Draft Renewable Heat Incentive Scheme Regulations 2018 Draft Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2018

Jeremy Lefroy Excerpts

Monday 23rd April 2018 General Committees

[Jeremy Lefroy (Stafford) (Con)]

I will be very brief—I have only one question for my right hon. Friend the Minister. The current impact assessment, which replaces that of December 2016, shows a substantial fall in the net present value of the RHI deployment from £1.3 billion to £30 million. That is a huge reduction. Clearly the scope of the scheme is a little bit less, but nothing like that order of magnitude.

I very much support these proposals, but will the Minister give her view on whether that throws into question some of the various technologies included, and on whether they have a much smaller rate of return than had been originally expected? Page 26 of the impact assessment looks at the returns in terms of the value of traded and non-traded CO₂ and the air quality benefits. It refers to non-monetised costs and benefits below that, but the positive impact of new technologies that support the growing UK industrial and technology base in this area has perhaps been under-calculated in coming to the NPV. I wonder whether that could be taken into account.

Given the huge discrepancy between 2016 and now, only 15 to 16 months later, I would appreciate the Minister’s comments on how that has arisen and whether she believes it is a game-changer or simply a smaller factor to be taken into account.

--- Later in debate ---

[Jeremy Lefroy]

I apologise for detaining my right hon. Friend on this, but does she also agree that the kind of investment that is being made by UK manufacturers and service companies is incredibly important as we seek to boost our exports? I am the Prime Minister’s trade envoy to Ethiopia, which wants to have, effectively, a waste-to-energy RHI and an electrical generation plant for each of its major cities. The UK is in a very good position to assist with this. Based on what we do in the UK, the opportunities are out there, and multiplied many times over, to provide on a commercial basis assistance around the world in renewable energy and heat.

[Claire Perry]

I commend my hon. Friend for his international knowledge. This is exactly the point. As part of the clean growth challenge and the industrial strategy, we have realised that as we are global leaders in decarbonising our economy, while at the same time driving growth—only two countries are considered to be doing enough to meet a 2°C warming of the climate, namely ourselves and China—we can create enormous prosperity in the UK from exporting those services and technologies. If he feels that my Department or the Department for International Trade need to do anything to support his ambassadorial ambitions, I hope he will let me know. It is an important area.

In conclusion, we have had a good thrash through the regulations. Hopefully we all agree that the reforms are needed. They are essential to improve on the experience of the first years of the scheme, to ensure that it is better value for money and that it continues to play its part in the transition towards a lower carbon-emitting economy. As I said, we will offer further proposals and suggestions as to how to move forward once the scheme has ended. I hope the Committee will support both sets of regulations, which I commend to it.

Question put.