Energy BILL [ Lords ] (Fifth sitting)

Debate between Clive Lewis and Simon Hoare

Tuesday 2nd February 2016 Public Bill Committees

[Clive Lewis]

I have no doubt that they have made that investment in renewables. However, I am talking about investor confidence. I will give an analogy of investor confidence. I was in the Army, where we orienteered by taking a reference point from something 100 or 200 metres away that we could see on our map. However, if you want to make the best progress—if you want to allow your men to make the best speed—you look at the far horizon, find a point and aim for it.

That is what this is about: investor confidence for the long-term future. What the Government have done, with one fell swoop, by trying to end the renewables obligation early, is say they can chop and change as they see fit for political motives. That sends the wrong signal to the market and investors.

[Simon Hoare (North Dorset) (Con)]

I am grateful to the hon. Gentleman for being generous with his time. May I put to him this countervailing thought? The onshore wind sector is now very mature. It has got a good basis and is “proving its worth”. Is the hon. Gentleman saying that it should always be subsidy-reliant?

I do not buy this lack of market confidence. Paris and everything else point to a decarbonisation of energy generation. Investors are not going to have that policy pulled from under their feet. That should give plenty of market confidence to the private sector and others to invest. To have them continually drip-fed public money, irrespective of which purse it is taken from, has to stop. If the market pretends to be surprised by that, the Government would be surprised, because our policy was trailed very well months in advance of the election.

[Clive Lewis]

I thank the hon. Members for their interventions. We are not talking about subsidies ad infinitum. We are just saying stick to the plan; that is all we are saying. Whether it is solar or wind energy, subsidy should be seen as a glide path. What the Government have done is chop the wings off. I have lists of quotes from investors who will say that this is not the best way forward.

A report last week from Bloomberg New Energy Finance research forecast that these measures will see the UK lose at least 1 GW of renewable energy generation, enough to power 660,000 homes over the next five years. The figures suggest that after 2020 the renewables infrastructure will collapse to almost nothing because of a lack of investment.

David Hostert, the analyst behind the research, said:

“Without some form of change in policy support, we could see investment drop off a cliff after 2019.”

Meanwhile, Maria McCaffery, chief executive of RenewableUK, said:

“The Government’s decision to end prematurely financial support for onshore wind sends a chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors. It means this Government is quite prepared to pull the rug from under the feet of investors even when this country desperately needs to clean up the way we generate electricity at the lowest possible cost—which is onshore wind. People’s fuel bills will increase directly as a result of this Government’s actions. If Government was really serious about ending subsidy it should be working with industry to help us bring costs down, not slamming the door on the lowest cost option.”

I come back to the point on bills, Let us look at what this saves the average household. According to the Government’s own assessment, the changes will save just 30p on consumer annual energy bills and increase the UK’s carbon emissions by 63 million tonnes.

Ultimately, these measures are a backtracking, chaotic travesty. They make no sense, punish one of our most cost-effective and successful renewable industries and endanger this country’s energy security by undermining investor confidence. As such, I urge the Minister to drop them.