Renewable Heat Incentive Scheme Regulations 2011

Duke of Montrose Excerpts

Tuesday 22nd November 2011 Grand Committee

[The Duke of Montrose]

My Lords, I, too, thank the noble Baroness for her explanation of this measure, which takes up many pages, and congratulate her on taking up the cudgels for the Department of Energy and Climate Change. I have a mild interest since I have a farm, where there is obviously scope for generating various kinds of renewable energy. I was interested to hear the noble Baroness say that the plan was to reduce the periodic support payments for large biomass operations, which reminded me of something that I saw recently on a BBC web page. Perhaps the Minister can write to me if she does not have a ready answer for this. The Scottish Government have devolved powers for renewable energy, and seem to be holding a consultation on reducing the ROCs on large biomass generation because they want to devote them to marine energy. However, does large-scale biomass qualify for ROCs as well as periodic support payments? What power do the Scottish Executive have over renewables obligation certificates? Can they allocate them up and down at their own will, or is the allocation of ROCs still a UK power?

[Baroness Stowell of Beeston]

My Lords, I thank all noble Lords for contributing to this debate. Quite a few issues have been raised and I will do my best to cover most of them in as much detail as is sensible on such a complex matter. I welcome not only everybody’s contributions today but the support that this initiative has received from the Opposition and my noble friends in all parts of the Committee. As someone who is new to this brief, it was interesting for me to learn that the scheme was first mooted by NGOs 10 years ago and that the Back Benches, rather than previous Governments, were behind this move, although it obviously now benefits from the decision of this Government.

I will go through the issues that were raised, some of them by several noble Lords. A number of noble Lords sought to draw comparisons between this scheme and the feed-in tariffs scheme for solar panels. I understand why some people might be concerned that issues will arise from this scheme similar to those which arose from the feed-in tariff scheme. The key thing is that this Government are learning lessons from how the feed-in tariff scheme was set up by the previous Government. There has been a much higher level of collaboration with the industry and stakeholders in setting up this scheme. We have tried to build in the flexibility that is not there in the feed-in tariff scheme. I point out, as I did in the Chamber earlier today, that the changes that we are making to the feed-in tariff scheme are to ensure that the industry is sustainable in the future. It is an important industry and we want it to be part of the future.

The noble Lord, Lord Grantchester, my noble friend Lord Teverson and the noble Baroness, Lady Worthington, raised the issue of why the RHI is being funded by general taxation, whereas the feed-in tariff scheme is funded by a subsidy, or a levy on consumer bills. The difference is that feed-in tariffs are paid to consumers by electricity suppliers. That is, there is a tariff for the energy that is generated by people through the solar panels on their roofs. To fund feed-in tariffs from general taxation would require the scheme to be restructured or the Government having to pass money to the electricity suppliers to pay to the solar panel participants. It is a different scheme altogether; that is the main reason why it is funded differently.