Climate Change and Sustainable Energy Bill

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Mark Lazarowicz: In the spirit of consensus, which is all the rage nowadays, I am sure that the hon. Gentleman would accept my assurance that I recognise what Woking has done, and also recognise that the gentlemen to whom he referred has been
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recruited by the Mayor of London to take forward proposals for the London climate change scheme. I hope that he recognises the important work that is being done in London, as well as what has been done in the past in Woking.

Gregory Barker: Absolutely. I welcome the Mayor’s agenda, which is very exciting and will command a lot of support. However, I am trying to make the point that this is not just for the future—it has already happened. The doubting Thomases need not worry; they can go to Woking. It is still very early days for London, but Woking borough council has already pioneered a network of more than 60 local generators, including co-generation and tri-generation plants, photovoltaic rays and a hydrogen fuel cell station to power, heat and cool municipal buildings and social housing. Many town centre businesses are also connected to that local energy supply.

The Woking energy model has already produced dramatic savings in energy use and reductions in greenhouse gas emissions. With further help from energy efficiency measures, the council has reduced the CO2 emissions associated with the operations of its own estate, including social housing, by a staggering 77 per cent. That is a huge lesson for the Government. I hope that the Minister will join me in going to Woking; the Government estate is woefully behind municipal government on this issue.

Joan Ruddock: The hon. Gentleman need not even go as far as Woking; he could go to Lewisham, in my constituency. The borough council has a superb low-carbon energy programme and renewable energy for its buildings and several schools. A housing association in Lewisham is about to install 14 mini-turbines.

Gregory Barker: I am delighted to hear that, and may well take up the hon. Lady’s offer.

Dr. Whitehead: If the hon. Gentleman is considering doing a circular tour, he could start in Woking, then go down to Southampton to see the geothermal energy plant that has been working for a number of years. It also undertakes CHP and heats municipal buildings, supermarkets, the college of higher education and the university. A new heating development will use renewable bio-oil facilities and heat 3,000 homes to the west of the city. Having seen all that, the hon. Gentleman could then go to Lewisham and then back home.

Gregory Barker: What an exciting day that promises to be.

Although the Woking, Lewisham or Southampton models—particularly the Woking model—are widely celebrated in energy circles, their significance for UK energy policy has yet to be fully appreciated. All the examples that we have heard about show that here and now renewable technologies and co-generation are highly complementary and lend themselves flexibly to an engineering approach as finances allow.

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The key lesson—whether in Woking, Lewisham or Southampton—must be that, liberated from the constraints of centralised rules and infrastructure, co-generation and renewables can assert their own competitive potential and work in a competitive marketplace. I really hope that in our enthusiasm for microgeneration we have not diminished the importance and potential of community energy.

I have one niggle, about which I have tabled a further amendment. The Government have been far-sighted and generous to me today, and I am sincerely grateful to the Minister for agreeing to my previous amendment. However, I hope that he will consider something else. I am not calling on the Prime Minister, the Chancellor, the Archbishop of Canterbury or any member of the Royal family, but only the Secretary of State to lay before Parliament each year a report on steps that the Government have taken to promote community energy.

We have already established that principle, and it is important that, in order to maintain the focus and attention of the House of Commons, and through it, the greater world outside, we allow Parliament the opportunity to quiz and hold accountable Ministers of this and any future Government, because this programme is long-term. I have no doubt that we will need to hold Ministers to account for many years to come before we can be truly satisfied that we have reached the full potential of community energy.

5 pm

Mark Lazarowicz: I was tempted to intervene on the hon. Gentleman when he started to discuss in detail the virtues of Woking, but then my hon. Friends the Members for Southampton, Test, and for Lewisham, Deptford, referred to their constituencies, too. Just to complete things, I add that interesting things are going on in Edinburgh, too, but I shall not now invite hon. Members to visit—of course, they are welcome to do so—because the clause does not apply to Scotland.

At the beginning of the sitting, in speaking about a possible interest of mine in relation to the promotion of schemes, I referred to my involvement in the development of a community energy scheme in my area. Once one becomes involved, one finds that an incredible range of organisations want to take up exciting ideas about decisions on energy use, energy saving and energy efficiency locally.

