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Standing Committee C
The Committee consisted of the following Members:
Chairman:
Mr. Joe Benton
†Barker, Gregory (Bexhill and Battle) (Con)
†Clark, Greg (Tunbridge Wells) (Con)
†Goodman, Helen (Bishop Auckland) (Lab)
†Griffith, Nia (Llanelli) (Lab)
†Hollobone, Mr. Philip (Kettering) (Con)
†Hurd, Mr. Nick (Ruislip-Northwood) (Con)
†Lazarowicz, Mark (Edinburgh, North and Leith) (Lab/Co-op)
†Palmer, Dr. Nick (Broxtowe) (Lab)
†Ruddock, Joan (Lewisham, Deptford) (Lab)
†Smith, Mr. Andrew (Oxford, East) (Lab)
†Stunell, Andrew (Hazel Grove) (LD)
†Villiers, Mrs. Theresa (Chipping Barnet) (Con)
†Walley, Joan (Stoke-on-Trent, North) (Lab)
†Weir, Mr. Mike (Angus) (SNP)
†Whitehead, Dr. Alan (Southampton, Test) (Lab)
†Wicks, Malcolm (Minister for Energy)
Alan Sandall, Committee Clerk
† attended the Committee
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Thursday 9 February 2006
[Mr. Joe Benton in the Chair]
2 pm
Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): I beg to move,
That, if proceedings on the Climate change and Sustainable Energy Bill are not completed at this day’s sitting, the Committee do meet on Tuesday 28th February at Four o’clock.
I welcome you back to the Chair, Mr. Benton, for our second sitting. I draw the Committee’s attention to the interests of which I notified it at our last sitting, which are recorded in the Official Report.
Question put and agreed to.
Mark Lazarowicz: I beg to move,
That the remaining proceedings on the Bill be taken in the following order, namely, new Clauses of which notice was given on or before 8th February 2006 other than new Clauses relating to commencement, Clause 5, remaining new Clauses, Clauses 11 to 14, new Schedules, remaining proceedings on the Bill.
Question put and agreed to.
New Clause 5
National targets for microgeneration
‘(1) The Secretary of State must, during the period beginning with 1st November 2008 and ending with 31st March 2009—
(a) designate one or more national microgeneration targets, and
(b) publish a statement of that fact together with a copy of the target or targets.
(2) But subsection (1) does not apply unless on 1st November 2008 the Secretary of State considers that it would be appropriate to designate one or more targets under that subsection.
(3) For the purposes of this section, a national microgeneration target is a target in respect of—
(a) the number of microgeneration systems installed in England and Wales, and
(b) the number of electricity microgenerating systems installed in Scotland,
as at a date specified in the target (“the target date”).
(4) The matters to which the Secretary of State must have regard in determining whether subsection (1) applies include, in particular—
(a) the number of microgeneration systems installed in England and Wales,
(b) the number of electricity microgenerating systems installed in Scotland,
(c) the strategy published under section 82 of the Energy Act 2004 (c. 20) (microgeneration), and
(d) the results of any research carried out into the effect that designating a target under subsection (1) could be expected to have on the number of microgeneration systems that are installed in England and Wales, and the number of electricity microgenerating systems that are installed in Scotland, by the target date.
(5) If a target is designated under subsection (1), the Secretary of State must take reasonable steps to secure that the target is met.
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(6) At any time before the target date, the Secretary of State may review the target and, if he considers it appropriate to do so, revise the target.
(7) If under subsection (6) the Secretary of State revises a target—
(a) he must publish a statement of that fact together with a copy of the revised target, and
(b) the revised target is treated for the purposes of subsection (5) and section (National microgeneration targets: modification of section 1 of the Sustainable Energy Act 2003) as the target designated under subsection (1).
“electricity microgenerating system” means a microgeneration system for generating electricity;
“microgeneration system” means any plant or system of plant for generating electricity or producing heat—
(a) which, 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 subsection (7) of section 82 of the Energy Act 2004 (c. 20), and
(b) whose capacity to generate electricity or (as the case may be) to produce heat does not exceed the capacity mentioned in subsection (8) of that section;
“plant” includes any equipment, apparatus or appliance.’.—[Mark Lazarowicz.]
