Lord Cameron of Dillington
Main Page: Lord Cameron of Dillington (Crossbench - Life peer)Infrastructure Bill [HL]
Lord Cameron of Dillington Excerpts
Lord Cameron of Dillington (CB)
My Lords, in rising to support this amendment, I should first declare my interests as a farmer and landowner with renewable schemes on my property which I am involved with financially. I try to encourage others to get involved in such schemes as well. I want to talk in particular about the future of our housing infrastructure. I hope that a lot of new houses are going to be built over the next few years and it is therefore important to think about these issues at this stage. I want to take a particularly narrow line, which I hope the Committee will excuse.
It may be that my remarks would be better targeted at Amendment 95ZBB tabled by the noble Baroness, Lady Eaton, but I have only just come across it so I am not quite sure what it is all about. The difference between some of the continental housing developments I have seen in recent years and ours is the much greater frequency of community heating schemes in both rural areas and new build housing estates in towns. For some reason our developers seem to shy away from community schemes, preferring individual gas-fired boilers or, in rural areas, oil-fired boilers fitted in each and every house. That must be very inefficient. I know that we have the renewable heat incentive, but clearly it is not quite enough and it tends to be used in community buildings such as churches and village halls, as well as on farms and in factories so that the heating system can be linked to one or two houses. These are quite small schemes. Plugging a new estate of 400 or 500 houses into a community heat source is really quite rare.
Lord Teverson
It may be useful if I tell the noble Lord that the RHI is not applicable to new builds, and there is a distortion because of that. We do not see community heating systems in new builds because the RHI does not apply to them.
Lord Cameron of Dillington
I thank the noble Lord for that explanation, which certainly underlines the point I am trying to make. As I have said, I hope that lots of new housing estates are built over the next few years, so DECC and DCLG ought to look very carefully at this issue and consider how community heating schemes might be improved. The advantages are huge. For a start, they are much more efficient and thus would justify proper investment either in the new type of boiler that is required or in the overall management of the heat. In rural areas, for instance, it is often hard to justify piping gas into villages, which is obviously the cheapest form of heat, but it could be much more worth while in cases where there is a major community heating unit so that gas can be brought in to provide fuel for that one particular source of heat. That is certainly better for climate change than putting oil boilers into each and every house because that involves a huge waste of oil and energy.
Lord Deben
Does the noble Lord also agree that the ideal use of pumps, both air and earth pumps, is in new build? And yet, as my noble friend has pointed out, that is precisely the area which is not covered by the present arrangements. It would make a huge difference if that were to happen and it would certainly help towards achieving really eco-friendly new homes.
Lord Cameron of Dillington
I thank the noble Lord for his intervention and I am glad that my remarks are invoking a certain amount of support. I totally agree with him: ground source or air source heat pumps, particularly on a large scale, are very efficient in climate change terms due to the reduction in the emission of greenhouse gases. Obviously one of the disadvantages is that you have to cost in the piping of hot water. Even with photovoltaics, the cost of those come down by something like 24% every time the number is doubled. There is a huge advantage in encouraging this because I am sure that the cost of pipes would come down, too.
Another advantage is that, as technology changes and sources of heat and efficiency go up and down, it takes only one change to get the whole community on to the most efficient fuel, burner or heat source. That is much more likely to happen than changing all the heat sources in all the houses. As I say, as our housing infrastructure catches up with the nation’s needs over the next few years—as I really hope it will, particularly in terms of affordable housing—DECC and DCLG ought to get together and ensure that these sorts of scheme are encouraged in new-build houses.
Baroness Maddock
My Lords, I support the noble Lord, Lord Cameron, in looking at community heating. I recommend that he looks at the district heating scheme in Southampton set up many years ago. I was a councillor at the time. Alan Whitehead, the MP there, and I set that up together. Barratt Homes put a new block of flats on to that scheme. We are going back nearly 20 years, but those schemes work.
There is a housing estate in Pimlico that still has a district heating scheme. I live in a flat in Dolphin Square when I am here and am really sorry that the owners of the square came off that scheme. Ever since, we have had gas boilers. Sometimes we do not have hot water. That never happened under the district heating scheme. Those are two schemes that have been successful. I wish the Government would use some of these examples to encourage other people to take this scheme up, as it works. People used to say that it was very difficult for the reason the noble Lord gave—they want their own boiler. However, it has been done successfully and where people have it, they are very satisfied.
Lord Teverson
As I said, I am sympathetic and understand that. However, that is also true of other parts of the economy. and I am just making the point about how far one could extend the argument. I hope that we can prove that this works, although there is still quite a challenge, and I have an amendment on some bits of it later on. At this point, I just want to say that it is an excellent initiative and that at least we are on the first few steps of this process, even if we do not get perfection straightaway. I fully understand the points made by the noble Baroness, but this is a great start and we should get on with this, prove that it works and move on after that point.
