Energy Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Monday 12th December 2022 Grand Committee

[Baroness Young of Old Scone (Lab)]

My Lords, I support the noble Baroness, Lady Worthington, in her two Amendments 130A and 130B and stress that the measurement, monitoring and verification of UK removals is vital. I declare an interest as chairman of the Woodland Trust. I have just been involved in the bowels of the woodland carbon code. It is quite staggering to think that many of these verified units of removal will not achieve full verification for 20, 30, 40 or 50 years and are then required to persist for 100 years. We have to find a way of inventing a system that will keep an eye on a plethora of landowners and land interests who are planting trees to sequester carbon and have that effective supervision, light-touch as it may be, for 100 years.

This will be quite a challenge. It is something I would appreciate the Minister responding to. We are now in the middle of implementing the peat carbon code, which will have similar difficulties, but perhaps the most important one has not yet been developed: the soils carbon code. That is of far more potential than either the peatland or woodland carbon codes in sequestering carbon. It will be a very widespread code because soils exist everywhere, though not all of them will be potentially good at sequestering carbon. I urge the Minister to accept these two amendments and give us a feel, as it were, of those 100 years and how the complexity of the carbon codes can be relied upon.

Before I finish, I make a similar apology to that of my noble friend Lord Whitty, as I was not here to speak to my Amendment 119. I did not miscalculate the pace at which the Bill would go; I was miscalculating the pace at which a snowed-in train would move. Since the Minister is appearing before the Environment and Climate Change Committee on Wednesday, I can ask him the question then anyway.

[Baroness Blake of Leeds (Lab)]

This has become a very rich debate. I thank the noble Baroness, Lady Randerson, for putting her amendments forward to enable us to have these broader discussions. We have said from the start that the difficulty with this Bill is the things that are not in it; this is one area we can all learn from and hopefully move forward on.

I also thank the noble Baroness, Lady Worthington, for the explanation of her Amendments 130A and 130B. I am sure that we would all welcome more clarity in these areas, and indeed a strategy so that we can bring confidence and certainty to the sector in the way that she described.

I will focus most on Amendment 124A in the name of the noble Baroness, Lady Randerson, in my comments and, in particular, the notion of adding local carbon transport schemes to the section on low-carbon heat schemes—indeed, to run alongside them.

As many will know, this was last looked at under the last Labour Government, with the 2009 report Low Carbon Transport: A Greener Future, which, interestingly, was published by the DfT. It made recommendations on supporting a shift to new technologies and fuels, promoting lower-carbon choices, and using market mechanisms to encourage a shift to lower-carbon transport. Of course we have moved on in many ways, but these principles should not be overlooked and we should continue to put in our full effort.

Specifically on hydrogen vehicles, we believe there is merit in looking at potential in the HGV sector. The discussions about shipping were interesting as well, but we feel that so much more focus needs to be put on alternatives, certainly in the short-term. Electric is obviously being looked at.

It is important to debate this at this point because, with the global situation regarding gas supplies, we are focusing our attention on domestic energy in particular, for obvious reasons—the cost of living crisis, security issues and all that goes with it—but we have to bear in mind that transport is one of the biggest sources of carbon emissions in the UK. In 2019, it accounted for 34% of the UK’s total carbon emissions. Its emissions have remained largely unchanged since the 1990s, which we cannot say about the energy supply generally. We have to ask why transport is such a poor performer.

We need to be concerned about where we get the electricity from if we continue with our ambition. If we are to reach our target of net-zero emissions by 2050, the decision to ban new petrol and diesel cars from 2030 will help, but there are so many other areas that we should focus on: alternative modes of transport, cycling and walking, and shared travel options. From my point of view, we have this enormous disconnect between transport policy and the policy we are discussing. We need to pick it up and take it seriously.

I speak with my experience of being a member of Transport for the North. All the schemes we tried to bring in through the integrated rail plan to deliver not only for the travelling public but for the impact on the climate seem to have been left behind. We have discussed this before. We have had Questions in the Chamber about the lack of joined-up thinking from the Government, which needs seriously to be addressed. The noble Baroness, Lady Randerson, referred to it as a lack of leadership and vagueness in the plan, but why are we not cross-referencing within the Bill to the work that needs to be done?

Speaking with my local government hat on, on building new homes, why can we not look at the schemes in Scandinavia in particular, where every new home has solar panels and the excess electricity generated is taken off and fed into personal electric charging points for vehicles? There are so many examples that we should look at.

