Baroness Jones of Moulsecoomb
Main Page: Baroness Jones of Moulsecoomb (Green Party - Life peer)Feed-in Tariffs (Closure, etc.) Order 2018
Baroness Jones of Moulsecoomb Excerpts
Baroness Jones of Moulsecoomb
That this House regrets, in the light of the worsening climate emergency, that the Feed-in Tariffs (Closure, etc.) Order 2018 will end the export tariff for small-scale renewable energy without any replacement scheme in place; will result in new installations having to export their electricity to the National Grid for free; and will harm jobs and investment in the renewable energy industry (SI 2018/1380).
Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
Baroness Jones of Moulsecoomb (GP)
My Lords, my regret Motion is against the Government’s decision to scrap the feed-in and export tariffs for people who install small-scale renewable energy systems in their homes. I should declare that I have already installed solar panels on my house and am therefore not affected by this measure.
I feel so strongly that it is a bad thing to do that I wanted to table a humble address, but the clerks advised me that I would create a constitutional crisis—and we probably have enough of those going on already. I want to emphasise that the word “regret” does not come anywhere close to my feelings on this issue. The Government have behaved with economic illiteracy and I hope that, towards the end of the debate, I will hear from the Minister that they will pause in the scrapping of the tariff until they have at least determined the level and the timing on the export tariff.
The Feed-in Tariffs (Closure, etc.) Order, currently before this House, will cause enormous damage to our fledgling green economy and wreck our already too slow attempts to deal with climate change. Over the past decade, solar panels have steadily been installed on rooftops around the country. People have saved huge amounts of money on their energy bills and made a significant reduction in their personal impact on the planet. Some local authorities, following the lead of Kirklees Green councillor Andrew Cooper, have been able to use the stability of the feed-in tariff to finance mass deployment of solar panels for some of the poorest residents in their boroughs. In the process, they have created thousands of jobs in a high-skilled, well-paid industry.
It is now undeniable that the world is in a state of climate emergency. Scientists have made it clear that we now have less than 12 years to make massive changes if we are to have any hope of avoiding runaway climate change. The switch away from fossil fuels to renewables is one of the essential changes that we have to make.
The Government’s response is that they have steadily cut away at the feed-in tariff scheme and have now finally scrapped it altogether. This is, according to the Government’s impact assessment, so that we can reduce people’s energy bills by £1 per year—I repeat, £1 per year. The Government suggest that this was the plan all along, and that this is just another step towards a market-based system of renewable energy that must compete cost-for-cost with other sources of energy. That sounds perfectly reasonable—except that it is a fallacy that requires us to pretend that other forms of energy do not receive huge subsidies from the taxpayer, society and the environment. The European Commission has recently published research that shows that the UK has the highest level of fossil fuel subsidies in the EU, and more subsidies for fossil fuels than for renewables. That is shameful and certainly not fair—as well as poor economics.
Coal and oil are not new sources of energy, but they still receive enormous tax breaks to keep them in business. Nuclear energy is being paid double the going rate with government price guarantees, despite the fact that it will take decades for new nuclear power stations to be built, and despite the fact that nuclear has lost all credibility with a large proportion of the nation. Fracking, a whole new source of carbon emissions, seems to be granted new tax breaks in every Budget Statement made by the Government.
There is not a single source of energy that is not heavily subsidised—apart from renewables. Why are renewables held to a higher standard as the only energy source that needs to become financially self-sufficient, in a way that would cripple fossil fuels and nuclear power? If the Government want subsidy-free energy, at least create a level playing field and remove the nuclear and fossil fuel subsidies. Perhaps the Minister will explain to the House why renewables are singled out while the Government continue to create favourable tax incentives, easy planning rules and a strong policy commitment for the polluting energy sources. The distortionary effect of all this is enormous—a government-backed guarantee that we will be tied into fossil fuels for decades longer than the planet can handle.
Coming back to the statutory instrument and its justification, the Government are suggesting that this is just a stepping stone between the old system of support and a new system, a “smart export guarantee”, which will be based around new technology and market innovation. Again, it sounds sensible, but none of that new system exists and there is not yet a market for domestically produced green energy. The Government are doing absolutely nothing to ensure that this changes.
