Energy Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Monday 19th December 2022 Grand Committee

Moved by

[Baroness Bloomfield of Hinton Waldrist]

169: Clause 186, page 154, line 18, leave out from “future” to end and insert “flow of electricity into or out of itself”
Member's explanatory statement
This amendment amends the reference to electrical energy in the definition of “energy smart appliance” that applies for the purposes of Part 8.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I beg to move Amendment 169 standing in the name of the Minister, my noble friend Lord Callanan, and will also speak to Amendments 170 to 172. This group of amendments considers the definitions set out in Chapter 1 under Clause 186 on “Energy smart appliances and load control”. Clause 186 sets out a number of definitions that are used in other clauses of the Bill relating to load control. These include permitting the creation of new licensable activities, the modification of licence conditions and industry codes for load control purposes, and the making of regulations for energy smart appliances.

Amendments 169 to 171 have two combined effects. First, by removing the reference to the “use, discharge and storage” of electricity, the definition broadens the potential scope of appliances captured. This is because the definition is now agnostic to the way in which the appliance interacts with electricity. Instead, we are now concerned only that there is a flow of electricity into or out of the appliance which can be controlled by a load control signal. The original formulation does not clearly capture local generation of electricity by an appliance—for example, solar panels—and we wish to capture this.

For the purposes of licensing load control, the relevant factor is the sending of a load control signal to an energy smart appliance, regardless of whether that signal is then received by the appliance. Therefore, the amendments make it clearer that the signal needs only to be sent to an energy smart appliance, not necessarily received, to be regarded as a load control signal.

Amendment 172 clarifies that a load control signal may not only be a signal that directly affects electricity usage by an appliance but one that affects the electricity flow into or out of an appliance, based on additional information that is available to the appliance. This means that the improved definition also captures a signal which can configure a device to change electricity usage, depending on additional information available to the appliance. For example, an appliance could be configured to increase its electricity usage if the price of electricity drops below a certain level.

I hope the Committee will agree that these are important amendments that deliver additional clarity in the definitions used.

[Lord Lennie (Lab)]

My Lords, we welcome the clarification.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

170: Clause 186, page 154, line 24, after “sent” insert “via a relevant electronic communications network to an energy smart appliance”
Member’s explanatory statement
This amendment, together with the amendment in the name of Lord Callanan at page 154, line 25, amends the definition of “load control signal” that applies for the purposes of Part 8 so that it includes a digital communication sent to an energy smart appliance even if the communication is not received by the appliance.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

173: Clause 187, page 155, line 6, after “cleaning” insert “tableware”
Member's explanatory statement
This amendment, together with the other amendment in the name of Lord Callanan at page 155, line 6, amends the list of purposes of energy smart appliances about which regulations may be made so that it includes appliances for cleaning tableware and washing or drying textiles but not other cleaning appliances.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, in moving Amendment 173, I will also speak to Amendments 174 to 176, 178 to 180 and 182 in the name of the Minister, my noble friend Lord Callanan.

Amendments 173 to 176 provide clarification and consistency to the definitions of the appliances to which the energy smart regulations will apply. These definitions focus on the purpose of an appliance. Amendments 173 and 174 ensure that energy smart regulations can be made only for cleaning appliances that are most appropriate for demand-side flexibility. This includes, for example, a dishwasher or a washing machine. Amendment 175 allows battery storage to be captured in a manner consistent with the definition of electricity storage in Clause 162. Amendments 176 and 182 clarify that the regulations capture heat pumps, which are essential to the Government’s policy objectives for decarbonising heat.

Next, Amendments 178 and 179 indicate that the Secretary of State may make provision about the recall of non-compliant appliances and may issue guidance about the prohibitions and requirements imposed by these regulations. These amendments therefore provide further safeguards to address serious cases of non-compliance and will support industry to comply with its obligations, aided by guidance.

Lastly, Amendment 180 makes a minor amendment to ensure that the regulations cover additional methods other than ordinary selling for making energy smart appliances available to consumers, such as hire purchase agreements.

Energy smart appliances will play an essential part in the transition to a smarter energy system, enabling consumers to save money on bills and contributing to cost-effective decarbonisation. These amendments provide important clarifications on the scope of these regulations and make certain that they can be implemented effectively in a way that maximises the benefits of smart functionality for consumers and the electricity group.

I will respond to the non-government amendments in this group when we have heard noble Lords’ contributions. I beg to move.

[Baroness Randerson (LD)]

My little Amendment 177 seems to have intruded on this group of government amendments. I tabled it because I was concerned about the practical implications of the Government’s reliance on smart regulations and smart appliances. I am certainly not arguing with the technology but I am seeking to tease out exactly how this will impact on us and the people of Britain as ordinary consumers.

