Electricity Capacity (No. 2) Regulations 2019
Lord Teverson Excerpts(6 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Stunell (LD)
My Lords, I will ask the Minister some questions, and I express some surprise that, in his presentation to the House, he did not mention demand-side response, which was the subject of an intervention I made on a previous occasion, and the reason why the state aid ruling was made by the European court. As it is absolutely at the centre of the reason why this matter has not been settled and the UK Government’s proposals were rejected, the Minister owes the House a little more detail about that, particularly because, as I understand it—he made the point himself—all the paperwork in front of us today is conditional on implementation on receiving state aid approval from the EU. At the moment, that is still outstanding.
That arose from an action taken at the European Court back in 2015 by a small company called Tempus Energy, which claimed that the system was discriminatory against those who sought to reduce electricity consumption as opposed to increase electricity generation. The outcome of that was that its claim led to the UK’s scheme being sent back for a rethink.
The way it is supposed to work is that firms bid into the auction at the price they need, either to keep existing plants open to generate electricity or to create new capacity from scratch. It does not deal adequately with the situation of companies which have come forward with a commercial proposition that they will reduce overall electricity consumption. That is surprising because, in fact, overall electricity consumption is falling, not rising. The Government itself recently took account of that, having for a long time somewhat denied the relevance of it to the whole question.
Having said all that, it is surprising that the Minister has not referred to the ECJ judgment, in particular to paragraphs 203 to 207 of it, and paragraphs 27(e) and 69 of the official guidance put in support of that judgment. Has the Minister read those paragraphs, and if he has, does he think that the plain and ordinary meaning of them could in any way be construed as a simple technical reprise as opposed to an outright rejection? How certain is he that the judgment of the European Court was not, as the Minister in the House of Commons alleged it to be,
“a challenge to the nature of the UK capacity market mechanism itself”?—[Official Report, Commons, 19/11/18; col. 1090WS.]
It seems that it is not very easy to make that stand up, and as regards our taking a decision today, it needs at least a little amplification and clarification.
The allegation put to the European Court was that our UK system was discriminating against those who had a commercial appetite to reduce electricity consumption as opposed to having proposals to provide generation. I hope the Minister will say that is not true and contradict the advice I have been given that, the way the system is designed at the moment, those who want to reduce consumption—the capacity supply industry—have to make sure they have a payback period in 12 months, whereas those on the demand side are given 15 years. That inequality is leading to discrimination, which means that DSR is extremely difficult to bring within the scope of the support that these regulations are intended to provide.
I hope the Minister will be able to give us some reassurances about the amount he has read and the legal interpretation of it he has, as well as something about demand-side response and getting that playing field level for all those who want to contribute to carbon reduction in the UK via the electricity market.
Lord Teverson (LD)
My Lords, I know the Minister always likes to hear optimism and congratulations on energy policy from these Benches. I will start with that, in that I am pleased that renewables—I understand the caveat about unsubsidised renewables—will be able to bid for the capacity market in future. The irony, somewhat, is that the form of renewables that costs the least and is most likely to be unsubsidised—onshore wind—has been banned by the Government. I think others will speak about that area later in this debate.
The capacity market came into operation in about 2014, which to us in this House probably sounds like yesterday, but in the development of the energy market—decarbonisation and the way in which variability, storage technology and all those other areas have moved forward—there has been a big change. The question we should come back to—as well as many of my noble friend Lord Stunell’s excellently made points—is: where do we need to go with the capacity market at this stage?
In this statutory instrument we have more of the same, to catch up with what we have not been able to do because of the European Court of Justice decision. I suggest that the capacity market, which was essential back when the Energy Act put it into place, is more questionable at the moment. I ask the Minister: what has the cost of the capacity market been to date? In recent years, what percentage of annual electricity consumption has the capacity market contributed? I am trying to get an idea of the scale of this instrument’s use and how important it has been. One thing is quite obvious: I understand that there has been an auction during this period of standstill. Given that there is no panic about this, do we need this capacity at all?
I repeat my noble friend’s points about demand-side management. It has been a characteristic of energy policy that we have always prioritised supply and capital investment, following demand, rather than trying to reduce demand and looking at the demand side rather than the supply side of the equation. Will we be in a position where demand-side response—the aggregators and that side of the industry, so important to our future —is able to compete not just in the one-year bids but in the three- and four-year bids? Will that now be the case? Where are we on storage? I believe that it is still not included as a sector that can bid for the capacity market. I hope that I am wrong on that, but I would be interested to hear that from the Minister.
So my real question is: how does the Minister see the capacity market moving in the future? I would love to see in the new energy White Paper—I hope the Minister will tell us this evening when it will be published—onshore wind coming back on to the system.
In terms of this particular statutory instrument, yes, it does the business, but we need a far more strategic approach to this part of the market than we have at the moment.
Lord Teverson
I understand entirely the argument that a number of years are required for physical capacity to build what was originally the coalition Government’s hope that gas would come online. But what I do not understand is this: by having that exclusively for supply side, a whole area of the capacity market is denied by demand response. By the time you come around to the short-term one-year deals, where demand response can come in, you have already filled a major proportion of the capacity market. It therefore discriminates against that sector—or do I completely misunderstand this?
Lord Henley
I might have to write in greater detail, but both T-1 and T-4—the short term and longer term—deal with the point about discrimination. I might be wrong, but I will think about that and come back to the noble Lord.