The amendment has generated an opportunity to discuss this. I look forward to the Minister’s response to the amendments from the noble Baroness, Lady Worthington, but in particular to her explanation as to why there is such a lack of joined-up thinking in these areas, where the potential could be enormous.

Energy Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Monday 19th December 2022 Grand Committee

[Baroness Boycott (CB)]

My Lords, I am very pleased to support Amendments 237 and 238, along with the noble Lord, Lord Teverson, and the noble Baroness, Lady Young. The noble Baroness, Lady Bennett, set out so many of the reasons why we should support this. As she said, the rollout of community energy has ground to a near halt in recent years for reasons related to the withdrawal of the feed-in tariffs and the surely well-intentioned but hopelessly ineffective smart export guarantee, which has given community energy generators either prices which are inadequate or, where they are adequate, no confidence that they will remain so. This has been distressing for volunteers and community energy generators who have put down roots in the community and are supplying valuable services for their community, including energy efficiency—a significant omission from the Bill, which we will hear more about—and skills.

The Government effectively banned onshore wind in 2015 and are now, after seven lost years, belatedly unbanning it in rather curious circumstances. Some communities are up in arms about solar farms, and the Government have recently wobbled somewhat awkwardly between permitting and restricting them, only to now be talking about the need for a balance between farmland and solar PV. This is odd, given that meeting the Government’s own energy security strategy, published in April this year, of reaching 20 gigawatts of installed solar by 2030 would occupy only 0.5% of UK land, which is half of that occupied by golf courses. As noble Lords know, I am very passionate about food production, but I know that we can also produce a level of energy. As I said, I am not so sure that there really is a great tension when the land needs of solar are so limited.

These bannings and unbannings and restrictions and relaxations are really just the policy manifestations of community concerns about energy installations being done to them, rather than with them. The point about the vast majority of large-scale generation in people’s areas is that there is actually very little community benefit. If the Government were willing not just to see the benefits of community energy—as I am sure the Minister does—but to put in place the policy measures to support it, it would make things so much easier for all of us.

I sit on the Environment and Climate Change Committee, which has been taking evidence about boiler upgrade schemes and the like lately. One of the things about community energy is that one or two people within a community are capable of finding their way through the quite complicated government documents to obtain the subsidies, and they in turn can empower a load of residents who otherwise might not be so minded to install insulation and take up new means of energy. There are multiple benefits to this, and I find it hard to see any drawbacks. I am sure the Minister agrees.

[Baroness Young of Old Scone (Lab)]

My Lords, I also support Amendments 237 and 238, to which I have added my name, and Amendments 242F and 242G in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, which, with some variations, aim to achieve the same outcome. Previous speakers talked about the role of community energy generation, which is an important one in future energy supply. It was a small but growing effort in this country and a contribution to the development of renewable energy on a local scale.

However, when the feed-in tariff disappeared for new applications that really put the nail through the head of that growth, and nothing that the Government have done in the last few years to try to reignite it seems to have worked. People have talked about Licence Lite and the smart export guarantee, but neither of these has really produced an uptick in that trend of community energy generation. We need to find a way to get around that. This depends quite substantially on reducing the barriers of upfront capital and the regulatory effort of getting a connection to the system, on making sure that there is a key partnership between the big boys and the small community energy generators, and on some sort of guarantee of purchase price and length of contract. If we do not have those, we will not get any security into the community energy generation sector through investment.

These amendments put forward simple solutions. I shall not go into any detail, because the noble Baroness, Lady Bennett, has gone through them, suffice it to say that the whole issue is about how local energy generators can sell the power they generate locally through a community scheme to local communities. That is the magic bit in this area of community generation. Local schemes are developed and owned by local people, and they have local benefits in the form of cheaper and cleaner energy. They also provide other benefits for local communities.

When I was thinking about a way of describing this, it came to mind that the Labour Party used to talk about Arthur Scargill in a particular way: “He may be a bastard but at least he’s our bastard”. There is a difference between “damn windmills” and “our damn windmills”, so there is a real attraction in local support. I thought that the Government were keen on improving the popularity of locally determined schemes—I am sure that they are—which gives me huge confidence that the Minister will take these four amendments and do the job that the noble Baroness, Lady Bennett, suggested some of the rest of us do: draw out the best cherries from among them.

However, I do not intend to do that. I would rather like the Minister to do it and come forward on Report with a government amendment that meets the key needs of obligating the big boys to buy from the small-scale generators; setting a predictable, fair price; and setting a minimum contract period.

