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Malcolm Wicks: I beg to move, That the clause be read a Second time.
The Chairman: With this it will be convenient to discuss the following: Government new clause 32—Promotion of reductions in carbon emissions: electricity distributors and suppliers.
Government new clause 33—Consequential amendments.
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Government new schedule 1—Amendments consequential on sections (Promotion of reductions in carbon emissions: gas transporters and suppliers) and (Promotion of reductions in carbon emissions: electricity distributors and suppliers).
6.15 pm
Malcolm Wicks: The aim of the new clauses is to provide more flexibility to energy suppliers in the ways in which they can meet their obligations under the Electricity Act 1989 and the Gas Act 1986. Under existing legislation, electricity and gas suppliers are required to achieve targets for the promotion of improvements in energy efficiency. The 2004 energy efficiency obligation order provides for the improvements to be achieved for domestic consumers in Great Britain. The obligation is commonly known as the energy efficiency commitment or, in the trade, as the EEC. It is open to suppliers how they meet their targets by, for example, encouraging and assisting household consumers to take up measures such as cavity wall insulation and energy-efficient lighting and appliances.
The EEC has proved to be a successful instrument and is a key contributor to the reduction of carbon emissions under the climate change programme in the household sector. Energy suppliers convincingly met their targets for the first phase of the EEC from April 2002 to March 2005. By carrying forward activity, they started work early on the current phase of the EEC from April 2005 to March 2008, which requires broadly double the level of activity.
We are thinking ahead to the third phase of the obligations on suppliers, which will run from April 2008 to March 2011. Throughout 2006, we will engage in discussions with a wide range of stakeholders to feed into the development of proposals that will be set out in a statutory consultation in spring 2007. The target for the new obligations and the framework for the scheme, which is administered by Ofgem, will be set by order towards the end of 2007. Although the targets placed on suppliers are achievable, we recognise that they present a challenge to them. As a result, we would like the opportunity to provide suppliers with as much flexibility as possible in the range of measures that they can employ to meet their targets.
The new clauses would enable the Secretary of State to require suppliers to achieve a carbon emissions reduction target. That is defined as a target for the promotion of measures for improving energy efficiency and, if provided by order, certain other measures—for increasing the amount of electricity generated or heat produced by microgeneration; any other measures specified in the order for increasing the amount of electricity generated or heat produced using low-emission sources or technologies; and measures for reducing the consumption of energy.
The current energy efficiency target on suppliers is often expressed in terms of carbon emission reductions and, thus, the new approach would provide a more effective way in which to join up measures in respect of carbon abatement objectives. We propose to consult stakeholders before making provision for the carbon
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emissions reduction target to include the promotion of measures that are additional to the promotion of energy efficiency improvements. However, the new clause would provide additional flexibility to energy suppliers and support a more joined-up approach to carbon abatement in the household sector.
Gregory Barker: I have already stated this afternoon that Conservative Members consider that there is a case for creating a much more holistic and flexible approach to energy regulation. I certainly recognise that in respect of the energy efficiency commitment from 2008 to 2011 the Minister’s proposal to provide greater flexibility and the type of measures that suppliers can employ to meet their targets, such as microgeneration, renewables, smart metering and behavioural measures, is welcome. I understand that DEFRA Ministers have agreed that we should be able to take the opportunity to enable microgeneration and other carbon reduction measures to be counted, allowing the EEC to become a much more innovative and flexible instrument in the future. We want to encourage flexibility and innovation, so I support this small measure. I would like it to be accepted as a principle and extended to the whole energy regime.
Mr. Philip Hollobone (Kettering) (Con): Has the Minister considered changing the way in which infrastructure charges are levied by gas transportation companies, particularly with regard to new developments? For example, when a new housing estate is being built, an infrastructure charge is levied on the house builder by the gas company for supplying that estate with gas pipelines. The same applies to electricity. As a way of encouraging energy efficiency, could there not be a mechanism by which the infrastructure charge for a house or houses that are accredited as energy efficient is less than the charge for a house or houses that fail to be accredited?
