Renewables Obligation Certificate Scheme

Tim Farron Excerpts

Wednesday 5th March 2025 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a great pleasure to serve under your guidance, Mr Murrison. It is also a great pleasure to follow four excellent speeches. I pay particular tribute to the hon. Member for South West Norfolk (Terry Jermy) for his excellent contribution and for securing this important debate. He said it felt somewhat less glamorous to be here talking about chicken poop, but people will say that I have been talking poop for the last 20 years; certainly, as my party’s water spokesperson, I spend half my life in this place talking about the human variety, so chickens makes a nice change. I also belatedly congratulate the hon. Gentleman on his elevation to this place, not least because it has allowed us to deploy Liz Truss elsewhere, in our battle to take down the forces of reaction across the world.

On the renewables obligation certificate scheme, we are right to think about what happens next. The scheme is being phased out by the current Government, with the contracts for difference scheme being its principal successor. For what it is worth, I am proud of the role the Liberal Democrats played in the coalition in trying to move on to a better scheme.

That said, hon. Members have rightly pointed out that letting ROCs disappear without being replaced is a particular problem for biomass. All four Members referred to the impact on their constituencies if that was to happen, and they talked about the jobs the scheme has created in Stafford, Suffolk, Norfolk and in Strangford, in Northern Ireland. They recognised that biomass plays an important part in providing diversification of income for farmers and others, and in using organic waste that might otherwise find itself on the land. Indeed, when I am in this place talking about water quality, we are principally talking about the failings of the water companies, but agricultural run-off is clearly part of the issue, so if we can deal with that in a positive way, that will be a good thing. It would be an unintended consequence of moving on to new and better schemes if we allowed important plants such as the one in Thetford to close, with the impact that that would have on the local economy, because we had not thought through the transition and managed it in an efficient way.

I want to say a few words about how ROCs fit in with the nation’s energy security and about the extent to which they sometimes have perverse incentives. Drax power station in Yorkshire enjoyed just over 9 million renewables obligation certificates last year, at a value of £548 million. The material burned at that site includes biomass that has been imported into the UK, which is often wood pellets, mostly from America and Canada. Drax has previously admitted that some of the wood is from primary or old-growth forests—ancient forests of incalculable value in terms of biodiversity and beauty that would be vital in the fight against climate change if they were not felled. The new contract, I am pleased to say, states that 100% of those pellets must be sustainably sourced, which is something. But it is not organic waste, and there is still something not very sustainable about wood imported from across the oceans and then burned. We want to ensure that we invest in renewable power, so that 90% of the UK’s electricity is generated from renewables by the end of this decade. To do that, we will need to call in all our available resources; we do not want a situation where we are meeting our targets by having renewables in name only.

Members have talked about energy security and the importance of getting to net zero, which is vital. In the last few days—hopefully it is longer than that—we have been waking up to our need to protect our national security on a military footing. Yesterday, in Treasury questions, I raised the issue of our failure to step up to the mark when it comes to food security. Only 55% of Britain’s food is produced in Britain; that is a deep threat to the United Kingdom’s food security, and we need to take action quickly to tackle that by undoing the basic payments cut and scrapping the family farm tax.

We also need to look at energy security. It troubles me that some of those who claim to be very patriotic seem to pour cold water on and be sceptical about the environmental imperative. Even if I cannot convince people of the reality of climate change, and of the need to produce renewable energy for that reason, if we care about our energy security, we should surely care about net zero, which is a way of achieving it. To put it bluntly, Vladimir Putin cannot turn off the wind, the waves or the sunshine in this country.

[Mr Angus MacDonald]

Does my hon. Friend recognise the fact that we have major issues with environmental tariffs being placed on renewable energy but not on the carbon fuel of mains gas? That is really hitting the renewable energy industry and the cost for consumers.

[Tim Farron]

I completely agree. We are talking about incentives that we give to renewable energy generators and providers, but we have an energy market that essentially advantages not just fossil fuels but ones that, to some degree, are in the hands of potentially hostile powers. That is ludicrous for both the environment and our security.

I was pleased to hear Members on all sides of the debate talk about the importance of farmers and farming to the battle against climate change and to clean energy generation. We would love to see a recognition that farmers are primarily food producers but that diversification of businesses and cross-subsidy within them is a good thing. It is right that farmers should be incentivised and encouraged to use their land—for example, by putting solar panels on buildings and land that is not good for food production—so long as that is not displacing good-quality agricultural land.

I want to draw attention to a site near Barrow, which is not in my constituency but next door, in the Westmorland and Furness council area. The council now has a solar farm on unproductive former agricultural land, with the full support of the local farming community. Let us look at the ways in which we can support farmers to do that. I live in a very wet part of the United Kingdom with 1,500 farms within it. Pretty much every farmer has fast-flowing becks and rivers on their land, so why are we not incentivising them to build small but nevertheless powerful hydro schemes? That would be great for the environment and the local economy, and it would ensure that farmers can continue farming.

I sound like a broken record given how regularly I talk about this, but it continues to astound me that the United Kingdom, which has a higher tidal range than any country on planet Earth apart from Canada, does next to nothing with the latent tidal power around our islands. I encourage the Minister to come up with schemes to reward that.

I also want to say a word about grid capacity. A huge barrier to progress with this scheme and those that follow is the fact that 75% of energy sector insiders find timely grid connections to be the biggest single obstacle to growing renewable energy in the UK. To give a sense of the size of the queue, there are £200 billion-worth of projects waiting to be connected to the national grid, and that delays all the benefit that would come with that. We would seek to expand the grid network and unlock those billions of pounds of renewable energy projects through a land and sea use framework that has statutory weight in the planning and infrastructure Bill. That would help us to balance the many competing demands on our land, and the competing priorities of security and self-sufficiency that I mentioned earlier.

Those priorities also include local communities’ experiences, which are important to understand when we are trying to tackle the climate imperative. It is no good building huge energy infrastructure near communities if there is no clear, tangible benefit to them. For example, customers in communities local to such projects should receive energy at a discounted rate. If we build renewable energy schemes on the River Kent or the River Crake, the people of Kendal, Staveley, Windermere and Coniston should benefit from them, at least to a degree. We also want to empower local authorities to develop local renewable electricity generation and storage strategies, because they are best placed to understand where the most and least appropriate sites to place them are.

I return to the issues raised by the hon. Member for South West Norfolk. It is important that ROCs have played a significant part in the transition from fossil fuels to new and renewable forms of energy. I recognise that they have had a big impact on his constituency by creating jobs and ensuring that farmers have additional sources of income. They are part of a range of actions—our arsenal—for tackling water pollution. We must not throw out the good things that ROCs have achieved when we move on to new schemes, which hopefully will make even more progress in our move towards a society run entirely on renewable energy.

[Dr Andrew Murrison (in the Chair)]

I call Opposition spokesman Nick Timothy.