[Lord Teverson (LD)]

My Lords, I was pleased to put my name to both of the amendments in the name of the noble Baroness, Lady Bennett. Most of what needs to be said has been said. I guess I need to declare my interests: I am a fairly insignificant shareholder of St Ewe community energy, which I have not heard a lot from recently—probably because of the reasons that we outlined here.

The one point I want to make is that this is exactly one of the areas that has been left out of this Bill, as the noble Baroness, Lady Boycott, said. It should be in here. However, to me, although community energy is about generating power, the real importance of it is in allowing communities to come together and be a part of the national and global march forwards to net zero. When there were feed-in tariffs, there was an enthusiasm for people coming together and being part of this essential journey towards a clean economy, a clean society and the environment that communities, families, households and small businesses wanted to see in their local areas. It is not about participation in that big COP 27 or whatever; it is about the local contribution that allows people to participate in one of the most important journeys and fights that we face at the moment, which is about climate change and all the benefits that come from net zero.

Let us have this issue in the Bill. Let us ignite this sector again. Let communities participate in one of the most important objectives that we have on this planet.

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[Lord Callanan (Con)]

I am happy to give the noble Baroness a detailed answer in writing but we do not see any particular limit on it. It is what the market will develop. The problem with the noble Baroness’s amendment is that she is seeking, in effect, to get every other customer to subsidise a relatively uncompetitive form of energy production. If community energy schemes are low-carbon and competitive, they will be able to take their place in the generation mix. Many of these community energy schemes are already supported and will continue to be.

[Baroness Young of Old Scone (Lab)]

I wonder whether, in writing to the noble Baroness, the Minister could also write to us on a couple of other things, including the number of schemes that have gone through the two mechanisms that were introduced subsequent to the feed-in tariff changes. This would let us see how trends are operating in the market situation that he is describing at the moment; my perception is that it is not producing growth in the uptake of community schemes. The Government must be clear: are they keen on community schemes, seeing them as a real attribute, or are they keen on only commercially competitive ones? If it is the latter, I am almost certain that we will not see many come forward.

[Lord Callanan (Con)]

We are keen on these schemes but, as always, the question comes down to cost. How much we are prepared to subsidise an essentially uncompetitive scheme that is leveraged on the bills of everyone else who is not benefiting from these schemes? That is the fundamental question. I am of course happy to write with the clarification that the noble Baroness asks for.

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[Lord Ravensdale (CB)]

My Lords, I shall speak to Amendment 192 in the name of my noble friend Lady Hayman, which is supported by noble Lords across the House, some of whom cannot be here today, including my noble friend. Amendment 192 is quite simple in that its sole purpose is to require the Government to produce an energy demand reduction strategy. It would require the strategy to be in line with the Climate Change Committee’s recommendation for all buildings to be EPC C by 2028, and in line with the Government’s own non-statutory commitments for all heating appliances to be low carbon by 2035. The strategy would have to include interim targets, including on the development of the necessary skills needed for the strategy to be achieved, and a public engagement element.

Since my noble friend Lady Hayman tabled this amendment at the end of the summer, we have seen some welcome movement from the Government. Last month they announced an £18 million public awareness campaign, with an overall target of reducing energy demand by 15% by 2030. To do this the Chancellor, in his Autumn Statement, announced £6 billion of funding—but not for this Parliament. I believe that while the Exchequer is footing our energy bills to the tune of billions of pounds a year, it would perhaps make sense to bring forward this investment. A new energy efficiency task force was also announced, which will be charged with delivering energy efficiency across the economy to realise that 15% reduction.

The government announcements on demand are most welcome, but what is lacking is that golden thread of a strategy to weave it all together. In that sense, the amendment is highly complementary to what the Government are aiming to achieve with demand reduction. A strategy such as this would link together all the areas which need to coalesce to ensure we can reduce the energy consumption of our buildings: strategic leadership by government, providing certainty to the sector; a plan for how and where efficiency will be achieved; importantly, the jobs and skills which will be required to deliver the energy efficiency improvements; and engaging with the public so that they are fully aware of the necessity of doing this and of the benefits to them that can be realised.

The final strategy would be up to the Government to decide, as is correct, but it could include and outline who will receive government support and through what means; what the expectations will be for those who are able to pay for it but perhaps are not doing so at the moment, because they are waiting to see whether they will receive support from the Government; and what non-financial incentives the Government will use to achieve the overall target. The strategy could also outline in what order improvements to efficiency could or should be made, while it should include provisions for skilling the workforce that will be needed. As I said, the Government have already implemented or are planning to implement things which are included in this amendment, but it would be helpful for the sectors which will carry out the work, for households and building managers and, no doubt, for civil servants to have this all in one place.

