Energy Bill [HL]

Lord Grantchester Excerpts

Tuesday 12th April 2016 Lords Chamber

[Lord Grantchester (Lab)]

My Lords, I shall speak to Amendment 7AB, tabled in my name. The Energy Bill started in your Lordships’ House shortly after the generally unexpected Conservative majority in the general election last year. It focuses primarily on the setting-up of the Oil and Gas Authority. Into the Bill, the new Conservative Government thrust two new clauses on onshore wind, closing down early, to a date of 18 June, the renewables obligation. Hurriedly, the Government agreed to consider exceptions, as grace periods, to allow schemes to complete as they had travelled a long way through the development stage, in good faith and at considerable cost.

While understanding that the Government have to draw a new line somewhere to give effect to this measure, your Lordships’ House was not content that sufficient logic had been applied and passed the Bill to the Commons with these two clauses omitted from it. These clauses now return to your Lordships’ House but without material amendment having being made in the Commons to these grace period proposals.

Amendment 7AB proposes a logical, consistent, clear, honest and fair extension to the exceptions agreed by the Government. The wider onshore wind industry has come to a consensus and supports this single, narrow extension to the existing renewables grace period criteria. The proposed change is for projects that have achieved democratic local consent for their development at a planning committee on or before 18 June 2015 but received Section 75 in Scotland and Section 106 in England and Wales agreement after that date. At present they are excluded.

This cannot be said to be against Conservative Party policy. It is widely considered that a decision made by a democratically elected local planning committee embodies the principle of giving local people the final say. To deny this extension is to deny and prevent local people having the final say on wind farm applications.

The publication of a resolution to grant permission is considered by both developers and local authorities to be a procedural step and that planning permission is to follow—in effect, agreement is all but made. The industry is not aware of any commercial project that received local community consent at planning committee and was not awarded a written decision because of a failure to complete a Section 75/106 agreement. Continuing to proceed on the basis that planning consent is secured, developers have greater sunk costs at this stage. Formal notice is expected because a resolution by a planning committee is a real and substantial commitment.

The lack of logic in the Government’s position arises from the concession they have granted to projects refused permission at 18 June but subsequently agreed on appeal. Projects refused on 18 June, although overturned, can qualify, whereas agreements resolved on 18 June and subsequently fulfilled cannot. This is a bizarre interpretation. The legal advice that the industry has received categorically states that there is as much “legal right” to a planning permission resolved at local level as there is to a permission subsequently granted on appeal following a refusal by a planning committee. As I have said, the Government are content to allow these successful appeals to proceed.

Grace period concessions for anomalies and complexities around the criteria should allow for projects which have local consent but missed the cut-off date due to the time needed for a planning authority to complete a Section 75/106 agreement and issue a decision notice. It would comply with Conservative policy that locally approved wind farms be enabled to go ahead.

To allow this concession will not open—I will not say floodgates—a gale of projects coming forward. I understand the industry has put forward a list of projects that received resolution for approval but where formal permission was issued after 18 June. The list totals seven projects—six in Scotland and one in England. This totals just under 90 megawatts. To put this into context, 90 megawatts would power 50,000 households—a mere fifth of 1% of more than 26 million households and about 1% of the present onshore wind capacity of over 8,500 megawatts. Surely the Minister cannot contend this to be a major concession.

As to the amendments tabled by the noble and learned Lord, Lord Wallace of Tankerness, he has worked tirelessly on trying to get a fair outcome for projects started in good faith by people who have committed substantial time and assets to bring forward onshore wind developments—which, after all, will be the least-cost technology providing low-carbon power. He has worked extensively, engaging with industry and the Government, to get a resolution that does the decent thing by these developers.

This measure closing down the renewable obligation has been one of the many taken by this Government that has done severe damage to investor confidence and led to a Commons departmental committee issuing a report on investor confidence in the UK energy sector.