Brought up, and read the First and Second time.
Amendment made: (a), at end insert—
‘(5A) If the Secretary of State does not designate a target under subsection (1) he shall publish forthwith a statement of his reasons.’.—[Mr. Barker.]
Clause, as amended, added to the Bill.
New Clause 6
National microgeneration targets: modification of section 1 of the Sustainable Energy Act 2003
‘(1) This section applies if a target is designated under section (National targets for microgeneration).
(2) Section 1 of the Sustainable Energy Act 2003 (c. 30) applies in relation to every relevant sustainable energy report as if after subsection (1B) there were inserted—
“(1BA) The report must also include such information as the Secretary of State considers appropriate about things done during the reporting period for the purpose of meeting any target designated under section (National targets for microgeneration) of the Climate Change and Sustainable Energy Act 2005 (national targets for microgeneration).”,
and as if, in subsection (1C), for “subsection (1A)” there were substituted “subsections (1A) and (1BA)”.
(3) For the purposes of this section—
(a) a sustainable energy report is a relevant sustainable energy report in relation to a target designated under subsection (1) of section (National targets for microgeneration) if the reporting period to which the report relates includes the period, or any part of the period, to which the target relates,
(b) a target designated under subsection (1) of that section relates to the period beginning when it is designated and ending with the target date (within the meaning of that section),
(c) “reporting period”, in relation to a sustainable energy report, has the meaning given by section 1 of the Sustainable Energy Act 2003 (c. 30), and
(d) “sustainable energy report” means a sustainable energy report which is required to be published under that section.’.—[Mark Lazarowicz.]
Brought up, read the First and Second time, and added to the Bill.
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New Clause 7
Reports under section 1 of the Sustainable Energy Act 2003: microgeneration
‘In section 1(1A) of the Sustainable Energy Act 2003 (c. 30) (annual reports on progress towards sustainable energy aims)—
(a) omit “and” at the end of paragraph (b), and
(b) at the end of paragraph (c) insert “; and
(d) things done during that period for the purpose of implementing the strategy for the promotion of microgeneration in Great Britain published under section 82 of the Energy Act 2004.”.’.—[Mark Lazarowicz.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 8
Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc
‘(1) Where the Secretary of State considers it appropriate to do so for the purpose of increasing the amount of the electricity consumed in Great Britain that is generated by microgeneration, he may make—
(a) relevant modifications of the conditions of a distribution licence or a supply licence held by a particular person;
(b) relevant modifications of the standard conditions of distribution licences or supply licences.
(2) For the purposes of subsection (1), “relevant modifications” means—
(a) in relation to a distribution licence, modifications—
(i) imposing conditions requiring the holder of such a licence to provide information to holders of supply licences about the connection to the distribution system, or use, of microgeneration plant, or
(ii) for the purposes of enabling or facilitating holders of supply licences to satisfy any conditions of such licences of a description mentioned in paragraph (b), and
(b) in relation to a supply licence, modifications imposing conditions requiring the holder of such a licence to offer to acquire electricity generated by microgeneration by the licenceholder’s customers;
and also includes incidental, consequential or transitional modifications.
(3) A modification under subsection (1)(a) of part of a standard condition of a distribution licence or supply licence does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the Electricity Act 1989 (c. 29).
(4) Where the Secretary of State makes modifications under subsection (1)(b) of the standard conditions of distribution licences or supply licences, the Gas and Electricity Markets Authority must make (as nearly as may be) the same modifications of those standard conditions for the purposes of their incorporation in distribution licences or, as the case may be, supply licences granted after that time.
(5) Conditions included in a distribution licence or supply licence by virtue of a power conferred by this section—
(a) need not relate to the activities authorised by the licence, and
(b) may do any of the things authorised in relation to licences of that kind by section 7(2) to (4) of the Electricity Act 1989 (c. 29) (which applies to the Gas and Electricity Markets Authority’s power with respect to licence conditions under section 7(1)(a) of that Act).
