Energy Bill
Debate between Lord O'Neill of Clackmannan and Lord Teverson
Lord Teverson (LD)
My Lords, I commend the noble Lord, Lord Oxburgh, on his amendment. Decarbonisation is fundamental, and is absolutely what the Bill is all about. The 11th word of the Bill is “decarbonisation”. The Long Title refers to,
“reforming the electricity market for purposes of encouraging low carbon electricity generation”.
The entirety of Part 1 of the Bill is about decarbonisation. The methodology there allows the Secretary of State to set a decarbonisation target. The Bill is about nothing if it is not about decarbonisation.
Of course, the majority of the Bill beyond Part 1 is about ensuring, not just through targets but in practice, that we have decarbonisation. There are many chapters about the nuclear industry. Whether one is for or against nuclear, it is a low-carbon technology and it is enabled by the Bill.
The Bill has a whole chapter devoted to the “emissions performance standard”, which is all about decarbonisation. I have a number of issues with it, but the standard is there and it is the practice for ensuring that decarbonisation actually happens. There is a whole chapter on the capacity mechanism, introducing the possibility of electricity and energy demand reduction and management.
Of course, at the core of the Bill, are the contracts for difference, which have taken up a lot of our time in Committee and elsewhere in the House. Contracts for difference would not exist, would not be in the Bill, if there were not a practical and urgent need to get low or zero-carbon technology investment into the generating sector.
There is no point in having this Bill if not for decarbonisation. As we know, this Bill started back in 2010 with a White Paper and has been through many other processes. It is all around one of the four pillars of government at that time—which are still there and which include carbon capture and storage—trying to decarbonise, in this case, fossil fuels, as the noble Lord, Lord Oxburgh, will know better than anybody. The second pillar of this energy strategy was emission performance standards, which are in the Bill. The third pillar was the carbon price floor, which has already been delivered. In terms of green taxes, we are already taxing output of carbon emission from fossil fuels. That is practical decarbonisation. In addition, the Government have introduced energy reduction through the Green Deal and the energy company obligation. As well as all these practical actions, do we need another target? That is what I really want to look at.
As this is a coalition Government, there are differences not just between parties but between departments. We have differences between the Treasury and DECC on occasions, and perhaps BIS as well. There are also different directions in which the two coalition parties look. Nevertheless, what the coalition came together for was to provide a specific programme in terms of government for the five years of this Parliament. A key part of that concerned the economy and debt reduction. Another, which both parties shared, was being a green Government with respect to the environment, part of which is decarbonising. The agreement, willingly entered into by both parties, called for a levy control framework that allows contracts for difference and decarbonisation investment to work, with some £7.6 billion by 2021. We have an agreement that the energy company obligation, which is really important in terms of households’ energy efficiency, stays at its present level until the end of this Parliament. We have electricity demand reduction in the Bill. We have an agreement at EU level that a 50% reduction of carbon emissions by 2030 should be negotiated with our European partners. We already have the carbon tax floor and we have emission performance standards legislated for, we hope, when this Bill finally gets through.
We, as Liberal Democrats, ask whether it is more important to deliver targets at this time, when issues of energy—energy bills and energy security—are so fractious, perhaps between all parties. Is it important to make sure that through this Bill we deliver real, practical, £100 billion-worth of investment decarbonisation, or do we go for just another target? I look back at targets, whether they were for fuel poverty being eradicated by 2010, which failed quite considerably, or whether carbon emissions for 2010 were met—they were not in terms of the original obligations. Do they make a difference for business? Yes, I think that they do—the noble Lord, Lord Oxburgh, is right.
What makes the real difference in terms of investment? It is stability and understanding that there is the right environment for investment in terms of cash flow, in terms of where the market is going and in terms of a determination to deliver a much broader agenda for investing in decarbonisation. That is the area that I feel is of the greatest importance. We should have a decarbonisation target. I am happy to wait until 2016 to deliver real decarbonisation.
Lord O'Neill of Clackmannan (Lab)
My Lords, in proposing Amendment 2A in this group, I will go roughly along the same lines as the noble Lord, Lord Oxburgh. We had to wait six minutes to get any indication of the previous speaker’s attitude towards these amendments.