I do not doubt that the amendments the noble and learned Lord has tabled are thought through with good intentions. However, I have targeted this side of the House’s focus specifically on the very minimum that could be considered reasonable, given that onshore wind developments are likely to be coming to an end in any case. His Amendment 7X, in part, supports my case. Yes, we want to be fair where we can, considering that the provision can be said to be in the Conservative Party manifesto, and the Commons has expressed its decision. We ask the Government to think again on the small measure I propose, at the very least, and show some consistency

I thank my noble friend Lord Hain for bringing this situation and his amendment to the attention of the House today. It allows me to underline just how destructive the Government’s arbitrary cut-off date of projects has been. A great amount of uncertainty now exists throughout the renewables sector and I urge the Minister and his department to open a dialogue with their Welsh counterparts to resolve this anomaly as quickly as possible.

I turn now to the amendments in the name of my noble friend Lord Foulkes of Cumnock and supported by my noble friend Lady Liddell and others. My noble friend’s Amendment 7Y, in part, also supports the case that I have made. Unfortunately, he includes other provisions that go beyond the small, narrow extension to the Government’s concessions. The fact that six of the seven projects arising from this extension are in Scotland shows the importance of wind power for jobs and enterprise there. He has identified the effect on schemes locally in Scotland in his remarks. It is unfortunate that the Government have brought back the renewables obligation scheme to be solely under the reserve of the Westminster Parliament by withdrawing it from being a devolved matter.

From the amendments that have come forward, I consider it reasonable to press ahead with the amendments that I propose.

[Lord Bourne of Aberystwyth]

My Lords, we have had a wide-ranging debate on the opposition amendments which I shall try to cover in my response. I shall take the speeches in the order in which they were made.

I acknowledge the great efforts that have been made by the noble and learned Lord, Lord Wallace, the noble Lords, Lord Foulkes, Lord Grantchester and Lord Hain, and the noble Earl, Lord Lindsay, and I thank them for their comprehensive suggestions and the detailed drafting of the amendments. I also thank them for their hard work and forensic skill—particularly that of the noble and learned Lord, Lord Wallace—in putting them forward.

I understand the points that are being made. There is, by and large, a doctrinal difference in attitudes to onshore wind between the Opposition and the Government. Hence it was in our manifesto and not in those of other parties. That should be our starting point.

I should make one thing clear that I hope I do not need to make clear. There were many references to my right honourable friend the Secretary of State for Scotland and projects being in his constituency and I hope no one was suggesting that there should be special treatment in that regard. Let me make it clear that there will not be—nor would the right honourable member for Dumfriesshire, Clydesdale and Tweeddale expect such.

I thank the noble Lord, Lord Foulkes, for his unusual, unprecedented and almost unique accolades. We go back a long way on devolution and, as he knows, I have the greatest respect for him. I am about to damage him with his Benches in the same way as he damaged me with mine but I thank him for his contribution. I contest the point he is making about these being mere technicalities—they are much more than that.

As noble Lords will appreciate, I cannot respond to all of the detailed projects because I do not have knowledge of every single one. Of those I do, I will endeavour to say what I can on them, but I cannot specifically carry the knowledge of where we are on them all. I certainly would encourage noble Lords and the developers to be in touch with the department because officials are keen to engage, to be helpful, and to give clarity in relation to these different projects.

I pay tribute to the noble Lord, who I know makes great efforts on behalf of his part of Scotland and the area he used to represent, and he has put forward a powerful case. I shall pick up on a point made by the noble Baroness, Lady Quin, and say that of course there would be an impact on deployment. Obviously if we alter the law it will not be just in relation to Scotland, it will apply to the whole of the country. It will not be laser-like on a particular area, so it will increase deployment, as the noble Lord, Lord Grantchester, indicated in his remarks. His figure was higher than that suggested by my noble friend Lord Lindsay. Further, as has been indicated, we have undertaken extensive consultation.

I turn to the points made by the noble Lord, Lord Hain, and I thank him very much indeed for making me aware of what he was going to say in relation to Llynfi Afan in the Afan Valley and the Gamesa project there. As he knows, DECC officials have already been engaged with the developer and they are happy to continue to do that. I am also certainly happy to write to Gamesa, as he indicated. From what I gather, this is not a difficulty with the Welsh Government, as has just been suggested. I do not think that that is the case at all. This project has planning permission so we will certainly take a close look at it and clarify the position. If I can help in that regard, of course I will.