Mark Lazarowicz: The hon. Member for Bexhill and Battle described the provisions as a small measure which he welcomed. I think we should not be too modest about them, because they are significant. Bringing microgeneration into the energy efficiency commitment will provide a major boost to the microgeneration industry and microgeneration take-up in this country. Including the provision will send such a clear message to the industry that it will have a positive response from those with an interest in the matter.
I understand that the provisions will apply throughout Great Britain and perhaps the Minister will confirm that, either now or later. They may be the most significant part of the Bill when it finishes its passage through Parliament, and I welcome the Government’s initiative in moving the new clauses.
Andrew Stunell: I also welcome the new clauses and hope that they will be included in the Bill and that the Bill progresses. It is a sad commentary on our proceedings that the hon. Member for Edinburgh,
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North and Leith may be right in saying that these measures may turn out to be the most significant part of the Bill, because many of the other good bits may have been removed. Nevertheless, we should give credit where it is due. On this occasion I think the Government are right and I welcome the additions to the Bill.
Malcolm Wicks: It might be appropriate to respond to a couple of the specific points that have been mentioned.
The hon. Member for Kettering (Mr. Hollobone) asked about new house construction and whether there could be some reward for those that are built to a high standard. He was not suggesting this, but it is not a matter for the EEC obligation. I am not saying that I will bring forward a great proposal, but if it is acceptable I will reflect on what he said and write to him.
I can confirm to my hon. Friend the Member for Edinburgh, North and Leith that the measures apply to Great Britain. With that, I hope that the Committee will support the new clauses.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
New Clause 32
Promotion of reductions in carbon emissions: electricity distributors and suppliers
‘(1) Section 41A of the Electricity Act 1989 (c. 29) (promotion of the efficient use by consumers of electricity) is amended as follows.
(a) for “energy efficiency target” substitute “carbon emissions reduction target”, and
(b) for “an “energy efficiency obligation”” substitute “a “carbon emissions reduction obligation””.
(3) For subsection (2) substitute—
“(2) In this section “carbon emissions reduction target” means a target for the promotion of—
(a) measures for improving energy efficiency, that is to say, efficiency in the use by consumers of electricity, gas conveyed through pipes or any other source of energy which is specified in the order;
(b) if the order so provides—
(i) measures for increasing the amount of electricity generated, or heat produced, by microgeneration;
(ii) any other measures of a description specified in the order for increasing the amount of electricity generated, or heat produced, using low-emissions sources or technologies;
(iii) measures for reducing the consumption of such energy as is mentioned in paragraph (a).”
(4) After subsection (12), add—
“(13) In this section “microgeneration” and “plant” have the same meanings as in section 82 of the Energy Act 2004 (Secretary of State’s strategy for promotion of microgeneration).
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(14) For the purposes of subsection (2)(b)(ii), electricity is generated, or heat is produced, using low-emissions sources or technologies if it is generated, or produced, by plant which relies wholly or mainly on a source of energy or a technology mentioned in subsection (7) of section 82 of the Energy Act 2004.”.’.—[Malcolm Wicks.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 33
Consequential amendments
‘Schedule (Amendments consequential on sections (Promotion of reductions in carbon emissions: gas transporters and suppliers) and (Promotion of reductions in carbon emissions: electricity distributors and suppliers)) (which makes amendments consequential on sections (Promotion of reductions in carbon emissions: gas transporters and suppliers) and (Promotion of reductions in carbon emissions: electricity distributors and suppliers)) has effect.’.—[Malcolm Wicks.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 34
Parish councils and community councils: powers in relation to local energy saving measures
‘(1) A parish council or community council may encourage or promote any of the following—
(a) microgeneration within their area;
(b) the use within their area of electricity generated, or heat produced, by microgeneration;
(c) efficiency in the use, by persons in their area, of electricity, heat, gas, fuel and other descriptions or sources of energy;
(d) reductions in the amounts of such energy, or sources of energy, used by persons in their area;
(e) production in their area of—
(ii) any fuel derived from biomass;
(f) use in their area of, or of electricity generated, or heat produced, from biomass or any such fuel.
