International Renewable Energy Agency (Legal Capacities) Order 2011

Lord Wallace of Saltaire Excerpts

Wednesday 7th September 2011 Grand Committee

[Lord Wallace of Saltaire]

That the Grand Committee do report to the House that it has considered the International Renewable Energy Agency (Legal Capacities) Order 2011.

Relevant document: 23rd Report from the Joint Committee on Statutory Instruments

[Lord Wallace of Saltaire]

I beg to move that draft Order in Council be approved together with an Explanatory Memorandum, as required for all affirmative statutory instruments. This Order in Council confers, in the UK, the legal capacities of a body corporate on the International Renewable Energy Agency, IRENA. It is a new international organisation that will work to increase the deployment of renewable energy technologies globally. It has been established by a treaty, the IRENA statute. This Order in Council was approved by the House of Commons Committee on 14 July 2011 this year.

The UK signed the IRENA statute in 2009. The Government believe that the UK should now ratify the statute. To that end, a copy of the statute was laid before Parliament on 7 June, together with an Explanatory Memorandum, in accordance with the Constitutional Reform and Governance Act 2010. The statute requires that all members of IRENA should confer legal capacity on IRENA in their territories. We therefore need to make this order to enable the UK to ratify the IRENA statute and become a full member of the organisation.

Let me explain the background to IRENA in a little more detail. This was a German initiative. The statute was agreed in Bonn in January 2009 and subsequently signed by the UK on 26 June 2009. The treaty entered into force in July 2010, after the deposit of the 25th instrument of ratification in Bonn. The statute establishes an international renewable energy agency to promote the widespread use and increased adoption of renewable energy technologies. The principal effect of the order is to enable the UK to become a full member of the agency.

So far, IRENA has 149 signatories. To date, 82 of these signatories have ratified the statute, including the United States, Japan, 18 EU member states, the European Union itself and 49 developing countries. With such a wide membership, IRENA will be the first truly global organisation devoted solely to renewable energy technologies. This is a young organisation, with its first assembly taking place in April this year. However, it has high ambition and is seeking to become an international centre of excellence for renewable energy technologies, with a specific focus on the developing world. IRENA will be able to bring together renewable energy experts from across the world to develop best-practice technical and policy examples. It will also be able to produce objective reports on the renewable energy market to help inform regional development across the world.

Renewable energy needs to play a key role in meeting global energy demand. Deployment has been increasing rapidly in recent years. Of the approximate 300 gigawatts of new electricity-generating capacity added globally during 2008-09, 140 gigawatts, nearly half, came from renewables. Global co-operation, through an organisation like IRENA, will be essential to ensuring that renewable energy deployment continues to increase.

The use of renewable energy has great potential to tackle climate change. The Intergovernmental Panel on Climate Change estimates that between 2010 and 2050, renewables can make CO₂ savings of between 15 per cent and 37 per cent against the world economic outlook 2009 reference scenario. There is also a role for renewables in increasing global and domestic energy security. The greater the deployment of renewable technologies internationally, the less pressure there will be on traditional energy sources such as oil and gas.

The deployment of renewable energy technologies can also support greater energy access, particularly in rural communities. IRENA will mean that the UK and others will have a framework within which to share technical and policy expertise with those most in need of securing innovative energy solutions.

The UK has a strong reputation internationally in the deployment of clean energy technologies. We are world leaders when it comes to offshore wind and have just introduced the world’s first financial incentive for increasing levels of renewable heat. In the future, renewable energy will play an increasingly important role in the UK’s energy mix. The renewable energy road map, published in July, sets out the Government’s vision for meeting our domestic renewable energy target for 2020. Increasing our domestic renewables capacity will mean that we can decrease our reliance on fossil fuels. Greater deployment of renewables globally will also mean that costs for these technologies will fall, making fulfilment of our domestic renewable energy ambitions more cost-effective. We want to remain at the forefront of this growing industry and ensure that UK interests are represented in what will be such a landmark global organisation.

The UK Government have made a commitment to push for greater efforts to tackle climate change internationally and to deliver investment to increase deployment of renewable energy technologies. We will thus be acting in accordance with this commitment by becoming full members of an organisation whose activities will help to make this happen. This is an important order, which reflects cross-party commitment to reducing global greenhouse gas emissions. I therefore commend it to the Committee and hope that it will receive the Committee’s full support.

--- Later in debate ---

[Lord Teverson]

I absolutely agree with the noble Lord, Lord Reay, in his use of the word “crippling”. What we have seen over the past few years is a crippling increase in fuel poverty in this country, something like a doubling. I do not know the exact figures, but is up to about 6 million because of the increase in fossil fuel prices that households have to pay. I also agree with that word “crippling” in terms of the increase in energy prices that we have seen. Gas, a well known fossil fuel, has increased by some 30 per cent this year. Those prices are truly crippling. That is the word to use in terms of the repercussions of the fossil-fuel based economy that we have at the moment. I do not want to get into that argument too much.

With regard to renewable energy worldwide, it is tempting to look just at new technologies, but we should remember that, globally, renewable energy was the only energy until the Industrial Revolution; before oil it was a major part. Renewable energy already accounts for about one-sixth of the world's energy production. Of course, that is not wind power or the other new technologies; it is largely biomass—I must admit that not all of that was renewable, but, I hope, most of it now is—and hydroelectricity, which is a major proportion of world energy generation even today. Renewables account for about one-fifth of energy production worldwide.