I have an example: I went to visit a heat pump manufacturer a few weeks back. It made the point that we have the target of installing 600,000 heat pumps per year by 2028, which is very good, but that the dots need to be joined—for example, having the skills available to install those heat pumps and incentives for households to install them. The dots need to be joined between the production of heat pumps, demand, skills and all those other aspects. That is one of the things this strategy could provide.

Reducing energy consumption in the near term does not require every household to do an urgent retrofit or install a heat pump next year. There are small and relatively cheap improvements, such as installing loft and cavity wall insulation, draught-proofing, thermostatic radiator valves and smart thermostats. It would cost around £1,100 on average to install these in a typical semi-detached house, which would cut energy bills by £273 annually. Under current energy prices, these costs would pay for themselves in just five years. The earlier we take action, the bigger the aggregate savings will be.

I also note that this approach would be popular with the public. Various organisations have come out in favour of a strategy like this. In a recent briefing, UKSIF, E3G and Carbon Tracker stated that improving the efficiency of the UK housing stock could lead to bill savings of at least £500 every year per household, and around £1,000 per year for the least efficient homes—an aggregate annual saving to the economy of £10 billion. Insulated buildings are also less damp and healthier to live in. I beg to move Amendment 192.

[Baroness Young of Old Scone (Lab)]

My Lords, I rise to support Amendment 192 in the name of the noble Baroness, Lady Hayman, which has been so ably introduced by the noble Lord, Lord Ravensdale. The crux of it is that it calls for joined-up policies around energy demand management, low-carbon heat and energy efficiency by requiring a national energy demand reduction strategy.

I have the privilege of sitting on your Lordships’ Environment and Climate Change Select Committee, and our current inquiry, as noble Lords have already heard, is into the boiler upgrade scheme. Indeed, we had an interesting session with the Minister last week. We have been hearing evidence from the UK and internationally, particularly those countries which are further ahead on air and ground-source heat pump adoption than we are. Both national and international witnesses have confirmed the importance of the key elements of this amendment.

The first is joining up policies by having multiple instruments clustered together and working to maximise uptake of grants and loans. Regulatory bars on old technology should be signalled in advance, but not too far in advance. There should be public information campaigns and effective campaigning for the positive promotion of energy demand reduction.

The second feature that comes clearly in this amendment is that low-carbon heat is not enough. Our housing stock is among the worst in western Europe. Low-carbon heat needs to be linked much more closely than it currently is with effective energy efficiency programmes, and both need interlinked targets so that progress can be co-ordinated and measured. The whole issue of rising energy prices has brought this into sharp focus. We expect to see nearly 11 million households in fuel poverty this winter. Many of those households live in houses that typify the UK as having the worst-insulated housing stock in western Europe.

There needs to be huge progress in energy efficiency as part of the mix but I caution an overreliance on EPCs as a means of judging that, because they are very imprecise instruments. In fact, they can have some peculiar outcomes: if you have an air source heat pump installed in your building you will not necessarily get a higher rated EPC as a result. We have to be sure that we are not inadvertently placing a trap for ourselves for buildings, particularly old and heritage buildings, that will never reach EPC band C.

The third element of the integrated strategy the amendment calls for is the issue of skills in installing and maintaining low-carbon technologies, and in installing energy-efficiency measures. Energy-efficiency skills are much more timeworn and easier. Skills for installing low-carbon technologies are more complex and we are only at the beginning of the road. NESTA has estimated that there were around 3,000 heat pump engineers as of July. It projects that we will need around 27,000 heat pump engineers if the Government are to meet that target of 600,000 installations a year by 2028. There has to be a really big investment in skills programmes. I had a figure that I have now lost, but the German Government have put about €28 million towards skills improvement. We need to be in that ballpark.

The fourth thing is public engagement. I commend the Government for, at long last, having lurched into action with their “It All Adds Up” campaign, but that is rather late in the day and very much short term in the face of price rises. It needs to be sustained and not overly to rely on social media and the public being left to seek out digital sources. I am glad that it will contain a couple of TV ads, but you do not get much television advertising for an £18 million budget these days.

The national energy demand reduction strategy that the amendment proposes would be well worth while in bringing these issues together in a co-ordinated way.