Carbon Budgets
Lord Teverson Excerpts(6 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
My Lords, I do not accept the noble Baroness’s premise that we are cheating; we are following international rules on this matter. If we wanted to change in the manner that she suggests, which might be a way ahead, it would be worth doing only if we had international agreement from all sides.
Lord Teverson (LD)
My Lords, in its report at the beginning of May the Committee on Climate Change made it clear that we had to “ramp up” our efforts in saving and getting carbon out of our economy quite substantially. It particularly criticised the Government’s target of ceasing the sales of diesel and petrol vehicles in 2040. Should we not get real here and say that if we are to meet our targets that date has to be brought forward, as many other nations have done, to 2030?
Lord Henley
My Lords, we have ramped up what we are doing; that is why, last week, we brought forward the order that moved us to a legally binding target of net zero by 2050, in line with the advice from the climate change committee. The committee made no suggestion that we should get rid of petrol and diesel cars by 2040, a very substantial change which would cause major problems for the whole automotive industry. I believe that the target we have set is about right.
Renewable Energy
Lord Teverson Excerpts(6 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Teverson (LD)
My Lords, I congratulate the noble Lord, Lord Cameron of Dillington, on his forensic and deep analysis in opening the debate, and the noble Baroness, Lady Bloomfield, who gave us that very exact background on the subject.
I have an interest in that I live in Cornwall—in fact, the noble Lords, Lord Cameron and Lord Berkeley, do as well. If the Minister is down our way some time and goes to the north coast, where the noble Lord, Lord Cameron, lives—I live nearer the south coast—and visits Newquay or any of the other beaches along there he will see surfers at all times of year. I think the noble Lord, Lord Cameron, is actually an accomplished surfer. I see him shaking his head—the rest of my speech will be true, rather than fake news. The Minister will see through the surfers the power of wave. I know this debate is more about tidal energy than wave, but we see it in practical action.
The background that many noble Lords have mentioned is the need to decarbonise our economy, as is laid out in the Government’s Clean Growth Strategy, with which I am sure the Minister is totally au fait. I was particularly struck when the Committee on Climate Change presented its report at the beginning of last month on meeting the zero-carbon target in the UK by 2050. What struck me in the presentation by Chris Stark, its chief executive, was his point that, for the UK to meet that target—we hope the Government will accept that recommendation, although I know that the Minister will not be able to do so today—we have to do everything concurrently. In the past, even I have thought of going down the power sector route first, transport second, heating third and land use and agriculture fourth. We have to do that all together, as I have said in the House before.
Even I think on occasion that we have solved the power sector, so we need to get on with the rest of it—particularly heating, which is difficult. But the fact is that we have not yet solved the power sector. Last year, I think that only 49.6% of our electricity was generated by low-carbon, non-fossil fuel sources, which includes nuclear. We still have the real challenge of getting past that first base in decarbonising our economy. Even in that area, we have a big issue with nuclear at the moment, which is one of the low-carbon technologies. Nuclear power is fundamental to the Government’s clean growth strategy; we have Hinkley C, which I visited about a year ago to see how it was developing. However, we now know that further projects there, whether they are supposed to be delivered by Hitachi or Toshiba, are not going to happen. I cannot see a way that they will happen. Indeed, even if those companies were able to deliver, through finance or public support, we know that the National Infrastructure Commission has now said that there should be no more than one nuclear power station in connection with that programme. We therefore have a challenge: how do we reach decarbonisation just of the power and energy sector in time for us to meet those decarbonisation targets?
I welcome the Government’s continued emphasis on offshore wind—I wish they would get on with onshore wind as well, which is even cheaper, but they are not doing that. We have to look at other sources as well. As many speakers have said, our marine energy resource is larger off our shores than almost anywhere else in the world. The question therefore comes back to exactly what the noble Lord, Lord Cameron of Dillington, is asking: how do we get that to happen?
There are other benefits to some of these schemes. I take the point made by the noble Lord, Lord Berkeley, about some of the issues with barrages. I certainly have never advocated, and never will, the full Severn barrage, which would be ecologically and commercially the wrong thing to do. However, we have much more subtle and sensitive ways to achieve this now, such as through other forms of tidal lagoon and tidal stream. Even on tidal lagoons, we have potential benefits such as flood control and leisure, and maybe other smaller benefits. We know from other renewable technologies that we have to get them going, and test and adjust them to make sure that ecologically they are right—we need to be sensitive about that to make sure that they are right as regards water movement, silting, and so on. However, we know that, on the whole, those factors can be overcome, and that as time goes on those cost curves come down. We have proved that in other renewable technologies—not so much in low-carbon nuclear, where the cost curve has tended to go the other way—but there must be that potential with regard to the shores of the United Kingdom and tidal and wave energy.
I say that costs can come down, which is why it is so important for the Government to enable this country to get to first base to start to see how these technologies work. We on these Benches are as concerned about value to the taxpayer as anybody else, but we know that we can achieve lower prices if we roll these out.
My question for the Minister is exactly the same as that asked by almost every other Member of the House so far. We have a fantastic resource, which we know in our hearts can be successful in the future and provide us with the leadership that my noble friend pointed out we did not get on wind turbines. How do we make it happen?
