Energy Bill [HL]

Lord Whitty Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Whitty (Lab)]

My Lords, my name is also on the amendment, but I must apologise to the Committee for not being here during its long discussions on the previous two amendments, which relate to the contribution that renewables, in particular wind power, make to the reduction of carbon emissions and the decarbonisation of electricity supply.

This clause or something like it is necessary in the Bill because of the consternation that the changes in support for and expectations of wind power, solar power and other renewables have caused within those industries. They are concerned not that, understandably, the Government wish to reduce the subsidy as those technologies become more competitive with conventional energy, but that they should change the pace at which and the terms on which they are doing it at such short notice, and with such drastic impacts on projects conceived and put to planning long before those changes were proposed. Some of that will have been covered in earlier debates, but the fact is that the renewables industry will lose confidence in this Government’s support for and wider commitment to the objectives established under the Climate Change Act, and those we hope will be established at EU and global level, if they are not prepared to continue such support.

If the Government have a better way of reporting to this House and to the country how well they are doing on their carbon reduction targets and their overall trajectory towards reduced carbon use, it would be helpful for the Committee to hear of it, but, in default of that and in reaction to what has been already announced, it is legitimate for us to put within this Bill an obligation on the Secretary of State to produce a report within six months of the passage of the Act. I hope the Minister can accept something like this amendment or indicate what alternative methods of report the Government are now proposing.

[Lord Teverson]

Although I agree in principle with what this amendment is trying to get at, I have a recollection—I cannot find it, so I may be wrong—that under the Energy Act 2013 the Secretary of State has to give an annual report to Parliament anyway. If that is the case, I just want an assurance from the Minister that that report would cover the sort of issues discussed in this debate. We could have endless reports, but the main thing is to have a key area of reporting where all these things come over at one time, and that Parliament can debate them.

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Moved by

[Lord Whitty]

35A: After Clause 60, insert the following new Clause—
“Decarbonisation obligation
(1) Within six months of the closure of the renewables obligation on 31 March 2016 for onshore wind generating stations, the Secretary of State must bring forward regulations for a decarbonisation obligation.
(2) A “decarbonisation obligation” means the level of carbon intensity of electricity generation in the United Kingdom that a relevant supplier may not exceed in respect of the total kilowatt hours of electricity that it supplies to customers in England and Wales during a given year.
(3) In setting a decarbonisation obligation, the Secretary of State must first obtain and take account of advice from the Committee on Climate Change.
(4) In this section, “relevant supplier” means electricity suppliers supplying electricity in England and Wales.”

[Lord Whitty]

In the unavoidable absence of my noble friend Lord Foulkes, I will speak to Amendment 35A. As we have just discussed, electricity decarbonisation is a key component of our carbon reduction strategy. The amendment would provide a mechanism whereby decarbonisation by supplier is built in and becomes transparent, and is therefore enforceable supplier by supplier. It would require the Secretary of State to issue regulations to place on each electricity supplier—subject to definition in the regulations—a maximum level of carbon intensity in the electricity that it supplies within England and Wales. This decarbonisation obligation would be a proportion taken over the year of the carbon content of the electricity supply to its consumers over the course of that year.

The amendment of course does not specify exactly how the obligation would be expressed nor the level, nor whether there would be a single figure or whether that would be varied supplier by supplier depending on their pre-existing achievement of reductions in carbon intensity. That is a matter for consultation prior to the regulations being promulgated. The only specification in the amendment is that the Secretary of State needs to take the advice on this issue of the Committee on Climate Change—I am glad to see that the noble Lord, Lord Deben, has joined us at an appropriate point. Therefore, that would be the benchmark against which the Secretary of State calculates the requirement. It is noticeable that the amendment would apply only in England and Wales. There would be different arrangements in Scotland and Northern Ireland.

The amendment would give a crucial mechanism to the Secretary of State for ensuring that the pace of decarbonisation in the electricity supply was maintained, transparent and understood supplier by supplier. It would be an important additional weapon in the Secretary of State’s armoury. The Minister has assured us that we are on track for 30% of renewables by 2020. We need to go much further than that to meet what will be the requirements for carbon reductions over the years beyond 2020. I beg to move.

[Lord Teverson]

My Lords, I was pleased to add my name to the amendment, although I do not pretend to be an expert on exactly how it would work. There was a great celebration in February this year when our Prime Minister, to whom I give full credit, made a declaration jointly with Nick Clegg, the then Deputy Prime Minister and Ed Miliband the then leader of the Official Opposition. They made pledges through the Green Alliance, one of which was to accelerate the transition to a competitive energy-efficient, low-carbon economy and to end the use of unabated coal for power generation.

