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Energy Bill [Lords]

Energy Bill [Lords]

Column Number: 433

Standing Committee B

Thursday 17 June 2004


[Mr. Roger Gale in the Chair]

Energy Bill [Lords]

2.30 pm

Clause 129

Strategy for microgeneration

Brian White (Milton Keynes, North-East) (Lab): I beg to move amendment No. 200, in

    clause 129, page 102, line 6, after 'microgeneration', insert 'and dynamic demand control.'.

The Chairman: With this it will be convenient to discuss the following:

Amendment No. 201, in

    clause 129, page 102, line 12, at end insert—

    '(2A) In drawing up the strategy or any revision of the strategy, the Secretary of State shall consider the role of dynamic demand control in—

    (a) reducing fluctuations in demand for electricity, and so increasing stability and security of supply,

    (b) creating a smoothing effect in electricity demand that facilitates the connection of high proportions of intermittent renewable generation,

    (c) reducing the need for reinforcement of electricity networks, and

    (d) reducing the cost of balancing the electricity system.'.

Amendment No. 202, in

    clause 129, page 102, line 15, at end insert

    'or produce products that would facilitate dynamic demand control'.

Amendment No. 212, in

    clause 129, page 102, line 16, leave out subsection (4).

Amendment No. 203, in

    clause 129, page 102, line 17, after 'microgeneration', insert

    'and the installation of dynamic demand control measures'.

Amendment No. 213, in

    clause 129, page 102, line 20, leave out from 'strategy' to end of line 21.

Amendment No. 214, in

    clause 129, page 102, line 23, leave out 'new'.

Amendment No. 204, in

    clause 129, page 102, line 24, after 'microgeneration', insert

    'and the installation of dynamic demand control measures'.

Amendment No. 205, in

    clause 129, page 102, line 28, at end insert—

    '''dynamic demand control'' means the ability of a load or a microgeneration device to adjust its electricity consumption or output according to instantaneous power imbalances on the electricity grid, in order that the variability of demand is reduced;'.

Clause 129 stand part.

New clause 2——Requirement for net metering for premises with microgenerating installations—

    'After paragraph 1 of Schedule 7 to the 1984 Act, insert—

    ''Net metering for premises with microgenerating installations

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    1A (1) Electricity suppliers shall provide net metering facilities upon request to domestic or business premises which have microgenerating installations.

    (2) The electricity meters shall be charged at the same tariff in both directions.''.'.

Brian White: I welcome you to our proceedings, Mr. Gale. When this Committee started its deliberations, which seems an eternity ago, we talked about security of supply. I made the point that we needed to look at the demand side as well as the supply side. It should come as no surprise to the Committee that I am going to bang on the same drum again. In the debate on clause 120, the Minister described micro combined heat and power as an important contributing factor to achieving our goals. I echo that. [Interruption.]

The Chairman: Order. Settle down please.

Brian White: I also fully accept that clause 129 as currently drafted is flawed. I therefore welcome the draft Government amendment, which has been circulated and which addresses some of those flaws. We have to recognise the benefits of microgeneration. It can help not only in CO2 reduction, where it can displace 60 per cent. of efficient central generation, but with the introduction of new technologies in our manufacturing base. It is highly carbon efficient. I have already mentioned security of supply.

Microgeneration is also helpful for affordable housing, which we have talked about in relation to the renewable heat obligation. It helps our competitiveness. Most importantly, it engages people in the debate where it matters—in their own homes. It therefore has a far more symbolic effect than many of the policy issues that we have debated in Committee. Microgeneration has a key role to play, so this is one of the key clauses in the Bill. That is why I am pleased that the Government have accepted that there is a role for microgeneration in the Bill.

I tabled amendments Nos. 200 to 205, and I assure my hon. Friend the Minister that they are probing amendments. I will not push them to a vote. My aim is to get the Government to look at dynamic demand technologies. They are the technologies of the future. Part of the microgeneration strategy should be to look at ways to use these technologies.