Reducing Greenhouse Gas Emissions
Lord Teverson Excerpts(6 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Teverson (LD)
My Lords, I declare my interest as a trustee of the Green Purposes Company that holds a special share in the Green Investment Bank. It is a delight to take part in a debate introduced by the noble Lord, Lord Rooker, given his key role in this House and in Parliament when the Climate Change Act was finally approved just over a decade ago in 2008. It makes me wonder whether determination and enthusiasm about this issue runs on a 10-year cycle. I hope that it does not and that it will be a bit more consistent over the next 10 years. I want also particularly to congratulate the noble Lord, Lord Deben, on his work on the Committee on Climate Change. Along with a number of other noble Lords, I was privileged to be at the presentation of the report this morning. We were asked by the chief executive, Chris Stark, to read the whole document because it is comprehensive and it will do us good. That is quite a big ask for us these days, but it is good. Having said that, one of the things about this debate is that it generates passion, which there needs to be, along with some attitude. I was a little disappointed with the noble Lord, Lord Deben, when he attacked my noble friend Lady Featherstone. Believe me: you are both on the same side on this issue, and I am sure that that is true for this subject more generally, as it was back in 2008.
It is important not only that we agree but that we call government to account, because that is what Parliament and this Chamber is partly about. It is impossible not to, as my noble friend did, mention the car crash at the time of regime change in 2015. Then, frankly, onshore wind disappeared, carbon capture and storage ended, and there was the vandalism of stopping the zero carbon homes initiative. Not only that, the Department of Energy and Climate Change was abolished, which illustrated all too well where we were. The person who instigated that is no longer in the Government and in fact is no longer in Parliament; he edits the local evening rag in London and is doing a great job there. But what that says to me is that if there is one thing the Government need do on climate change—be it the current Government or whatever we have in the future—it is to get the Treasury on board. We have to make sure that more than anyone else, the Chancellor of the Exchequer is the standard bearer for climate change and this particular crisis. For the past four years we have been resting on our laurels because of those changes. While I do not for a moment question the authentic wish and determination of the noble Lord, Lord Henley, Claire Perry MP and Greg Clark MP to implement this policy, more needs to happen.
The outcome of resting on our laurels is that the Committee on Climate Change now says that we will not meet our fourth and fifth carbon budgets even as they are at the moment; that is, aiming for an 80% reduction by 2050. The fourth budget will start in 2023, which is only four years ahead. I have only one question for the Minister. I cannot ask him whether the Government will commit to meeting the aims set out in the report published this morning because that is not reasonable. The Government first have to consider it. However, can he tell us what actions the Government will take to meet their current commitments to the fourth and fifth carbon budgets? At the moment we have had a lot of very good and worthy pieces of paper. We have had a number of strategies, including the Resources and Waste Strategy, the Clean Growth Strategy, the 25-year environment plan, and the Road to Zero Strategy, but what is the outcome of those?
Let us look at some of the major emitting sectors. On power generation, yes, the past Administrations of this country have done very well. We now have a hole in terms of nuclear, given that the Toshiba and Hitachi stations do not look like they will go ahead. However, the one thing I give absolute credit to the Government for is carrying on with contracts for difference for offshore wind. A further 900 turbines are going to be delivered under the present plans. That is excellent but it is not going to do everything, so we need to improve in that area.
Heating, mentioned by the noble Viscount, Lord Hanworth, is a big issue. We have got nowhere on that and we are still discussing it. I was delighted that the noble Baroness, Lady Altmann, brought up transport. We are seeing emissions rise through use of white vans for mail order deliveries. While I have not looked at the sales, I have checked the stock of electric vehicles. What percentage of our total stock of motor transport is electric? It is 0.2%: one-fifth of 1% of vehicles on our roads are electric, so we still have a huge distance to go. Sir John Armitt of the National Infrastructure Commission reminded us only last week that we absolutely must have a working infrastructure of charging points. That will give people the courage to buy electric vehicles because they will know that they can drive them anywhere. However, as the noble Baroness, Lady Altmann, said, we do not have that at the moment.
I turn to agriculture and land use. The NFU has now committed to zero carbon by 2040, although that is quite sketchy. But, again, we are seeing no real action. Our peatland areas are of concern to me. They act as one of our biggest carbon sinks, but we still have a voluntary code governing the use of peat in horticultural compost. That use is actually going up rather than coming down. We need mandatory controls on that. I am delighted that Claire Perry has said that we should have carbon capture and storage schemes operating by 2030, but we have already been told by other experts that as things stand in the sector, it will not happen commercially.
The new chief executive of the Committee on Climate Change, Chris Stark, told us earlier that in the past the plan was to do all of these things serially, working through the major sectors one after the other. We now have to do them all at the same time and that is going to be a challenge, but it is doable with our current technology. I want to congratulate the Committee on Climate Change on not factoring in future technologies. The report is on existing technologies and, taking the point from the noble Baroness, Lady Jones, about bringing the date forward, I hope that, when that technology changes, the date is brought forward. It certainly needs to be.
I have perhaps sounded a little pessimistic. As I did in the debate in the name of the noble Baroness, Lady Jones, in the Moses Room only a month ago—which was rather less well attended—I will go through some of the huge benefits we get from meeting these targets. One is clean air, which is already a rising political issue. Another is better health. We are going to have higher and better-skilled employment and, I believe, strong and robust economic growth in this sector. We will also have a circular economy—it is not just about carbon emissions—in which we use the resources of our planet again, circulate them and make that sustainable. By following this new trajectory of zero carbon by 2050, we as a nation take back that leadership on climate change that I believe we have partly—only partly—lost over the last four years.
