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Norman Baker (Lewes) (LD): I congratulate the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) most sincerely on an extremely valuable Bill, which I hope will receive its Second Reading. I also congratulate all the Members, across the parties, who have added their names in support of it, including my    hon. Friend the Member for Hazel Grove (Andrew Stunell).

The background is the threat from climate change, and, like the hon. Member for Edinburgh, North and Leith, I do not want to go into that in great detail. Suffice
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it to say that predictions from scientists become more rather than less apocalyptic as time goes on. It is clear that we need drastic action domestically and internationally, and tackling energy issues is a key part of that.

The Government's climate change review, coming up shortly, gives them an opportunity to recognise what has gone right and what has gone wrong, to take stock and to come forward with measures that may differ from what they have advocated before in order to meet the Kyoto target this country has set itself and the domestic target of a 20 per cent. cut in carbon dioxide emissions. They will not do that successfully if they rely on pulling the same levers as they have used in recent years. Without wishing to appear partisan on a non-partisan Bill, I may say that it is a matter of fact that carbon emissions are rising in this country, and we therefore need a step change in how we approach them.

The Bill successfully and innovatively challenges the basis on which energy is delivered in this country. Hitherto, energy has been about big sources of power in certain strategic locations, with huge swathes of power lines taking power from those sources to where it is needed elsewhere in the country. That has been the case with coal-fired power stations, oil-fired stations and nuclear stations, and the same principle is, arguably, being applied to wind farms. The Bill rightly turns that on its head, saying that there is a better way to meet our energy needs in the 21st century.

One way to do that is undoubtedly energy efficiency; that is, in an over-used cliché, the low-hanging fruit yet to be picked by the Government. A huge amount could be done to tackle carbon emissions if we had a sensible energy efficiency strategy. Another way to deal with it would be to promote micro-generation. It makes no sense to have an electricity grid, with all the investment that requires and with power lines stretched across the country, simply to meet winter peak demand. That energy grid is simply not being used at capacity, except on a few occasions over the year. Yet we carry on building the grid, building power lines and disfiguring the country with pylons.

Norman Lamb: Is my hon. Friend aware of the work commissioned by Greenpeace on the importance of local generation and of moving away from the old-fashioned national grid, which was designed for a different age and which is not fit for purpose in today's world?

Norman Baker: My hon. Friend is absolutely right: the Greenpeace document on centralising energy has much to commend it, and I hope that when the climate change review is published—whenever that will be; it seems to be slipping, and perhaps the Minister might tell us today—it will reflect some of the sensible proposals set out in the Greenpeace document.

As well as dealing with the old-fashioned grid to which my hon. Friend referred, the Bill localises energy in an entirely desirable way. It applies the proximity principle. It empowers people and local communities.

Mr. Hurd: Will the hon. Gentleman join me in welcoming the work of Woking borough council—a Conservative council, as it happens—in proving that in
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practice? By decentralising energy, it has reduced carbon emissions by more than 70 per cent. Will he join me in acknowledging that success?

Norman Baker: Indeed, I will, and I think the figure is 77 per cent. Woking has done extraordinarily well, and I hope that that lesson can be picked up by other local authorities and the Government. By the way, that also shows the value of not tying the hands of local government, allowing it the flexibility and space to develop such ideas, which can then be rolled out elsewhere in the country when they prove to be a success.

Jenny Willott (Cardiff, Central) (LD): It is important, too, to involve the National Assembly for Wales and the Scottish Parliament in these measures. A lot of issues around energy efficiency lie within their remits. Has my hon. Friend any views on the involvement of the devolved Parliament and Assembly?

Norman Baker: I agree that we need to involve both the Scottish Parliament and the Welsh Assembly, as well as local councils, community groups and individuals. The Bill is about devolving responsibility to individuals, which it is absolutely right to do.

The old system of power delivery simply is not fit for purpose. It is not working to deliver the environmental, economic and social objectives that we all want promoted. Of all the energy generated from fossil fuels, 61.5 per cent. is lost through inefficient generation and heat wastage, which leaves 38.5 per cent. to go into the national grid. Some 3.5 per cent. is lost in transmission and distribution, leaving 35 per cent. that actually gets somewhere, of which 13 per cent.—roughly a third—is wasted through inefficient end use. All that means that barely a fifth of the energy generated is actually used. Given the challenge of climate change, that wastage is intolerable.

Mr. Hollobone: We are in danger of confusing transmission of electricity, which goes over a long distance at high voltage, with the local distribution of electricity at a lower voltage on a far more local level. This country's national grid has the most robust transmission system in the world, and while I favour micro-generation, I do not think that we should gainsay the effectiveness of the national grid.

Norman Baker: I can happily pass on to the hon. Gentleman a parliamentary answer detailing transmission losses from the national grid, so there is an issue there. The point about localised energy, as opposed to distance energy, needs to be recognised.

Woking borough council, as mentioned, has slashed 77 per cent. of its CO 2 emissions by setting up decentralised energy networks and instigating energy efficiency measures. That shows the potential that can be achieved across the country. The right hon. Member for Bromley and Chislehurst (Mr. Forth) asked about the potential of the Bill. If half the homes in Britain installed 1 Kw micro-CHP or micro-wind turbines, it would provide as much winter generating capacity as all our nuclear power stations put together, so the potential is enormous.
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Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): Does my hon. Friend agree that a further potential benefit of the Bill is that it would help to tackle fuel poverty, which is a particularly important issue at the moment, given rising fuel prices—especially of heating oil—in areas that do not have mains gas supply, such as the Highlands and Islands? That is another reason to support micro-generation through this Bill.

Norman Baker: It is always spooky when someone intervenes to make the next point in my speech, and I am grateful to my hon. Friend for that point. As well as tackling fuel poverty, the Bill would be useful in rural areas. For example, domestic heat pumps are already in use in Cornwall and other areas where there is no mains gas. That has an empowering effect and also tackles the carbon emissions that would result from oil use or inappropriate gas use.

Lembit Öpik (Montgomeryshire) (LD): Does my hon. Friend agree that while wind power has its place, one of the great frustrations for people in rural areas is that they are beginning to feel like the new macro-energy producers? It is as much a scourge on local communities to be surrounded by large wind turbines as it was to live next to a large power station.

Norman Baker: I must say that I would rather live near a wind farm than a power station. It is right to try to localise energy supply wherever possible, and I have supported individual wind turbines in my constituency and elsewhere, which can meet local needs. If such initiatives are pursued, people will feel ownership of the structures, rather than feeling that they are simply there to serve somebody else.

Greg Clark (Tunbridge Wells) (Con): The hon. Gentleman's constituency, like mine, has several farming communities that have experienced a relative decline, especially in hop gardens and fruit crops. A big expansion in the use of biomass fuel could help to regenerate some of those local communities before it is too late.

Norman Baker: I agree. There is a wonderful opportunity for a win-win situation, with the production of less carbon-producing energy that also supports our farming industry. That potential has not yet been maximised. We need to do more, and I welcome the biomass taskforce report from Sir Ben Gill, although I was surprised that it did not recommend a renewable heat obligation. That is included in the Bill, and I shall be interested to hear the Minister's view on it. I am in no doubt that a renewable heat obligation would be valuable, and that is why I tabled an early-day motion on the matter in 2004. Indeed, the Government signed up to the renewable transport fuels obligation only this week, and they have signed up to a renewables obligation generally. So the Government recognise that the mechanism works, and I look forward to the Minister saying why he does or does not agree with its use for renewable heat.

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