Energy Bill
Debate between Lord Grantchester and Lord Teverson
Lord Grantchester (Lab)
My Lords, this is the amendment that we discussed in Committee in July. On this side of the House, we have considerable sympathy and agreement with my noble friend’s amendment and the sentiments behind it. In Committee, the debate highlighted the achievements made by the previous Labour Government in initiating waste reduction plans; the progress made since the last election, with the setting up of the Courtauld agreement; and the developments made at EU level with the landfill directive, setting up targets to reduce the amount of biodegradable municipal waste entering landfill in 2020 to 35% of 1995 levels. The UK is on course to meet that target; there is an EU-wide review which should reveal that next year.
Over the past couple of years, the number of plants set up to produce energy from anaerobic digestion of waste has doubled to 110. The Minister spoke of encouraging this through feed-in tariffs and the renewable heat incentive, as well as the Green Investment Bank’s initiative, in her reply in July. My noble friend’s amendment is pushing at an open door; it is happening already, but as part of an industry and the EU-wide process rather than through adding it to the Bill.
In my response in July, I said that recycling organic waste for renewable energy generation is no substitute for eliminating the volume of food waste produced in the first place. Ten days ago, Tesco revealed that in the first six months of 2013 it generated 30,000 tonnes of food waste. Obviously, this figure revealed widespread differences between different foodstuffs. To reduce waste, it is important first to discover where that waste is taking place, so that action can be made more effective. Tesco added that, where possible, any food which could not be sold could also be donated to the charity sector, Foodshare and other food banks, or diverted to animal feed for livestock. This is also part of an effective answer.
While the Minister will be resistant to the amendment, it gives me the opportunity to ask her to commit the Government to certain helpful activities. Would she promise to report back to the House at regular intervals—I suggest twice annually—on actions that the Government are taking with the aim of reducing organic landfill waste, as well as undertaking to report back to Parliament immediately after the 2014 EU review is published, offering an updated strategy for reducing landfill of organic waste?
Lord Teverson
My Lords, I shall speak slightly out of order here, for which I apologise. I tabled a similar amendment in Committee, and I am very pleased that the noble Lord, Lord Judd, has brought this matter forward again.
This is not my noble friend the Minister’s area, or her department’s; it is very much a Defra area. Although I suspect that this Bill is not the best place to do this, I very much hope that Defra will take this area increasingly seriously and that the Government will find a way in which to move the agenda forward.
Energy Bill
Debate between Lord Grantchester and Lord Teverson
Lord Teverson
My Lords, I have a sense of déjà vu about this amendment. With every energy Bill in which I have been involved since I was honoured to become a Member of the House in 2006, I have tried something similar. Each time I refine it slightly more until I think that it is perfect, but of course perfection is no use if there is no application. However, we will see.
I thank the Minister for the support that the department has given geothermal energy recently. It has been slow and difficult but it is getting on to the agenda, particularly in terms of the industrial renewable heat initiative and the contracts-for-difference strike prices. It is starting to appear far more regularly than previously without prompting, which is very good. Geothermal is a technology that works and I will not take a long time describing it because I am sure that Members are all well aware of it. Globally, it is a very important source of energy for hot water, direct heating and electricity generation. As we mentioned in a previous sitting of this Grand Committee, there have been discussions between Britain and Iceland over the use of geothermal energy from that area.
However, it is a lot easier when hot water comes to the surface of its own accord, as it does in many parts of the world, such as New Zealand and Iceland. It is different when one has to drill down five kilometres, 10 kilometres and sometimes a very long way in order to circulate it and bring it up. In the UK, there are examples of shallow geothermal energy but not much deep geothermal energy yet. This technology is credible and possible. It is a source of renewable heat that has a small footprint and acts as a base load rather than being intermittent, which is why it can be particularly attractive. Again, there is a choice between hot water and heating or electricity generation.
Why is this amendment necessary? It is because this issue is a bit like the oil industry. There are noble Lords here who know far more about the petroleum industry than me. However, basically, when you have put a major investment into drilling, as soon as you make your strike on a viable geothermal hot water well, you do not want someone 100 yards along buying the plot next door, extracting the water and then leaving you with all the exploration costs and only half the benefit. That is why a credible regulation infrastructure includes having a licensing regime over a suitable area of land. I particularly emphasise that this does not of its own right mean that there would be planning permission or surface access. That would all have to be sorted out by the exploration companies.
This is a major area where Britain, particularly the south-west but other areas of the UK as well, could benefit by building up its renewable energy resources of heat and electricity. For that to move forward, we must have a licensing system. I do not believe that there will be a great cost to producing this. It has already happened in Ireland and other parts of the world. In the past, we have had positive discussions with Ministers about this but they have never got far—hence this amendment. In due course, I look forward to hearing the Government’s thinking on this from the Minister. In the mean time, I beg to move.
