Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Oxburgh
Lord O'Neill of Clackmannan
My Lords, I support my noble friend on this amendment, although I have to say that we tend to forget that at the moment a substantial number of meters are replaced every year. The replacement meters have been either replicas or slightly more updated versions of the previous ones. Sometimes they are placed in a different part of the household. If you are lucky, you might even be able to get the utility company to put one in your garden, if you have a garden, so that they do not have to come to your house to read it. What we are talking about initially is scale of operation. We have ambitions for 26 million households—18 million gas meters and some 25 million or 26 million electricity meters to be installed over a 10-year period.
I understand that that work is now going on at quite a rate in some of the utility companies. It would be unfortunate if, in such a large and potentially intrusive operation that will go into every household in the country, a clear form of parliamentary accountability were not involved. Obviously, in order that there be parliamentary accountability we need to know what is happening. I would therefore have thought that an annual report, while it might not be required reading for every Member of the Commons and the Lords, ought to be required reading for members of the appropriate Select Committees which take an interest in these matters. If necessary, that report could be debated annually in both Houses.
Many of us are concerned that we are still rather vague about what is being suggested for this rollout. This amendment goes some way towards identifying a number of concerns and issues. One thing perhaps missing from the amendment is sufficient reference to providing the consumer or householder with adequate information on how the meter operates. If the Minister were to accept the spirit of the amendment, however, he might go away and add to it. If we are to take advantage of the so-called smart element in these meters, it is important that the public understand what is shown on the dials in their kitchens, their gardens or wherever and what those dials can do to help them to use their energy more efficiently and make savings that might mitigate the price rises for electricity and gas that we all anticipate during this introduction.
In principle, this amendment is a good idea. If the Government accept it in spirit, they should be given an opportunity to go away and provide something of their own. A number of bodies outwith this House would want to be able to take the evidence that such a report would provide—for example, the Fuel Poverty Advisory Group which provides help and assistance to Ministers on fuel poverty. It would be emboldened and assisted in its work if it had the kind of technical information from such a report as is being suggested by my noble friend’s amendment, so I give this my full support.
While an amendment of this complexity is easy for Governments to knock down, it might not be the last word on the subject, and it is incumbent on the Government to provide that. That will be a report of sufficient meatiness that it could be chewed over by interested parties and Members of both Houses, and could provide the companies with sufficient information and evidence to be able quickly to change anything that is wrong with the way they are going about their work. One problem that we can envisage here is that the scale of this operation is likely to create something akin to a juggernaut moving across the country and trampling households under its wheels.
Everybody wants to see the introduction of smart meters but it is incumbent on the Government, who have the responsibility of directing that if not actually implementing it, to ensure that public confidence both in the companies and in the whole concept is maintained. I do not think that we have heard many complaints about the work already done. However, it is too soon to reach conclusions, and any horror stories might well jeopardise a project in which everyone sees great virtue. I support my noble friend’s amendment.
Lord Oxburgh
My Lords, I, too, have substantial sympathy with the amendment. Before one starts talking too much about juggernauts, it is worth placing on record that we had to have our domestic electricity meter changed a month ago. From the time the man who was doing the work came through the door to the time he left was about 12 minutes. It is a quick and easy operation, certainly so far as electricity meters are concerned.
However, an important point has been missed. By and large, the electricity companies have a poor understanding of their customers simply because they have no way of disaggregating their demand. With a better understanding of why, how and when loads peak in particular areas, which they do not have at the moment, a significant indirect benefit should be possible for consumers, which would be reflected in reduced electricity charges, because we may well be able to run the electricity system with a lower generating capacity than at present because of our limited understanding.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Oxburgh(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Oxburgh
My Lords, I am happy to support the amendment, to which I put my name, and I support everything that the Lord, Lord Teverson, just said. The Government have very challenging targets for renewable energy by 2020. They will achieve those targets only if there is sufficient private investment. Investment decisions depend on assessment of risk.
In the case of geothermal in this country, there is a really no doubt about the existence of the resource. Indeed, a couple of decades ago, I was co-leader of the group that produced the first geothermal map of the UK. The resource is certainly there. I declare an interest as a technical consultant to one of the companies to which the noble Lord, Lord Teverson, just referred.
We know that we have the hot rocks at depth. The real question is whether we have adequate technology to extract the heat from those rocks. Therein lies the uncertainty and the exploration risk. There is a good chance that we can do that, but if an investor is going to invest in this he really wants to see the risks minimised. As the noble Lord pointed out, after the demonstration of a successful well in one place, there is a real danger of someone else coming in and drilling nearby.