I turn to the points made by the noble and learned Lord, Lord Hardie, on the issue of the grid and radar delay as set out in the letter that we sent to him. If I can, I will get officials to contact him again in case there is a lack of clarity on that or if there is an ambiguity; I do not think there is. I know that it is an issue that matters to other noble Lords as well.

I turn to the noble and learned Lord, Lord Wallace, who raised many points with forensic skill, as he does. As he has been around the legal block a bit he will know that cut-off dates are always a problem. It can be suggested that they are capricious or arbitrary, but virtually all legislation has cut-off points in it, and there will always be someone on the other side of them who you wish you could help. But in reality a cut-off point has to be set, and that is what we have done. I can understand that it does not appeal to some people, but of course it is arbitrary only in the sense that any date is arbitrary, so even if we moved in the way he has suggested, there would be other projects that would fall just the other side of the line.

I think that the noble and learned Lord’s ultimate conclusion was that there is no hybridity in this Bill. If that was his conclusion, I agree with him; this is not an issue about hybridity. Scottish developers are subject to Scottish planning law and those in England and Wales are subject to English and Welsh planning law. It is not unusual for differences in law to arise on either side of the border these days, and indeed it is now happening more and more in relation to Wales as well, producing different practical results. I do not think that that causes hybridity unless a specific private interest is affected, but I do not see that being the case here. So, with regret, I do not think that I can move on any of the points he has raised. We have made our position very clear.

Perhaps I may just say in response to some of the matters that have been brought up in relation to Scotland—I understand the particular interest in Scotland because of the massive deployment there; it has benefited massively, there is no doubt about that—that it was not a significant issue in the House of Commons. I did not think it was and so I double-checked it. That is not to say that it is not a matter that needs to be addressed, but it is interesting to note that it did not seem to be a massive issue in another place.

The noble Baroness, Lady Worthington, set out a position in relation to CFDs and the Scottish Government. We have set the rules for CFDs and we have said that they will not be considered for the round of CFDs in this year, but I am very willing to ensure that we engage with the Scottish Government, as we do on energy issues, to see if there is anything that we can do in relation to future CFD rounds. I will take that away and look at it.

The noble and learned Lord, Lord Wallace, raised an issue about what he saw as the improved clarity set out in the letter that I sent to him. That is the correct position, and we will ensure that the letter is circulated to noble Lords who have participated in the debate and we will make use of it too if it is helpful to developers, as indeed we do. The correct position is set out in it, so I will be happy to do that.

The noble Lord, Lord Grantchester, spoke kindly about our unexpected election victory as he saw it, and he also said quite rightly, for which I thank him, that one has to draw the line somewhere. That is a very realistic position. We can take different views as to where the line should be drawn. He talked about democratic control, but I would make the point that this does not stop wind farms deploying onshore, it ends the subsidy. People need to grasp that. The position is that we do not want to carry on subsidising where there is no continued need for subsidy. That is the basis on which we are moving and one of the prime reasons for this provision.

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Moved by

[Lord Grantchester]

7AB: Line 179, at end insert “, or
(e) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18 June 2015 for the station or for additional capacity,
(ii) a grant of planning permission was resolved by the relevant planning authority on or before 18 June 2015,
(iii) planning permission was granted after 18 June 2015, and
(iv) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”

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Moved by

[Lord Grantchester]

As an amendment to the Motion that this House do agree with the Commons in their Amendment 9, at end insert “, and do propose Amendments 9A to 9D in lieu of the words so left out of the Bill”.