Lord Grantchester
My Lords, the noble Lord, Lord Teverson, is to be congratulated on his persistence in tabling amendments on geothermal energy. He correctly identifies the huge contribution that this could make to the UK’s energy mix. I think this may be the third time that he has come forward with his amendment. The last time was in February 2011 during Committee on the previous Energy Bill. At that time, the Government had just slashed the remaining £2 million of a £6 million allocation for research from Labour’s time in office by 50%—plus ça change. Also at the time, the then Energy Minister, the noble Lord, Lord Marland, explained that two ROCs already in place were available for geothermal, which his department deemed to be sufficient to bring forward investment. However, of course, he rightly identified that it is not the ROCs that are important but the regulations to maintain the returns for the investor. At that time, the Minister spoke positively about this power source while saying that DECC would continue to work on the complexities of introducing a licensing system. That was well over two years ago. Perhaps the Minister will update the Committee today on how those regulations are proceeding.
Renewable Heat Incentive Scheme (Amendment) (No. 2) Regulations 2013
Debate between Lord Grantchester and Lord Teverson(11 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Teverson
My Lords, I always find on these occasions that it is a great motivation to speak to a crowded House. I congratulate the Minister on her mastery of the subject. I did not even see her grasp for her water once, which is a tremendous start to the debate. I now understand the context of drying and cleaning. I could not quite work that out; I was thinking of washing machines, but it was clearly nothing to do with that.
This is a serious subject. As my noble friend said and as the Explanatory Memorandum sets out so well, heat is an important part of our energy usage in this country. It is an important part of decarbonising our energy requirements and meeting our 15% target by 2020. Starkly, as the Explanatory Memorandum says, we are now at something like 2% and we need to get that up to 12%. That is a big ask over the next few years and therefore I very much welcome this instrument.
There are bits of the regulations that I particularly like. One is the emphasis on air quality, which is really important in terms of solid biomass, and another is the flexibility that it gives to ensure that the scheme will be much more user-friendly than it is at the moment. The consultation showed that some of the metering requirements were difficult, and I congratulate the Government on taking that on board and trying to fix it in a very practical way. I shall come back to a couple of issues on that but, as I say, the air quality side is important as well. In my modest house I have two wood burners, and if the wind is in the wrong direction the air quality in my house is pretty bad with the solid biomass of the logs. However, that is not quite what this statutory instrument is about.
I wanted to ask the Minister about the domestic RHI but she has more or less answered that. I hope that the urgency on that continues because, apart from anything else, there has been a stalling of that industry in terms of waiting for the scheme to come along. It is very important to make sure that it starts now.
Coming back to the regulations and the Minister’s speech, she said that certain of these technologies have not met their potential with the RHI so far. What are those technologies? I particularly welcome deep geothermal technology as one of the things that the Government are starting to look at in terms of future moves on these schemes. That is excellent.
I should like to ask a question about Regulation 23. It refers to new Regulation 42A(3)(a), which states that,
“each length of piping which is 10 metres or less and situated outside a building is properly insulated”.
Although this document has technical depth, it says that the piping must be “properly insulated”, and we see that that is key when reading the document all the way through. I am surprised that there is not more of a specification there. I presume that there is an industrial definition of “properly insulated” but, to monitor and control the process, it would seem to be important to have a specification relating to the insulation. It is a term that I would like to understand.
When equipment is moved—again, I welcome this as part of the flexibility—does it have to be recertified or does it have so-called grandfather rights in its new situation?
My last question is on the impact. Paragraph 10.2 of the Explanatory Memorandum talks about air quality limits and states clearly that they will affect only people who are investing in the scheme. Does that mean that the air quality standards for an RHI installation are different from those for boilers otherwise—or are there air quality standards for these boilers otherwise? I should be very interested to understand whether there is a differentiation here and, if so, why, and how we move forward on that—or perhaps I have misread or misinterpreted that.
I am delighted to say that I have just completed a solar thermal installation on my house—at my own expense, obviously, as there is not a domestic RHI. I got it there just in time for the wonderful sunshine that we are having at the moment, and I am really enjoying free hot water. The more that British industry can do this, the better.
Lord Grantchester
I thank the Minister for her extensive introduction to the regulations. The RHI, launched in November 2011, is a key financial scheme focused on encouraging climate change mitigation and is especially relevant to off-grid businesses in rural areas which are dependent on heating oils.
On all sides of the House, renewable heat is recognised as an essential component of the UK’s long-term energy mix. In a debate on the order in the other place yesterday, the Minister there gave details regarding uptake of the scheme, which is very encouraging—indeed, the Minister here has mentioned some of those figures today.
