Energy: Climate Change

Baroness Maddock Excerpts

Tuesday 2nd November 2010 Lords Chamber

[Baroness Maddock]

My Lords, like other noble Lords, I welcome the opportunity to take part in this important debate and have a couple of interests to declare. I am a vice-president of National Energy Action, a charity that works to eliminate fuel poverty, and president of the Micropower Council. Given what most of us in the Chamber today believe about climate change, reducing energy consumption and moving to sustainable sources of energy must be two of the key strands of our energy policy. For far too long we have been profligate in our use of energy and have failed to build energy-efficient buildings to high standards. If we had been doing this over the past 40 years, we certainly would not find ourselves facing many of the problems that we face today. This point was well made by my noble friend Lord Teverson.

It is amazing that British households still use more energy for heating than Swedish households. For too long, we have taken up measures on a rather small scale and have not been clear enough about the long-term direction of our policy. This has meant that many in the energy business and individuals have not always been willing to invest in technologies. This is the case with microgeneration, an area that I want to cover in the rest of my remarks in order to highlight some of the issues preventing the mass take-up of these technologies.

Microgeneration is the small-scale generation of low-carbon heat and electricity by householders, small businesses and community organisations such as churches and schools. By generating their own heat and power, the microgenerator can save money on bills and help to protect the environment at the same time. According to a government-backed report, microgeneration has the potential to produce as much electricity in a year as five nuclear power stations. The report was commissioned by the former Department for Business, Enterprise and Regulatory Reform in 2008. It also states that with the right incentives, some 10 million microgeneration systems could be installed by 2020. This would provide nearly 5 per cent of the UK’s electricity, saving 30 million tonnes of carbon dioxide. So it is clear that microgeneration can play an important role in making progress towards our renewable energy targets, as well as in job creation throughout the United Kingdom. Indeed, the noble Lord, Lord Grantchester, mentioned this in his speech opening comments.

By supporting the microgeneration sector, the Government can create new jobs, revitalise manufacturing industries, help the UK export market, and of course improve our energy security. Microgeneration also has the unusual benefit of engaging citizens directly in their energy supply. This often heightens their awareness of the UK’s renewable energy targets and encourages surrounding neighbours to consider microgeneration technologies of some sort. Microgeneration would be only part of ensuring Britain’s energy security, but I believe that it does have a place, after energy efficiency measures, to heighten consumer awareness and engage citizens in a way that no other energy supply option does.

What is stopping the potential uptake of microgeneration? The issue of permitted development is a major barrier to both air source heat pumps and micro wind turbines. This was supposed to have been resolved by July this year, but the Government failed to comply with a statutory deadline to introduce micro wind and air source heat pumps into the planning system. At the time, a spokesman from the Department for Communities and Local Government stated that the Government were absolutely committed to laying this right before Parliament and that it would be laid before Parliament before the Summer Recess. However, it was not. This is a major barrier to air source heat pumps and micro wind as it means that those who want to install these products have to seek planning permission first. I would be grateful to hear from the Minister, when he winds up the debate, exactly when this issue can be resolved. It has been going on for a long time, not only with this Government but with the previous Government.

Another barrier to the mass uptake of microgeneration is the uncertainty surrounding financial incentives, although some of this has improved. Before the comprehensive spending review announcement, there was much speculation about feed-in tariff levels and what might happen before the review date in 2013. That speculation arose from the lack of government certainty, and it causes crises for investors, manufacturers and consumers, especially if consumers fear that they will not get the tariffs they were promised. I hope the Government recognise that they need to learn from the past. They must set the post-2013 tariff levels with much thought, and sooner rather than later, because creating certainty is important in that it will allow those affected to adjust what they are doing accordingly.

Clarity around the renewable heat incentive, mentioned by other noble Lords today, is also key. Although the renewable heat incentive announcements were very much welcomed by the microgeneration sector, the detail is yet to come. I do not know whether the Minister is in a position to give us a little more detail on this today. I see that he is shaking his head.

A large barrier to microgeneration uptake is the lack of capital among consumers, especially among the more vulnerable fuel-poor ones. It is important that all citizens should have the opportunity to access these technologies, but to achieve this, capital is key. The Government have announced the phasing out of the Warm Front scheme, also mentioned by other noble Lords. I understand that it is largely to be replaced by the green deal, so again we await further information on the details of the policy.

It is clear that energy efficiency will be key, but it is still unclear whether microgeneration will be included in the green deal as the step on from energy efficiency. Given the consumer behaviour-changing characteristics of microgeneration, the opportunity would be lost if it were left out of the green deal entirely. Again, I hope that the Minister can say something about this when he winds up the debate.

The final barrier to microgeneration that I am going to touch on today is the lack of public awareness of the various microgeneration technologies, and of course the benefits of them. This is something that needs to be addressed both by the Government and by the industry. I know that the Micropower Council is working closely with its members to formulate a plan of action in order to reach consumers and demonstrate to them how microgeneration naturally follows on from energy efficiency.

I hope the Minister will agree that microgeneration has an important part to play in an energy strategy designed to combat climate change. It certainly fits in well with his opening comments about the security of supply and a low-carbon economy. I hope when he winds up the debate that he will have time to address some of the issues I have raised.