That was a fantastic declaration at the beginning of a general election campaign when politics was running high and competition between political parties was starting to move into a more confrontational stage. Yet three party leaders came together and said that low carbon and taking out unabated coal would be key. I see the amendment as something that could move us towards that solution in a concrete way. That is why I support it so strongly.

The Energy Act 2013 started off being about decarbonisation. It made it clear that the Secretary of State had the ability to—and in parliamentary Bill language that presumed that the Secretary of State would—declare a decarbonisation target in 2016 when the Committee on Climate Change came forward with its recommendations for the fifth carbon budget. My question to the Minister on this key area in meeting Climate Change Act obligations is whether the Secretary of State intends next year to follow that through in the carbon budget that is recommended and the one that is subsequently agreed.

The other attractive thing about this amendment is that it tries to find a least-cost way through to decarbonisation. As previous debates have shown, in this House we are united in wanting to decarbonise our economy at least cost. We all know that that is important to consumers, for fuel poverty and to the competitiveness of our economy. This amendment finds a way to do that.

I welcome the amendment and I agree entirely with what the noble Lord, Lord Whitty, has put forward. I will be interested to learn from the Minister how the Government intend to take forward the pledge the Prime Minister made in February. Will the Government move next year to a decarbonisation target for 2030 and, as part of that, will they make sure that coal really does disappear from our system as soon as that is practically possible?

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[Lord Bourne of Aberystwyth]

My Lords, I appreciate that point. On the clause as set out, I have made it clear that we will not come forward with this additional obligation. The manifesto is absolutely clear that there will be no power sector target. That is the position of the Government.

[Lord Whitty]

My Lords, if I understand that right it is very disappointing. I can understand the objection, or at least the querying by the noble Lord, Lord Deben, as to whether we need a detailed mechanism for setting carbon intensity coefficients by supply, but he argued very persuasively, and has done before, for a decarbonisation target for 2030. That is why that was written into the 2013 Act and why there was an expectation and general indication from the Minister’s predecessors that there would be a target set in 2016, but only in the context of the carbon budget, which they are obliged by the Climate Change Act to come forward with. I did not accept that argument, but I understood it in terms of the timing. There was some considerable debate about that during what became the passage of the 2013 Act.

It is very disappointing, not only to us in this House but to the various industry operators, including the supply companies, that there seems to be an abandonment of that commitment in what the Minister has interpreted from the Conservative Party manifesto. As I well know, manifestos are pretty flexible things. I hope that he can consult with his colleagues as to whether it actually meant that, or whether there was some more room—

[Lord Teverson]

I am not quite sure how to ask the noble Lord, Lord Whitty, this, but having read the Conservative manifesto many times and having it on my iPad on iBooks, I have not seen this obligation not to have a target anywhere in it. Has he?

[Lord Whitty]

My Lords, I am not quite such a conscientious and diligent reader of the manifestos of various parties—even my own—as the noble Lord, Lord Teverson. The best thing we can ask the Minister to do is to go back and talk to his colleagues—whether it was in the manifesto or not—about whether they are definitely now not going ahead with what was allowed for in the 2013 Act. If that is the case, there are ramifications. I understand why the Minister is opposed to the mechanism proposed in the amendment. I would have thought that having set the 2030 target for decarbonisation would be a useful addition to the armoury, as the Committee on Climate Change and the noble Lord, Lord Deben, advocated. If the Minister feels that that would be too much interference in the market mechanisms, I understand that. It would still be up to the supply companies how they met that obligation and what kind of technologies and contracts they entered into. The market is still operating there. I understand and accept that the Minister is not prepared to go along with that.

[Lord Bourne of Aberystwyth]

To be helpful, in view of the fact that there is a degree of uncertainty about what the manifesto says specifically—not least with me—I am happy to go back and have a look at it. We can come back to it on Report to ensure that I have understood the position correctly. I undertake to do that and we can pick it up on Report if that is helpful.

[Lord Whitty]

My Lords, that was very generous of the Minister. I thank him very much, as I think the Committee will as a whole. Before I withdraw the amendment, I will just comment on something that the Minister said on markets and nationalisation. When the then Energy Bill of 2013 first came before us, the noble Lord’s colleague, the noble Lord, Lord Lawson of Blaby, described it as “Gosplan”. There is something in that. There is nothing from any element in the Labour Party that goes as far as that. I beg to ask leave to withdraw the amendment.

Amendment 35A withdrawn.