However, I am concerned about the application of the degression system, whereby tariffs are reduced if one or other or both of two thresholds of expenditure are reached—namely, a technology-specific trigger where an imbalance in take-up between technologies occurs and a total trigger that puts an overall cap on spending. While I am not critical of there being an overall total trigger, I am nevertheless concerned that the total may be set rather low, and therefore I am concerned about its effect on applications. If, as of 1 June this year, a scheme payout to date of £13 million has resulted—as the Minister in the other place said yesterday and the noble Baroness has repeated here today—the degression system is already in action.
I am concerned that a tariff reduction of 5% at this early stage will discourage schemes coming forward. The Minister in the other place went on to say that £53.8 million is expected to be spent by this time next year. Will this result in further tariff reductions and does this total include the effect of degression? When an application is made under the scheme, when is it known at what level the tariff will be paid? While it is not specifically relevant to the regulations, it is nevertheless important to understand how the scheme has worked to date and how details of the degression payments are published in real time to applicants. Will the payment level be set at the time of an application and thereby not be affected by later uptake by further applicants?
The developments in the RHI that the Minister has outlined today are entirely to be welcomed. Meeting renewable energy targets should not come at the price of increased risks to public health or the environment. Several key outputs will be achieved. First, air quality will be protected through the introduction of emission limits for new biomass installations supported through the scheme. Secondly, the number of excessive, burdensome compliance requirements will be reduced, thereby increasing take-up; for example, by reducing the burdens associated with metering.
Thirdly, the relocation of accredited installations will be permitted, thereby allowing asset values to be maintained and the economic life of assets to be extended. The Explanatory Memorandum is commendable in its assessments, judging that the total resource cost increase will amount to about 8% over the lifetime of the policy, that additional testing and certification costs are likely to be largely immaterial and that Ofgem’s administrative costs be limited to 0.5% of total costs. Against this, the benefits are estimated to outweigh costs by the commendable margin of eight to one.
Renewables Obligation (Amendment) Order 2013
Debate between Lord Grantchester and Lord Teverson(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Grantchester
I thank the Minister for her comprehensive explanation of the order before the Committee. She has correctly identified it as the main financial policy mechanism for encouraging large-scale renewable electricity generation to put it on a sustainable footing as part of the UK energy mix. The order updates the band support levels, introduces new power sources and increases the importance of certain fuels such as biomass. I certainly support the order. A lot of what the noble Baroness has said is eminently sensible and can agreed by noble Lords all around the Committee. It will help to deliver the UK target of 15% from renewable generation by 2020. It will help UK energy security by reducing reliance on imported fossil fuels. It will assist in the conversion to cleaner generation and it will deliver on decarbonisation targets. It will also help to secure necessary capital and supply chain investment and, not least, it will help to deliver good value for money for consumers.
That said, the Government have presided over a rather disruptive process. There have been public disagreements between Ministers in the noble Baroness’s department and challenges with the Treasury. These do not engender the certainty that is so necessary to the industry if it is to invest with confidence. Uncertainties remain over elements of biomass and solar generation which will be subject to further separate consultation and orders. It is extremely damaging to the industry’s confidence if it experiences constant downward revisions of its support and to the targets of the renewable transport fuel obligation as well as the carbon reduction targets. Can the Minister confirm that the target under the renewables directive is safe? New renewables stations will be ineligible from 1 April 2017. This amending order increases generation per annum to 79 terawatt hours a year by 2017, as explained in the Explanatory Memorandum. However, the target for 2020 is 108 terawatt hours a year. By what measures is the Minister confident that the shortfall of 29 terawatt hours per year will be generated?
One of the key points of the order before us is that from 2014 onwards, support for large-scale renewable electricity will be through a new feed-in tariff with a contract for difference scheme, as proposed under the forthcoming Energy Bill. Does the Minister agree that there is a need for a smooth and well managed transition from the renewables obligation to the contracts for difference regime? If there is any delay for whatever reason, can she confirm that the RO scheme can be extended to give investors the certainty that projects which need longer timeframes have the necessary clarity in terms of levels of support that are needed for their investment?
In its examination of this order, the Secondary Legislation Scrutiny Committee noted that the lives of some existing coal-fired generating plants, which had been expected to close due to carbon emissions reduction targets, may be extended through support to convert to cleaner biomass generation. The committee asked for clarification on how the banded support would allow this to happen. In its reply, the Minister’s department pointed to Ofgem’s Electricity Capacity Assessment 2012, which identifies a tightening of generating margins from 15% this winter to 4% in 2016. While it makes sense to utilise existing stations and convert them, perhaps I may suggest to the Minister that not only may this delay decarbonisation targets, it will delay the necessary urgent investment in fit-for-purpose energy generation. Are the Government seeking the flexibility that will allow them to rely on coal as a back-up supply to help keep the lights on? Is that the more pressing reason, and will it comply with the industrial emissions directive, which replaces the large combustion plant directive with more stringent emissions limits, that is to come into force from 1 January 2016?