If you read Clause 187, you will see that it is very dictatorial and centralised in its approach. Yet if you look at paragraph 438 of the Explanatory Notes you will see that, in practice, the Government’s intentions are going to be carried out by retailers and manufacturers, and they will face penalties if they do not get it right. My concern is that one size does not fit all. For example, the noble Baroness just mentioned washing machines and so on, but my example would be electric vehicles. We are told to charge electric vehicles at times when electricity usage is low, and we are promised that this will become an automatic default position. The Government are relying on smart usage, in effect, to expand limited national grid capacity. At the weekend, when I was reading some background material, I noticed that there are only two regions where there is currently said to be any level of surplus national grid capacity. The rest of the country is in a very stretched position.

I have been asking these questions for some years. I have been asking how a reliance on telling people when they can wash their clothes or charge their cars will impact on consumers and the way we use our gadgets and run our daily lives. There is a current experiment, not using smart technology but with a voluntary agreement, to get people to opt in to using their washing machines, dishwashers and so on at low-demand periods, with a financial incentive to do that. That is great if it is convenient for these people and they are opting in to do it. I am pleased that the experiment is taking place, as I am sure it will produce some useful information, but I want to float past everyone a couple of potential issues.

First, I do not want to bore noble Lords for long with the details of my domestic life but I have solar panels and an electric car. I want to use my washing machine and dishwasher and charge my electric vehicle when the sun is out; sometimes, that is at a time of peak demand. I am saving myself money, which I regard as a good thing, but, more importantly, I am limiting the amount I draw down from the grid because my solar panels provide my electricity. I am minimising my call on the grid. There are lots of people like me with solar panels; let us hope that there are heaps more in the coming months and years. This issue needs to be taken into account.

Secondly, more importantly, there is a host of people whose working patterns require them to charge their cars and do their washing at peak times. A care worker working nights has to fit their domestic life around those daily patterns, which might be peak demand times. This is not just about just care workers; it is about health workers, district nurses or anyone working on shifts—the police, firefighters and taxi drivers. We want taxi drivers to drive electric vehicles but they are going to run out of electricity half way through the day; they must be enabled to carry on their work.

We have all, I am sure, experienced a situation where we have had to take our phone or laptop to the technical experts because it is doing something strange, behaving in a way that is beyond our understanding. We are normally told that it is the factory settings or an automatic download. I am now aware that, because they are so automated, electric vehicles adopt patterns that one might not necessarily understand fully because they have downloaded a new program and so on. As the technology becomes more sophisticated, in reality, consumers will find it more difficult to understand what it is doing, why and to override it when they need to.

My big question is that any reliance on smart charging and smart usage must be able to be adapted for that large body of people for whom it is not convenient. In days of high energy prices, most of us can probably be relied on to know what is best for us financially and, therefore, what draws least from the grid. I am concerned that the way in which this is expressed allows no latitude, judgment or option for consumers to make that decision for themselves.

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The other area that gives me grounds for concern—the noble Baroness, Lady Randerson, also highlighted this—is all the equality considerations in this discussion. Who would be disadvantaged by some of these proposals? Has equality screening been done with regard to the impact on people with disabilities, people with different work patterns—as we have heard—families with young children and those who have older relatives living with them? In my view, it would not be appropriate to come up with a two-tier system that brings benefits to some but excludes others by its very nature.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lord, Lord Teverson, and the noble Baronesses, Lady Randerson and Lady Blake, for their contributions. I was going to cover enforcement in group 7, but I have now catapulted some of those remarks back into this group so that we can cover that at the same time.

Turning first to Amendment 177, tabled by the noble Baroness, Lady Randerson, the Government have published both the smart systems and flexibility plan of 2021 and the July 2022 public consultation on developing a smart and secure electricity system. Both documents set out how consumers can provide flexibility to the system and reduce their energy bills via the deployment and use of energy smart technologies and flexibility services. Consumer interests and considerations are at their heart. However, we believe that this amendment would place an unreasonable and inappropriate expectation that regulations could determine or pre-empt how and when consumers choose to use those smart technologies and appliances. It is unnecessary as the Energy Bill is already clear on the importance of protecting and providing benefit to consumers.

First, Clause 187 already allows for regulations to be made which impose requirements on energy smart appliances—in particular, to ensure that the appliance can operate in response to load control signals; to ensure the protection of end-users; and to impose technical requirements, including the requirement to display or provide information about the appliance. Secondly, in taking these primary powers, the Government are also clear that energy smart appliances should always benefit consumers in line with their preferences and choices. The detail of how appliances may be operated is for manufacturers and product designers, and for consumers when they make their product choices. No one will be forced to use their appliances at particular times, and consumers should decide how they want to utilise smart functionality to best meet their individual needs and lifestyles.

