Energy Bill

Debate between Alan Whitehead and Caroline Lucas

Tuesday 4th June 2013 Commons Chamber

[Dr Whitehead]

My hon. Friend is right. Indeed, there are companies in the UK, such as Ecotricity, which have not exactly involved themselves in crowd funding, but have engaged in bond arrangements for the development of their low-carbon power. Even if such a source of funding is available, if the deal for the subsequent sale of the energy is so disadvantaged by a contract for purchase that shaves off the reference price or makes arrangements that are extremely disadvantageous to the ability of that company to sell its energy into the market—while at the same time those potential purchasing companies take advantage of their vertical integration by providing routes to market for their own generation at different costs and under different arrangements—the future market will be very distorted indeed.

I welcome the Minister’s saying that the issue is being actively considered, that he understands the problem at the heart of the GPAM proposals, and that he is actively in dialogue with industry on possible routes to solutions. I look forward to proposals in another place to address the issues. It is essential that they are addressed before the Bill completes its passage, so that the market that we produce as a result of CFDs is fair for those participating in it and produces the varied and pluralistic market that we want for electricity generation, particularly low-carbon energy generation, in the future.

[Caroline Lucas]

I want to say a few words about the amendments in my name, starting with new clause 2, which deals with the strategy for electricity demand reduction. The clause sets a clear ambition for 2020 and 2030, using figures published by DECC, alongside the electricity demand reduction consultation, and requires the Secretary of State to have policies that get us there.

I was a little disappointed that, in response to the amendments that I have tabled, the Minister on many occasions indicated warm sympathy but not action to achieve the aims. Willing the ends but not the means creates a nice warm fuzzy feeling, but does not change the menu of targets and strategies before us. That particularly matters when it comes to electricity demand reduction, because there is so much scope for doing so much more in this area. No matter how sympathetic we feel to that aim, however, unless the legislation is in place, we do not have the clarity, certainty or confidence that action will be taken. We have seen all too often how, in the absence of firm targets and strategies, Governments fail to put in place adequate polices or resources to achieve things. My worry is that in many respects elements of the Bill are more like a wish list than a strategy.

Energy Bill [Lords]

Debate between Alan Whitehead and Caroline Lucas

Wednesday 14th September 2011 Commons Chamber

[Caroline Lucas]

We discussed this matter in Committee, so I know that the Minister and I do not agree. I still do not think that the measures under the green deal will be significantly subsidised. I agree that we have the ECO pot of money for the fuel poor and hard-to-treat homes, but the figures that have been discussed in respect of the ECO are about £1 billion to £2 billion, which is a small amount given that we hope there will be mass take-up of the green deal. Most people who take up green deal provisions will therefore not feel that they are being significantly subsidised. I still do not agree with the Minister that this proposal will in its current form be attractive enough.

[Dr Whitehead]

In the light of the Minister’s intervention, the hon. Lady might want to point out to him that the logical consequence of setting a market rate in respect of the green deal and the golden rule is that a significant proportion of those who cannot access the green deal at a market rate will be pushed into the ECO. That underlines the point made earlier about the purpose of the ECO: is it a fuel poverty device, or is it a device to mop up, as it were, those people who cannot afford the green deal at a market rate, which the Minister appears to think is the case? If it is the case, perhaps it ought to be clearly spelled out in our discussion.

[Caroline Lucas]

I am extremely grateful for that helpful intervention. It focuses on some of the contradictions in respect of the purpose of the ECO, and I hope that in this debate we can make clear what exactly the ECO will be for, how big it is going to be, the extent to which it is intended to subsidise those who are in genuine fuel poverty, the extent to which it is intended to subsidise those who cannot afford market interest rates, and the extent to which it is for hard-to-heat homes. There is a lack of clarity, and I worry that ECO is being used as a kind of get-out-of-jail-free card, in that whenever there is a difficult question, the ECO tends to be the answer. There simply is not enough money in the ECO for it to be the answer, however. The financial community has much less appetite than has been suggested for providing affordable green deal finance, which is why the green investment bank must step in.

As Members may remember, on Second Reading the Secretary of State quoted Conor Hennebry, director of global capital markets at Deutsche Bank, as having said that

“‘the City is practically champing at the bit to finance the government’s green deal.’”—[Official Report, 10 May 2011; Vol. 527, c. 1059.]

That sounds very good, but the Secretary of State failed to add that Mr Hennebry went on to say:

“Financing the green deal is absolutely possible for us”—

the City—

“but whether the figures will stack up for you is a different matter.”

That is the crux of the issue: will the figures stack up in respect of rolling out this programme as widely as possible? I do not think they will. It is not at all clear that the figures will stack up for householders, unless there is Government support through either the green investment bank or the ECO. If the ECO is to be used, that is fine, but we must make it an awful lot larger and make its provisions a lot clearer.