[Lord Foster of Bath (LD)]

My Lords, I will speak to Amendments 197, 198A, 198B and 212. While I acknowledge that there are some differences between the targets referred to in Amendment 192 and my own, I nevertheless support the principles behind the amendment from the noble Baroness, Lady Hayman, which was so ably introduced. The main purport of my amendments, and part of her Amendment 192, relates to energy efficiency and the important, urgent need to improve that in some 19 million homes across the UK. which are currently classed as energy inefficient—those rated below EPC band C. I say in passing to the noble Baroness, Lady Young, that I entirely agree that we urgently need to address the way we take the measurements that we currently use in our very out-of-date EPC system.

I have raised the issue of energy efficiency on numerous occasions in your Lordship’s House and have arguing for a crash programme of energy efficiency to reduce fuel consumption and fuel bills for years to come. Yet, sadly, even in the past year, work on home energy efficiency has plunged by 50% and is now at its lowest level since 2018. A decade ago, 2.3 million homes had energy-efficiency measures being installed; now it is nothing like that.

Energy Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Monday 16th January 2023 Grand Committee

I urge the Minister, who has gone so far, to go a little further by adopting the amendments and ensuring that we understand precisely what the terms of the mitigation hierarchy are in UK law and at what stage of the planning procedures the overhead pylons will be considered, so that we have due regard to our precious marine environment and the mammals and sea birds that live within it.

[Baroness Young of Old Scone (Lab)]

My Lords, I shall speak to the government amendments, the accompanying policy statement and Amendment 242D in the name of the noble Baroness, Lady McIntosh.

There is absolutely a need for a real balance when it comes to the speed of getting both onshore and offshore wind online. There is no point in reaching net zero if behind us is the other threat that the ecosystems on which we all depend have started to collapse. The Environmental Audit Committee in the other place has already said that the planned fourteenfold increase in offshore energy production risks sensitive marine and onshore environments, so we really have to look carefully at how we get the balance between the two drivers. I share the view already put that some of the safeguards in the policy statement need to be toughened up and put in primary legislation, in a Bill.

The amendments give Ministers pretty broad powers. Although I am sure this Minister is wholly trustworthy, Ministers come and go. In common with the noble Baroness, I ask the Minister to support some strengthening of his amendments. First, there should be the clear presumption against development in protected areas, particularly marine protected areas, by avoiding those at all costs for renewable energy developments, rather than relying on shutting the stable door after the horse has gone by providing compensation. The mitigation hierarchy that the noble Baroness, Lady McIntosh, outlined is fundamental to that. Its principles are, first, avoid; if you cannot avoid, then reduce and mitigate impact; and then, only as a very last resort, compensate. That needs to be enshrined in law, and I look forward to the Minister’s response on where the mitigation hierarchy is in legal terms.

There is a message that the Government need to give to developers of offshore and onshore wind and associated infrastructure: that, to be honest, avoiding protected areas, particularly MPAs, means avoiding hassle. If it looks too easy to focus on protected areas as part of the area available without too much hassle because that is all downstream, developers will not make the effort.

The second issue is compensation and making sure that it does not damage the coherence of the marine protected area network. There is an Environment Act target to have 70% of MPAs in a favourable condition by 2042; they will not be in a favourable condition if they have wind farms on them. We need a joining up of government, so that the left hand and the right hand are aware of what each is doing. Distressingly, we see that not happening from time to time in the relationship between BEIS, DLUHC and Defra. Perhaps we can urge the Minister to get the rest of government to walk, talk and chew gum at the same time. We need to make sure that there is a process for measuring the intentions of the compensation, reviewing that periodically and, if it is not working, doing something different.

The third thing that needs to be toughened is the clause—of which I am deeply suspicious—that makes it possible for Ministers to override the protections of the habitats regulations and the Marine and Coastal Access Act. I understand that the Minister will say that the imperative reason of the overriding public interest test will be used and compensation will be available, but that is no substitute for the statutory protections that have revolutionised biodiversity and ecosystem protection over the last 30 years. It would be greatly detrimental and, in my view, the thin edge of the wedge if we saw that diminution happening. We are going to have this argument in bucketloads on the retained EU legislation Bill. The reality is that these pieces of legislation have proved very effective and anything that undermines them would be a backward step. As I have said before, policy statements and ministerial commitments come and go.

Can the Minister tell us how his amendments can be strengthened to give statutory assurances that there will be no weakening of protection for designated marine sites? There is a lot of space and a lot of wind out there at sea; putting wind power sites in areas not long designated for protection—it is comparatively recently that all these marine protected areas have been declared—is not something we should see going forward. Can the Minister assure us that he will consider these concerns and come back with a way forward before Report?