At an earlier stage in informal discussions, the Government’s position was that that could probably be managed through local planning consents, but I do not think that that is the case. Modern drilling technology allows you to drill in one place, maybe 10 miles away, and then turn your well horizontal and go into anywhere within a pretty wide radius. In other words, if we are really to give investors the kind of security which I suspect they will demand in order to support this kind of investment, we really have to have a licensing regime which effectively pre-empts others who come in later and have not made the primary investment from tapping in on the risky exploration work that the initial company has done. I am not sure whether this amendment is in the exact terms that we need, but there will not be significant investment in geothermal in this country, I believe, unless something along these lines is done fairly rapidly.
What we have to bear in mind is that capital moves between countries and that any company interested in investing in geothermal will compare the opportunities in this country with those elsewhere. For example, I believe that Ireland has legislation in place to give the kind of protection that we are asking for here. Ireland has comparable geothermal possibilities; the same is true in other parts of Europe. If we do not do this, the capital will simply move elsewhere and this contribution to the 2020 target will not be realised.
Lord O'Neill of Clackmannan
Perhaps the noble Lord can help me. I understand exactly where he is going on the protection of the investment but he is being incredibly coy about telling us what the scope of the possibility would be. He said that he conducted an inquiry some years ago. How many gigawatts or megawatts of electricity could there be in the UK? I am not wanting to pour cold water on this—I stumbled into that one. However, are we going to do something here that could, at the end of the day, be worth while or are we just kidding ourselves? Perhaps this is another technology that might be appropriate in countries or areas of the world where tectonic plates are crashing. In Iceland, that is self-evident but one does not get the feeling that there are too many serious earthquake areas in the UK where you are likely to access those kind of geothermal possibilities. Can the noble Lord be a little more specific about what he would regard as the likely output from a geothermal electricity industry?
Lord Oxburgh
My Lords, that is a difficult question to answer at the moment; we would be in a better position to answer it after the Cornish exploration has gone ahead. The fact is that this work was killed around about 25 years ago, as the noble Lord, Lord Teverson, said, by the crash of the oil price and by the DTI, as it was then, simply being no longer interested in supporting this work. Until that time, we had very good support from the DTI. In fact, the one geothermal source in this country that is functioning at the moment, which is the one around Southampton, was the outcome of the PhD work of one of my students at the time.
Since that time, drilling and fracturing technology has improved enormously. The oil companies have developed that to a very fine art. One can now drill, with control of the drill tip, to about the same precision as a brain surgeon uses when operating on a brain. It can be a very fine control indeed. We really have to see how successful this is at exploiting these resources, which have been known about for quite a long time. It is very simple to tell the noble Lord how many gigawatts of energy could in principle be removed, but that is a meaningless figure until we have some feeling about how effective the new technology is going to be. I would not want to say at this stage that this will save our renewables targets. At the moment, I would say there is a good chance that it will amount to good housekeeping but it may be considerably more than that.
Lord O'Neill of Clackmannan
I was not going to speak on this amendment, but I have to say that there is a lot of water up in the North Sea and I am not sure why the two cannot coexist. You cannot move the oil and gas fields, but a lot of windmills can be moved because there is rather a lot of wind up there, which tends to be spread over a bigger area. I think that it is incumbent on the mover of this amendment to be more explicit about in which areas he would envisage a degree of overlap or competition. At the moment, he is seeking to legislate by assertion, not by evidence, and seeking to tell us that there could be some need for reassuring of investors. Frankly, there are lots of other reasons why investors are a bit leery of offshore wind farms. The technology, the durability of the metals and the exposure to all kinds of elements mean that the North Sea is more inhospitable than a lot of areas where offshore wind developments have taken place so far.
However, perhaps the noble Lord can tell us where there is likely to be an overlap; that is, where there is a clear need for wind power in addition to reservoirs of oil and gas. I have to come back to the point that not all the output of the North Sea is used for energy-generating purposes. A lot is used for the high-tech existing industries. We are in the process of losing Pfizer, but the petrochemical complexes across the United Kingdom are sources of high-tech, well paid employment for large numbers of people. These jobs exist and they will carry on as long as oil and gas is coming through to be reprocessed. National security and various economic objectives would stand up just as robustly and strongly as anything in relation to renewable targets, from which I do not demur.
I have yet to see where we would find that there would be a conflict on such a scale as to require amendments of this kind. If there is a case, it has not been made. If there is not a case, I think that it is part of the anti-oil and gas mentality of certain sections of what chooses to call itself the green and renewable movements in this country. Therefore, it has to be balanced out. I do not think that the case has been made adequately for such an amendment.
Lord Oxburgh
In the interests of reducing internecine strife, I think the prospects of serious incompatibility here are quite small. There is not really as much scope for moving wind farm locations as it might appear—wind is pretty variable—but, given the kind of technology of which I spoke in relation to the previous amendment, one can now exploit gas fields or oil fields at an angle from some distance without too much difficulty. It is important to give some confidence, as far as it is needed for investors in this area, but I do not think this is going to be a big problem.