Sustainable Energy Bill

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New clause 9

Energy efficiency of residential accommodation: National Assembly for Wales

    '(1) The National Assembly for Wales (''the Assembly'') must within one week beginning with the coming into force of this section designate under this subsection at least one energy efficiency aim.

    (2) For the purposes of this section an ''energy efficiency aim'' is an aim which—

    (a) is contained in a published document;

    (b) relates to the energy efficiency of residential accommodation in Wales; and

    (c) is compatible with Community obligations and any other international obligations of the United Kingdom.

    (3) The Assembly may, at any time after designation under subsection (1), designate under this subsection a further energy efficiency aim or aims.

    (4) Where an energy efficiency aim is for the time being designated under this section, the Assembly must (using the powers it has apart from this section) take reasonable steps to achieve the aim.

    (5) In deciding which steps to take for the purposes of subsection (4), the Assembly must consider steps relating to the heating, cooling, ventilation, lighting and insulation of residential accommodation.

    (6) A designation under this section may be withdrawn, but not if its withdrawal would result in there being no energy efficiency aim

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    designated under this section.

    (7) If an energy efficiency aim designated under this section ceases to meet the condition in subsection (2)(c) it ceases to be designated under this section, but if this results in there being no energy efficiency aim so designated the Assembly must without delay designate a new energy efficiency aim.

    (8) A designation of an aim under this section, or a withdrawal or cessation of such a designation, must be published in such way as the Assembly considers appropriate: a designation may be contained in the same published document as the aim itself.

    (9) In this section ''residential accommodation'' has the meaning given by section 1 of the Home Energy Conservation Act 1995 (c.10).'.—[Brian White.]

Brought up, read the First and Second time, and added to the Bill.

New clause 10

Energy efficiency of residential accommodation: energy conservation authorities

    '(1) In this section an ''energy efficiency direction'' means a direction requiring each energy conservation authority to which it applies to take such energy conservation measures as that authority considers to be—

    (a) likely to result in achieving, by a date specified in the direction, an improvement so specified (which may be expressed as a percentage) in the energy efficiency of residential accommodation in that authority's area; and

    (b) practicable and cost effective.

    (2) For the purposes of this section, ''the energy efficiency'' of residential accommodation in an energy conservation authority's area has such meaning as may be specified in an order made by the Secretary of State.

    (3) The Secretary of State may, after consulting the Local Government Association, give an energy efficiency direction which applies—

    (a) to one or more named energy conservation authorities in England;

    (b) to all energy conservation authorities in England; or

    (c) to a particular description of energy conservation authority in England.

    (4) The National Assembly for Wales (''the Assembly'') may, after consulting the Welsh Local Government Association, give an energy efficiency direction which applies—

    (a) to one or more named energy conservation authorities in Wales;

    (b) to all energy conservation authorities in Wales; or

    (c) to a particular description of energy conservation authority in Wales.

    (5) With effect from the giving of an energy efficiency direction—

    (a) each energy conservation authority to which the direction applies must comply with the direction, using the powers it has apart from this section; and

    (b) the Home Energy Conservation Act 1995 (c.10) (''HECA'') shall cease to apply in relation to each such authority.

    (6) In deciding which measures to take for the purposes of complying with an energy efficiency direction, an authority must give preference to measures which it considers would also contribute to—

    (a) achieving the objective mentioned in paragraph (d) of section 2(2) of the Warm Homes and Energy Conservation Act 2000 (c.31) by the target date for the time being specified under that paragraph;

    (b) achieving any interim objectives for the time being specified under paragraph (c) of section 2(2) of that Act by the target date so specified.

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    (7) Different energy efficiency directions may be given in relation to different energy conservation authorities or different descriptions of such authority.

    (8) The Secretary of State may after consulting the Local Government Association, and the Assembly may after consulting the Welsh Local Government Association, alter the date or the improvement (or both) for the time being specified in an energy efficiency direction given by the Secretary of State or (as the case may be) by the Assembly.

    (9) An energy efficiency direction may be revoked, but only if each authority to which it applies either—

    (a) is subject to a new energy efficiency direction taking effect immediately on the revocation; or

    (b) no longer exists at the time of the revocation.

    (10) The Secretary of State may give to energy conservation authorities in England, and the Assembly may give to energy conservation authorities in Wales, such guidance as he or it considers appropriate in relation to the exercise of an energy conservation authority's functions under this section.

    (11) An energy conservation authority must have regard to any such guidance.

    (12) The Secretary of State may by order—

    (a) amend this section so as to alter the body which must be consulted by him;

    (b) make transitional provision in relation to HECA's ceasing to apply in relation to an energy conservation authority in England.