[Baroness Worthington (CB)]

My Lords, I congratulate the Government on bringing forward these amendments to help us to reduce the delays that are often commonplace when it comes to investment in our offshore wind industry, which has been one of the crown jewels of the UK’s energy transition. We can all look back and say that it was a wise group of civil servants and Ministers who understood the sheer potential of that transition to a wind-based economy in the North Sea. Many of the jobs that have shifted from our offshore oil and gas sector in maintaining the oil rigs are now being deployed in the maintenance of this very important part of our new and clean energy system.

It is very rare that I deviate from the noble Baroness, Lady Young, in my belief in preserving the wildlife, countryside and marine environment that we all enjoy—indeed, I started my career in conservation and it is a very deeply felt passion of mine. I therefore have sympathy for the amendment from the noble Baroness, Lady McIntosh of Pickering, but—and this may seem a little heretical, I am afraid—I feel that we must take a systematic and holistic view of this. If we are going to start enshrining mitigation hierarchies in legislation, the very first place that we should apply those is to the fossil fuel industry, which this Bill largely concerns itself with. It would be disproportionate to introduce this merely for offshore wind in this part of the Bill. We should be seeking to avoid and mitigate before we compensate—certainly before we give money out to the oil and gas industry for fuel security reasons. It would be disproportionate to simply apply it to the offshore wind industry which, let us be honest, is part of the solution.

If we care about the marine environment and marine mammals specifically, the damage being wrought on those species and habitats from the existing fossil-fuel-based energy system should be first and foremost in our minds. We have no real evidence for why cetaceans are beaching. The noble Baroness, Lady McIntosh of Pickering, infers that it could be because of wind farms. We do not have evidence of that; what we have evidence of is the build-up of toxic chemicals in these mammals.

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There is evidence of offshore wind turbines creating no-take zones and preventing some of the more damaging practices associated with trawling, which we allow to continue in MPAs. Fishing, which still goes unregulated in some of our MPAs, is having a devastating effect on some of our cold-water corals in protected areas. If there is to be a hierarchy, let us start with the most damaging activities, which I would contend are fishing, oil and gas exploration and the chemicals industry; then, if we have that correct, we may want to look at offshore wind. To start there seems disproportionate and would unnecessarily slow down a sector that needs to grow.

[Baroness Young of Old Scone (Lab)]

I just want to address the Minister on what the noble Baroness has just said. She has made an admirable case for marine protected areas being protected from all sorts of things. The opportunity in front of us is to do that job as the legislation is going through on offshore wind. I absolutely make the case that saying, “Let me be good, but not yet” is not in the interests of marine conservation and some of the hugely important ecosystems that are under threat from all sorts of other things. If we wait for all of them to be addressed before addressing offshore wind, we will wait for ever, and they will be gone.

[Baroness Worthington (CB)]

Since we are having this conversation, it is not a question of putting off these measures but of proportionality and ranking those impacts according to the scale on which they are occurring today, taking into account the positive impacts of offshore wind on no-take zones and the artificial reefs they create, as well as the advances in technology that mean that floating platforms will be more common.

Then there is subsea cabling. The noble Baroness, Lady McIntosh, did not pick up on the fact that the 30% loss she cited is very old data. We do not see those losses now, with modern technology. Subsea cabling will be the future of connections into existing places where there are already reinforced grids, thanks to the closing down of thermal plants. I do not see that we should be unduly raising issues and putting more and more barriers in the way of clean technologies delivering great reductions in emissions, as well as providing energy security and jobs. I support the Government’s amendments and I am sorry that I cannot be more supportive of the amendment proposed by the noble Baroness, Lady McIntosh of Pickering.

Energy Bill [HL]

Baroness Young of Old Scone Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

[Baroness Young of Old Scone (Lab)]

My Lords, I support Amendments 134 and 135, so ably led by the noble Baroness, Lady Boycott. I had hoped that my name would be added to them, but something happened along the way.