Having made that point, I note that both the Committee on Climate Change’s bioenergy review and DECC’s own energy strategy conclude that coal firing with biomass offers a cost-effective way to decarbonise existing coal-fired power stations. The Explanatory Memorandum is also correct to point to energy efficiency and demand reduction as important elements in the calculation of targets that renewable generation needs to fill. However, I do not see any figures in the Explanatory Memorandum to clarify that. Previously, I have asked the noble Baroness for her assessment of the success of the Green Deal and other measures to reduce demand. Is she now able to come forward and put any figures on these measures?
There is much in this order to consider and I welcome the support increase to five ROCs for both tidal stream and wave. That should help reduce the risks of not achieving decarbonisation targets. I welcome the section on rural-proofing within the context of the Government’s overall reforms of the planning system.
The final issue of importance concerns bioenergy crops. Quite rightly, there is anxiety over land use that may be taken away from food crops, and deforestation may also result. The use of palm oil has already been excluded from supply chains. Could the Minister clarify that her department’s bioenergy strategy has now taken account of the sustainability standards recommended in the RO recognition of the environmental assurance scheme’s requirements? To sum up, I support the order and would be grateful if the Minister could give reassurances on the points that I have raised.
Lord Teverson
My Lords, I must admit that when I saw this order on the Order Paper, got a copy of it from the Printed Paper Office and opened it, I thought it was my maths O-level paper all over again. It took me back I will not say how many years to that dreaded moment. I passed in the end but it was quite a struggle. The formulae in the order as I went through it got more and more complicated: E=MC2 was rather simple by comparison. I hope the people that have to interpret this have a lot more time and mathematical and computerised power than my brain normally does.
I thank my noble friend for going through the order and particularly for highlighting something very important to the south-west and my part of the world: the wave side. Yes, DECC and the Government have put that back up to five ROCs but what is important about this, which my noble friend did not mention, is that that has put it back on a par with what they pay in Scotland. We in the south-west can now compete with our northern brothers and sisters in terms of marine energy. I very much welcome that.
One of the particularly good things about this is that we are moving into a much more professionally and better managed transition in terms of ROC values. I know that ROCs are about to disappear anyway but we are able to make measured and predicted changes in the regime to keep investor confidence, yet knowing that we will have the mechanism to, we hope, keep these numbers within what I thought was a very good settlement in terms of the levy control framework between DECC and the Treasury. That was a good outcome. I hope this approach now means that we will not have that backwards and forwards in trying to second-guess in the short term, and that we have an environment where the investor community is able to put its money where its mouth is—and where our mouth is—in getting renewable capacity, and that that actually happens.
My main question is very much the same as that of the noble Lord, Lord Grantchester. We have a marvellous list here of all the technologies that there are in renewables, some of them which even I forget about. Some, like co-firing bioliquids sounds definitely like something I would not want to get involved in but there are some really interesting technologies there. A number of them are biomass-related and I would also be interested to know where the Government have got to in terms of these quite complicated supply-chain issues around sustainability. It is sometimes all too easy to condemn everything and to give excuses for things not to happen, rather than to bring them forward. However, sustainability is important, and I am very interested to hear my noble friend’s comments in response to my question and to that of Lord Grantchester.
Electricity and Gas (Energy Company Obligation) Order 2012
Debate between Lord Grantchester and Lord Teverson
Lord Teverson
My Lords, this is the first document that we have debated in the House that refers to the carbon-saving communities obligation. I want to welcome that because it plugs a hole. The Government have listened and put that in. It is important that that has happened.
I do not want to take over the Minister’s task, but I say to the noble Lord, Lord Reay, that energy efficiency is costly now, but we are paying the cost of the lousy house constructions of the 1950s, 1960s and 1970s. Someone has to pay for that, and unfortunately it has come to us, our generation, to do it. Is that the right thing to do? Absolutely everything that I have ever read, seen or had numbers on has said that energy efficiency is a far more cost-effective way of reducing energy demand or decarbonising than all the other technologies that we tend to talk about. It is completely obvious that it is better to save than to spend to save later. That is why the Green Deal and this area of the ECO are important.
The noble Lord, Lord Whitty, made a number of points on which I agree, and there are a lot of question marks about how things will roll out, but I get the impression from the Government’s mood changes, which are welcome, that the Green Deal is such a large, important, new and innovative programme that it is impossible to nail down all the details right away. We are going to have to go through a learning curve as we implement it. We obviously have to get a number of bits of it tied down, but I am sure that over the first one, two or three years, the programme will change in detail because some of it will not work and some of it will. That is why I welcome the fact that there is not a big-bang launch of the Green Deal but an introduction that tries to learn from the initial experience of rolling it out.
I know that this is a DCLG issue, but I should be interested if the Minister can tell us how the 2016 deadline on, effectively, zero-carbon houses is going. I know there are a number of challenges around achieving that, but I would dearly love to understand whether we are now approaching that optimistically so that in future we do not have the problem that we inherited from those post-war decades of bad house construction.
