Andy Sawford
Main Page: Andy Sawford (Labour (Co-op) - Corby)
Gregory Barker
Indeed. I hope we will have time to discuss the hon. Gentleman’s amendment on carbon monoxide detectors, of which he is an unprecedented and unparalleled champion in this House. I am glad to say that his point about smart meters is fully recognised in the strategy documents. He is absolutely right to say that smart meters will give far better access, as well as information, to consumers to participate in this new, two-way energy efficiency economy and open up all sorts of opportunities. They will also be an essential part of our vision to build an electricity, internet and smart group in the UK. On the development of a demand reduction measure, we are clear that a financial incentive is the most appropriate way forward and that it should lie in a capacity market.
Climate change is, according to the vast majority of scientific experts, with whom I emphatically agree, a clear and present danger to our planet and our economy. Our measures reflect yet another example of the coalition’s determination to rise to this challenge and allow the UK to play an ambitious part in combating the worst excesses of dangerous, man-made climate change.
Hon. Members can be reassured that the measure is not an additional green burden on consumer bills. It will make energy policy greener and potentially cheaper—a genuine win-win situation. I therefore hope that hon. Members will withdraw new clause 2 and its amendment (a).
I now turn to the Opposition amendments—I am grateful to them for tabling them—on the important issues of distributed energy and route to market for independent renewable generators. Independent renewable generators are key to the Government’s ambitions for not just green energy, but the energy market as a whole—not just in helping us achieve secure, affordable and low-carbon electricity, but in delivering a more plural, competitive and dynamic market.
The Government agreed during the Bill’s Committee stage to consider an amendment similar to amendment 1, the intention of which is to increase the maximum generating capacity of feed-in tariff eligibility from 5 MW to 10 MW. I have a great deal of sympathy with the proposal. It continues to be under active consideration and I am committed to finding a workable solution. However, it is a complex issue, because not everyone agrees on this way forward. The Solar Trade Association has stated, for example, that it would be against such an increase. My Department is considering whether it could be delivered without destabilising the existing FITs and renewables obligation schemes or creating perverse incentives.
Andy Sawford (Corby) (Lab/Co-op)
Will the Minister define more clearly what he means by “active consideration”? Those Members who support amendment 1 will be encouraged by his remarks, but they will also fear that the impetus of amendment 1 might be lost if it is not agreed to tonight.
Caroline Lucas
I am delighted to hear the Minister say that. All I want to do is build on that wonderful beginning and make it go even faster with even more ambition. That is why I so hoped that he would support the amendments that go in exactly that direction. Seriously, I know that the Minister is deeply committed to the issue; I simply think that we could get there faster and with a bit more ambition by having a clearer strategy and focus.
Decentralised energy is not even formally defined in Government policy. I would have thought that it would be simpler if it were; that is one of the issues that my amendments would address. Of course, decentralised energy is already used in hospitals, schools, small towns and so forth, but its untapped potential remains vast. I cannot help thinking that if Ministers spent a fraction of the time promoting decentralised renewables that they spend promoting the nuclear industry, we might have a different kind of energy system today.
The amendments would create a new feed-in tariff scheme for distributed generation, with a maximum capacity limit of 50 MW. I am glad that I now understand the amendment tabled by the hon. Member for Liverpool, Wavertree (Luciana Berger); I am delighted that the 10 MW was a bottom line rather than a top limit. The 50 MW was the level recommended by the Energy and Climate Change Committee and we should be more ambitious than the 5 MW that the Government currently foresee or the 10 MW ballpark figure from the official Opposition.
Finally, the amendments would require distribution network licence holders to play their part in facilitating decentralised energy. It is worth pointing out that a distributed generation feed-in tariff would involve no additional cost for consumers or the Treasury; it would simply provide an effective way for small generators to invest in electricity generation and participate in the market.
Again, the new clause is complementary to amendment 47 on a green power auction market and to Opposition amendment 1. I hope that the amendments can be taken together as a positive contribution to moving to decentralised energy in a swifter fashion.
Andy Sawford
It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas) and my hon. Friend the Member for Southampton, Test (Dr Whitehead).
A year ago, my hon. Friend and I, along with my right hon. Friend the Member for Don Valley (Caroline Flint), wrote in a paper called “The Power Book” about the potential for community energy. We argued that as the new energy industrial revolution unfolds in this country, future technologies, new sources of renewables and low-carbon energy have huge scope to challenge the existing market, help reshape the relationships between people and power providers and create new agents of delivery. I pay particular tribute to my hon. Friend the Member for Southampton, Test, who has been pioneering such work for some years—for example, he has championed the district heating project in Southampton as an MP and former local council leader.