The noble Baroness referenced EV charge points. The Government anticipate implementing these measures in a phased approach over several years, recognising the EV charge point sector is already working hard to implement existing regulations. We will work collaboratively with industry as our policy develops, building and learning from the experience of the EV charge point regulations to deliver necessary protections for the energy system and for consumers. To reiterate, consumers will remain in control. This legislation is aimed at facilitating exactly the sorts of exemplary behaviours the noble Baroness is referring to. So, while I welcome the intention of her amendment, I hope she recognises that the Bill sufficiently commits future regulations to maximising the benefits of smart energy technology to deliver the best outcomes for consumers and the wider system.

Turning to Amendment 181, tabled by the noble Lord, Lord Teverson, the Government have already set out how consumers could reduce their bills and be rewarded for the value they provide by using smart appliances in a flexible way. I refer noble Lords again to the smart systems and flexibility plan and the public consultation on developing a smart and secure electricity system. However, this amendment would place an impractical and inappropriate expectation on the Secretary of State to make a statement on exactly how individual consumers can derive maximum value from their smart appliances.

This value is highly variable, depending on how flexible consumers can be with their energy use, their location and the type of smart service and appliances they wish to use. Manufacturers and flexibility service providers will be best placed to inform consumers about the best available benefits and value from their products and services. So, while I welcome the intention of the noble Lord’s amendment, I hope that he can recognise the impracticality of his suggestion and appreciate the wider government actions in train to maximise the benefits of smart energy technology for consumers and the wider system.

The noble Lord also spoke about security, a concern also raised by the noble Baroness, Lady Blake. Regulations made under these enabling powers will ensure that smart devices in scope are secure by design, and that economic operators that play a critical role in delivering load control services to consumers are meeting minimum standards of cybersecurity and data privacy. BEIS is working very closely with the National Cyber Security Centre as well as industry experts to implement measures we intend to take to achieve this. So I beg to move the amendments in the name of my noble friend Lord Callanan and ask noble Lords to withdraw their amendments.

Amendment 173 agreed.

Moved by

[Baroness Bloomfield of Hinton Waldrist]

174: Clause 187, page 155, line 6, at end insert—
“(ba) washing or drying textiles;”Member’s explanatory statement
See the explanatory statement to the other amendment in the name of Lord Callanan at page 155, line 6.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

178: Clause 187, page 155, line 30, at end insert—
“(ca) make provision about the recall of appliances to prevent, or in response to, non-compliance with the regulations;”Member’s explanatory statement
This amendment enables energy smart regulations to make provision about the recall of appliances.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

182: Clause 188, page 156, line 24, at end insert—
“(3A) The reference in subsection (3)(b)(ii) to electrical heating appliances includes a reference to heat pumps.”Member’s explanatory statement
This amendment glosses the definition of “relevant appliance” so as to clarify that heat pumps without the energy smart function, or that are not compatible with the energy smart function of another appliance, are relevant appliances about which provision by virtue of Clause 187(4)(c) may be made.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

183: Clause 189, page 156, line 41, at end insert—
“(iii) take specified steps to remedy non-compliance;”Member’s explanatory statement
This amendment enables energy smart regulations to make provision about steps that must be taken to remedy non-compliance (without an enforcement authority imposing a requirement under provision made by virtue of Clause 189(5)).

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, this group of amendments seeks to strengthen the enforcement powers of the energy smart regulations. This would enable an enforcement authority to investigate and take action swiftly and effectively against non-compliance, and to provide support to industry to comply with their obligations. First, these amendments enable the regulations to place obligations on economic actors to take steps to remedy non-compliance, and to provide evidence of their compliance to an enforcement authority.

Secondly, the amendments allow an enforcement authority to test and make test purchases to assess and to ensure that appliances comply with the regulations. This is an essential requirement, given the necessarily technical requirements the Government will impose to protect consumers and the energy system. If severe non-compliance is identified, Amendment 186 grants a power to an enforcement authority to issue a recall notice to withdraw appliances from the market, if necessary.

Thirdly, Amendment 187 permits an enforcement authority to accept enforcement undertakings. This allows authorities to work constructively with industry to ensure appliances are brought into compliance with regulations, without the need for costly corrective enforcement action being taken.