My list of specific questions for the Minister is even shorter than the list of the noble Lord, Lord Whitty. We want to get a lot of people out there to take advantage of the affordable warmth part of the energy company obligation. What plans do we have to make sure that those people are aware of this scheme and get it to work if they are not approached by their energy supplier? That is always a problem with these issues.
The noble Lord, Lord Whitty, made a point on the rented sector. I am not as pessimistic about the rented sector because the scheme is written with the debt applying to the meter, so there is every incentive for even a short-term tenant to get the Green Deal if they want because they do not have to pay it back later on if they move on in a few months’ time. It still requires them to be motivated to do it, to be told that they can and to be able to understand that. I would be interested to understand the Government’s point on that at the minute. This will require working with local authorities to roll this out street by street, neighbourhood by neighbourhood, and village by village.
Lastly, there is a small issue around warranties. The warranty conditions under the Green Deal are pretty good now. I would like to understand from the Minister whether we are going to have an equivalent warranty position on the affordable warmth programme.
Lord Grantchester
I thank the Minister for his explanation of the orders. From our side, we are pleased to continue our support for the Green Deal. Any demand-reduction and energy-efficiency improvements are vital for meeting greenhouse gas emissions targets, energy security and climate change mitigation. It has been reassuring that the coalition Government have continued along the pathway set by our previous Labour Administration, but it has been frustrating that progress has been slow at times. While recognising the imperative that measures must be fully budgeted, it has been frustrating that schemes have oscillated wildly, as happened with the feed-in tariffs fiasco, undermining confidence and jeopardising investment.
When readjusting payments in the future, it cannot be stressed enough that adjustments must be smooth and based on accurate and meaningful calculations. I begin with the energy company obligations—ECO. Since the passing of the Energy Act last year, it is recognised that there will necessarily be a period of consultation and drafting. It is recognised that the Government have responded positively, and the noble Lord, Lord Teverson, was correct to draw attention to this in his remarks.
The proposals strengthen key areas such as consumer protection, strengthen protections for lower-than-average energy users and those in rural areas, and adopt Labour’s proposals to include hard-to-treat cavity wall insulation. However, there is concern that following the Minister’s department’s downgrades the schemes will not achieve the targets necessary. The Government have been high on hyperbole and claims, to quote the Minister in the other place,
“to improve 14 million homes by 2020 and a further 12 million by 2030”.
Now that we have the final impact assessment, these claims can be assessed in detail. The actual figures are much less stunning.
The department’s figures for loft insulations suggest that they will fall from about 900,000 this year to just 150,000 next year, a decrease of some 80%. Cavity wall insulations will drop from 700,000 to 400,000 in 2013. Solid-wall insulations will remain the same as this year. These downgrades will have significant consequences for the industry, for the country’s ability to meet climate-change targets and, most importantly, for the many hard-pressed households struggling with everyday energy bills.
As to the Government’s consultations and dialogue with industry, there are several detailed points on which I will press the Minister. The industry has signalled that it is keen to work with government, and has made significant progress. My noble friend Lord Whitty has already spoken to points raised by the Combined Heat and Power Association on district heating. The ECO is intended to work in tandem with the Green Deal policy to enhance further the installation of cost-effective energy efficiency improvement measures, especially measures not fully financeable through the Green Deal alone—for example, through solid-wall insulations. A supplier may support a measure under the ECO. However, it is not clear what is the process under which the ECO may be triggered and join up with the Green Deal, and how the hierarchy of providers, assessors and the bill payers will have clarity of responsibility. Once again, my noble friend Lord Whitty has highlighted this issue, especially the difficulties of fuel poverty.
We are keen to see the Green Deal be a success. However, there are continual concerns raised as each proposal is announced. It is not only Labour that is raising concerns. A coalition of 16 organisations, including Consumer Focus, SSE and the WWF, recently issued a paper, which stated:
“The Green Deal and ECO, as they currently stand, are nowhere near sufficient to meet the challenge of eliminating fuel poverty and ensuring affordability for all”.
Low take-up will seriously impact the British installation industry. It has been claimed that the Green Deal will create 250,000 jobs. Now, in the impact assessment, the department has downgraded its estimates again. The Minister in the other place has put the figure at a mere 34,000 jobs created by 2050. Under the department’s worst-case scenario, only 12,000 jobs may be created by then. Every new job is to be celebrated at a time when the Government’s economic policies are making many people redundant or out of work. Does the Minister have an update today on how many jobs will be created by the Green Deal next year and up to 2015?