I did my fellowship with the Industry and Parliament Trust and with the now defunct Electricity Association. That involved going round the national grid looking at how it operates, how it balances electricity demand at any one time and how it deals with surges in electricity such as will occur at 5 pm today. The national grid has to deal with constant variations in demand every day. Much is done by prediction and by planning ahead. There is variability from minute to minute and even second to second that is not predicted and is balanced by running a few power stations at variable rates. They go up and down as the demand rises and falls.

There is a potential problem as we add more renewable capacity to the grid, which is not as constant as some other forms, and we introduce more variability into the system. That increases costs. Power stations that are balancing the grid at the moment by

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turning up and down run well below capacity. It is estimated that around £80 million a year is spent on balancing the grid in that way.

There are an awful lot of power-hungry devices in our homes. The classic one is the fridge. Typically, a fridge will switch on its motor for about 15 minutes and then stay static for about three quarters of an hour. As it gradually warms up again, it will hit the trigger and then cool air will come in. If we could adapt that technology by detecting changes in the way in which the mains frequency varied, we could save power. One fridge would not make any difference, but a million fridges operating at the same time would start to do so.

A number of small measures such as that—which involve people making decisions, contributing and having ownership of the way in which they affect climate change—would make a major difference and get people on board to support the policies that we are advocating.

Mr. Robert Key (Salisbury) (Con): I am delighted to see you in the Chair, Mr. Gale. I do not know whether the hon. Gentleman is an electrical engineer. I am not, but electrical engineers have told me that changing our traditional system of running electric motors at free speed could make a dramatic difference to energy consumption. There is no limiter for the speed. Generally speaking, every electric motor that does anything runs at top speed all the time. Am I correct?

Brian White: That is my understanding, too. That is why I am saying that if, collectively, we put limiters on our domestic machinery, we could make a major difference. Each individual one would not make much difference, but across the whole country, dynamic demand management would make a major difference. The hon. Gentleman makes the point clearly. I am not an electrical engineer, but one of those people who used electricity, but did not manage it. The price of putting these controllers into an item such as a fridge is between £3 and £5, so for a very cheap investment, which would presumably be made when machines were built and bought—the effect would build over time—we could make a major saving in the £80 million that the national grid uses in keeping power stations inefficient and well below capacity.

To make progress on this issue, the Government must set the framework. There must be a clear steer from them, because there is no argument for consumers to pick up those products or for manufacturers to make them. The Government have a role in setting out the strategy and the goals and encouraging the industry to implement the strategy. The industry could deliver it effectively.

At the risk of setting myself up to be ridiculed under the headline ''Fridges Save the Planet'', I believe that there is a danger that, because we cannot solve all the problems and because my proposal would make only a small contribution, we will reject it. The measure would be a small part of the overall solution, and I urge the Government to consider it and to go down the

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route that I have described. They should consider it as a step forward. Collectively, we could make major inroads into the demand side of electricity use.

Mr. Laurence Robertson (Tewkesbury) (Con): I welcome you to the Committee, Mr. Gale.

Clause 129, which concerns the strategy for microgeneration, was put into the Bill in another place. A few minutes ago, we were given a copy of the Government's preferred amendment, which I presume will be moved on Report. To be fair, we have not had a chance to read through it in detail or to consider it. I am therefore tempted to stick with clause 129 for now. It can, of course, be revisited. I would probably suggest that my hon. Friends do the same.

The hon. Member for Milton Keynes, North-East (Brian White) made his customary well informed and enthusiastic speech, highlighting the need to reduce demand. That would be a useful outcome of clause 129. It is also important to promote the clause because of the new concept that it represents. We have macro-management of the electricity system—to describe it crudely—but also the important concept of microgeneration. According to my brief, microgeneration is when each and every householder will no longer only consume energy, but will produce it. That will engender among householders an interest, which has not existed previously because for 30 years we have had uninterrupted supply. Whenever anyone, including me, has switched a light on, it comes on without a problem. However, that situation is changing so we need a strategy for microgeneration and a requirement for the Secretary of State to implement that strategy.

I have not had a chance to study the proposed amendment. The Minister will propose it in good faith and we will consider it in good faith, but for now, I support clause 129. It is an extremely important part of the Bill and future energy strategy. I welcome its presence.


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