Finally, Amendment 188 allows an enforcement authority to issue guidance about the enforcement of the regulations and how any authority would exercise its role. This will support industry to comply with their obligations. The market for these appliances is expected to grow rapidly and will play an essential part in the transition to a smarter energy system. These appliances will help consumers save money on bills and contribute to cost-efficient decarbonisation. I hope noble Lords will agree that this is an important group of amendments to enable an appropriate and proportionate enforcement regime to develop, which is consistent and compatible with existing product safety legislation. I beg to move.

[Lord Teverson (LD)]

My Lords, I just want to probe the Minister so that I understand how this works in practice. What are the Government enforcing? Is it an operating system? Is it the design of a chip? Is it the company that makes them? Will they be type-approved in the UK? Will there be compatibility across different domains? All producers of white goods are international, I think. Will we have our own standards here? I am trying to understand how this will work practically. I absolutely agree with the Minister that this is a key area.

Enforcement authorities are mentioned in the Bill. I just want to understand who they are. Are they the thought police? The Minister mentioned an organisation—the UK cyber headquarters or whatever—so is it that? Is it the Department of Trade, as we would have understood it? Is it the police? Who are those enforcement agencies and how will they work?

I have one last request for clarification. Clause 189(2)(f) refers to

“conferring functions, including functions involving the exercise of a discretion.”

I cannot work out what that means so I would be pleased to understand it.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I agree that the language in that particular paragraph is quite legalistic. I might need to come back to the noble Lord on that one unless I can get an instant answer.

As I have said, the detailed enforcement regime will be set out in legislation. The enforcement powers underpinning these regulations will provide an appropriate toolkit to allow an enforcement authority to work with industry to ensure that appliances are both compliant with the future regulations and proportionate to the risks that non-compliant devices could pose to consumers and the grid. The Government have aligned the enforcement powers underpinning the regulations with other product regulations that have similar enforcement powers, such as the Electrical Equipment (Safety) Regulations 2016 and the Electric Vehicles (Smart Charge Points) Regulations 2021.

We are in conversation with regulators on our measures. We are confident that we will have the right knowledge and expertise to resource and regulate this market as it develops. I think that is probably as far as I can go at this stage.

Amendment 183 agreed.

Moved by

[Baroness Bloomfield of Hinton Waldrist]

184: Clause 189, page 156, line 41, at end insert—
“(ba) requiring persons to supply evidence of their compliance to enforcement authorities;”Member's explanatory statement
This amendment enables energy smart regulations to make provision requiring persons to supply evidence of their compliance to enforcement authorities.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

189: Clause 192, page 159, line 12, at end insert—
“(1A) Energy smart regulations may make provision about the sharing of information between an enforcement authority and the GEMA for the purposes of their functions in relation to energy smart appliances and load control.”Member's explanatory statement
This amendment enables energy smart regulations to make provision to facilitate information sharing between any enforcement authority designated under the regulations and the Gas and Electricity Markets Authority (and vice versa).

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, the Government have tabled two amendments relating to the licensing of load control. The activity of load control here refers to the control of electricity flow to an energy smart appliance by a load controller.

The first of these amendments, to Clause 192, will ensure that the information-sharing between enforcement authorities for energy smart appliance regulations and load-control licensing is explicitly provided for in legislation. The energy smart appliance regime and the load control regime may be regulated by different authorities, so it is imperative that they are able to communicate effectively and share information where necessary. The second of these amendments also relates to the effective delivery of the load control licensing regime. It relates to Schedule 16 and ensures that the provision for consequential amendments to be made to existing legislation, in practice to support the amending of licence conditions, also applies to Acts of the Scottish Parliament or instruments made under them.

In practice, it is unlikely that amendments will be required to Acts of the Scottish Parliament or instruments made under them. However, the load control market is a nascent market. We cannot rule out the possibility that future categories of licence could interact with devolved matters in Scotland. This amendment will ensure that that scenario is provided for, should it ever be needed; should this scenario arise, the Government would of course work with the Scottish Government and adhere to the appropriate processes.

These two amendments will help to provide clarification and explicit provision to support the effective delivery of a load-control licensing system. I beg to move.

Amendment 189 agreed.

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

190: Clause 196, page 162, line 23, leave out subsection (8)
Member's explanatory statement
This amendment omits a provision that is superseded by new Clause (Section (Modifications of licences etc): supplementary).

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Moved by

[Baroness Bloomfield of Hinton Waldrist]

191: Schedule 16, page 315, line 11, after “enactment” insert “, including any enactment comprised in, or an instrument made under, an Act of the Scottish Parliament”
Member's explanatory statement
This amendment enables provision made by regulations under section 56FBA of the Electricity Act 1989 (inserted by the Bill) to include amendments to Acts of the Scottish Parliament and Scottish Statutory Instruments (which are not within the meaning of “enactment” given by the Interpretation Act 1978).