Energy: Feed-in Tariffs

Baroness Worthington Excerpts

Monday 31st October 2011 Lords Chamber

[Baroness Stowell of Beeston]

Perhaps I may remind the House that this is an Oral Statement and that interventions should be limited to brief comments and questions.

[Baroness Worthington]

My Lords, I am grateful for the Minister’s comments. My concern is that this is merely about the Government’s priorities, which are being set by a modelling of the energy system that is proving to be utterly incapable of modelling what happens in the real world. This is now the second set of changes whereby a successful industry is essentially being cut off at the knees because of an unexpected success rate, when this is something that we should be championing and backing. The Government must accept that if their modelling is incorrect, they must go back to first principles and work out which technologies are going to deliver the step change that they describe. No matter how much money is thrown at some technologies, they may not succeed—I am thinking of CCS and the current generation of nuclear.

The Government saying, “This is just too successful, we cannot afford it”, is not a good answer. We must go back to first principles and ensure that our successes continue to be successes. If they are having trouble now with feed-in tariffs, they will have even more trouble when they look at energy market reforms and try to fix prices for the long term on the big generators. That should be settled by the market. I am very concerned that the modelling is incorrect and that trying to fix prices is just the beginning. We should probably look at market-based solutions.

[Lord Marland]

The noble Baroness is completely right. The modelling was incorrect. We inherited it and we have sought to get it right. As I asked earlier when I talked about government priorities, do we think that this is a game changer in electricity supply and that it is in the best interests of the consumer? The answer from Consumer Focus is no. As regards the game change in the electricity supply of 0.1 per cent, even if every house had them the figure would get to only 0.3 per cent. Therefore, this goes down the list of priorities. I am afraid that it is not a government priority, given the massive problem that we will have for electricity in the 2020s.