The clause has incredible potential, and I am delighted that the Government will accept it, as I understand it. Although they have in the past promoted community energy in various ways, I think that this is the first time that a specific duty to promote community energy in a wider sense will be incorporated in legislation, although there were certain specific provisions before. The direction that we are taking has potential for application in many ways. As we suggested, it can provide heat and/or power for one building, multiple buildings or entire communities, and it can apply to homes, schools, universities, hospitals, leisure centres and offices. Initiatives can be run in a range of ways involving the
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community, co-operatives, mutuals and various other organisations. The clause has real potential, and I think that it will resonate in many parts of the country.

Although the clause will not apply to Scotland—I will not say that I regret that, because as a strong supporter of devolution I am always keen to ensure that matters are devolved where they can be—I certainly hope that the approach will be taken up in those parts of the UK to which it does not apply as a result of the devolution settlement.

Nia Griffith (Llanelli) (Lab): I very much welcome this aspect of the Bill, as it is extremely important that we promote community energy. We have heard about many laudable projects that have already been put into action, but I ask my hon. Friends and Opposition Members to join me in investigating and promoting the opportunity to connect the training machines in the Palace of Westminster gym to a power generation system. That would enable all hon. Members, including Ministers, to show their commitment to producing energy and using it in the House. It is a rather ambitious project, and plans are on the table at the moment, but I see that as another community energy project. We could use that human energy, which is being used to get rid of excess fat and make people healthy, to produce light for use here in Westminster.

Malcolm Wicks: I am reflecting on that informal amendment. I suppose that the logic would be that when were all voting and not in the gym, the lights would go out. We need to think through the technicalities.

We live in interesting times. The Conservative party spokesman, the hon. Member for Bexhill and Battle, used the word “revolution” about three times. I understand that the Conservative party is seeking to move to the left, but I recommend that it goes through a Fabian gradualist stage first. Then we hear that one of those revolutions has taken place in Woking; that is about as unlikely as a whale in the Thames and Wigan beating Arsenal, but we live in strange times. Seriously, I, too, have heard about developments in Woking. We could go on the long march to Woking together, but if we took in the constituency of every Committee member who wanted to namecheck their locality, it would indeed be a long march, perhaps longer than the original one.

We are committed to community energy schemes, and not only because they reduce emissions through the use of low-carbon forms of energy. Their real significance lies in the engagement of whole communities in the energy agenda. Indeed, part of the excellence of microgeneration is that it reconnects the citizen to energy sources. The schemes inform and may even enthuse communities about the benefits of low-carbon energy and the need to use energy efficiently.

The Government already do much to support community energy schemes. The clear skies initiative and the major photovoltaics demonstration programme provide funds for renewable installations
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in the community. So far, we have funded 370 community installations through the clear skies programme, and another 46 community projects through the major photovoltaics demonstration programme. That work will be carried on by our £30 million low-carbon buildings programme, which will be launched in April.

My Department and DEFRA jointly fund the community renewables initiative, which has been instrumental in ensuring the success of many community projects. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has supported the community energy programme. This capital grant programme is aimed at increasing the development and installation of community heating schemes throughout the UK. The programme’s schemes are based mainly on combined heat and power, but several renewable-based schemes have also been supported.

Joan Walley: It would be very helpful if my hon. Friend could tell the Committee whether applications for that funding can be made now, and what the application arrangements will be.

Malcolm Wicks: I presume that my hon. Friend means applications under the carbon buildings programme. The answer is probably no at the moment, because we are launching the programme in April. I will write to her with the details, however, and tell her if I am wrong.

The programme should deliver more than 28,000 tonnes of carbon a year by 2010 and help more than 29,000 people on low incomes to heat their homes. On Second Reading, I indicated that we did not see the need to have a specific duty in relation to the promotion of community energy. After further thought and after correspondence with our DEFRA colleagues and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, we have agreed in principle such a provision would perhaps be helpful.

In summary, I am happy to support the clause, as amended.

Amendment agreed to.

Amendments made: No. 23, in clause 9, page 4, line 38, leave out paragraph (a).

No. 24, in clause 9, page 4, line 39, at end insert—

      ‘(   )   schemes whose purpose or effect is the promotion of community energy projects,’.

No. 25, in clause 9, page 4, line 40, leave out ‘community energy,’ and insert

    ‘such schemes and community energy projects, and’.

