Lord Grantchester
Main Page: Lord Grantchester (Labour - Excepted Hereditary)
Lord Grantchester
There is now general consent that climate change is happening and that human activity is contributing to the change. While there has been debate in the scientific community on this point, and some people continue hotly to contest it, the weight of scientific evidence now firmly supports the analysis. As a result, we as a country urgently need to develop an energy system for an affordable, secure and low-carbon future. This can mean only a clear focus on renewable energy, away from dependence on the finite resources of fossil fuels. I thank Leonie Greene of the Renewable Energy Association and Oliver Harwood of the Country Land & Business Association for their assistance in preparing for the debate today.
Europe currently produces more than 10 per cent of its energy from renewables. In the UK, the figure is just 3 per cent. This country must continue and intensify the progress initiated by the previous Administration. We must push forward to reach the accepted targets and press on with policies to get us there. The coalition Government have confirmed a commitment to 15 per cent renewables by 2020, but this is still behind the EU-wide target of 20 per cent, with several countries exceeding the target, most notably Sweden, which shortly will hit 50 per cent. The coalition Government will have to seriously consider raising their game if they are to earn the title of the greenest Government ever.
Everyone recognises the dynamic advances made in communications over the past few years. In the energy sector we need no less of a step change in our thinking. We need to move away from thinking that energy flow is one-way down pipes and wires from a big industrial complex somewhere over the hills and beyond our influence. The energy sector is regulated by government, and this Government need to make wise choices to ensure that we meet our climate change commitments. These must include public education so that everyone understands the contributions necessary in the home and in the workplace.
I declare my interest as a food producer when I say that the risks of unrestrained carbon emissions are significant for three key reasons. First, the country's food supply is at risk from rising sea levels. Eighty per cent of the best grade 1 agricultural land lies at or below current sea levels. Secondly, rural businesses rely on a secure and steady energy supply. Because of greater distances and vulnerability of supply, these businesses are at an increased risk of interruption from storm events. Thirdly, the agricultural industry is likely to suffer because of the increased risk of water shortage. Recently the University of Reading released a report entitled Water for Agriculture, commissioned by the Royal Agricultural Society of England. Scientists found that climate extremes such as droughts and flooding are likely to reduce the amount of water for agriculture and water culture, which will pose a major challenge to farmers, researchers, plant breeders and policy advisers. Given that agriculture and the food sector are recognisably responsible for a disproportionate amount of greenhouse gases when compared with the value of their production, they have challenged the conventional mindset of being seen as the problem. Instead, they can help to show the change that is necessary by being part of the solution. I am greatly interested in the Government's response to the findings of the University of Reading report, and in how they plan to interact with farmers and food producers to address their concerns, both immediate and long-term.
In the broader economy, energy historically has been a major driver of inflation. A major characteristic of renewables is a stable price, as much renewable energy is ambient and therefore free. The bigger implication of low-inflation energy for economic stability is a huge opportunity to be grasped, especially against the recent background of rises in energy prices of 125 per cent. The need to ensure national strategic objectives can be met by means of an effective planning system, particularly in relation to wind power.
The suspension of the coming into force of the planning infrastructure legislation puts the country back into delay and uncertainty. In addition, many of the renewable projects are under 50 megawatts and are therefore decided at local level. It is unclear how the local planning framework will work. Can the Minister say how this country will be able to meet its targets? The regional spatial strategies are vital for getting approvals granted but these have now gone.
Can the Minister confirm when he will bring into reality the extension of permitted development rights for small-scale renewables—a matter that I understand is on his desk? Will this also ensure planning presumption in favour of renewables outside nationally protected areas and for small-scale—up to 5 megawatt—schemes in national parks and the green belt? This will demonstrate increased ambition for PV, helping to provide clarity for the UK PV industry, where there is a need to address urgently what is meant by “higher than expected deployment” requiring an “early review”. When will this start? Will the Minister also confirm that the coalition Government will not act on the Conservative proposal to bring in a third-party right of appeal to planning consent, which will only increase delay and frustrate investment?
The introduction of feed-in tariffs from 1 April under the previous Administration has provided the opportunity to make a step change in renewable energy. The renewables obligation has supported only the cheapest, very large-scale projects. This feed-in tariff extends support to projects of any scale up to 5 megawatts where individual local co-operatives and developers can get on with their own investments at the small, local level. The benefit that this can bring to renewable supply is best demonstrated by Germany, which has operated in this way for 15 years. There, 80 per cent of renewable power is from small-scale sources and only 20 per cent from major infrastructure schemes. In contrast, in the UK 96 per cent of renewables is provided by the large power companies. This opportunity must not be frustrated by the planning regime of local authorities operating under the present severe financial restraint. The Minister can free up a huge surge in activity.
