Infrastructure Bill [HL]

Debate between Duke of Montrose and Lord Teverson

Tuesday 14th October 2014 Grand Committee

[Lord Teverson (LD)]

My Lords, I very much support the amendments of my noble friend the Minister. The socialist in me would say that I do not see why individual landholders should have particular rights over ground more than 300 metres deep. It does not in any way disturb their properties above; 300 metres is a long way down. Certainly all shale gas, conventional gas or oil, geothermal or hot rocks geothermal extraction takes place below that level.

I thank my noble friend Lord Jenkin for his excellent exposition of geothermal; I can see that the exchange of information will be more than two-way in the future and he will quickly overtake me on this issue. There has been an uncertain legal position over the right to heat; how do you define heat? It is not a substance but a characteristic of substances that you then extract. These proposals make the situation absolutely clear to developers so that geothermal extraction can start to take place and investors can have some confidence in this form of energy.

I had a great experience earlier this month. I went to a quarry called Rosemanowes, near Penryn, some 10 miles away from my home. More than 20 years ago, the then DTI carried out some boring for geothermal experimentation there. Under DECC’s Energy Entrepreneurs Fund, an organisation called Geothermal Engineering Limited has been able to reuse that borehole by putting down another polypropylene pipe for 1.5 kilometres. Water was pumped down and came back up from that depth at a temperature of 60 degrees. The company reckoned that they could increase it to 90 degrees. Obviously, the further you go down the more you can increase the temperature. With the renewable heat incentive introduced by the Government, deep geothermal heat becomes possible. As my noble friend Lord Jenkin said, in the short term, extraction of heat from geothermal will be far more important than the potential for electricity generation; you have to go down to some 9 kilometres to increase the temperature to 200 degrees. With much smaller investments, there is potential to reuse existing boreholes —the noble Lord, Lord Whitty, said that there are 2,000 scattered around England—for geothermal heat. That is why I particularly welcome these new clauses.

I predict that in the medium to long-term future, geothermal will be far more important than shale gas. I also think that the shale gas revolution, which I am not against as a substitute for North Sea oil strategically in our energy security, is probably overhyped. However, if it can be made to work under exacting environmental standards, I do not want to get in its way. I therefore welcome these clauses and accept that they must be considered within the context of very strict environmental control and licensing outside this piece of legislation.

As to some of the other amendments, I agree with my noble friend Lord Jenkin and do not understand why there is an exclusion regarding geothermal energy. I agree also with the noble Baroness, Lady Young, that there should be some specific restrictions in the legislation. I am not sure the whole of her list should be included but we need to be firm about certain areas, and it would be useful if it were stated in primary legislation.

I very much agree with the objectives of the noble Lord, Lord Whitty, but am not sure about some of the detail. Why do we need a whole 12 months of monitoring beforehand, looking at base data? I am sure there are all sorts of technical reasons for that but I wonder if they go a little far sometimes in standing in the way of a development that can go ahead. I agree that there are a number of areas that we have to be very careful about. Whether those are put in secondary legislation or in the Bill, I am not sure. I congratulate my noble friend on bringing these amendments forward. They will do great things for our energy mix in future.

[The Duke of Montrose (Con)]

My Lords, I must apologise to the Committee as I have not read the consultation response and so am not up on all the issues that have been looked into. I declare an interest as an owner of land in Scotland.

As we venture into this field of land at a depth of more than 300 metres and questions of ownership and interest, I just wonder whether all aspects have been looked at. One thing that is quite useful is that all coal, petroleum and so on are in the power of the Government but there is a chance that, once a shale extraction site has been established and there are large channels out under various properties, people may find that something else can be developed within that property. That might be coal gasification or something like it at deeper levels. I do not know how deep coal mines go in this country. I hope, with any luck, that they are not more than 300 metres but some coal mines are very deep indeed. One has to think of what effect establishing the shale gas network will have on other interests within the land.

I was very interested in the noble Lord, Lord Whitty, talking about the knowledge of the Environment Agency in monitoring this. In fact, it may well be that the skills that my noble friend Lord Borwick referred to in being able to detect deep drilling will become rather more vital. Presumably the Environment Agency can tell that drilling is more than 300 metres deep. It would be perfectly possible to drill a hole 300 metres deep and then put out side-feelers at less than 300 metres, saying “Oh, but we drilled to the depth we needed to”. That is where more surface problems might arise.

I guess that the question of why heat is not included in the Scottish powers is that we did not reserve heat to Westminster when we passed the Scotland Act. No doubt the Minister will tell me what the correct answer is on that. The other thing I thought of is this: supposing this network is established at great cost and somebody then does something to damage it—certainly an earthquake would damage it but you could not blame anyone for that—what rights do the owners of a shale extraction business have to their assets that are underneath other people’s property?

Renewables Obligation (Amendment) Order 2013

Debate between Duke of Montrose and Lord Teverson

Wednesday 6th March 2013 Grand Committee

[Lord Teverson]

My Lords, I must admit that when I saw this order on the Order Paper, got a copy of it from the Printed Paper Office and opened it, I thought it was my maths O-level paper all over again. It took me back I will not say how many years to that dreaded moment. I passed in the end but it was quite a struggle. The formulae in the order as I went through it got more and more complicated: E=MC² was rather simple by comparison. I hope the people that have to interpret this have a lot more time and mathematical and computerised power than my brain normally does.

