Feed-in Tariffs (Amendment) (No. 3) Order 2015

Lord Teverson Excerpts

Tuesday 2nd February 2016 Lords Chamber

[Lord Robathan (Con)]

My Lords, for many years in the House of Commons I was the vice-chairman of the All-Party Parliamentary Renewable and Sustainable Energy Group because I happen to believe that renewable energy has a hugely important part to play in the future energy provision for this country. I hope that most noble Lords would agree with that. But it is only a part, and that is where the noble Viscount suggested that there is a contrast between nuclear, fracking and renewable energy. They all have a part to play in making a good policy to provide energy for this country.

I have been a loyal Government supporter and I was particularly pleased when the Prime Minister said some years ago that he would create the greenest Government ever. I hope very much that the Minister will bear that in mind. He rightly said to the noble Viscount that FITs were very high. They were high for a reason: in order to attract investment, which they have done, and indeed to attract landowners—possibly such as my noble friend who has also spoken—to put up wind generators, for instance, and it has worked. I should say that I am quite interested in putting one up myself on my farm in Leicestershire, but I do not yet have an interest to declare. However, it is right that these very expensive feed-in tariffs should be brought down. They are extremely lucrative and they need to come down. As the costs of putting up solar, wind or indeed hydro energy plant come down, so too should the feed-in tariffs.

I know that the Government have reviewed their initial plans in this area, but I would say gently to my noble friend the Minister that, as I am sure he is aware, we should not as a Government kill the golden goose that has led to a resurgence of renewable energy in this country, which is all to the good. In quite rightly reducing unnecessary government expenditure, or perhaps one should say government largesse, we need to be careful that we do not end the wind and solar energy industries in this country or stop the generation of renewable energy which began so well under the coalition Government and up to now.

[Lord Teverson (LD)]

My Lords, I apologise to the House for not being in my place for the start of my noble friend’s speech. I was interested in the speech of the noble Lord, Lord Grantchester, who I admire and for whom I have a great deal of time. As has been said by Members on the Benches opposite, the whole point of feed-in tariffs is that they should come down in order to reflect the cost of investment by producers in that industry. That is what the Secretaries of State, Chris Huhne and then Ed Davey did during the coalition Government period. Producers should not receive more money than they deserve. The point is that it was done in such a way that the industries did not die. That is why we are debating this subject. As the noble Lord said, this cliff-edge change will probably see the end of these industries, and that is a problem. It is therefore appropriate that we have a fatal Motion for an SI that will be fatal to a very important part of our renewable energy provision. That is why we are here and why this debate is so important.

Last night I was privileged to be at an event where the Secretary of State, the right honourable Amber Rudd, spoke at some length about the Government’s energy policy. It was interesting and I was taken by her enthusiasm for and excitement about the Paris agreement. She and the Minister who is to respond to the debate were involved in bringing about that important agreement. She feels inspired by it and those of us attending the event agree with her absolutely. It has its difficulties, but the fact was that there was unanimity among all the nations present.

This Motion is important because not only do we have to talk the talk, sign the agreements and be the good guys internationally, we actually have to walk the walk as well. All I can see in the Government’s policy, apart from one or two areas such as taking out coal by 2025, for which I give it credit, is that the direction of travel, as the noble Lord, Lord Grantchester, and my noble friend Lady Featherstone put it so well, is going in the opposite direction. That concerns me greatly. Exactly as my noble friend Lord Steel, said, one of the great things about the Conservative manifesto 2015 was that it committed itself to the Climate Change Act. It did that unequivocally; it was there in black and white without fear, and it said it proudly. However, this is not meeting those targets, not meeting the carbon budgets and not finding a way to meet those commitments. That is why this Motion is important and why I support it.

[Viscount Ridley (Con)]

My Lords, like the noble Lord, Lord Teverson, I was not here at the start of the debate, but I hope the House will indulge me if I add a few short remarks. The noble Lord, Lord Grantchester, said that the policy of feed-in tariffs has been highly successful. What do we mean by that? It has been highly successful in taking money off people and giving it to other people. As my noble friend Lord Cavendish said, something in the order of £1 billion a year is now going through this programme. It is going, on the whole, from the poor to the rich because electricity bills are a bigger part of poor people’s bills than they are of rich people’s bills, and most of the people who can afford to put up the upfront costs of drawing down feed-in tariffs are on the whole rich people.

That is not the measure of success surely by which we should judge this policy. The noble Lord, Lord Teverson, just said that it should be judged by its impact on the climate. So how much has it reduced carbon dioxide emissions? How much bang for that enormous billion pound buck are we getting? The answer is: a trivial effect. We know that solar power, which is the bulk of the feed-in tariffs, produced 1% of our electricity last year. Therefore, the emissions reduction cannot be more than 1%. It is probably a lot less because of back-up and other issues. We know roughly where it is and we can therefore make a rough calculation as to the costs per tonne of carbon we are buying these omissions at.

The figure for those who were lucky enough to get Ed Miliband’s first tranche of feed-in tariffs is close to £1,000 a tonne. Not even the noble Lord, Lord Stern, thinks the social cost of carbon is anything like that. He says that it is about $29 per tonne. More recent estimates, because of cuts in the feed-in tariff, show that that number has now come down to something like £200 a tonne, but it is still 10 times higher than the social cost of carbon. We do not have a successful policy. We are doing it on the backs of relatively poor people. It surprises me that the two parties opposite should in this case be taking the side of the Sheriff of Nottingham rather than Robin Hood.