It is true that everybody is saying that there is real importance in community energy, but the proof of the pudding has to be in the eating. After that initial burst of schemes that the feed-in tariff encouraged, we have really not seen any major growth and the government measures that have been put in place simply have not worked. The amendments are important for two reasons. First, they would enable improved financial predictability and viability for community energy schemes, because, at the moment, there are a number of hurdles that such schemes have to cross. If financial viability and predictability are not there at the start, they lose heart very rapidly in approaching the other hurdles. The second is the issue that has already been touched on: that is the whole business of community “joie de vivre” around energy generation schemes. A surefire way of not having local schemes is where there is a scenario of “all pain and no gain”—where there is a bit of local environmental disruption and a little adjustment to the view. Local communities very rapidly turn off those schemes if they do not see any value for themselves. That is happening more and more at the moment. Local community generation schemes are not very popular since there is landscape blight and no direct benefit. In fact, the figures show that more solar farms were turned down in 2020 at planning stages than had been turned down in the previous four years.

The presence of a local community scheme may even lead to dialogue locally about increased uptake of energy efficiency measures. People become interested in both energy efficiency and demand-side and supply-side issues. That is exactly the sort of community engagement we need if we are really going to see net zero hit. Indeed, Chris Skidmore in his much-quoted net-zero review urged the Government to produce a community energy strategy and to break through the current regulatory and legislative funding barriers. He supported the provisions of the Local Electricity Bill, which these amendments have largely reproduced.

As has been said, the noble Lord, Lord Callanan, assured us in Committee, in his letter of 22 December and in subsequent meetings that the Government want to see more community energy schemes. We are really asking him what in effect will be done, as, so far, government measures have not worked. To echo the noble Baroness, Lady Boycott, we are not seeking subsidy; we are looking for a fair price varied by government, as advised by Ofgem—an increased price, perhaps, where schemes need to be encouraged and a reduced price, perhaps, if scheme growth is going gangbusters. It is about a guaranteed floor price, similar to the contracts for difference from which other renewable sectors benefit.

I thank Octopus and other major suppliers for tackling some of these issues. The reality is, however, that they are not creating the volumes that are required. It is quite a telling fact that Octopus, through Unity, its subsidiary, is now responsible for one-third of all the community energy sector schemes. If one company, busting a gut, can actually be involved in one-third of the community energy sector, it seems to imply that it is not moving very fast. We are not seeing the volume of schemes being created. Other barriers need to be tackled, particularly access to the grid, lack of early-stage feasibility funding and planning complexities, but to accept these two amendments would go a long way to encouraging the community energy sector and to removing the most fundamental barrier, which is the economic one.

It would also be good if the Minister could tell us what the latest timescales are for the review of the electricity market arrangements, because that is another area where the whole business of how renewable energy competes is going to be fundamental. Can the Minister tell us today—if he is not going to accept these amendments, as I am sure he will not do—what the Government are going to do that will be effective in getting the community energy sector off its knees, where it is at the moment?

[Baroness Meacher (CB)]

My Lords, I will not take the time of the House to repeat comments that have already been made. The noble Baroness, Lady Boycott, and others have made a very powerful case for these amendments. It is ludicrous for us not to be enabling community energy production when this does not involve a subsidy and when it could create additional energy sufficient for something like the 2.2 million homes mentioned by the noble Baroness, Lady Boycott. This is a completely neglected area; it can be resolved as set out in these amendments in a straightforward way. The main thing is that these community energy projects need to be able to sell their energy to big suppliers in the locality—those with more than 150,000 customers was the figure quoted, I think. So there is very strong support for these amendments and I hope the Minister will be able to accept them. I cannot see any reason why not: it is not going to cost the Government anything.

--- Later in debate ---

[Lord Berkeley (Lab)]

Noble Lords will be pleased to know that Amendment 138A in my name is a probing amendment, and I certainly do not intend to divide the House. This issue, which has come to me from a number of people in the south-west, is about the need for parity in the government incentives for heating homes that are off the gas mains. This would require a scheme that mirrors the Renewable Transport Fuel Obligations Order 2007.

I get the impression that the government policy on this is that everyone who is off the gas grid should be able to install a heat pump. When I am not in Scilly, I live in a little village in the middle of Cornwall, where lots of my friends use fuel oil for heating because there is no way that you can put a heat pump in some of these houses. Heat pumps are very good, but, in terms of fairness, about 1.7 million homes—perhaps occupied by 4 million people—are off the gas grid. They all want to decarbonise quicker, but how will they do so? The Government’s statistics show that 20% of off-grid homes are not suitable for heat pumps—again, we quite understand that. There is also the cost of installing them, of about £22,000, which is quite expensive for some people.

I am interested in a recent survey by the Future Ready Fuel campaign, which showed that 90% of people living off the gas grid are concerned about the Government’s current heating proposals, which are treating them unfairly. They would rather a greater choice of low-carbon heating solutions. The amendment asks the Government to investigate this further.

