. Does my hon. Friend agree that we have fallen behind in this area?
Luciana Berger
We need to see urgent action in this regard. Other countries are forging ahead with numerous locally generated schemes, and we ought to have as many, if not more.