From what I read on the body's website, it is not just about future technologies, which are not greatly applied, but traditional renewables. That is why it is important to bring together the world community on renewable power. I was pleased to see that there are already 149 signatories and 82 members—including, as the Minister said, the European Union. I was disappointed to see that although the United States is a signatory, that is not true for China, Canada, the Russian Federation or Brazil. I do not know whether they are in the queue to join; I very much hope that they are.

Outside the argument of the cost of renewables against that of fossil fuels and technologies such as nuclear power, it is undeniable that renewables are, have been through human history and will be a really important contribution to energy production globally. That is why it is important that IRENA has been founded. I am surprised that it took so long—until 2009—before it was. The noble Lord, Lord Reay, magnifies imperfections that we all see, but I hope that it will be a body that will help the evolution of renewable power more effectively and successfully.

It is easy to set up international organisations and pay for administrations and bureaucracies, but I would be interested to understand what the priorities are in the practical programmes of IRENA in its next time horizon of three years. That is slightly more specific than the question asked by the noble Lord, Lord Liddle, which is important, of how the UK will contribute. I was not clear from the publicity of IRENA exactly what it was trying to do over the next few years in research and co-ordination, because however worthy an international organisation and its cause is, it must be effective. It costs money, so it has to produce results.

I very much welcome the Government’s move to complete our signing up to IRENA as this is clearly an important area of technology for our future.

[Lord Wallace of Saltaire]

I thank noble Lords who have contributed. Perhaps I may answer the question from the noble Lord, Lord Liddle, and then extend it to the question of what IRENA’s agenda should be for the next three years.

The United Kingdom has accepted the position of chair of the IRENA policy and strategy committee, so we will be playing a leading part in defining the agenda. British interests are clear. First, we want to support the channelling of investment in energy in the developing world as far as possible towards renewable energy and away from the further consumption of fossil fuels.

Secondly, we wish to promote the full ownership by developing countries of the switch towards renewables. I have to say that the role of Abu Dhabi and the UAE is extremely positive in this. It demonstrates that it is not simply the West pushing this agenda on the developing world, but that we have partners in the Arab world who are themselves actively concerned to assist developing countries in investing in renewables. I will come back to the role of Abu Dhabi in a minute. Thirdly, there are opportunities for UK expertise and industry, both in exports and the economies of scale that come from a larger market, which will then drive down the prices we have to pay for renewable technologies at home.

In terms of a practical programme for the next three years or so, I understand that the underlying purpose of IRENA is to encourage co-operation in renewables across the developing world. In the same way that the IPCC at an early stage put a great deal of effort into training experts from developing countries so that it was not simply a western argument about climate change being put across the developing countries, so IRENA will try to encourage the development of expertise and adoption of these technologies in those countries—both at the macro level and very much at the micro level. In a lot of these developing countries where the population is dispersed, micro power, for which renewable schemes are often extremely helpful, will be very much the local example.

The noble Lord, Lord Reay, made a number of points. I should say to him, first, that we face long-term rising demand for fossil fuel, which is, as we already notice, driving up long-term prices for fossil fuel. Further development of and investment in renewable technologies is moving in the opposite direction, driving down the prices and costs of renewables. That is part of the process we of course wish to encourage.

The Matthew Sinclair book has, as the noble Lord will know, very kindly been sent to, I think, all Members of the House of Lords, and I dare say that a number of us may read it. Countries such as Tonga are not just along for the ride. Tonga is, after all, one of those Pacific islands that have very little land way above sea level, and it is thus directly threatened by the impact of climate change. The Pacific islands are therefore among the most active countries in pushing for a switch to renewables and a really serious effort to contain the expansion of CO₂ in the atmosphere.

There is also an energy security dimension to this, as I mentioned in my opening remarks. Dependence on a small number of countries for supplies of fossil fuel over the long term is potentially a major source of global insecurity, and the more that we can reduce dependence on imported fossil fuels for all countries, the better we do.

The UK’s contribution to IRENA’s budget is on the scale provided for in British contributions to the United Nations and other agencies. It is currently £750,000; it will increase to £1 million and, no doubt, in the long run will increase further. The Government’s view and that of our predecessors is that this is a worthwhile and modest investment. I should perhaps add that so far the largest contributors by far to IRENA are Germany and Abu Dhabi, which, in addition to the scale of their contributions, are making some substantial and very valuable voluntary contributions. The interests of Abu Dhabi, I understand, are that fossil fuels should not last for ever as the driver of its economy and that it wishes to diversify its economic interests. This is very much an enlightened approach. German interests are also mixed. Germany has a highly developed renewable energy industry and its Government certainly see major opportunities for exports as this area expands. That is something that we as a country also need to look at, and that is part of where we hope the future revival of British exports may indeed come from.

On renewable energy, I simply say to the noble Lord, Lord Reay, that I spend my summers walking around the Yorkshire Dales, past weirs that used to produce power and in one or two cases, as in Grassington and Upper Wharfedale, used to produce electricity 60 or 70 years ago. We are now at last, although very slowly, beginning to put some of those weirs back into production, producing electricity. The French have been doing this for 30 or 40 years. There is a great deal that we can still do in this country.

I had an argument with a Conservative MP recently who said that it would deface the southern Yorkshire plain if we were to have windmills on it. There are in fact a number of ruined windmills scattered across the plain, but when I drive across it I find that the biggest eyesores that one faces are Drax and the other two big coal-fired stations. If I may say so, I find those who object to switching to renewable energy and wish to go on burning fossil fuels on the scale on that we do, importing coal from Poland, Australia and elsewhere, a little short-sighted in terms of our long-term interests in energy security and the balance between imports and exports.

Having, I hope, answered most of the questions raised, I hope that I may take the Opposition’s welcome as being very much cross-party approval.

Motion agreed.