No matter what interest rate is applied to the loans, it is vital that consumers have confidence that their rights will be protected if they take up a green deal offer, and I seek to strengthen those protections in amendments 26, 49 and 50. Amendment 26 would ensure that only products and services that reduce household emissions could be sold during green deal assessments and installation visits. Amendment 49 would ensure that consumer protections on the repayment of a green deal loan are extended to energy advice services or energy plans that are not specifically green deal plans. Amendment 50 would ensure that the Secretary of State can make regulations to ensure that quotes provided for green deal goods and services are easily comparable.

Finance (No. 3) Bill

Debate between Alan Whitehead and Caroline Lucas

Tuesday 5th July 2011 Commons Chamber

[Caroline Lucas]

I entirely disagree. I wish that the hon. Gentleman had been at a meeting with representatives of the solar industry that took place a few days ago in Portcullis House. We were shown presentations by Ernst and Young and others which demonstrated that if a small amount is invested now, solar energy will be able to compete with all fossil fuels and with nuclear power in four or five years.

Although an improved carbon floor price mechanism could help to deliver a less carbon-intensive energy sector, it is important for the Government not to see it as a “silver bullet” solution. Other stronger levers, such as a well managed—I underline “well managed”—feed-in tariff regime and a strong emissions performance standard must also be part of the overall picture. Sadly, however, the Government are falling short in those respects as well. I should like them to devote at least as much effort to stepping up their work at EU level to ensure that the next phase of the EU emissions trading scheme is much more effective than the current phase. The recent collapse in the cost of EU carbon allowances under the scheme is clear evidence of their over-allocation, and the shortcomings of the scheme are becoming increasingly obvious.

I should also like the Government to work with European partners to ensure that, as a minimum, allowances are in line with the policy of cutting EU emissions by between 80% and 95% by 2050, as agreed by member states; that allowances cannot be banked from the second phase of the EU ETS into the third phase; and that a reserve price is set on the auction of permits into the market. Any permits that the market does not want to buy at the reserve price or more should be retired from the scheme.

I urge the Government to undertake to produce the report for which the amendment calls, and to take the opportunity to show how the benefits of a carbon floor price can be maximised and any unintended consequences eliminated. If the carbon floor price is to be effective, we need a tax on the windfall profits of the nuclear industry, along with flanking measures to ensure that those in fuel poverty do not suffer as a result of this policy.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The Economic Secretary to the Treasury has already suggested that those in favour of a carbon floor price should explain how it could be introduced in a different way from that proposed by the Government. I imagine that she will return to that subject at the end of the debate, but I suggest that she need only look at her own consultation document, which led to the amount that has been established and the mechanism by which the floor price works.

The consultation document posited a £1 difference between a Europe emissions trading scheme and a carbon floor price, certainly in respect of the starting period. It also warned about how far away from that £1 difference a floor price might go and what might happen to energy prices in the rest of Europe. As people who contributed to that consultation document suggested, because our energy supply is highly interconnected with that of Europe, a substantial difference could lead to investment going to where the sale price is cheaper, with, perhaps, new gas-fired power stations being developed on the other end of an interconnector rather than lower-carbon power stations being developed at our end of an interconnector.

Offshore Wind Infrastructure Competition

Debate between Alan Whitehead and Caroline Lucas

Tuesday 12th October 2010 Westminster Hall

[Dr Whitehead]

I agree that Government acting as a catalyst—I mentioned pump-priming—is vital, not by providing underwriting and a subsidy for ever, but by priming the process whereby, precisely as the hon. Gentleman mentioned, manufacturing brings about the added value that I am certain will be part of the process in a relatively short time.

It is important that the pump-priming process remains in place, giving the manufacturers confidence that there is a future for them in the UK and that the plans for getting the supply chain in the UK right for wind are serious. However, the announcement of the competition, archived on the Department for Business, Innovation and Skills website, has, subsequent to its initial appearance, had this message affixed to it:

“Current policy under review. Site will be updated as soon as we have a clearer view of the new Government’s policy”.

That is it, in a nutshell. Will the competition now proceed? My view is that for all the reasons that I have outlined, it is imperative that it does. Cancellation or even a delay of the competition would seriously hamper the development of the infrastructure necessary to make what all sides are committed to, start to work in practice.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Gentleman agree that if the funding is cut, that will show that the coalition Government have little or no real understanding of the returns to the economy and the environment from maintaining investor confidence in green initiatives such as offshore wind infrastructure, and that their savage spending cuts are causing uncertainty for people living near ports such as Newhaven, just up the coast from my constituency? Does he share—

[Mrs Anne Main (in the Chair)]

Order. May I ask the hon. Lady to keep her remarks brief?