I have really enjoyed this debate. What I really like about it is the passion, the attitude and the fact that we are agreed; there are no climate change deniers here today, as the noble Lord, Lord Prescott, mentioned. We now know that this is the truth. We on the Liberal Democrat Benches might want to call the Government to account, but we are desperate to join Members of all other parties and none in this House to work towards the solution and achieve zero carbon emissions in 2050.
Fuel Poverty
Lord Teverson Excerpts(6 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
I suspect it is a benefit of which a large number of Members of this House are in receipt—I see one or two indicating that they are not. I note what my noble friend said. It is a very good suggestion, and I will ensure that my right honourable friend the Chancellor is made aware of it.
Lord Teverson (LD)
My Lords, the Minister is absolutely right to mention the private rented sector. One year ago, the minimum energy efficiency standards regulations came into force, which meant that properties could not be rented unless their EPC was E or above. However, properties are still being advertised that do not meet that criterion. What are the Government doing to ensure that local authorities apply those regulations and fuel poverty is reduced in that sector?
Lord Henley
The noble Lord is right: it is for local authorities to do that, but he will also remember that we brought forward further regulations this year, which he and I debated in this House, whereby we increased the obligation on landlords in how much they should be expected to spend to raise houses in the private rented sector to, I think, at least band E. I forget the precise level that they have to be at.
Climate
Lord Teverson Excerpts(6 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Teverson (LD)
My Lords, the noble Baroness, Lady Jones, has rightly asked us whether we see this as an emergency, and I put my hand up and say, “It absolutely is”. With this particular emergency, as with many national emergencies, there are lots of down sides in that there are all sorts of negative consequences to war, threats or security. Today, however, I want to go through all the positive things that come out of genuinely calling this an emergency.
First, even in conventional terms, we have economic growth. As we saw during the 2008 recession, the green sector was one that grew in 2017—those are the most recent figures. GDP growth rose by some 1.8%, but economic growth in the green sector was something like 7%. There are more or less 250,000 jobs just in the green growth and energy efficiency sector.
Clean air is one of the consequences of decarbonisation; King’s College London estimates that in recent years there have been some 36,000 premature deaths per annum because of dirty air. There are 2.5 million households still in fuel poverty, yet through proper efficiency programmes and the housing stock, we could eventually reduce that to zero. That would also help winter deaths, of which there are some 50,000 per annum. Indeed, with heatwaves these days, it is estimated that in the last couple of years there have been some 600 to 900 deaths due to excess heat. Obviously, figures have been far higher on the continent, which may show what is still to come.
We can reduce fuel bills, not just by increasing the energy efficiency of the housing stock, but by renewable energy now being cheaper than fossil fuels. Because of all this increased welfare, I hope we can increase national welfare but also reduce costs on the National Health Service. By doing all this, we are making a major move towards a circular economy, which means that the planet can start to exist within its own finite resources.
To come back to climate finance, the noble Baroness, Lady Lane-Fox, rightly mentioned the decline of venture capital and the restriction on it in this sector. I was interested to hear those figures. Having said that, a huge amount of money wishes to invest, and it is about finding those opportunities; maybe government, through the public sector, can help that to happen. France has produced sovereign bonds, which have been at coupon rates that are less than standard ones. All this would also provide the UK with climate leadership again, which we are starting to miss.
I will ask the Minister only the following question. On 2 May, the climate change committee will produce its report on what we should do to achieve only a 1.5 degree centigrade increase—reckless though even that is. Will the Government accept the committee’s recommendations, whatever they are?
Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2019
Lord Teverson Excerpts(7 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
While we believe, as we have said on many occasions, that a deal with the EU is in our mutual interest, it would be irresponsible at this stage not to make appropriate plans for a no deal situation. This draft instrument ensures that in such a scenario our ecodesign and energy labelling legislation will continue to function effectively. It provides business and the public with the certainty they need.
Before I talk specifically about this instrument, it may be helpful if I speak briefly about the current EU framework for ecodesign and energy labelling. In recent years, the EU has introduced a suite of product-specific regulations through the ecodesign directive and the energy labelling regulations framework. The EU ecodesign regulations are about minimising the costs and environmental impact of products used in both homes and businesses by setting minimum performance requirements. Energy labelling regulations are about empowering consumers to make informed purchasing decisions through energy labels.
Both ecodesign and energy labelling regulations agreed to date will save household consumers around £100 on their annual energy bills in 2020, and, just as importantly, lead to greenhouse gas emissions savings of 8 million tonnes of CO2 in 2020. As well as bolstering our commitment to reduce carbon emissions, the policy also serves a purpose for industry. Setting minimum performance requirements can help to drive innovation and increase the competitiveness of businesses, in line with our industrial strategy.
This brings me on to the instrument being debated today. Using the power in the withdrawal Act, this instrument amends EU retained law to ensure that the ecodesign and energy labelling regime remains operable in the event of a no-deal outcome.
I will turn now to the amendments. The instrument replaces references to the “Union market” with the “UK market”, so that ecodesign and labelling requirements continue to apply to the UK market after exit. This amendment is essential so as to prevent less efficient and more polluting products being placed on the UK market. It also gives the Secretary of State the power, currently held by the Commission, to lay ecodesign and energy labelling product-specific regulations. As set out in the Clean Growth Strategy, this power will be exercised to,
“keep step with equivalent standards wherever possible and appropriate, or even exceed them where it is in the UK’s interest to do so”.
