Energy Bill [HL]

Lord Grantchester Excerpts

Monday 14th September 2015 Lords Chamber

Moved by

[Lord Grantchester]

35: After Clause 60, insert the following new Clause—
“Renewable and other technologies
Within six months of the passing of this Act, the Secretary of State shall publish an assessment of the progress towards decarbonisation of energy supply, including a strategy for the development of renewables and a strategy for energy efficiency within the supply system.”

[Lord Grantchester (Lab)]

My Lords, I rise to propose Amendment 35 and declare an interest, in that I am undertaking a planning application with regards to solar technology.

The Energy Bill is largely focused on securing the value of energy supplies of oil and gas in the North Sea through the creation and operation of the Oil and Gas Authority. It is encouraging and positive. In contrast, the final two clauses bolted on to the Bill do the exact opposite. They seek to bring onshore wind to an early closure, dismantling the least costly form of renewables technology. They undermine investor confidence, as others have stated already tonight and as Ernst & Young reports in its research. They raise alarm bells throughout the renewables sector. These clauses raise wider questions and concerns regarding how wind power, and indeed other renewables, will feature and impact on an overall energy strategy.

Just recently, the Minister’s department issued a further consultation on the feed-in tariff regime for solar power. All this is against the back-cloth of the European Commission’s report in June, which highlighted that the UK is falling behind the trajectory necessary to achieve the UK’s national renewable energy targets, which are so necessary to achieve substantial decarbonisation of the energy supply.

On transport, the aim is for 10% to come from renewable sources by 2020. At present, the UK is at only 3.5%. On heat, the target is for 15% to come from renewables; at present, the figure is only 4.9%. While the electricity sector may presently be on track, there are misgivings that its renewables element will continue slowly to fall following this Bill. Quite simply, this Bill is moving in the wrong direction on both fossil fuels and renewables. It facilitates recovery of oil and gas for generation while reducing support for one form of renewable energy, onshore wind, making more difficult the installation of the cheapest form of renewable energy. This legislation will increase consumer bills.

The help for operators recovering oil and gas in the North Sea is said to include substantial tax breaks. Can the Minister confirm that private contracts between operators and HMRC are being drawn up and include offsetting decommissioning costs against previous tax payments? That is a worrying development set against reduced support for wind renewable technology.

The amendment would require the Government to give an account of how their carbon reduction programme is progressing. They must set out the pathway to achieve the 2020 targets for carbon reduction, for renewables use and for energy efficiency—the so-called 20-20-20 strategy. Discussions are continuing on the EU target for 2030, which is to be set out in Paris at the end of the year. Discussions are focused on a single target for 2030 rather than on several targets. While this is recognised, we nevertheless need to understand that strategies will still be required to meet the overall reduction in a co-ordinated way through carbon reductions in supply, heat and transport and efficiency. While the Government may claim that they can meet their 2020 target, they are certainly unco-ordinated and unclear about what happens beyond that.

The impact of recent government decisions is to reduce support for renewables—onshore wind in this Bill; solar in changed arrangements for that sector—while making it easier to use North Sea oil and gas and easier for fracking ventures. The direction of energy policy in relation to energy decarbonisation is further shown through measures on onshore shale gas and oil, giving rise to considerable doubts about the Government’s overall intentions. This is aggravated by the reported delays in bringing new nuclear power capacity into the system, given the problems at Hinkley Point with EDF. Of considerable concern is the position in relation to state aid. Existing clearance was predicated on the basis of technology-neutral auctions. As the Government no longer appear neutral, is this in jeopardy? Can the Minister confirm that DG Competition, in the Commission, could re-examine their judgment?

All this raises doubts about the trajectory of decarbonised electricity. It is therefore important that as early as possible in this Parliament, the Government make clear their decarbonisation strategy and how far it is working. Let us see their analysis and how they can be so confident that the targets will be met, while they tie the hands of very successful aspects of the renewable energy industry. This amendment would require the Government to produce for Parliament an assessment of their strategy and progress towards decarbonisation of electricity supply. The report should include the Government’s assessment, first, of the expected contribution from renewables and, secondly, of measures designed to improve the overall energy efficiency of the electricity supply, reducing demands for carbon in this manner.

Such an assessment should also cover the broader aspects of energy efficiency—commitments notably absent from this Bill and from government pronouncements since the election. I accept that this is beyond the scope of the Bill and, hence, it is not referred to in the amendment; I therefore refer explicitly only to energy efficiency within the supply system. Energy, and hence carbon, is wasted at each stage: in generation, transmission, distribution and use. In reality, to be comprehensive, such an assessment would also look among other things at the contribution of both nuclear power and demand reduction and redistribution technologies, but this amendment confines itself to those aspects covered by the remit of the Bill.

The objective of the amendment is that Parliament receive a report within six months of the passing of the Act, which will enable us to assess the progress of and plans for decarbonisation of the electricity supply in a holistic manner. If the Government are not prepared to accept the amendment, I would expect them to tell the Climate Change Committee how they propose to report to Parliament about the impact of the Bill and other policy changes on the difficult aim of decarbonising electricity supply. I beg to move.

--- Later in debate ---

[Lord Grantchester]

My Lords, I thank the Minister for that reply and for being keen to hear about our policies. I was questioning only whether state aid issues could be re-examined by the commission if the UK appeared to divert from its stated neutrality towards renewable technologies. I am heartened by his reply, notably that the Committee on Climate Change will press forward with its annual reports to which the Government are mandated to reply. On that basis, I beg leave to withdraw the amendment

Amendment 35 withdrawn.