No. 26, in clause 9, page 4, line 41, leave out from ‘of’ to end of line 44 and insert

    ‘advice and assistance (whether by public authorities or any other persons) to persons establishing and operating, or proposing to establish and operate, community energy projects’.

No. 32, in clause 9, page 5, line 2, leave out from beginning to end of line 18 and insert—

    ‘“community energy project” means—

      (a)   the use of relevant plant for a community purpose,

      (b)   the installation of relevant plant for use for a community purpose, or

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      (c)   the adaptation of any plant for use as relevant plant for a community purpose;

    “community purpose” means the purpose of—

      (d)   generating electricity for consumption wholly or mainly in qualifying premises, or

      (e)   producing heat for use wholly or mainly for heating qualifying premises;

    “plant” includes any equipment, apparatus or appliance;

    “premises” means any building or buildings (and for this purpose “building” includes part of a building);

    “qualifying premises” means premises which—

      (f)   are used wholly or mainly for purposes other than carrying on a trade, business or profession, and

      (g)   in the case of premises which consist wholly or mainly of a dwelling or dwellings, contain at least five dwellings;

    “relevant plant” means any plant which—

      (h)   in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in section 82(7) of the Energy Act 2004 (c. 20) (microgeneration), and

      (i)   satisfies the condition in subsection (4).’.

No. 27, in clause 9, page 5, line 18, at end insert—

    ‘(4)   Plant satisfies the condition in this subsection if its capacity does not exceed—

      (a)   in the case of plant for the generation of electricity, 20 megawatts, and

      (b)   in the case of plant for the production of heat, 100 megawatts thermal.’.—[Mark Lazarowicz.]

Amendment proposed: No. 33, in clause 9, page 5, line 18, at end add—

    ‘(4)   The Secretary of State shall each year lay before Parliament a report on steps that he has taken to promote community energy.’.—[Gregory Barker.]

Malcolm Wicks: The amendment would put a duty on the Secretary of State to lay a report before Parliament on steps taken to promote community energy. I have no problem with the idea behind the amendment, but I suggest that such a report should be included in an annual report on implementation of the energy White Paper. Having only one report on our energy policy achievements is a much more coherent approach and probably a more efficient use of energy than having several reports, perhaps produced at different times. On that basis, I am happy to lay before the Committee a new clause along those lines in our next sitting. I hope that that is acceptable to the hon. Member for Bexhill and Battle, and I therefore agree to consider amendment No. 33.

Gregory Barker: I am grateful to the Minister for that considered response, and I look forward to seeing his proposals at our next sitting. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9, as amended, ordered to stand part of the Bill.

Clause 10

Renewable heat obligation

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

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The Chairman: With this it will be convenient to discuss the following: Government new clause 3—Renewable heat

    (1) It shall be the duty of the Secretary of State to take such steps as he considers appropriate to promote the use of heat produced from renewable sources.

    (2)   For the purposes of subsection (1), heat produced by any plant is produced from renewable sources to the extent that the plant is fuelled by renewable sources.

    (3)   The steps which the Secretary of State may take for the purposes of subsection (1) include, in particular, steps for the purpose of promoting—

      (a)   the installation of plant which is or may be fuelled by renewable sources,

      (b)   the adaptation of plant so as to enable it to be fuelled by renewable sources, or

      (c)   the production of heat by plant which is fuelled partly by renewable sources and partly by other sources.

    (4)   In this section—

    “fossil fuel” means coal, substances produced directly or indirectly from coal, lignite, natural gas, crude liquid petroleum, or petroleum products (and “natural gas” and “petroleum products” have the same meanings as in the Energy Act 1976 (c.76));

    “plant” includes any equipment, apparatus or appliance;

    “renewable sources” means sources of energy other than fossil fuel or nuclear fuel.’.

And the following amendments thereto: (a), at end of subsection (1) insert—

    ‘(1A)   Before taking any such steps the Secretary of State shall satisfy himself as to—

      (a)   the most cost effective; and

      (b)   the most practicable,

    method or methods of promoting heat from renewable sources.

    (1B)   The Secretary of State shall publish in whatever form he sees fit his conclusions reached pursuant to subsection (1A).’.

(b), at end of subsection (3)(c) insert—

    ‘(3A)   The Secretary of State shall lay before Parliament an annual report on—

      (a)   steps that he has taken to promote renewable heat and any steps that at the time of the report he proposes to take; and

      (b)   the effect of any steps taken by him and an assessment of any steps specified in the report that he proposes to take.’.