The instrument removes the requirement for suppliers placing products on the UK market to enter product information into the EU product database, a new EU online portal, live since January, where market surveillance authorities—the Office for Product Safety and Standards for the UK—can view information uploaded by suppliers. Instead, the market surveillance authority will be able to request technical product information, as it does now, directly from suppliers.
The next three amendments relate to changes the Government are making to the trading of goods subject to EU-wide product-specific rules. They are not specific to this instrument. One of these changes pertains to the conformity assessment of goods to ensure they meet relevant requirements. After exit, products needing to be assessed by a third party in order to show compliance with UK legal requirements will be assessed by UK “approved bodies”. This replaces the pre-exit requirement to use an EU “notified body”. To minimise disruption, however, businesses will for a time-limited period be able to continue using EU notified bodies when selling their goods to the UK after exit.
After exit, a new UK marking will need to be affixed to products for the UK market to indicate conformity with UK requirements. This will replace the CE marking which indicates conformity with EU requirements. To ensure continuity, most manufacturers will still be able to use the CE marking for the UK market. This is intended to be for a time-limited period.
The last of these changes relates to testing standards used for the verification of compliance of products with legal requirements. The current list of EU “harmonised standards” will be carried across but renamed for the UK as “designated standards”.
Finally, this instrument makes minor changes to ensure market surveillance can carry out its enforcement activities with regards to the labelling of household lamps and electric ovens. These are routine changes not related to exit.
In conclusion, these regulations are an appropriate and necessary use of the powers of the withdrawal Act and will maximise continuity in our ecodesign and energy labelling regulations as we leave the EU. I commend the regulations to the Committee and I beg to move.
Lord Teverson (LD)
My Lords, perhaps I will be more positive about these regulations and make the Minister feel better. I very much welcome the tone of the Explanatory Memorandum and its emphasis on the benefits of energy efficiency, which is clearly one of the least costly and most effective ways to reduce our carbon footprint. In fact, energy efficiency is one of the reasons why although energy prices have gone up, energy bills for households have gone down. This time, the irony is on not the Government but the broader British media because the famous Brussels-regulations-related vacuum cleaner efficiency scandal foisted on British citizens by the tabloids will remain. I welcome those product standards coming across.
My question are quite practical. I think that the Minister went through this, but who will police or register this matter and what will the additional cost of that be? Secondly, and perhaps more importantly, who will hold the register? Is the IT for that complete? How will what is on the European Union register get on to the UK register? That covers a series of intellectual property rights issues. We came across this with the REACH chemicals database: you cannot just copy this information across. How can we have a robust system that works in this regard? Without that, this scheme cannot work.
I understand the Minister’s point about continuing labels for a while but, more importantly, will it be legal to sell all the electric appliances covered by this SI in our home market from the point of our departure? I want to understand whether the preparation in those technical areas is right and things will work. Legislation is great but if it cannot work, even passing these regulations is not a lot of use.
Lord McNicol of West Kilbride (Lab)
My Lords, again, I am standing in for my noble friend Lord Grantchester so I apologise to my team in the Box if I do not get the language quite right. I spent time going through the regulations. The SI is quite a tome. I feel as if it covers more than just one issue and a number of SIs have been merged together.
I start with a point about no deal because large swathes of the SI cover that scenario. I know that it also covers what will be needed if there is a deal, but the parts of the SI covering a no-deal scenario would not be needed if the Government agreed with us and ruled out a no-deal Brexit. That would save so much effort, energy, time and money.
Looking at the specifics, like the noble Lord, Lord Teverson, I have a number of questions flowing from the draft SI. I want to work through those issues, some of which are technical and some of which are a bit wider than that.
The Secondary Legislation Scrutiny Committee declared the draft SI of interest to the House. I am sure that it will be scrutinised further after today. One of the big themes that came through—and one of my concerns—is about the powers that would be moved to the Secretary of State. There are a number of issues around that. The Minister said that these powers are about protecting and preserving the current standards, possibly increasing and building on them, but I do not see that in the language of the draft SI. Part of it says that the Secretary of State will,
“implement the strategy set out on page 44 of the Clean Growth Strategy which is to ‘keep step with equivalent standards [after exit]’”—
but then, “wherever possible and appropriate”. My reading of those words leads me to believe that the Secretary of State may not decide that keeping a level playing field or keeping the standards at a specific level is possible or appropriate, so those standards could dip. A bit of clarification from the Minister would be very helpful.
As has been touched on, the instrument also creates a stand-alone UK regime for third-party product verification, to be established in further detail in later SIs. Can the Minister assure us that these SIs will deal with that under the “made affirmative” procedure rather than the negative one? The text of the instrument is far longer than most, running to more than 80 pages; the five quite distinct schedules and areas contained in it could and should have been separated into separate SIs.
The Government have also chosen not to produce an impact assessment since, as they say, there will be “no imminent change”. Can the Minister clarify what this means? Are we talking about a week, a month or a year? As has been mentioned, there are financial, operational, organisational and oversight issues involved in setting up new bodies.
On page 7, paragraph (7) of proposed new Regulation 2A states:
“Where the Secretary of State removes the reference to a standard from publication, that standard is no longer a designated standard”.
Does this mean that the standard no longer exists in that area? If so, does that raise any implications or concerns?