We have all had approaches from a plethora of organisations; in my years in this House and the other place I can rarely remember such a broad coalition. You normally get the greens and one or two others, but it is quite surprising to get support from across the spectrum of industry, banking and environmental concern for an amendment along the lines that the noble Lord, Lord Oxburgh, and I are proposing. The amendment I have tabled is in some ways slightly different from the amendment in the name of the noble Lord, Lord Oxburgh, in so far as it seeks to define the decarbonisation obligation, which it sees as the level of carbon intensity of electricity generation which may not be exceeded in total kilowatt hours. However, it does not set a target by plucking a figure out of the air. The idea is that it should give the Minister probably longer than the amendment in the name of the noble Lord, Lord Oxburgh, which gives the target of 1 April. Amendment 2A mentions 12 months, which would mean another six months in the process. That is important in itself.
The other fundamental requirement is that having set up a Committee on Climate Change, the Secretary of State should take account of what the committee has to say and what its findings are. It is a very important body, formed of a distinguished group of people from academia and business who take an interest in these matters—and it has a distinguished chairman from this House. However, it is not the only body. We are seeking to establish a consensus that would broadly agree to the figures that would then emerge.
We have international obligations, some of which have been imposed upon us, in so far as we have been forced to troop in and put our hand up in the Council of Ministers. In this instance we seek to fill a gap in the British obligations beyond 2020, a gap that would effectively extend from 2020 and 2030. It is important that any Government can go into Europe with a clear programme so that we are not seen to be chasing an agreement—and equally, so that the target figure we would set ourselves would be arrived at by British agreement and British discussion. A country of 60-plus million people with our diverse industry, economy and geography is that kind of country, the limitations or parameters of operations of which are very similar in many respects to a lot of the member countries of the EU that will be sitting on the Council of Ministers in this area.
Some say, “We mustn’t be allowed to be dragged along by the EU”, but in this instance we would be, in many respects, ahead of the game—not, however, to get our green badge to put on our jacket. Rather, we will have made a rational decision on the basis of sound information and wide discussion, and we would be doing so because it is necessary for us to have a degree of foresight. I will not use the word “planning”, but “foresight”. We have to recognise that the investment requirements of our energy economy are not just only long term. I remember talking here about setting down roads. We know that we have a 2050 target, but frankly, at the moment, after 2020 there is no road map and no signposts or proper targets. We must recognise that we will not have 30 years of doing a bit of this and that, then a mad helter-skelter run between 2040 and 2050 to try to get to where we are supposed to be. This has got to be done on the basis of proper consideration. These amendments give business, the investment community and the people who are engaged in research signals regarding the kind of timescales in which to operate.
Energy Bill
Debate between Lord O'Neill of Clackmannan and Lord Teverson
Lord Teverson
My Lords, one important but largely forgotten area of energy policy is the smart meter rollout which has been recently, rightly, postponed to make sure we get it right. To put it into context, nearly 50 million meters altogether will be rolled out to some 30 million homes and businesses at a cost, over about a decade, of £11 billion. That is a major national investment. Sometimes I feel that we do not give this enough attention—I am sure Government do but maybe Parliament does not—to make sure that that investment delivers what should be a real change to the way that the electricity market, distribution and usage, work in this country as the future foundation of a truly smart grid.
One important area is data. I apologise to the Minister for tabling this amendment very late; it is a probing amendment and she might tell me that I have nothing to worry about. If that is so, I will welcome it. I have felt a concern both on the consumer side and from within the industry that this area is not fully clear. If you look up smart meters on the DECC website, it says that both these areas are satisfactory. Clearly, there is no great detail there. The amendment would ensure that the considerable data that come out from smart meters and are transmitted to energy suppliers will remain the property of the consumer who used the meter, and that they will be able to use the information in whatever way they want, primarily to help use their energy more efficiently but also to get quotations from other energy companies. This will ensure that the data are used properly and to the benefit of consumers as well as to the electricity supply industry, which will have reduced collection charges.
Those two areas are fundamentally important. I would be very pleased to hear from the Minister that I have nothing to worry about and that this is already enshrined in a reasonable degree of law. If it is not, it is important that we make sure that it is enshrined in some legislative form. I beg to move.