I thank my noble friend for going through the order and particularly for highlighting something very important to the south-west and my part of the world: the wave side. Yes, DECC and the Government have put that back up to five ROCs but what is important about this, which my noble friend did not mention, is that that has put it back on a par with what they pay in Scotland. We in the south-west can now compete with our northern brothers and sisters in terms of marine energy. I very much welcome that.

One of the particularly good things about this is that we are moving into a much more professionally and better managed transition in terms of ROC values. I know that ROCs are about to disappear anyway but we are able to make measured and predicted changes in the regime to keep investor confidence, yet knowing that we will have the mechanism to, we hope, keep these numbers within what I thought was a very good settlement in terms of the levy control framework between DECC and the Treasury. That was a good outcome. I hope this approach now means that we will not have that backwards and forwards in trying to second-guess in the short term, and that we have an environment where the investor community is able to put its money where its mouth is—and where our mouth is—in getting renewable capacity, and that that actually happens.

My main question is very much the same as that of the noble Lord, Lord Grantchester. We have a marvellous list here of all the technologies that there are in renewables, some of them which even I forget about. Some, like co-firing bioliquids sounds definitely like something I would not want to get involved in but there are some really interesting technologies there. A number of them are biomass-related and I would also be interested to know where the Government have got to in terms of these quite complicated supply-chain issues around sustainability. It is sometimes all too easy to condemn everything and to give excuses for things not to happen, rather than to bring them forward. However, sustainability is important, and I am very interested to hear my noble friend’s comments in response to my question and to that of Lord Grantchester.

[The Duke of Montrose]

I would like to raise a couple of small questions. One is out of curiosity. We all understand that Scotland administers its own renewable energy regime and the quantities of ROCs that are administered. However, when it comes to providing the certificates, can the Minister tell us whether this is done centrally? Is a Scottish ROC equivalent to an English ROC, and able to be traded across the border? When we get to this horrible question of a referendum in Scotland and Mr Salmond asks whether the Scots want to be devolved, will they suddenly find themselves having to set up ROC administrations that they do not presently have? I am sure that if that is the case, it will be one of many aspects that have not been costed.

The other point comes from what the Minister said about the extent to which the Government expect to have a conversion of coal power stations to biomass. If conversion does take place to the full extent that the Government anticipate, how much of the biomass required is available from the UK and how much might have to be imported?

[Lord Teverson]

Before my noble colleague sits down, I would like to say something important about co-ordination between Scotland and the south: we definitely need a ROC concert.

Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011

Debate between Duke of Montrose and Lord Teverson

Tuesday 12th July 2011 Grand Committee

[Lord Teverson]

I naturally welcome these regulations. The renewable heat initiative is pretty unique worldwide. The concept was introduced by the previous Government and has been taken on wholeheartedly by the present Government. It is an excellent example of decarbonising the economy. We think that most carbon emissions are around electricity generation, but that only constitutes around half of emissions. That means that our targets for 2020, of 15 per cent of energy being renewable, are tough to meet. That is well illustrated in the Explanatory Memorandum by the fact that the proportion of renewable heat, currently estimated at 1.5 per cent, must rise to 12 per cent by 2020. Given the fact that part of the scheme will be implemented only next year, this is a tall order—but I am sure that it can be met.

I also congratulate DECC on its negotiations with the Treasury, in which it managed to get £860 million-worth of direct taxation at a time when the public accounts are very tight and difficult. I am sure that those of us who argue on green issues would wish for even more, but it is a large and realistic figure and I am very pleased to see it.

I was slightly disappointed by the fact that a domestic RHI scheme will not come in until 2012. I understand that a pilot scheme for domestic RHI starts this year. I would be interested to understand more about how it will help the successful introduction of the full domestic scheme next year.

Finally, my one area of slight regret, inevitably, is characteristic of a market intervention such as this, great though it is. The fact that we have not been able to implement it earlier—I see all the obstacles and why it has not been possible—means that we face the irony of a number of ground heat pump businesses, for example, going out of business while people put off decisions to invest in renewable energy until the incentives come through. Regrettably, there is a generic inevitability about these schemes when people realise that there will be a subsidy but not yet. I very much welcome the RHI and hope that it will have a very successful career not just up to 2020 but well beyond.

[The Duke of Montrose]

My Lords, after the description given by the Minister I almost think that I need to declare an interest, if for no other reason than that I have a livestock production business. I thought that the present measures were largely to do with commercial production. I also have a small restaurant which, as he said, is possibly in line for a renewable heat incentive grant.

I was reassured by what the Minister said about peat. When I saw that peat was mentioned in the second instrument, I thought that the Government were going to bring it into the definition of biomass. However, it is excluded, which fits in with the other measures that people have taken regarding peat.

Noble Lords will be aware that renewable energy was the subject of a statutory instrument early on in the sequence of devolution legislation for Scotland. The term at that point largely meant wind, solar and marine energy. The Minister described all the other forms of renewable energy that this measure covers. One can presume only that we are now into a further application of renewable energy. Taking the definition used of necessity, renewable heat is now part of the devolution arrangements. All the production systems benefit from financial subsidy. I hope that the Minister will confirm that renewable heat will also receive incentives from Her Majesty's Treasury, even when it is north of the border. This will be a great help to the Scottish Administration's ambition to replace all their atomic power generation with renewable energy sources.

Further to that, and in parallel with the regulation that brings the construction of plants and facilities for coal production within the powers of the planning regulations of the Scottish Government, even though coal is not a devolved matter, I presume that the construction and provision of plant for the production of renewable heat will be subject to Scottish control, even though the measures in the Bill are retained within the United Kingdom.