9A: Clause 80, insert the following new Clause—
Review of calculation of net UK carbon account
(1) The Secretary of State must carry out a review of whether it is appropriate for the calculation of the net UK carbon account for the 2028—2032 budgetary period, and subsequent budgetary periods, to take into account the crediting and debiting of carbon units as a result of the operation of—
(a) the European Union Emissions Trading Scheme, or
(b) any amendment of, or replacement for, that scheme that the Secretary of State considers may have effect for the budgetary periods to which the review relates.
(2) When carrying out the review the Secretary of State must take into account—
(a) any representations made by the other national authorities,
(b) scientific knowledge about climate change,
(c) technology relevant to climate change,
(d) economic circumstances,
(e) fiscal circumstances,
(f) social circumstances,
(g) energy policy, and
(h) circumstances at European and international level.
(3) Nothing in subsection (2) is to be read as restricting the matters that the Secretary of State may take into account.
(4) The review must be published, in such manner as the Secretary of State considers appropriate, no later than 31 December 2016.
(5) In this section “European Union Emissions Trading Scheme” means the scheme established under Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, as implemented by the Greenhouse Gas Emissions Trading Scheme Regulations 2012 (S.I. 2012/3038).
(6) Expressions used in this section and in Part 1 of the Climate Change Act 2008 have the same meanings as in that Part.”

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9D: Page 48, line 13, leave out “subsection (2)” and insert “subsections (2) and (2A)”

[Lord Grantchester]

My Lords, I will speak to Amendments 9A to 9D in my name, regarding the UK carbon account. A clause on carbon accounting was added to the Bill under consideration in your Lordships’ House before passing to the other place. This was reversed and the clause deleted by votes on Report in the other place. I had thought to retable the amendment on the Bill’s return to your Lordship’s House. However, in view of the fact that this would have been opposed by the Government, consideration has been given to how best to present this long-term issue so that a serious assessment would be made of it.

There is no doubt that climate change is the single most important long-term threat to be faced across the world. Its importance, and the need to get positive responses from the world’s governments, was highlighted at the Paris conference. Yet there is a weakness in the way carbon budgets are assessed and, therefore, how measures to combat climate change will be implemented. If the UK is to continue to be at the forefront of global efforts to reduce greenhouse gas emissions, the UK needs carbon budgets that are clear and certain and which drive emissions reductions in all sectors of the economy. At present, they do not meet this standard, as they can be misleading about what emissions are covered. They impose targets in the traded sector of the EU emissions trading scheme, which mean very little, and in the non-traded sector, which are subject to arbitrary change.

In June this year, the Government must set the UK’s fifth carbon budget for emissions for the years 2028 to 2032. These proposed new clauses ask the Government to commit to a review to reassess the accounting rules and to critically examine the issue, especially as the Committee on Climate Change has commented that it will provide new advice on the appropriate level of the fifth carbon budget should the rules be changed to take account of the improvements which Labour has proposed.

Currently, the carbon accounting regulations allow the Government to ignore emissions from the electricity sector and heavy industry, which are covered by the EU ETS, while determining whether the carbon budgets have been met. This makes the Government responsible for only half the carbon budgets: those residual parts not under the scope of the EU ETS, such as transport and heat. The Committee on Climate Change has expressed its dissatisfaction with the current accounting rules. The UK’s carbon budgets fail to provide a framework that offers investors confidence in the UK power sector that the necessary measures to decarbonise will be put in place.

The amendment proposes that the Government now seriously undertake their own assessment and report back by the end of this year. It is drafted to bring forward views that need to be taken into account from as wide an audience as possible.

Finally, Amendment 12A is consequential and merely amends the Long Title to include this in the provisions of the Bill. I beg to move.

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[Lord Bourne of Aberystwyth]

It is perfectly in order for me to have discussions with other Members. I have indicated that there is some sympathy for looking at the accounting principles—but not, as I indicated in my speech, at this time. I have indicated that the timetable is unrealistic. I hope that in the future we can look at these issues, but the Government do not feel it is timely to do it in the way suggested. That is something that has been shared with other Members: there is no great secrecy about that.

[Lord Grantchester]

I thank all noble Lords who have spoken this afternoon and thank the Minister for the considered way he has responded to issues. On reflection, following the wider debate, I conclude it would be best to press the Government more strongly to be more certain about the outcome of the review. I will therefore not press the amendment in my name, but instead support the amendment in the name of my noble friend Lady Worthington. She is a recognised expert on climate change and a very forceful advocate that the UK must take strong, decisive action to reduce emissions to mitigate its effects.

Lord Grantchester’s Amendment withdrawn.