Energy Bill

Lord Teverson Excerpts

Monday 28th October 2013 Lords Chamber

[The Lord Bishop of London]

My Lords, biblical studies teach me that when you have two amendments that look as much alike as my amendment and that of the noble Lord, Lord Grantchester, you must look for an Ur-text. Indeed, there is an Ur-text, as we all know, and the figures in my amendment are simply the latest figures available from the Government. This is intended to be a constructive and supportive amendment, which also reflects the concern mentioned by the noble Lord, Lord Roper, about the sole emphasis on the capacity market not really catching the full subject here.

According to the Secretary of State in his own foreword to the response to the consultation, which was published in May of this year, a 9% reduction in overall demand could save electricity equivalent to the output of four power stations in one year. I do not want to pose as an expert, of which there are many in this House, but I have been trying in my own diocese of London to improve energy efficiency. I have taken a keen personal interest in the various efforts and our churches have actually achieved a 22% saving in energy consumption between 2005 and 2011.

I represent the voice of the consumer—a rather small consumer. Nationally, through the environment campaign of the Church of England, which I chair, we have invested in a mixture of retrofit measures to address the heating and lighting of a stock of buildings that were not originally built with energy efficiency in mind. Renewable technology and behavioural change have helped an institution such as ours, which emits as much carbon as a large supermarket chain, to use energy more efficiently while maintaining open buildings at the heart of the local community countrywide. I am particularly proud of the fact that our new vicarage at St John’s, Wembley, was awarded the highest score ever under the code for sustainable homes at the 2012 awards.

We are not great experts on the general theme but we represent people who are seriously anxious to support the government policy and to operate in the most efficient way possible. We have learnt from colleagues in other European countries. In Sweden, which faces greater climatic challenges, the building code for new constructions has been strengthened; smart meters have been installed in almost all households—I understand that this is proposed for the UK but not yet implemented; public funding for research and innovation has been increased; and a new incentive programme has been launched.

Of course, these and other ideas were set out in the 2012 consultation, and the Green Deal is addressing the fact that in developed western countries the built environment uses half of all energy and generates half of all greenhouse gases, and there is very substantial wastage through walls, et cetera. But even the chief executive of the Green Deal Finance Company, Mark Bayley, has admitted that complexity is one reason why the take-up has been so disappointing. Many of those in fuel poverty, a substantial percentage of whom live in London, pay inflated prices through meters in their homes, and the current position whereby the more energy you use, the more likely it is that the tariff will be reduced, is surely unsustainable as well as unfair. This Bill, which I heartily support in the main, provides an opportunity to reflect on the wider costs of our energy habits and how to make the best use of our resources without penalising the poorest in our society. In the UK 6.5% of households say that they cannot keep their homes warm, as against 1.5% in Sweden. The figures for children living in fuel poverty, at 1.6 million, are especially alarming.

The amendment relies on the Government’s own latest estimates of the potential for demand reduction. It would seem obvious that a strategy setting out cost-effective policy options that go beyond what is currently being proposed by the Government should be published to show how these reductions can be achieved.

[Lord Teverson (LD)]

My Lords, I will speak briefly on Amendments 50 and 51. My heart is with them completely, and I congratulate the right reverend Prelate on his award. I am sometimes involved in green awards and energy efficiency—an area that has often been left out of these debates—and it is great to have someone who has been a recipient of one of those.

The difficulty with these two amendments is that they target a specific reduction in electricity. Coming back to the decarbonisation debate that we had earlier on today, better decarbonisation can, of course, actually be achieved by having an increase in electricity. One of the big challenges of decarbonisation is moving the transport sector from fossil fuels either into biofuels or, particularly, into electricity, using electric vehicles. We also eventually want to move home heating from gas into electric—non-carbon-generated electricity. It therefore makes it very difficult in these areas to have targets on terawatt-hours or proportions or whatever; you have to take it back to exactly what the right revered Prelate said, which is energy efficiency. I am a great advocate of the green deal, and it certainly has its issues at the moment and I hope it succeeds, though perhaps it needs a number of changes to do that. At the end of the day, however, the real thing we have to do is just to go out there and, perhaps rather brutally—whether it is street by street or village by village—ensure that we upgrade domestic and industrial premises so that they are energy efficient. Going down the route of specific electricity-target reductions could actually work against decarbonisation and the way in which we are trying to reduce carbon emissions in this country. I am absolutely with the intent, but I think the method in this case has great difficulty.