Lord O'Neill of Clackmannan
I should perhaps start by declaring an interest. I am chairman of SmartGrid GB. In some respects we will have an information overload as a consequence of the rollout of smart meters. On the other hand, it would be desirable for the rights of the consumer to be taken properly into account. It is quite likely that there will be a lot of information, and it would be a reassurance to the consumer if they had access to what was out there. Some of the enthusiasts for the new technologies, which have yet to be fully realised, find their eyes glowing at the prospect of smart metering. We have to be a wee bit cautious. There could be civil liberties concerns, although not about the time when you put on a kettle or whether you run the washing machine in the middle of the night. These issues are trivial.
It is a bit like another problem that we have at the moment. If we use our passes on the Underground, we could be tracked over the course of a day or a week. While that might be of use to some authorities, and might be used for beneficial purposes, it could be a problem. It will be the same when we get these new meters in households. I see the noble Lord, Lord Deben, looking at me, but I am sure that, in his experience of constituency surgeries, he had, as I had from time to time, individuals who were convinced that in a television set there was a camera as well as the receiver, and that somebody, somewhere, was finding out what was going on in their living room.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Teverson(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Lord Bishop of Chester
My Lords, when the Minister does indeed bring the tablets down the mountain at the end of this short debate, I wonder if he could put on record what the Government anticipate will be the average capital and installation cost, which will be an additional burden on the energy consumer.
Lord Teverson
My Lords, perhaps I may make a short comment on the contribution of the noble Lord, Lord O’Neill. Of all the things that the Minister has or has not done, the one thing that he has not done is to come back on amendments and say that they are not exactly right and will not therefore work. I have never heard him make that particular response, to put the record straight.
Lord O'Neill of Clackmannan
It is usually the Whip who gets the dirty job of saying, especially to his noble friends, that they have a nice amendment but it is not quite good enough and they will have to come back. The noble Baroness has already done it several times, but perhaps the noble Lord was not in the Room at the time.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Teverson(13 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Teverson
I was glad to note in that last exchange that the Minister had moved far more towards the Opposition than the Liberal Democrats, as happened earlier in Committee.
We now move on to Chapter 4, which is headed “Reducing Carbon Emissions and Home-Heating Costs”. It seems to me that we have moved on psychologically from the paramount area—as the Government have recognised—of trying to retrofit and bring up to a reasonable standard of energy efficiency the existing building stock. Having moved on through the Bill from that stage, we now have an opportunity to look to the future, and I hope that this amendment will be particularly useful and helpful to the Government.
We have to make sure that in 25 years’ time we do not have to go through another Green Deal process with all the houses that we are currently building which will not be up to the standard that we require in the future. Instead, it would be much better to build these houses now to the right standards of energy efficiency and carbon emission levels. The Minister has perhaps recognised that in the area of energy and climate change there is a great deal of agreement among reasonable people and political parties. One area on which I certainly congratulated the previous Government was that they put a marker in the ground saying that by 2016 building regulations should effectively lead to carbon-neutral domestic dwellings. I do not think they said anything further regarding industrial buildings but that was what they said in respect of domestic dwellings. I tried to find out about it before the Committee, but my understanding is that Ministers in the present Government have endorsed that and have said that that will be the case.
We know that one important thing for industry and for people who have to build these Houses and ensure that regulations have been met is to have a degree of certainty in the market. We have heard how red tape and bureaucracy can be negative in legislation, but politicians and legislation should be able to give certainty to industry and the people who have to deliver policies, in a positive way. One of the best and most effective ways of doing that—the way in which we show true intent—is to put something in the Bill. Once we do that, that certainty of provision—the certainty that the Government mean that to happen—increases so that actions can take place, the target is met and the effect is achieved. In this case, it is not just for 2016 but for all the years ahead, when we are trying within this economy to reduce our carbon emissions and fuel poverty, so that they are history as well.
I tabled the amendment because it gives the Government an opportunity to confirm that target and to ensure that business, industry and the other various actors in producing these homes can make full plans for these measures so they can be delivered. The domestic sector is not the only sector. In fact, something that we truly welcome from the Government in terms of the Green Deal is that it includes a commercial aspect, which we have not discussed or debated much to date. The industrial sector is more difficult, so I have given the Government discretion to set a date, but it is important that the Secretary of State should set a date at some time.
