Queen’s Speech

Lord Teverson Excerpts

Thursday 5th June 2014 Lords Chamber

[Lord Teverson (LD)]

My Lords, I take a particular interest in energy and climate change, so it was some relief to see in the list of Bills that we do not have another energy Bill this Session, the previous one having taken up most of the time of energy teams on all sides from the general election through to December last year. As my noble friend Lord Jenkin of Roding said earlier in the debate, there is relief that it is all about implementing quickly and effectively all the enabling secondary legislation that will be needed to make sure that our energy supplies in this country—hopefully renewable rather than non-renewable—are guaranteed, protected and in place over the next one or two decades.

Having said that, I particularly want to draw the Government’s attention to the fact that the latter parts of the Bill put much greater emphasis on the demand side of electricity markets, in contrast to the complete and utter focus on supply at the beginning. I ask my noble friends, Ministers and the Secretary of State in DECC to make sure that that momentum continues, particularly when it comes to the capacity mechanism that is out to consultation. A number of important decisions will be made fairly soon on demand-side management, and the demand side should be taken fully into account so that we can benefit from the investment that will lead to further reductions in electricity costs as well. I hope that that emphasis will remain strong.

What we have in the Infrastructure Bill, as has already been mentioned by many noble Lords, is fracking and being able to exploit that resource and get around the legal difficulties and hurdles that there are at the moment. I support this in principle. I think it is quite a difficult message to sell, because stating that you are going to take away people’s rights, even though the fracking will be at a greater depth than 300 metres underground—I think that is the proposal—will mean that there are concerns. It is a way forward through which we can exploit our resources effectively. It has been true of other areas of energy already. However, we have to make sure that the environmental controls on gas from those unconventional sources are absolutely tight, that they work completely effectively—not just partially—and that people can have complete confidence in the environmental checks as that industry starts to work.

Again, we have to remember that gas can only be an intermediary fuel in the UK’s energy mix. I suspect that it is unlikely that we will have a lot of gas that will benefit from carbon capture and storage, or from other ways of taking carbon content out of gas, so it is an intermediary technology. Nevertheless, as illustrated many times by my Conservative colleagues, we have seen that by introducing more gas into the generating mix in the short term, the United States, which is still the largest economy in the world, has managed to reduce carbon emissions quite significantly. I may come back to that theme later on.

What intrigues me from a renewables point of view, as someone who lives in the far south-west, is that the logic—forgive me, I was going to say spin, but I am sure it is not—of this particular development and legislation is also about helping geothermal generation, not just of electricity but of heat. I hope that my ministerial colleague in her answer will state or confirm that with the increased profile of geothermal energy in the gracious Speech we will have further action from the Government in promoting this technology—not just through the renewable heat initiative, which has started to work very effectively, but in terms of electricity generation. We have a fantastic resource, which is completely renewable and not an intermittent power source either. From that point of view, I hope we will see a brighter future for it.

The other area I wanted to move on to is that of zero-carbon homes, which is a DCLG issue as well as one of energy and environment. I am interested to read the proposals as they are published on that, because we have had a target—set, I think, by the previous Government—for the number of zero-carbon or carbon-neutral homes by 2016. That was a very important target but one that was always under threat from the temptation to dilute it as we approached that date. I am very pleased indeed to see that the Government have reaffirmed their intention to meet that target and maybe to meet it in a more practical sense. Through what they describe as “allowable solutions”, there are ways outside that particular development to make sure that overall, maybe through community energy schemes and that sort of thing, developments are carbon-neutral. In particular, I press on the Government and my noble friend the need to make sure that those definitions and restrictions, and the allowances to move away from the building itself being zero-carbon, are interpreted strongly and really are delivered. If that is the case, it will be a sensible way to move forward in this area.

However, I am concerned that there is an exclusion around small developments. No one would wish to promote smaller developments more than I do. I live in a village community. I think it was Prince Charles who asked why we do not have more small developments in village and other communities, as well as garden cities and new towns. I agree—we should have those smaller developments and they should be a significant proportion of the total housing stock—but it is dangerous to exclude them totally from this legislation.

One thing really worries me about this, given my business background. In a way, I can see that there is a sort of logic that says that smaller developers do not necessarily have the skills and are not necessarily able to apply some of these technologies. However, you then create a barrier to growth for those organisations in the future—in a way, this is where the whole construction industry needs to learn those skills and to be able to apply them. I will be testing that exclusion very strongly, because I think it is likely to be a mistake. We have learnt that the biggest mistake over the past decades, particularly in the 1960s and the 1970s, was to build homes that we have to spend an endless amount of extra money retro-converting decades later to make them suitable places that people can live in within sensible energy budgets in the future.

I was delighted with the part of the Speech—I am sure it was not supposed to be quite as marginal as it perhaps appeared—that said:

“My Ministers will also champion efforts to secure a global agreement on climate change”.

This, perhaps, is the most important area for all of us that will develop in Lima in December this year at the international conference and particularly a year later in Paris, where we expect and hope—I certainly do—that there will be a new international agreement on climate change. The announcement in the United States by the Obama Administration that they will start to get tough on their own emissions was a major step forward in setting the climate, if I can put it that way, for those negotiations, not just with Europe and developing countries but with China in particular.

In the past week, I think, the final figures for EU emissions for 2012 came out, and there are already provisional ones for 2013. The 2012 figures showed that European emissions had come down by 1.3% and were very close to the Kyoto target for the European Union of 20% from 1990. That target will be met soon, but there were two major exceptions in those figures. One of them was Germany, where emissions had gone up. The other, I regret to say, was the United Kingdom: our carbon emissions had gone up 4.5% and our overall greenhouse gas emissions by 3.5%. They are coming down in 2013 but not by that amount.

Why is that? It is because, despite the fantastic work this Government have done in delivering renewables, we have moved from a primarily gas-based system of electricity generation to one based on coal. Just over 40% of our electricity is now generated by coal. Those coal stations are expected to move out of production over the next decade, but I ask the Government to redouble their efforts. Regrettably, they did not do this completely in the Energy Act, but they should make sure that while the UK promotes shale and alternative gas, at the same time the old dirty technologies of coal generation disappear. That way, our emissions can come down substantially once again.