The noble Lord, Lord Teverson, asked how other bodies would be constituted and what consideration was given to them. I look forward to the Minister’s response to that. On page 11, paragraph (4)(a) of proposed new Regulation 22 says that the Secretary of State must,
“consider the life cycle of the product and all its significant environmental aspects, including its energy efficiency, and the feasibility of their improvement”,
and paragraph (4)(f) says that they must,
“consult on the draft implementing measure”.
I seek clarification from the Minister on which bodies and organisations would be consulted on the draft measures. This would be helpful for the future.
Lord Henley
I am very grateful to the noble Lord for ending on a positive note. I think I can say—I will write to him if I am wrong—that any further SIs will be affirmative. It is important to make a distinction between affirmative and negative orders. The noble Lord will know that, whenever legislation goes through, Governments of whatever political persuasion are often tempted to make some small concessions by offering to turn a negative order into an affirmative one. Oppositions often push for this, thinking that they have achieved some great victory. I have certainly done it in opposition. We then very often burden both Houses with some unnecessary affirmative orders. In the past, I can think of a large number of affirmative paralytic shellfish orders that kept littering the Order Paper. I cannot remember what they were about, but they would probably have been far better left as negative. I can see a Minister at some point making some generous gesture in the course of the Committee on a Bill to suit some Opposition of whatever colour. As far as I know, the orders will be affirmative. If, inappropriately, we try to make them negative, I am sure that the appropriate committees, chaired by the noble Lord, Lord Cunningham, and others, will correct us.
I briefly—but not completely—apologise for the size of the regulations. Rather rashly, I am tempted to say, “You ain’t seen nothing yet”. Speaking more honestly and frankly, very often, it makes life more convenient for the users if we put everything into one instrument. We get a better end product. The noble Lord is exactly correct in saying that this one is 81 pages long. There are a further few pages of the Explanatory Memorandum. To have to repeat this debate five times with five instruments—five into 80—might be a less satisfactory process. So I do not really apologise; I think this is the appropriate way of getting these things done.
I say the same to the noble Lord, Lord Teverson, who at least welcomed the tone of the Explanatory Memorandum. He told us just how much actions of this sort—even with rising electricity costs—could reduce one’s electricity bills.
I suggest another mechanism: to get one’s children out of the house, which happens when they get to a certain age. The noble Lord, Lord McNicol, shakes his head, but I think the noble Lord, Lord Teverson, knows exactly what I am talking about.
Lord Teverson
I agree, in that my wife’s 40 year-old daughter has just left the house to move elsewhere, so that is a very appropriate comment and I look forward to the reduction in my electricity bill.
Lord Henley
I was not thinking of those who had reached the maturity of 40; I was thinking of the somewhat younger ones who, despite their extraordinarily green credentials, take a slightly less purist approach to turning off lights and other procedure.
I shall deal quickly with some of the questions. On the impact assessment, I assure the noble Lord, Lord McNicol, that the instrument’s impact was assessed at below the annual cost of £5 million, which was why a full impact assessment was not required, but a de minimis impact analysis was undertaken to reach this conclusion and, in doing so, the department followed the guidance, so we are happy about that.
On consultation, I assure both noble Lords that we worked very closely with the industry and other organisations, meeting them and keeping them up-to-date via email. Last summer, officials met all the appropriate trade bodies to consult them. Views were sought on the proposal to keep the design of the energy label, remove obligations in relation to the EU product database and retain the legislative functions carried out by the Commission for the Secretary of State. In the main, as far as I know, the trade bodies supported all those proposals and stressed the importance of not imposing new costs on businesses and the UK being able to legislate after exit.
I shall deal with some of the more detailed points. The noble Lord, Lord Teverson, asked about the policing of this. Ecodesign enforcement and control activities are carried out by the Office for Product Safety and Standards. Energy labelling enforcement and control activities are carried out by that office and local authorities’ trading standards departments in Great Britain and by the Department for the Economy in Northern Ireland. The regulations will not result in any change in that policy.
The noble Lord also asked who holds the products register and whether there is one for the UK. There is no UK database, but there is an EU-wide database, which went live on 1 January this year. There have been delays on the public section of that database, but it remains broadly on track and, after exit, we will review whether to introduce a UK database. Again, I can give the assurance that we will consult on that. He also asked whether all appliances under the SI will be covered from the point of exit, and I can assure him that the changes come into force from exit day and there will be no gaps.
The noble Lord, Lord McNicol, was concerned that there could be a reduction in standards, but I can assure him that we continue to support all these policy measures, which cut energy bills and increase energy security. As stated in the Clean Growth Strategy, we will keep step with equivalent standards, but intend to go further where, as I think I said in my opening remarks, we believe that is in the interests of the UK.
I have dealt with the noble Lord’s concerns about consultation, but I just correct myself on the affirmative nature of SIs. Only the SIs that are not identical to EU standards will be affirmative. If they are not identical to EU standards, they will be negative. I think I have it the right way round.
Storage of Carbon Dioxide (Amendment and Power to Modify) (EU Exit) Regulations 2018
Lord Teverson Excerpts(7 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Teverson (LD)
My Lords, when I read this, particularly the Explanatory Memorandum, I started to feel it was an exercise in irony. Despite all the urgency of the potential Brexit, here we have a situation where it will probably be necessary to pass this legislation by 29 March 2029, given the current government decarbonisation strategy.