Groceries Code Adjudicator Bill [HL]
Debate between Lord Grantchester and Lord Teverson
Lord Grantchester
My Lords, the issue of proceeds of fines has become prominent since last year, when the Office of Fair Trading fined certain supermarkets for raising their prices in 2003 in response to a concerted push-up on prices from dairy suppliers through their processors. Dairy farmers were responding to very low returns. The supply chain was being receptive and wished to respond without disturbing the competitive status quo. The supermarkets wanted a sustainable supply chain but the Office of Fair Trading, with its primary concern focused on prices to the consumer, fined the supermarkets, with the proceeds going to the Exchequer. That took further resources out of the supply chain, which brought it great alarm, and many in the dairy industry thought that this was unfair and counterproductive.
I will not comment further, as I understand that this case may yet be unresolved. However, the proceeds of fines levied on supermarkets for anti-competitive behaviour in a supply chain can be seen, in many regards, as different from those for most other wrong-doing. The Consolidated Fund helps taxpayers, not consumers. The complainants insist on anonymity. Rather than take money out of the grocery trade, surely we could be more imaginative.
We have doubts about whether the Government ever intend the adjudicator to levy a fine. If, on reflection, the Government find their nerve and agree that the adjudicator’s powers need to have teeth, the industry may be looking at significant sums of money if the level of fines is to have some meaning to supermarkets with multi-million pound turnovers. The proportionality of fines to the offence should also be taken into account. Have the Government done any thinking on this? Our amendment offers scope to undertake more positive action.
In early February, the House debated the report of Sub-Committee D of the European Union Committee, Innovation in EU Agriculture. The report’s main conclusion was that the UK must show leadership within the EU in order to develop a strategic approach to food production. The CAP budget should be rebalanced to increase allocation to research and innovation. All sides of the House, including the Government, welcomed the report. We have a wonderful opportunity to increase innovation in our groceries supply chain with proceeds from fines. “Innovation” includes all aspects of development in farming and the supply chain, technological development, product development, and marketing. The amendment at this stage does not seek to name a specific recipient, but rather to seek agreement to this idea.
Much of the innovation in farming originates in the supply industries that provide farming inputs: genetics of crops and animals, plant protection, animal health products and treatments, plant and machinery, and a range of expert services for financial, technical, environmental and marketing purposes. The BBSRC—Biotechnology and Biological Sciences Research Council—and the Technology Strategy Board urgently need to reposition UK agriculture at the forefront of technological advance. As an alternative, we have the Agricultural and Horticultural Development Board, as well as sector centres of excellence such as the dairy innovation centre.
The noble Lord, Lord Knight, received only today a letter from the Minister, dated 29 May, following our debate at Second Reading. In the letter, which the noble Lord has shared with me, the Minister mentions where money should go. I quote:
“There is … a risk that if the funds were earmarked for funding groceries supply chain initiatives this could lead to lobbying or even litigation over who the most suitable recipient was”.
I am not sure whether we need at this stage to specify in the Bill where precisely the money should go—the area is surely sufficient. Could that not be included as an amendment to secondary legislation under Schedule 3? Other examples do not seem to have caused a problem. For example, the regional growth fund is quite able to make awards without challenge. We have mentioned this idea to stakeholders in the industry and have received encouragement to explore this option with the Minister.
The Groceries Supply Code of Practice was needed precisely because anti-competitive behaviour stifled innovation. What better way to promote innovation in the supply chain than by using the money raised in fines from such behaviour to undertake this work? It would be the best way to provide redress to suppliers, who must be assured of confidentiality if they are to come forward without fear of reprisal. It is a pro-growth measure; pro-supplier and pro-consumer: a win-win-win. I beg to move.
Lord Teverson
My Lords, I shall speak to my Amendment 49. There is an opportunity here, as the noble Lord, Lord Grantchester has said, to be a little more innovative. I have certainly put down one suggestion in my own amendment, though I am not saying that it is exactly the right way to go. At this stage, we are talking about the principle.
I know that the Government are often concerned about what they would see as creeping hypothecation, and that fines should generally go into the Consolidated Fund. However, I was interested to read the Statement today from my right honourable friend the Chancellor of the Exchequer about the Barclays crisis, where he stated that fines paid to the FSA are used to reduce the annual levy on other financial institutions. We have an example there of where such fines do not go into the Consolidated Fund, as pointed out very conveniently by the Chancellor. If anyone knows about these Treasury issues, it is probably him—we hope, at least.
The Chancellor goes on to say that he wants to change that, and that proceeds of fines should go back into the Consolidated Fund. The reason that he is iffy about that system is that the money goes back to the financial sector. Here, we are not suggesting that it should go back to the rest of the retail sector; we are suggesting it should go to the people whom this Bill is trying to protect and promote—that is, the supply chain. There is an opportunity here for innovation, for goodwill and for common sense. I do not think that it will be the end of the Treasury trying to meet its targets in reducing the public debt. It will not be that significant, but it will be important to the industry.