Another area that I have emphasised or been careful about in my amendment is to avoid being overprescriptive. I hope that I have achieved that in two ways. It is not necessarily sensible for individual dwellings to be carbon neutral themselves, because the technology for renewables and low-carbon technologies are for groups of dwellings. They focus on ways in which a development as a whole can be carbon neutral in its broadest aspect, rather than an individual house, which is probably too big an ask, even for those who really want perfection in this area. There might be a renewable energy part of an overall housing development, which might be the travel plan that goes with it; there might be a district heating system or ground-sourced heat pumps put in across the whole estate that allow the larger unit to be carbon neutral, rather than the individual dwelling. That should be even truer of the commercial developments.
Another part of this amendment gives the discretion to the Secretary of State to define what carbon neutral means, because that definition is clearly something that we could debate for ever. At the end of the day, after proper consultation, it should be left to the Secretary of State to make that definition—one that is practical and will never be fudged.
The amendment introduces an aspiration for certainty by putting it into the Bill, which would ensure that we achieve it. I beg to move.
Lord O'Neill of Clackmannan
I support this amendment, which I realise is probing. One of the major reasons why we have an inadequate housing stock in the United Kingdom is that the incoming Government of 1951, charged with the ambition of building 300,000 houses, sought to achieve that by reducing housing standards. That was the way in which Harold Macmillan, as Housing Minister, achieved his obligation. It is as a result of that we have so many substandard houses in comparison with our European counterparts. In that fantastic period in the 1950s and early 1960s, when hundreds of thousands of houses were built every year, properties were more often than not built to standards which were less than desirable in terms of what could have been achieved. They were not bad but they could have been a lot better, and if they had been we probably would not have half of the problems we have today. It is useful, however, to give the Government an opportunity to make quite clear that they are signed up and prepared to take the appropriate steps to achieve the 2016 target.
The kind of pragmatic and flexible approach suggested by the noble Lord, Lord Teverson, in respect of different forms of heating and the combination of different forms of accommodation, is an appropriate way in. We do not want to be overprescriptive, but there are areas where we have to be prescriptive—not only prescriptive but prescriptive in a fairly tight, legalistic way. These regulations tend to be a mixture of the consultative processes which are implicit in secondary legislation. They can afford that degree of flexibility.
As in this decade we address the challenges of climate change and the environment, in some respects we are parallel to the post-war reconstruction challenges which were being addressed in the 1950s. I would like to think that this Conservative-led Government will not make the kind of mistakes made by the Churchill Administration, under the responsibility of Harold Macmillan as Housing Minister, in the early 1950s. I would like to think the Government could clearly and explicitly embrace the desirable environmental objectives set out by the previous Government and which appear to be supported by the Liberal part of this coalition.
Energy Bill [HL]
Debate between Lord O'Neill of Clackmannan and Lord Teverson(13 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Teverson
My Lords, I welcome this amendment from my noble friend. It is important that tenants are actually mentioned, which is the emphasis here. The broader point is that although tenants are not a homogenous group, because of the differences that arise in the sector, there certainly will be people who cannot and never will be able to afford their own homes as opposed to more transient people who have not bought a property perhaps, because they are seeking to move on. The group will be different in many ways. I therefore support the idea that the review should try to identify the particular hurdles faced by this group in asking their landlords to make the improvements through the providers of the scheme. It is an important area and one it would be useful to understand if and when the report is produced.
Lord O'Neill of Clackmannan
Short-term tenants who are in poor-quality houses and move on regularly are not normally the kind of people who will have the time, let alone the inclination, to enter into such an agreement. They may not actually be involved when it comes to the implementation of the scheme, because there is likely to be some time lag. The other side of that is that the kind of landlords who operate in these areas are often unscrupulous and indifferent. Particularly in big cities, we now have substantial numbers of an almost underclass of people who live on the national minimum wage, are in one job that is lowly paid and get moved on to another and, perforce of circumstance, keep moving. There does not seem to be much consciousness on the part of government that such a group of people exist. I am not certain whether they will really be touched by the Green Deal because of the indifference of the landlord, the difficulties facing the tenant, and the persistence of high energy bills due to the inadequacy of the insulation of the houses—that is the simplest form of improvement that such properties could have. No matter how much encouragement we give either to the tenant or to the landlord in these circumstances, I am not sure that much will happen. We might have to fall back on other forms of remedial action, which might not have the market finesse that the Green Deal is supposed to promise.
Lord Teverson
My Lords, I am a landlord—very much in the line that the noble Lord, Lord Best, described of one property, but I thought that I should declare that interest in this debate.