The stark reality is that the Government are throwing the domestic renewable industry off a cliff, with the vague promise that an ambitious new system might appear in time to save it. Plus we have no idea of the rate at which this energy will be valued. Can the Minister let us know whether there is any conclusion on that? Why have the Government decided that for an indeterminate amount of time new domestic renewable installations will have no option but to export the energy they produce to the national grid absolutely free? How that can be considered acceptable to anyone is beyond me. It is state theft and cannot be justified.
If the Government had a policy that resulted in the oil and gas industry producing for free, people would complain that we had turned into a communist country. For some reason, the exact same thing is happening with solar and wind power and it is just fine.
It is true that the renewables industry has made incredible progress in bringing down its costs and that we are approaching a point where it will be able to outcompete fossil fuels on its own. However, it is plain wrong to single renewables out as being the only energy source that should not get any subsidies or tax breaks. We need to do the opposite of this; we should be spending billions of pounds on a green new deal to create a million climate jobs and transform our economy.
Will the Minister explain to this House why the Government are not doing all they can to take climate change seriously? I ask her please not to do a Claire Perry and say how we are world leaders, that we are doing on best on emissions and that sort of thing, when we do not even count all our emissions—for example, we do not count aviation and shipping. For all these reasons, I beg to move.
Lord Teverson (LD)
My Lords, I thank the noble Baroness, Lady Jones, for raising this issue and bringing it to the Floor of the House. I commend her passion about the subject; it is completely justified. We should remember that feed-in tariffs have been amazingly successful. As we see from the Explanatory Memorandum and the commentary from the Secondary Legislation Scrutiny Committee, some 800,000 feed-in tariffs have been applied over the period in which they have been in force. One of the great things about them is that they democratise the fight against climate change. Whether they are microschemes or smaller schemes, they allow households, communities, small groups and small businesses to participate in providing renewable energy to the energy system and decarbonising our economy.
I am proud to say that FiTs came in in 2010 and were implemented by the coalition Government as part of the work of the previous Labour Government. The announcement that they would end came in 2015—a dreadful year for climate change—when the Conservative majority Government took over and we had announcements about this, the end of carbon capture and storage experiments, the end of zero-carbon homes and many other examples of decarbonisation and “all that green crap” disappearing from our legislation and our climate change targets.
As was shown during the coalition period, Liberal Democrats agree as much as anybody else that renewables and the public money put into them need to provide value for money. I have no problem with tariffs being brought down to reflect cost levels, as long as that is done in a smooth way that industry can predict, whereby the rate of return remains sensible for investors, whether they are firms or households.
What we have here is the stopping of the system altogether. Once again, it is an example of the green vandalism we have seen so much of in renewables, affecting jobs and green industry. There has been a failure to provide continuity of employment and skills, and no growth of private-sector green businesses. This secondary legislation is an example of that. We have taken away one of the ways in which communities, households and small businesses can participate, resulting in another body blow to the small-scale renewables industry.
The noble Baroness referred to the export tariff. I find it unfathomable. Claire Perry, the Minister for climate change, said that there will be export payments, but there was a major gap between that and the original announcement of this government policy. That meant the industry had a major shock, and only later was that repaired by some very vague references. The consultation period has not ended. We come to the end of FiTs on 31 March, and we are bound to have a gap during which the industry will not know what is happening. I do not know what went through BEIS’s mind as a department. From 1 April—very appropriately—consumers were going to give free energy to major energy companies. This was one of the greatest ironies and a huge political mistake. Yes, the department has decided to change that, but very late and leaving a gap. We still do not know what the change is.
Baroness Vere of Norbiton
I am afraid that the noble Lord heard incorrectly and I apologise if that was what was understood from my description of what will happen. The consultation closes tomorrow; we will look at the consultation responses as soon as we possibly can. It is our intention to bring forward the new scheme as soon as possible, but we recognise that there will be a hiatus between the two schemes. However, anybody installing generating capacity between the two schemes will, of course, be able to sign up to the SEG when it becomes available. Installing generating capacity also means that they can take advantage of their own home-generated energy, so it has many advantages.
Baroness Jones of Moulsecoomb
My Lords, I thank all noble Lords who have contributed to this debate. I am always impressed by the ability of the noble Lord, Lord Teverson, to speak without notes, which I am afraid I can never do for that long. It was very good to hear from the right reverend Prelate the Bishop of Salisbury, who expanded on the climate change aspect, which I tend not to do in this Chamber because I think people will get bored by my saying it, so I am delighted that he did. I thank the noble Lord, Lord Grantchester, who talked about a sensible climate change policy, which clearly this Government do not have.