Offshore Chemicals (Amendment) Regulations 2011
Debate between Lord Grantchester and Lord Teverson(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Teverson
My Lords, I thank the Minister for his robust explanation of these regulations which are clearly important in terms of environmental sustainability in the north-east Atlantic area. I want to explore the Ospar agreement a little. It is very important to us and will be critical in carbon capture and storage, which I shall not go into this afternoon. I am interested to understand how we are doing this to comply with a decision by Ospar. Do decisions by contracting parties to Ospar have to be unanimous or are they by qualified majority voting? What incident brought to the attention of the Government the fact that the previous legislation was defective in some way? Listening to the Minister’s explanation, I was surprised that there has to be this difference between a discharge, and I have already forgotten what the other noun was, but never mind. Will the Minister confirm that other contracting parties to the Ospar agreement—the Explanatory Notes mention the harmonised mandatory control system—are fully complying with that decision, as we are attempting to do?
Lord Grantchester
I thank the Minister for introducing these offshore activities regulations. It is obviously eminently sensible that the pollution prevention and control regulations be updated to correct a deficiency, simplify and create more consistency across the two regimes and make compliance with regulatory requirements easier to understand. In addition, information-gathering powers have been strengthened so that information can be obtained from a wider range of persons in relation to a wider range of incidents capable of affecting the environment.
It must be correct that all unauthorised emissions—discharges and releases—are liable to enforcement action, including prosecution. It must also be correct to allow inspectors to require preventive action to stop spills occurring in the first place. When these regulations were debated in the other place on 1 March, the Minister gave the context of spills recorded over recent years. Between 2005 and 2009, chemical spills averaged 157 notifications per year, totalling 735 tonnes, none of which posed an environmental threat, with chemicals being defined in their broadest sense and including substances such as brine. Between 2005 and 2009, oil spills averaged 283 notifications per year, totalling 51 tonnes, 6 tonnes of which were crude oil, with the remainder being diesel and hydraulic fluid, none of which posed an environmental threat. The Minister added that if the chemical releases deficiency had not existed, another three incidents would have been liable to enforcement action, although it is tempting to ask whether the department can be sure that that is all there would have been if by the new definition a release was not then notifiable. Is the department confident that its knowledge of operations is exhaustive in this respect?
What does this figure of spills mean? Does it include only unauthorised emissions, or does it also include permit releases by agreement, which therefore do not result in an offence? If it is only the former, will the Minister give us the comparable figures on emissions that have occurred through permits? This will allow us to appreciate the balance between authorised discharges and unintended releases and the totality of all emissions. I also understand that permit applications are not granted where it is thought that operators should be able to operate without an emission. In other words, permits should not be applied for to cover possible discharges. Have there been such occasions? If a permit application was refused, has there subsequently been a release?
Will the Minister give us an understanding of how the enforcement agency—presumably the Environment Agency, but perhaps also the Health and Safety Executive—goes about its enforcement role? With the number of notifications of spills of chemicals and from the oil industry, not all spills would have resulted in a prosecution. In notification, what is the typical response? The numbers seem to suggest that this is a frequent, almost daily, occurrence. Does this lead to an element of complacency? Are these spills analysed to see whether action could be taken to reduce the amount? I am sure the industry is tireless in its pursuit of perfection, but an understanding of the interplay between the regulators and the relevant industries might be enlightening.
These regulations are brought forward with the recent events in the Gulf of Mexico fresh in our minds. We debated this situation on 16 December when the differences between the two regulatory regimes were explored and noted. The Minister rightly praised the UK industry for its high safety standards. In response to the gulf disaster, the industry set up the oil spill prevention and response advisory group, OSPRAG. Will the Minister update us on any developments that have occurred in its deliberations following various reports on the disaster by the congressional inquiries?
Renewables Obligation (Amendment) Order 2011
Debate between Lord Grantchester and Lord Teverson(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Teverson
My Lords, I do not think I will reply to the noble Lord, Lord Reay, but I agree with him profoundly that wind turbines are fantastic and are a great asset to much of the countryside for visitors to Cornwall. However, there are issues for those who live near them which we must recognise, although once they are there I do not think people notice them too much.
I want to concentrate on something completely different. I welcome the efforts by the Government and by the Minister to ensure that the issue of sustainability of biomass fuels is taken on board and is concentrated on. Two or three years ago, we found that biofuels in the transport area were the great salvation for decarbonising our economy but because of the many valid issues around food security and rising food prices, the substitution of fuels for food became a lot more contentious. Although I believe that biofuels are an important part of the future, they have to be seen to be sustainable, otherwise what is the point?