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(6) In this section and section (Exercise of powers under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc))—
“distribution licence” has the meaning given by section 6(1)(c) of the Electricity Act 1989 (c. 29) (licences authorising supply,);
“microgeneration plant” means plant used, or intended for use, for generating electricity by microgeneration, where “plant” has the same meaning as it has in section 82 of the Energy Act 2004 (c. 20) (microgeneration);
“supply licence” has the meaning given by section 6(1)(d) of the Electricity Act 1989 (c. 29).
(7) In section 33(1) of the Utilities Act 2000 (c. 27) (standard conditions of electricity licences)—
(a) omit “or” at the end of paragraph (a), and
(b) after paragraph (b) insert “or
(c) under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc) of the Climate Change and Sustainable Energy Act 2005 (sale of electricity generated by microgeneration: power to modify distribution and supply licences etc)”.’.—[Mark Lazarowicz.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 9
Exercise of powers under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc)
‘(1) Before making any modification of a distribution licence or a supply licence under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc), the Secretary of State must consult—
(a) the holder of any licence being modified, and
(b) such other persons as he considers appropriate.
(2) The Secretary of State must publish every modification made by him under that section.
(3) The publication must be in such manner as the Secretary of State considers appropriate.
(4) Where the Gas and Electricity Markets Authority makes modifications of standard conditions under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc)(4), it must publish the modifications in such manner as it considers appropriate.
(5) The Secretary of State’s powers under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc) are exercisable only during the period which—
(a) begins with the first anniversary, and
(b) ends with the third anniversary,
of the commencement of that section.
(6) Sections 3A to 3D of the Electricity Act 1989 (c. 29) (principal objectives and general duties) apply to the carrying out of functions conferred on the Secretary of State, or on the Gas and Electricity Markets Authority, by section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc) or this section as they apply in relation to the carrying out of functions conferred on him, or on it, by or under Part 1 of that Act.’.—[Mark Lazarowicz.]
Brought up, read the First and Second time and added to the Bill.
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New Clause 10
Functions of the Gas and Electricity Markets Authority in relation to microgeneration
‘In section 47 of the Electricity Act 1989 (c. 29) (functions of the Gas and Electricity Markets Authority), after subsection (1) insert—
“(1A) The activities to which subsection (1) applies also include, in particular, activities connected with the generation of electricity by microgeneration or with the transmission and supply of electricity so generated.
(1B) In subsection (1A), “microgeneration” has the same meaning as it has in section 82 of the Energy Act 2004 (Secretary of State’s strategy for promotion of microgeneration)”.’.—[Mark Lazarowicz.]
Brought up, read the First and Second time and added to the Bill.
New Clause 2
Adjustment of transmission charges for electricity
‘(1) Section 185 of the Energy Act 2004 (c. 20) (adjustment of transmission charges) is amended as provided in subsections (2) to (4).
(2) In subsection (1)(a), for “of Great Britain” substitute “in Great Britain”.
(3) After subsection (3) insert—
“(3A) If subsection (1) is satisfied in the case of two or more separate areas in Great Britain, an order under this section may relate to both, or all, of those areas.
(3B) This section has effect in relation to an order which, by virtue of subsection (3A), relates to two or more areas as if references in subsections (2), (3) and (10) to the area to which the scheme established by the order relates (however expressed) were references to the combined area.”
(4) In subsection (11), for “more than ten years after the commencement of this section” substitute “later than 4 October 2024”.
(5) Subsection (7) of section 185 may be satisfied in relation to any order to be made under that section after the commencement of this section by publications and consultation taking place wholly or partly before that commencement.’.—[Malcolm Wicks.]
Brought up, and read the First time.
The Minister for Energy (Malcolm Wicks): I beg to move, That the clause be read a Second time.
The Chairman: With this it will be convenient to discuss Government amendment No. 15.
Malcolm Wicks: It is a pleasure to serve under your chairmanship, Mr. Benton.