[Lord Berkeley]

My Lords, the noble Lord, Lord Teverson, has some very good points there. If, as I do quite often, you go around properties in different parts of the continent, you find that the energy usage and consumption and insulation are generally a lot better than many of our buildings here. I have a feeling, having talked to a few people in the building trade, that it is because the standards to which we build our properties actually require less insulation and draught-proofing than those of many other countries. It may be because we think that the temperature is always the same here, so it does not really matter.

Another problem that we have to sort out soon is the greater use of air conditioning in buildings, because in some countries—I do not think it is the case here—the current use of energy for air conditioning is a great deal more than that for heating. It is possible to design buildings which need much less air conditioning. Noble Lords will have seen them in the architectural press at some time. I do not know why we do not encourage more of this in this country; it has been an issue for years.

However, I am still not convinced that the energy suppliers have any incentive to sell less electricity or gas. It is a bit like the water companies: they love having leakages and no meters, because they sell more water and seem to think that is a good idea in places or times where there is a shortage. We are stuck with some perverse incentives. I agree that these are probably not the right amendments to achieve what we want, but it is something that we need to do to get the incentives, insulation and building regulations right, and look at the air conditioning and the design of our buildings so that they are fit for purpose in the time of global warming, as we debated earlier.

--- Later in debate ---

[Baroness Parminter (LD)]

My Lords, this is the same amendment I moved in Committee, where I spoke of the benefits of greater interconnection across Europe. Given the lateness of the hour and the unanimity around the Committee at that time, I do not intend to repeat those arguments, but it is important to remember that if we are to deliver that greater level of interconnection we are going to need more investment in infrastructure. That means that the Government need to make quite clear their commitment to prioritising interconnection in the same way that they have with the capacity market and demand side reduction measures in this Bill.

I was grateful for the warm words from the Minister about the Government’s commitment to interconnection when I moved this amendment in Committee, as I said at the time. Therefore, I hope this evening that over the summer, those warm words have translated into a rather firmer commitment to action.

[Lord Teverson]

My Lords, I want to reinforce the comments of my noble friend Lady Parminter. One of the great challenges of the electricity supply industry is to de-peak its supply. One of those is demand side, but the other is very much around alternative sources of supply. Energy storage is not really where it needs to be at the minute, but interconnection is a technology that has been around for decades. It works and we should multiply it. I know that the Government have a number of schemes that they are looking at currently. I welcome those and congratulate them on being so proactive in this area. I hope that the Government and the Minister will be able to propel this even faster and further by taking notice of my noble friend’s amendment.

[The Earl of Caithness (Con)]

My Lords, while I support in principle what my noble friend Lady Parminter is trying to do, I am concerned about her wording. The idea that a Government should prepare a strategy, and then that is it, leaves a lot of questions begging. I suppose the Government would have to implement that strategy, but the amendment does not specify that.

My noble friend Lady Parminter will recall the evidence we heard when we were on Sub-Committee D together. Therefore, perhaps this is a good opportunity to ask my noble friend the Minister a couple of questions regarding what progress has been made with the energy infrastructure regulation, in particular the PCIs, so that that can be implemented. It is no good, we discovered, having one side that was keen to do an interconnection if the other side was not.

That leads me on to the seemingly constant battles between the regulators in each country. We had evidence from the Agency for the Cooperation of Energy Regulators and the European Network of Transmission System Operators for Electricity about that. Has there been any progress between the regulators? If there has, that would make future interconnection much easier.