The importance of the order is that we get in front of the curve in this area and assure the public that, with the increasing use of biomass, they are sustainable. I have two wood-burning stoves in my house which I hope are sustainable; they appear to be and I am told they are, although they come from Somerset and are trucked down to Cornwall rather than produced locally. We have to be careful as the public perception of what is sustainable in regard to biomass, particularly wood, is not always what it should be. Strange as it may seem, sometimes it can make sense to bulk-ship wood in the right condition across oceans rather than cut down local forests. In terms of transport solutions to carbon production, that can sometimes be best. I am sure that that is taken into account but I welcome this order.
Lord Grantchester
Once again, I thank the Minister for introducing the renewables obligation order today. It is an extremely important order as the renewables obligation is crucial in driving forward the development of renewable electricity generation through various support mechanisms. We are in broad agreement with the order. The provisions concerning the phased development of offshore wind generation are sensible and build on Labour’s legacy in laying the foundations and ensuring that the ROCs cover the whole lifespan of a project.
The situation at Dogger Bank, where there may be some 2,000 turbines, requires phasing so that the early capacity can be rewarded while the later development can still qualify for the full 20-year payment period permitted to receive ROCs. As wind power is at the vanguard of renewable technologies, will we need similar orders to encourage investment in other technologies, such as wave and tidal generation?
This part of the order is to be welcomed. Set against wider electricity market reform, signals to facilitate cost-effective investment in all forms of low-carbon generation must be supported. It is a complex balance reviewing the roles that a carbon price, an emissions performance standard, a revised renewables obligation, feed-in tariffs, capacity mechanisms and other interventions should play in achieving our goals.
The challenge in the order today relates to the sustainability criteria for biomass and bioliquids. Deliberations between Defra and DECC will have been informative in assessing whether we have the balance right in defining the sustainability criteria. We must ensure that we do not produce negative adverse implications for land use management or for the transfer from food production into biofuels or biomass oil, and that must be the case both domestically in the UK and internationally. There are several options for the Minister to consider when looking at how to achieve that balance, and the question for the Committee to consider is whether we have that balance right.
The issue of cost efficiency is key and the provisions will not satisfy everybody. Some organisations will say that we must go much further and put sustainability criteria at a higher level. Of course, that will have implications, and not only for the UK. If all we do is transfer the problem to other EU nations, that will simply drive our greenhouse gas problems abroad. I hope that the Minister will elaborate a little on the representations that he has heard during the 12-week consultation both within DECC and in discussions with Defra Ministers and other organisations. Will he tell us who is broadly content with the proposals, who thinks that they should go further and who thinks they have gone too far? Who thinks that the burdens are too great? That will help us to decide whether we have the balance right.
The Minister said that this order will be subject to endorsement by the devolved Administrations. Will he illuminate the Committee about whether there have been any differences of opinion among the devolved Ministers in terms of input into the formulation of the sustainability criteria? Were the Welsh, Scottish or Northern Ireland departments in a different position? What was the nature of the discussions that have brought us to this point today, or was there broad consensus from the outset that the right balance was achieved between avoiding the imposition of undue burdens on businesses, the regulatory framework and delivering legally sourced, sustainable biomass and bioliquid crops?
Earlier, I mentioned marine and tidal power and asked whether a similar approach can be adopted. Paragraph 7.6 of the Explanatory Memorandum states how that could work. I can see the sense in that. The 50 kilowatt exemption is eminently sensible. We do not want to drive new or smaller investors from this potential market. It is right to exempt essentially domestic installations. However, in the intervening time, will the Minister also consult with those industries which are not directly involved in biomass generation and so on, and which have an interest in what happens with the ROCs regime and the development of this industry?
Energy Bill [HL]
Debate between Lord Grantchester and Lord Teverson(13 years, 11 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Grantchester
I thank the noble Baroness for seeking that extra clarification. In this clause we are assuming that in a situation where a tenant is holding out against the wishes of every other tenant in a block, he would be required to undertake the improvements as part of the Green Deal. The costs arising would not land on the local authority. The tenant that was proving to be the roadblock would be entered under the Green Deal and would make payments under that deal. I think that this provision is set out in Clause 37.
Lord Teverson
My Lords, I admit that I do not understand this amendment. I do not understand what it does. I thank the noble Lord, Lord Grantchester, for his explanation, but I do not see how it relates to multiple tenancies. I apologise and will leave it at that.
Baroness Northover
My Lords, I am very grateful to noble Lords for their amendments to Clause 39. Amendment 20AAA would give local authorities the power to carry out improvement works if the landlord defaults, and to recover all reasonable costs for undertaking work. We are not convinced that it is appropriate to grant such powers. Local authorities already have the power under the Housing Act 2004 to carry out works and recover costs in cases where there is an immediate and serious threat to health and safety. We are not convinced that any further power is appropriate or proportionate.
I will address the point about a tenant dissenting. Sitting tenants will not be forced to take on a Green Deal, and secondary legislation will set out how this affects landlords' obligations under any PRS regulations. I hope that the noble Lord will be happy to withdraw the amendment.