Government amendment No. 14

Malcolm Wicks: Although it is important to promote renewable heat, it is also important to find an effective way of doing so, particularly in terms of carbon savings and costs to the consumer. The heat market is vastly different from the electricity market—for example, in the number of suppliers and the scale of installations. We do not consider that an obligation in relation to heat similar to the renewables obligation is necessarily the most effective measure to support renewable heat generation.

The biomass taskforce and the Scottish renewables forum recently suggested that the complexity of such an obligation led them to believe that other measures were more appropriate to bring forward renewable heat at this time. The Government agree, and therefore do not support the proposal for a renewable heat obligation in clause 10. Although a renewable heat obligation is not the correct approach, we remain committed to promoting renewable heat. We already support renewable heat projects through the bioenergy capital grant scheme, the clear skies initiative and the community energy programme. Support for renewable heat will continue in the low carbon buildings programme, to which I referred earlier.

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The Government are considering their overall approach to renewable heat in the context of our response to the biomass taskforce. We are carrying out further analysis on all the taskforce’s recommendations. That analysis will take account of the recent study by Future Energy Solutions, which carefully considered renewable heat, combined heat and power and the carbon savings likely to be associated with each, and the Carbon Trust report on biomass.

Bioenergy is the largest potential contributor of renewable heat, and the Government are committed to responding fully to the taskforce report by the end of April. That will include responding to its recommendation for a capital grant towards bioenergy heat and combined heat and power projects, and the recommendation on longer-term support measures. The Carbon Trust is currently scoping a project to accelerate the development of biomass in the United Kingdom, focusing on heat. The European Commission is likely this year to bring forward measures to support biomass under its biomass action plan. Measures to support renewable heat are being considered also in the context of the climate change review and the new energy review.

As the hon. Member for Edinburgh, North and Leith indicated, amendment (a) to new clause 3 would require the Secretary of State to publish his considerations on the cost-effectiveness and the practicality of methods of promoting renewable heat. The Secretary of State would of course have regard to those issues in putting forward options to promote renewable heat. However, there are significant difficulties in defining them in the Bill. For example, how does the amendment define cost-effectiveness? For whom would the measure be most cost-effective—the Exchequer or the consumer? What is the relationship between the potentially conflicting requirements of practicality and cost-effectiveness?

Given the difficulties attached to the implementation of amendment (a), the Government do not support it. We are content to consider reporting on the Secretary of State’s duty to promote renewable heat as proposed in amendment (b) to new clause 3, but we do not feel that the reporting requirement should be expressed in the Bill in that way. We would
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prefer to report on the duty to promote renewable heat in the context of our reporting under the Sustainable Energy Act 2003. That would be more appropriate, given the need for a consistent approach on all our reporting responsibilities on other aspects of energy policy. We will consider the reporting requirements further, and we aim to table a new clause for the next sitting.

5.15 pm

In case anyone has not followed all that I have said, let me say that I oppose clause 10 standing part, but support new clause 3. I support amending the title of the Bill, as proposed in Government amendment No. 14, to reflect the content of new clause 3. I would resist amendment (a) to the new clause, but I will consider amendment (b).

Mark Lazarowicz: The potential for renewable heat is widely recognised, but the UK as a whole has yet to take full advantage of it. That was the reason behind clause 10.

I am aware that there is still a considerable lobby among those who favour renewable heat in support of a specific obligation. I understand what the Minister said, however, about the need to develop the best way of taking renewable heat forward. I am influenced by the fact that even some in the renewables industry are not necessarily convinced that a renewable heat obligation is the right way forward, so I accept the changes that the Government propose.

I ask the Committee to support new clause 3. Although it was tabled by my hon. Friend the Minister, I was involved in discussions with the Department about its contents. I understand the reasons for the Government’s opposition to amendment (a) to new clause 3. It would help if the Minister could give more detail either today or in writing about how he would satisfy himself as to the most effective and practicable way of taking forward renewable heat. As for amendment (b) to new clause 3, I shall be happy in due course to accept a revised provision, as outlined by the Minister.

Question put and negatived.

Clause 10 disagreed to.

Further consideration adjourned—[Joan Ruddock.]

Adjourned accordingly at seventeen minutes past Five o’clock till Thursday 9 February at Two o’clock.

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