In 2017, as the Minister will probably remember, the Public Accounts Committee in the other place pointed out that the Government had wasted some £168 million on CCS projects—including £100 million on the one cancelled by George Osborne in the 2015 Budget—with no progress whatever.
Having said that, I agree with Claire Perry, the Minister responsible for the clean growth strategy. In the CCUS Cost Challenge Taskforce report, she said that,
“we want to have the option to deploy CCUS at scale during the 2030s”—
as long as the pricing is right.
The Minister mentioned the Acorn project. I agree that there may be some necessity to do this, but it reflects the rather tragic trajectory of government action. The fact that this core part of the clean growth strategy will not be implemented until the 2030s is most unfortunate.
The clean growth strategy called for a new CCS council—or CCUS as it is called nowadays. Has that been established and is it operating now?
As the Minister knows, I am interested in areas of international agreement, such as the Ospar Convention, which prevents the deposit of waste in marine areas of the north-east Atlantic. I seem to recall that the Government got an allowance through the Ospar Convention process for CCUS—it is seen as disposal of waste at sea, even though it is under the sea—potentially in the North Sea. The UK and the European Union are signatories of this. I am interested to understand whether the UK itself has enough permits under the convention, or a derogation in our own right to be able to continue this, rather than it being done in agreement with the European Union, with it as the signatory. Will we need any treaty revisions or further derogations from the Ospar Convention to move this forward once we are out of the European Union?
In a way, I am glad that BEIS has given this some priority—perhaps it is a sign of movement at last. I look forward to seeing those future plans for CCUS. We do of course have Drax, but I do not think it requires any geological resolution of storage, which this SI is all about.
Baroness McIntosh of Pickering (Con)
I am grateful to my noble friend for moving this statutory instrument. I have just one question. He said that there has been consultation with only the Oil and Gas Authority, which presumably is the regulator in this instance. Page 5 of the Explanatory Memorandum says that it will apply to,
“activities that are undertaken by small businesses”.
Was a conscious decision taken not to consult widely with the industry, and, if so, what was the reason for that? Obviously the regulator will have a view, but those who work in the industry might have an alternative view.
Climate Change
Lord Teverson Excerpts(7 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Teverson (LD)
My Lords, I remind the House that I am a trustee of the Green Purposes Company, which owns a green share in the Green Investment Bank.
It is a long time since I have been involved full-time in business, though I was for many years. During that time, one of the things that did not happen was that at each board meeting we did not look at corporate risk registers. They sort of existed, but not in the way that they do at the moment—the ones with probability up one side of the graph and impact along the other. They have big red boxes at the top right-hand corner which tells you what you really need to pay attention to as a business or as an organisation.
As I prepared for this debate, I thought that surely these are what we need globally—maybe the United Nations or whatever has a view on that—to give us the priorities. And, hey presto, the World Economic Forum now meeting in Davos has a global risks report. Guess what? Up in that top right-hand bright red corner, there are three particular risks, all environmental. The first one and the highest is that of extreme weather events, the second is natural disasters, and the third is our inability or potential inability to solve mitigation and adaptation policies in terms of climate change. I congratulate Davos on pinpointing some of the issues I want to go through in this debate.
Last year we celebrated 10 years of the Climate Change Act here in the UK—something that we can really be proud of across all parties in this Chamber, and in the House of Commons as well. A decade before that, in December 1997, the world agreed the Kyoto Protocol at the third conference of the parties. Again, that was the first time that the global community came together and really concentrated on how to solve the issue of climate change. Yet we have a background today where global temperatures are already 1 degree above pre-industrial levels; we have more than 400 parts per million of carbon dioxide in our atmosphere; and we are now warned by the IPCC that we risk hitting that new target of 1.5 degrees by 2030. That is the context of our debate this afternoon.
What are the threats? Well, they are many. I suppose it is depressing to go through this list, but I will because that is the topic of the debate. I promise to try to raise our spirits as we go through this discussion. Clearly, there are the obvious ones to do with extreme weather: flooding; on the ocean side, sea-level rises, the potential of ocean currents stopping or changing, and ocean acidification; all the areas to do with the nature of biodiversity; the threat to our species from diseases migrating from the tropics northwards—and southwards—and, of course, invasive species, which we debated in the House yesterday on a secondary legislation instrument. Not least is the threat to the ice cover of our planet at the polar regions. Those threats give rise to consequential issues such as potential crop failure, human morbidity because of high temperatures, large migration and financial instability. I want to mention the strong role of Mark Carney as Governor of the Bank of England in raising these issues globally as well as in this country.
The effects of such threats are already being seen. We have seen droughts in Australia and South Africa; we have seen forest fires in Australia and California; and, in the United Kingdom, we have seen flooding and various other extreme events far more regularly than we used to.
However, the world has made progress. In 2014-16, emissions of carbon dioxide across the globe plateaued. In Kyoto, a big issue was the rising levels of emissions from both China and India. They were much smaller economies then but were growing very quickly, and they felt, rightly, that the developed world should take the strain on mitigation. However, we saw in Paris both those countries getting involved, with China starting to say that it should be the leader, taking over in many ways from the European Union and the United States.