Before I speak about that, and the obvious need for consumer choice in this, it is probably worth explaining what the material—hydrotreated vegetable oil, or HVO—actually is. The easiest way of doing so is to say that it is used vegetable cooking oil, animal fat residue and tall oil—whatever that is—which is a by-product of the manufacture of wood pulp. Most of the time, when we hear about used cooking oil, it is because people have tipped it down the drains and eventually blocked them; it is very nasty for the drainage companies to solve this and take it away.

What surprises me is that the industry data has forecast that, by 2030, the feedstock availability, which is the important resource, is more than enough to meet the transport and non-transport needs, including home heating. The Department for Transport is very keen to use this to get more environmentally friendly airplanes in the sky—we might all have views about that. Production of HVO in the United States is already 10 billion litres and is expected to increase to 22 billion litres by 2025; ditto in Europe, where it is expected to double in the next two years from 5.5 billion litres to 11 billion litres.

This is not suggesting that this is the only low-carbon solution for people who need to heat their homes and who cannot use the existing systems, but it is an important issue for debate. You are telling people that they need to reduce their carbon usage and that the best way is air source or ground source heating, but there is an alternative. I suggest that the Government need to look at this and see whether there is a compelling case to look again at the tariffs. The Minister may say that the Government are doing this already; in which case, I shall say, “Well, that is lovely, but when is the report going to be published?” If they are not, I gently suggest that they should look at it, and I will be happy to facilitate a meeting between Ministers and the group of manufacturers concerned to see how we could take it forward. I beg to move.

[Baroness Young of Old Scone (Lab)]

My Lords, I will not detain the House. I declare an interest as living in an off-gas-grid property. I am sure that the Minister knows what I will ask him.

There is a lacuna in government communications or policy about the off-gas-grid regulations. These were consulted on extensively but so far, unless I have missed it, they have not resulted in an emanation in government policy. We are in a situation where, if you are one of the folk in an off-gas-grid residence, you do not know what to do. Under the system that was consulted on, it was proposed that, after 2026, if your oil boiler broke down you could not replace it with another oil boiler; as yet, we do not know whether that date is still in currency or not. It would be good if the Minister could tell us exactly what the current policy of the Government is and, if it is to change from something that was consulted on, when we would get an announcement.

The alternative, if they do not adopt the proposition from the noble Lord, Lord Berkeley, is that people need to get themselves an air source or ground source heat pump, but that is not a feasible proposition if you are trying to replace your recently defunct oil-filled boiler that has broken down between Christmas and New Year, when you have the grandchildren or your elderly great-granny in residence. Frankly, from the work done by the Environment and Climate Change Select Committee of this House on the boiler upgrade scheme, it was clear that getting an air source or ground source heat pump not only was an expensive proposition but would take some time. For the most part, it would take a number of weeks, and often a number of months, rather than having a nice man from British Gas or the local oil company coming round to give you a replacement on Boxing Day.

Apart from that, there is a debate to be had about the efficacy of air and ground source pumps in some houses, though I must admit that I probably come from the school that says that, providing you get a big enough one, you can heat almost anything—but that then raises major questions about ongoing energy costs.

Although I welcome the Minister’s statement earlier today about the extension of the boiler upgrade scheme term, it is a real pity that it was a complete failure in terms of numbers in the last financial year, and that most of the money that had been allocated had to be sent back to the Treasury. That is a great regret. My question—which my noble friend Lord Berkeley has given me the opportunity to ask yet again—is when we will get some clarity on the off-gas-grid regulations and what that clarity, if I have missed it, might be.

[Lord Ravensdale (CB)]

My Lords, I want to offer a few words of support for the amendment from the noble Lord, Lord Berkeley. It is something that the Government should take very seriously if it is to be used in a very specific and limited way for off-grid properties—the key point being the feedstock availability, which needs to be understood in more detail.

On the link with sustainable aviation fuel that the noble Lord, Lord Berkeley, mentioned, there is potentially an important counter-cyclical benefit here, in that jet fuel is dominant in the summer months and heating oil is dominant in the winter months. They are essentially the same fuel, so there is potentially a good economic fit between those two cases, and the relevant departments—DESNZ and DfT—should work together on that.

I would suggest some potential improvements to the amendment, such as limiting it to those off-grid properties that already use heating oil and specifically stating in the amendment that this is only for recycled fuels, to eliminate the unintended consequences of biofuels being eligible. Overall, however, this is something that the Government should take seriously.