I also want to mention such projects as the Baywind energy co-op in the Lake District, Watchfield in south Oxfordshire and Brixton Energy. There are increasing numbers of inner-city providers of community energy.
However, we have to be honest. The scale of such projects in this country is small compared with other countries. We should look to America, for example. Some 42 million American citizens, the equivalent of two thirds of the population of this country, are members of energy co-ops. The German example is even more impressive. Since 1990, German citizens have had a legal right to be producers and suppliers of electricity to their grid system. The big step change came a decade ago when their Government introduced a system of preferential feed-in tariffs. That transformed an energy sector that once had only four major suppliers into one that now has over 2 million contributors. It also created 400,000 jobs and has lowered prices, year on year, over the past five years.
Across the UK, local councils are rising to the challenge of transforming the energy sector. I have followed community energy projects around the country and I have profiled projects in Stoke, Stevenage, Kirklees and Sheffield. I am particularly pleased to welcome Electric Corby, which was launched in my constituency on Friday. It is a not-for-profit community interest company formed with the support of the borough council to establish the UK’s leading practical community-scale test centre for future low-carbon living and transportation and to redistribute the benefits of its labours to the Corby community. As the Minister will know, Electric Corby is funded via DECC’s Cheaper Energy Together switching competition. We welcome that support, but it is very much a local initiative.
Jim Shannon
The hon. Gentleman is energetically outlining the case for the community initiatives that are taking place across the whole United Kingdom. Does he feel that these community initiatives will enable people to see that this is not being foisted on them because they have an opportunity to control the situation? That is why they are good, and they should have had a great start.
Andy Sawford
I absolutely agree with the hon. Gentleman, who hits on the key point that this is about shifting the power in energy supply to give ordinary people a chance to say to the big six, “If you won’t give us a fair deal we can do this for ourselves in our local communities.”
Electric Corby is partly about enabling people to switch their energy provider, but it is wider and more ambitious than that. For example, it will involve an electric vehicle charging point infrastructure. I recently welcomed the shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna), to Corby to see those electric charging points and other innovations in my constituency. In Priors Hall, a major development of 5,000 new homes has just begun, and there is smart metering and electric charging points across the whole development.
We are trying to lead in Corby, but I am concerned about the potential impact of this Bill. I particularly support amendment 1, which has been ably championed by my hon. Friend the shadow Minister. In Committee, the Government indicated that they were supportive of the amendment. That was welcome, and it was on that basis that it was withdrawn at that stage. We have heard some very warm words from the Minister today. He and I have previously spoken in the Chamber about energy policy. I know that he tries to listen and respond to good debate, as in Committee, but it is disappointing to find that he cannot offer something more substantive to the House in respect of amendment 1.
The purpose of amendment 1 is to raise the feed-in tariff threshold to benefit co-operative and community energy suppliers. Currently, the feed-in tariff is for projects of under 5 MW. That means that renewable developments of over 5 MW have to participate in the new contracts for difference. I share the concern that contracts for difference will raise the barriers to entry for the community energy projects that Members in all parts of the House have said that they support. The need for a higher degree of technical knowledge is one such barrier to entry. The contracts will mean that smaller generators will receive lower market prices for their power. With the end of the renewables obligation, there will no longer be an incentive for suppliers to purchase renewable energy from independent suppliers.
For those reasons, the feed-in tariff threshold should be raised to above 5 MW. I agree with the hon. Member for Brighton, Pavilion that we should be ambitious and raise it further, but the amendment would allow us to raise it to apply to schemes of above 10 MW. That would give smaller renewables projects a clear and certain route to market and enable us to promote the community-owned renewables sector.
Nigel Adams (Selby and Ainsty) (Con)
Will the hon. Gentleman explain why the Solar Trade Association is opposed to raising the threshold to 10 MW?
Andy Sawford
I have to inform the hon. Gentleman that had I been a representative of the Solar Trade Association I would have declared an interest. I am sure that he and I can both read the briefings it supplies to this House. Indeed, he may wish to enlighten us about this; I will gladly give way if he wishes to do so.
I was surprised to hear about that. I have a letter from 15 organisations involved in the championing of community energy provision in this country, including the Centre for Sustainable Energy, the Forum for the Future, the National Trust, the Low Carbon Communities Network, the Communities Carbon Action Alliance, the Co-operative, Co-operatives UK and, indeed, the Co-operative party, which I represent in Parliament. They all believe that the Energy Bill’s measures will make it much more difficult to achieve the step change in the provision of community energy that I hope we all want to see.