New clause 2 will increase the support that can be given to renewable generators on the Scottish islands of Shetland, Orkney and the Western Isles. It builds on a power in the Energy Act 2004 enabling the Government to adjust the charges that renewable generators in a specified area of Great Britain must pay to use the transmission network, if the charges would otherwise deter renewable development in that area. Of course, the Scottish islands have great potential for renewable development—enough, I am told, to power the cities of Glasgow, Edinburgh and Aberdeen. I have been to the Western Isles on two occasions, and I saw
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the potential for renewables on those wonderful islands. I very much hope that I will have the chance to visit some of the other islands in due course.
Renewable generation has important environmental benefits. The Government have made clear their commitment to supporting the development of such generation, which can help us to tackle one of the biggest challenges we will ever face: climate change. It can also bring important social benefits. Renewable development on the Scottish islands can provide a real boost to local communities. Indeed, a delegation of councillors from the islands came to see me some months ago to make the case for extending the benefits that we can give to renewable projects on the islands. I was impressed by what they told me about the community support for some of those projects and the way in which benefits can be channelled into local communities.
The power that we took under the Energy Act 2004 enables us to reduce the transmission charges that renewable generators on the islands will have to pay. Without that reduction, renewable generation on the islands would probably not be viable. The existing powers allow us to adjust charges for up to 10 years from the commencement of the provision in October 2004, so as things stand, any scheme would have to end in 2014. However, it became clear in the recent consultation exercise that renewable projects on the islands are unlikely to be operational before the beginning of the next decade. A scheme ending in 2014 would give insufficient support and would not make those projects viable. The new clause will enable us to extend any scheme to 2024, which will enable us to give the projects the support that they need to go ahead.
The new clause also makes a couple of technical changes. It will ensure that a scheme can be applied to separate islands and that the consultation requirement in the 2004 Act can be satisfied by consultation taking place before the provision in the Bill is commenced.
In summary, the Government are committed to encouraging renewable development. The new clause will give further support for renewable generation and ensure that the potential in the Western Isles, the Shetlands and the Orkneys is not wasted. I have listened carefully to the representations of colleagues representing the islands and to the local councillors who came to see me. I think that the provision is an important proposal. Amendment No. 15 is consequential, and is required to make the long title of the Bill reflect the inclusion of the new clause.
Mr. Mike Weir (Angus) (SNP): The Minister will not be surprised to learn that I have talked about this issue on many occasions on the Floor of the House. I start by warmly welcoming the new clause; he has genuinely listened to what has been said by those on the Western Isles and northern isles, and it will make a great difference to generators in those island areas. I will not burden the Committee by going over the evils of the transmission charge regime introduced by Ofgem, which on the whole will do great damage to renewables in the north of Scotland.
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I want to ask the Minister one or two questions. Can he be more specific when he talks about the territorial extent of the Western Isles and the north of Scotland? For example, the Pentland firth, which sits between the Orkneys and Caithness, has huge potential for tidal and wave power. It is not clear to me whether the proposal will affect only schemes that are actually in the islands, or whether it will also benefit schemes in the Pentland firth.
The Minister also talks about extending the period for a further 10 years. Am I right in thinking that the scheme is still based on the area and that it will run for a total of 20 years? Will the extension be based on the area rather than on a particular proposal? For example, if someone comes along in 10 years and wants to set up a scheme in the area, will they still have only 10 years rather than 20?
I appreciate that the Minister has listened and has done something for the northern isles, but I draw his attention to The Herald this morning, which has printed comments made by one of his predecessors, Brian Wilson, on Ofgem’s proposals. In fact, the headline is “Ofgem could stem tidal energy flow”, and he talks about the discriminatory charges against power carried from the periphery. I am not sure that we in Scotland like to be called the periphery, but none the less that is a good point that I have raised with the Minister on many occasions: the way in which the charges are structured militates against renewables.
The Minister has now done something about the islands, and I appreciate that, but he has done nothing about the mainland. The same problems affect the mainland and offshore installations such as the Beatrice installation on the Moray firth, promoted by Talisman Energy, which will not get any additional benefits as a result of the provision. If we are serious about renewables we must attack such problems.
I have no great faith in Ofgem from my own meetings and discussions with it during the passage of the Energy Act 2004. I raised many such issues and will not go through the detail again, but I ask the Minister to consider my points.
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