    (13) The Assembly may by order—

    (a) amend this section so as to alter the body which must be consulted by it;

    (b) make transitional provision in relation to HECA's ceasing to apply in relation to an energy conservation authority in Wales.

    (14) Any power to make an order under this section is exercisable by statutory instrument which, in the case of an order made by the Secretary of State, shall be subject to annulment in pursuance of a resolution of either House of Parliament.

    (15) In this section the following expressions have the meaning given by section 1 of HECA—

    ''energy conservation authority'';

    ''residential accommodation'';

    ''area'', in relation to an energy conservation authority;

    ''energy conservation measures''.'.—[Brian White.]

Brought up, read the First and Second time, and added to the Bill.

Clause 6 disagreed to.

Clause 3

Amendments of the Electricity Act 1989

Question proposed, That the clause stand part of the Bill.

The Chairman: With this it will be convenient to debate new clause 11—CHP targets.

Brian White: This is one of the key issues on energy policy that faces the Government. The Government have set targets in this area through their climate change programme. Some hon. Members will be only too well aware of the urgent need to give a boost to the CHP industry. There are huge concerns in the industry that the market for CHP has all but stagnated. A strong declaration of Government support is therefore vital to kick-start investment in such highly efficient technology.

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I regret that we were unable to reach agreement on removing the renewables obligation. The CHPA estimates that, without it, some £100 million will drift from the CHP sector to other green technologies by 2010, acting as a further break on progress towards real breakthroughs. The debate will continue and I am hopeful that, over time, the Government will be persuaded of the merits of such a measure.

I make the point to the Minister as he learns about his new job that CHP is in crisis at the moment, and much of that results from the new electricity trading arrangements. Not accepting the original clause 3 will not make that problem go away. Many of us will be on the Minister's doorstep and that of the Treasury over the coming months. Scottish Power, Scottish and Southern Energy, Innogy, Powergen, Northern Electric and Meridian Industrial have all withdrawn from the development of their new CHP schemes. New CHP capacity fell by 95 per cent. from 2001 to 2002. I could go on, but given the time, I will not. The Minister will be aware of such statistics.

The Government have agreed that there is a need for action on CHP, and the new clause provided some assurance to the CHP industry. A proper CHP strategy is now five years overdue but the clause will help to convert some of the Minister's statements into future action. It will allow the Secretary of State to set targets for CHP in Government use. It is a useful, if minor, step forward that will help the CHP industry. The Minister has to realise the gravity of the situation facing the CHP industry, and I hope that, when he responds to accept the new clause, he will recognise the severity of the economic situation that the industry faces.

11 am

Mr. Robathan: I should say that I have been a vice-president of the CHPA for many years. Regrettably, it is not an interest that I need to declare because I do not get paid for it—hope springs eternal. I instigated an Adjournment debate in October 2001 with the Minister's predecessor because NETA has had a dire impact on the CHP industry, and, at the time, was having such an impact on the renewables industry—although that has partly been allayed by the renewables obligation.

The hon. Member for Milton Keynes, North-East mentioned a few aspects of the problems with CHP. I want to tie the issue into—guess what—another Government target. Measured against targets, we can appreciate the dire situation of CHP. The Government target, which was set by the Conservative Government before 1997, was to have an installed CHP capacity of 5 GW by 2000. In 1997, the Government set a subsequent target of installed CHP capacity of 10 GW by 2005. We have yet to reach the 2000 target, which the Government accepted when they came to power, of 5 GW. Our current capacity is 4.8 GW.

That is immensely important. The hon. Gentleman pointed out that new CHP capacity fell by 95 per cent. between 2001 and 2002. That means that the amount of new capacity being installed now is miniscule. The output of existing schemes fell by 17 per cent. Some

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£1 billion of investment in Government-consented CHP schemes is now stalled. The consequence of that and other things is that carbon emissions in the power sector have risen by more than 10 per cent. since NETA came in.

I return to the targets. In the previous debate, the Minister said that the Government were selective about adopting targets and that the whole apparatus of Government comes behind targets to ensure that they are reached. Well, there are two pretty plain targets that will not be reached. The whole apparatus of Government has not come behind them to ensure that they are reached.

Clause 3 would exclude CHP from the renewables obligation and largely treat it as a renewable. I am the first to admit that CHP is not renewable, but it is an efficient way in which to generate electricity, which is why it found favour with the Conservative Government and has found favour with this Government. If we are going to generate electricity—let us consider fossil fuel—it is better to do it in the most efficient way possible.

 
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