Lord Cameron of Dillington
My Lords, I, too, support the idea of community involvement in projects. As I said in my Second Reading speech, I support Amendment 94AA in view of the possibility of local opposition causing projects to fail. Fracking is very controversial. It seems to me that if you could involve the local community in a fracking project in the same way as the Government are trying to do with renewables, it would be very beneficial.
Baroness Verma
My Lords, I take this opportunity again to thank all noble Lords for their excellent contributions. In addressing this rather large group of amendments, I hope that I can respond to many of the points the noble Baroness raised. If I do not do so, I undertake to write to her.
Amendment 94AA seeks to extend the scope of the community electricity right to include all electricity generation facilities. While the Government strongly support community engagement in relation to the development of all energy projects, we are clear that these provisions should apply only to renewable electricity generation facilities. I would like to set out the reasons for this.
First, this measure is part of our broader approach for increasing community investment in renewables, as set out in the Community Energy Strategy. The policy was developed specifically to tackle the imbalance between national and local benefits that characterises renewable schemes. In general, there tends to be widespread support for renewable electricity developments at a national level, but this is not always reflected at a local level where the impacts are felt directly by communities. Enabling communities to invest in their local renewable electricity schemes will mean that they can gain a greater share of the financial benefits and, more importantly, feel a greater sense of ownership of schemes being developed on their doorstep. This will help to increase public engagement, acceptance and support for renewable projects at a local level. What is more, developers will also stand to gain. Experience in this country and abroad has shown that where communities have a financial stake in a local renewable development—the noble Baroness cited Germany in this regard—this often translates into less opposition and a quicker, cheaper development process.
There is already a voluntary approach that is currently developing a framework for increasing shared ownership. Only if this is not successful would we consider exercising the backstop powers. It would therefore make no sense to expand the scope to include all electricity generation projects when both the policy objective and the voluntary approach are focused solely on renewables.
On Amendment 94AB, I remind noble Lords of the importance of reporting on actions to reduce energy demand and carbon emissions. I recognise that there are many forms of community action that can make a difference to reducing our country’s carbon emissions and managing the demand of energy. The Community Energy Strategy that we published recognises the benefits of putting communities in control of the energy they use. Furthermore, it sets out how communities can get involved in reducing, generating, managing and purchasing energy.
In addition, through the Community Energy Call for Evidence, the department committed to commissioning an external research project specifically focused on energy demand and distributed energy. This research project has now concluded, and we will publish the findings shortly. While these are very important elements of growing the community energy sector and tackling climate change, they are not directly connected with the implementation of the community electricity right regulations.
Lord Cameron of Dillington
I oppose these amendments. There are dangers involved. I believe in community involvement in local energy schemes whether voluntary or, if need be, statutory, and on the whole this clause is a good proposal. As I said at Second Reading, financial involvement means that the local community does not get in knee-jerk opposition to a scheme, which is good. However, I have chaired or been on the board of several unquoted companies, and I am very much aware of the power that shareholders owning as little as 10% of the equity can have. They would probably rightly be able to claim a place on the board and by judicious use of their block of shares they can have, if so minded, a fairly negative effect on the progress of the company in question. I have experienced an instance of this where a minority shareholder on the board had an agenda different from that of the rest of the board. It is very difficult to drive forward a company under those circumstances. The shareholder can look for opportunities to block and do deals with other shareholders in a negative way.
We are trying to encourage these energy projects to get off the ground and overcome all the obstacles. Those obstacles are not only planners but energy companies, connection problems, landowner problems and certainly community problems. They all have to be focused upon. If the business involved does not remain totally focused on driving the project and overcoming all these obstacles, it can easily falter and the project will get delayed or, worse still, fold altogether. If a group could compulsorily buy in to 10% or, worse still, 20% of a local energy project, that would easily open the door to spoiling tactics by antis, whether they are anti-fracking, anti-wind, anti-PV or just BANANAs —BANANA, as your Lordships will know, stands for “build absolutely nothing anywhere near anything”. In my view, 5% would be a safe upper limit for community involvement, particularly if it is compulsory, 10% would be risky and 20% would be extremely dangerous for our renewable energy industry.
Lord Jenkin of Roding
I promise I am not going to try the patience of the Committee anything like as long as I did a few minutes ago. If one reads the passages in the draft report of the task force, it recommends a number of different methods by which financing could be organised. One is crowdfunding. That might be quite a good way to raise sufficient money to get the community involved. Perhaps it would not be the whole community or the BANANAs that the noble Lord, Lord Cameron, referred to, and we are all very familiar with them, but enough people for them to turn around and say “For heaven’s sake, shut up because we want this to go ahead”.
That report is quite interesting because financial circles see some difficulty of the sort that the noble Lord, Lord Cameron, has been describing, but this is particularly a case where the widest possible flexibility is needed. We want to see community involvement in infrastructure schemes of this sort, but we should not attempt to prescribe how that should happen. The noble Lord, Lord Cameron, clearly indicated that raising the percentage might offer considerable difficulties. It should be entirely free for a local community or investor to decide how it should be done. That can really only be done under a voluntary system.