We then had the Paris Agreement some two or three years ago, where it was agreed that we should move on from Kyoto and the disastrous Copenhagen conference and aim for 2 degrees and hopefully 1.5 degrees. In Katowice at the end of last year, a rulebook was agreed on how those targets should be met and how we assess carbon emissions. So we had good news worldwide. As for the United Kingdom, one of its greatest strengths in the past, as shown by the Climate Change Act, has been political consensus. Political bodies, business and NGOs all see it as a real issue that we should tackle. We can proudly say that the United Kingdom has reduced carbon emissions by some 43% from the 1990 baseline, yet we have had economic growth of 70% over that time, so we have seen a decoupling. We do not often hear it, but it is also calculated that we have saved some £4 billion per annum in our energy bills as a nation because of increased energy efficiency. As for our green technologies, the cost of solar has decreased by some 78% since 2010 and, over two years, the cost of offshore wind fell by 50%. I remember our debates during the coalition years about the “energy trilemma”. We no longer have that, because renewables represent the cheapest form of electricity generation. We no longer have issues around the cost of renewables, sustainability and probably energy security as well. Also understated is the economic engine that renewables can give us. Even in the dark days of 2008 in the depths of recession, the green economy grew by some 5% to 7%—with good jobs and not the bad ones.
However, the threats that I listed earlier are already starting to change our lives. They affect regions differently and the clock is ticking. Unlike in that other debate where an issue is the clock ticking, unfortunately we do not have the ability to extend the equivalent of Article 50. This is it and we have to make sure that we are able to meet the challenge.
Despite all that good news, there is not-so-good news as well. In 2017 global emissions went up by 1.6%; in 2018 it is estimated that they will be up by something like 2.6%. I regret to say that much of that growth has come from China and India. Even in the EU, where our track record has been good, our ability to reduce carbon emissions has plateaued and started to go down. Even if everybody who signed up to the Paris Agreement performs, we will still have a rise of some 3% in global emissions. Here in the UK, our great achievement of a 43% reduction is almost exclusively from the power sector, nearly all from taking coal out of the system. We are almost at the end of that road and cannot push that policy further; therefore, we have big questions about where we go, particularly now we are challenged by the withdrawal of Hitachi and Toshiba from our nuclear programme. We are now seen as being top of the subsidies league on fossil fuels within Europe, with some £10 billion-worth of subsidies per annum—although, probably like the Government, I question how that arithmetic was arrived at.
Perhaps most worrying of all is that investment in renewable technologies has plummeted and we are now at the lowest level of investment for a decade. I do not want to get into party politics here, except in one area: that consensus perhaps started to divide in 2015 with the Osborne Budget, when we had the privatisation of the GIB, the end of zero-carbon homes, the end of onshore wind, the end of carbon capture and storage and a relatively hostile taxation regime coming back in. But we have had, I am sure the Minister will remind me, a lot of strategies. We have had the clean growth strategy, the 25-year environment plan, the national adaptation programme, the “road to zero” strategy and the resources and waste strategy. That is great, but there has been little action around those strategies, and that is the big issue.
In transport, our emissions are going up. Our target for 2040 on electric vehicles, which does not include vans and is still fairly iffy, is seen as quite inefficient. In heating, which is a large proportion of our carbon emissions now, we have no strategy that we have started to implement, and the same is true for agriculture, although there has been good news from the NFU and its strategy to go to zero carbon by 2040. So there is much to do.
I have one or two questions for the Minister. The first is on carbon budgets. The climate change committee tells us we will not meet the fourth and fifth carbon budgets: it is saying that categorically. How are we going to meet those two carbon budgets, the last of which ends in 2032, only a little over a decade from now? That climate change committee report to Parliament put forward four principles, very constructively. It said to the Government—and to all Governments—first, support the simple, low-cost options. That obviously means offshore wind in particular, but others as well. Secondly, the committee said that we should commit to effective regulation and strict enforcement. Even on those houses where we now have higher standards of insulation than we did, do local authorities ever check them? I suspect not. Third was the end of chopping and changing of policy—that is a real pointer to all of us here in politics—and fourth was the suggestion that we act now to keep long-term options open. Clearly, those four are simple ways in which really to start to concentrate on this issue here in the UK. Are the Government taking up those recommendations?
It is quite obvious that tackling climate change now, as the noble Lord, Lord Stern, said in his original report, is far cheaper than doing it in the future. It is not only cheaper; it offers growth for our economy to get ahead. Yet we already have insurance costs, and those threats of costs to households, companies and the country are affecting us now.
The United Kingdom needs to regain its leadership in this area. When I was young, my mother always used the phrase “the road to hell is paved with good intentions”. I say to the Government that the road to a scorched planet is paved with worthy strategies rather than action. I beg to move.
Nuclear Energy
Lord Teverson Excerpts(7 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
My Lords, there was an awful lot to answer in the noble Lord’s question, but I think he is right to emphasise the importance of nuclear. It provides some 20% of our electricity requirements, and obviously in a low-carbon manner. We are also looking for cost reductions in new-build projects and I am glad that the noble Lord emphasised that. In our nuclear sector deal we are looking for cost reductions of some 30% over the next 15 years or so, as well as cost reductions in other areas. He is also right to emphasise the role that wind can play and the fact that the cost of wind is coming down.
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, it is in fact the turn of the Liberal Democrats.
Lord Teverson
My Lords, I welcome very much the Government being far more questioning about Chinese investment in critical infrastructure in this country, such as 5G telecoms, which is being rolled out. Will they extend that questioning to our critical nuclear infrastructure, not least Bradwell, which is a Chinese-designed system?
Lord Henley
My Lords, we will continue to work with CGN on Bradwell, as they have committed to do, and we hope that Bradwell B will become available in due course.