Renewable Energy: Generation Licences

Lord Kamall Excerpts

Tuesday 13th December 2022 Lords Chamber

[Lord Callanan (Con)]

There are of course no subsidies given to fossil fuel generation. In fact, it is the opposite: they are paying into the system record levels of taxation. This is a gradual transition. To all those who want to get rid of fossil fuels, I say great, but 80% of our heating is gas heating at the moment; are we going to turn off people’s gas boilers overnight? I suspect that the answer to the noble Baroness’s question is no. Of course we want to roll out renewable generation, which is what we are doing, but it is intermittent, as the question from my noble friend Lord Forsyth intimated earlier. We need back-up generation for that; that could take a number of different forms, and nuclear is one of the possible options. In the short term, as we move to a more renewable system, we will need fossil fuel generation.

[Lord Kamall (Con)]

My Lords, I want to ask my noble friend the Minister about the long-term thinking in the department. Looking at the developments in technology, particularly in storage capacity and micro- generation, might there be a day when there really is no incentive for people to feed into a grid, and they can generate all their energy locally? What sort of long- term thinking has there been on the impact on the grid of more local generation and storage?

[Lord Callanan (Con)]

My noble friend makes an important point. There will be, and has been, an increasing amount of microgeneration. I am told by the suppliers that there are record demands at the moment for things such as solar panels and PV generation, as people respond to high electricity costs. Many people will want to install systems that will save them money in the long term. Of course, the higher electricity prices are, then the pay-back period for microgeneration schemes becomes less and less. It comes down to the question that was asked earlier about the reconfiguration of the grid. There would be much more small-scale generation rather than the big node operators that we are used to. A considerable investment is going into the grid to bring that about. We also have schemes such as smart metres; 50% of the country is now connected to a smart meter, and they enable better charging regimes, demand-management schemes, et cetera, all of which will contribute to what the noble Lord suggests.