Feed-in Tariffs (Amendment) (No. 3) Order 2015

Debate between Lord Steel of Aikwood and Lord Robathan

Tuesday 2nd February 2016 Lords Chamber

[Lord Steel of Aikwood (LD)]

My Lords, I blundered into this debate on 19 January during the Committee stage of the Scotland Bill. At that stage, I was making a very simple point, which is that hydropower is much overlooked in comparison with solar power and wind power. That was the only point I was making. However, in the course of his reply to that debate, the noble Lord, Lord Dunlop, the Scottish Minister in charge of the Bill, gave some figures that I did not think to challenge. No sooner had the ink dried on Lords Hansard then coals of fire were heaped upon my head for not having challenged those figures. I did not know any better and I do not think that he knew any better, because he was quoting figures given to him by the Department of Energy and Climate Change. It is worth stopping for a moment to consider them.

I congratulate my noble friend on raising this matter and the excellent speech that she made, and the noble Lord, Lord Grantchester, on his speech from the Front Bench. I do not think we should get into a long argument about whether we should do something about this or just wring our hands, which appears to be something that the noble Lord, Lord Grantchester, feels strongly about.

I am concerned about the drift of this Government away from the commitments that they made at the time of the election, posing as a green Government. My new party leader has a very nice way of putting this. The other day he said:

“The prime minister has not so much hugged a Husky as led it behind the coal shed, shot it in the head and told his energy secretary it is gone to live on a farm”.

That is quite a good way of putting the about-turn of policy that we are experiencing.

To return to the point that I was making, the noble Lord, Lord Dunlop, argued on 19 January that the tariff injections proposed for hydropower would result in something like 500 new projects over the next three and a quarter years. I do not see how that can happen now that the Government have themselves reduced the tariff for the small hydropower schemes. Those are the ones that I am talking about; the little ones that I have been to see in the Scottish borders, not the massive public hydropower schemes. I was very glad to see that the noble Lord, Lord Sanderson of Bowden, supported me on that occasion because he and I live in an area where there is no shortage of water. There is sometimes a shortage of sun and occasionally there is no wind, but there is plenty of water and the water flows at a time when peak demand is so strong during the winter. That was the point that I was making.

Yet I have in my hand the consultation tariffs that the Government propose, and for small hydro schemes in the 100 kilowatt to 500 kilowatt bracket the Government’s own consultation document suggests a tariff of 9.78p. The actual tariff that they are now proposing is 6.14p. I therefore do not see how they will get 500 schemes with that reduction. Will the Government enter into a serious discussion with the British Hydropower Association to see what is wrong with the figures that they have given and how they can possibly justify the proposal for 500 new hydropower projects with this severely reduced tariff? A reduction of some 37% makes all the difference in the world and I am very glad that my noble friend mentioned hydropower in her speech.

[Lord Robathan (Con)]

My Lords, for many years in the House of Commons I was the vice-chairman of the All-Party Parliamentary Renewable and Sustainable Energy Group because I happen to believe that renewable energy has a hugely important part to play in the future energy provision for this country. I hope that most noble Lords would agree with that. But it is only a part, and that is where the noble Viscount suggested that there is a contrast between nuclear, fracking and renewable energy. They all have a part to play in making a good policy to provide energy for this country.

I have been a loyal Government supporter and I was particularly pleased when the Prime Minister said some years ago that he would create the greenest Government ever. I hope very much that the Minister will bear that in mind. He rightly said to the noble Viscount that FITs were very high. They were high for a reason: in order to attract investment, which they have done, and indeed to attract landowners—possibly such as my noble friend who has also spoken—to put up wind generators, for instance, and it has worked. I should say that I am quite interested in putting one up myself on my farm in Leicestershire, but I do not yet have an interest to declare. However, it is right that these very expensive feed-in tariffs should be brought down. They are extremely lucrative and they need to come down. As the costs of putting up solar, wind or indeed hydro energy plant come down, so too should the feed-in tariffs.

I know that the Government have reviewed their initial plans in this area, but I would say gently to my noble friend the Minister that, as I am sure he is aware, we should not as a Government kill the golden goose that has led to a resurgence of renewable energy in this country, which is all to the good. In quite rightly reducing unnecessary government expenditure, or perhaps one should say government largesse, we need to be careful that we do not end the wind and solar energy industries in this country or stop the generation of renewable energy which began so well under the coalition Government and up to now.