The feed-in tariff pays different rates to differing project scales and sources of supply, and, generally speaking, pays the correct amount to guarantee a return on investment of between 6 and 8 per cent. First, will the Minister ensure that this support is protected under any future review, that it extends well beyond 2013 and that it will not be subjected to meddling and cuts? Secondly, he is urgently required to review the regime regarding small-scale waste plants, particularly on farm anaerobic digestion schemes. Regrettably, although the price is correct for commercial operations, where plants receive income from waste from commercial sources such as restaurants, this rate is insufficient for on-farm waste plants, where no income is received from farm-generated waste. The industry does not want to wait until next spring. The potential for on-farm AD needs to be realised. Will the Minister say today that he will look immediately at the rate for on-farm AD and biomass, and introduce a higher 23.5p commercial rate?
The Government recently committed £1 billion for the green investment bank. This bank was a policy idea first raised by the previous Labour Administration and it is therefore one that we are happy, in principle, to see adopted. Is the Minister able to clarify the specifics of this policy? How does he see the functions of the green investment bank? Will it be able to raise money on the financial markets? Has the department made any forecasts of the total funding that will be available in each of the next five years, and what leverage will this have with the private sector? Our vision was to have the green bank supported by both public and private funding—a dynamic partnership to champion social and environmental change.
On the carbon reduction commitment, there is the bizarre situation where, if a company claims feed-in tariffs or renewable obligation certificates as a company for on-site renewables, it has to count these renewables as producing carbon in the same way as average grid-mix electricity. The shake-up to the CRC announced in the CSR means that the Treasury will keep all this revenue. If this rule is not changed, we will be in the position of the Treasury taking money from companies investing in renewables for carbon that they did not emit. The situation needs urgent attention as it is vital that the commercial sector also invests in renewables.
Under the Labour Administration, the department instigated a marine energy action plan to which industry contributed enthusiastically. Much valuable data and many useful suggestions were assembled within the four work streams of finance, infrastructure, planning and technology, but the impetus was lost during the general election. The department now faces the challenge of utilising that work with the new policies of the coalition Government, who state that they will introduce measures to encourage marine energy. In the July annual energy statement the department promised to consider how the development of marine energy parks around the British coast can help to support marine energy in the UK. Detailed proposals are expected by the end of the year. The UK cannot afford to lose its lead on marine. We need to see five renewable obligation certificates for wave and tide. Once again we need to catch up on lost momentum.
On the RTFO, we need the mandatory EU sustainability standards to be implemented as soon as possible for both renewable transport fuels and liquids for power generation. They should be implemented by the end of this year but the Government are waiting until 1 April. We would like to see good-quality biofuels, as the UK biofuel industry has risen superbly to the sustainability challenge and has, since the beginning of the scheme, been producing biofuels that perform acceptably well against the RTFO sustainability criteria. The reports from the Renewable Fuels Agency on the first two years of the RTFO 2008-10 show that UK biofuels have consistently delivered carbon savings of 70 per cent and more compared to fossil fuels, and have produced the highest sustainability scores of any biofuels sold in the UK.
Within my sub-region of Cheshire, there have been many projects that can be identified as examples of best practice. Envirolink Northwest is doing excellent work with smaller projects, both on farms and in businesses, supporting the installation of renewable energy technologies. This momentum is in serious danger of being lost with the abolition of the NWDA. It remains to be seen what resources and commitment will be given to the new area local enterprise partnerships. Once again, momentum is being lost. It is important not to take our foot off the accelerator. The department under the Labour Government made some real strides forward. It remains to be seen whether many of the projects and policies mentioned will come to fruition under the coalition Government. It is positive to see that the renewable heat incentive and plugged-in places funding survived the cuts, albeit in depleted form. I think that Envirolink would argue that grid connection and finance are the two real sticking points at the moment. For example, even with the arrival of feed-in tariffs for solar panels, for many people the up-front capital costs mean that they will remain prohibitively expensive. Our loss of the co-ordination role from the North West Development Agency is a real blow as there is no other organisation to take up effectively the mantle of sub-national climate change. The LEPs will struggle to really deliver a low-carbon agenda on the ground without any funding or co-ordination and support.
Developing renewable energies is an integral part of our fight against climate change. Notwithstanding the Government’s slogan of wanting to be the greenest Government ever, it remains behind Scotland’s challenge of 80 per cent renewables and behind the comparatively modest European target of 20 per cent renewables by 2020.
There is not enough urgency in the Government's policies compared with what was in train and proposed under the previous Labour Administration. They are missing a major injection of funding for infrastructure and research. One related planning policy that will undoubtedly impact the future of renewable energies in this country is the Government's plans for the Infrastructure Planning Commission. The commission is proposed to be replaced by the major infrastructure planning unit—a policy that we are anticipating to see in more detail when this House considers the decentralisation and localism Bill. Through this change the Government are promising to continue a fast-track approach to planning applications, for example for wind farms, while at the same time promising the public a greater opportunity for influencing these decisions. We look forward to seeing how they plan to reconcile these two competing parts of the process when the Bill reaches this House.