(2) The power conferred by subsection (1) includes, in particular, power—
(a) on application, to provide information about goods or services available within their area offered or provided otherwise than by a person mentioned in section 142(1) of the Local Government Act 1972 (c. 70) (provision of information, etc, relating to matters affecting local government), or
(b) to provide advice or assistance,
for the purpose of encouraging or facilitating any of the matters mentioned in that subsection.
(3) Nothing in this section authorises a parish council or community council to provide any financial assistance by—
(a) making a grant or loan,
(b) giving a guarantee or indemnity, or
(c) investing by acquiring share or loan capital.
(4) The power conferred by this section is exercisable by a council only to the extent that they do not (apart from this section or section 137 of the Local Government Act 1972 (c. 70) (power of local authorities to incur expenditure for certain purposes not otherwise authorised)) otherwise have the power.
(5) For the purposes of subsections (4) to (7B) of section 137 of the Local Government Act 1972 (c. 70)—
(a) any expenditure incurred by a parish council or community council under this section is to be treated as having been incurred under that section, and
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(b) any purpose for which expenditure may be incurred under this section is to be treated as a purpose for which such a council are authorised by that section to incur expenditure.
(6) Subsection (5) applies to expenditure incurred by a parish council or community council under section 142 of the Local Government Act 1972 (c. 70) on information as to the services provided by them under this section, or otherwise relating to their functions under this section, as it applies to expenditure incurred under this section.
(7) The appropriate person may by order amend the list of matters mentioned in subsection (1) by—
(a) adding any other matter whose addition would in the opinion of the person making the order be likely to contribute to reduction of greenhouse gases in England and Wales;
(b) omitting any matter for the time being included in the list.
(8) In subsection (7), “the appropriate person” means—
(a) in relation to England, the Secretary of State, and
(b) in relation to Wales, the National Assembly for Wales.
(9) The power conferred by subsection (7) includes—
(a) power to make different provision for different cases, and
(b) power to make such supplemental or consequential provision (including provision modifying this section) and such transitional or saving provision as the person making the order thinks fit.
(10) The power of the Secretary of State to make an order under subsection (7) is exercisable by statutory instrument.
(11) No order under that subsection may be made by the Secretary of State unless a draft of the order has been—
(a) laid before Parliament, and
(b) approved by a resolution of each House.’.—[Malcolm Wicks.]
Brought up, and read the First and Second time.
Amendment proposed, to the proposed new clause, (a), leave out subsection 3(a).—[Gregory Barker.]
Question, That the amendment be made, put and negatived.
Clause added to the Bill.
New Clause 35
Renewables obligation: issue of green certificates
‘(1) Section 32B of the Electricity Act 1989 (c. 29) (green certificates) is amended as follows.
(2) In subsection (1), at the end insert “or, if the order so provides, to a person of any other description specified in the order”.
(3) In subsection (1A), at the end add “or, if the order provides that a certificate may certify the matters within subsection (2ZA), (2AA), (2AB) or (2AC), the matters within that subsection”.
(4) In subsections (2) and (2A), for “to an electricity supplier or to a Northern Ireland supplier,” substitute “otherwise than to the operator of a generating station,”.
(5) After subsection (2) insert—
“(2ZA) The matters within this subsection are—
(a) that two or more generating stations have, between them, generated from renewable sources the amount of electricity stated in the certificate; and
(b) that it has been supplied to customers in Great Britain (or the part of Great Britain stated in the certificate).”
(6) After subsection (2A) insert—
“(2AA) The matters within this subsection are—
(a) that two or more generating stations have, between them, generated from renewable sources the amount of electricity stated in the certificate;
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(b) that none of them is a generating station mentioned in Article 54(1) of the Energy (Northern Ireland) Order 2003; and
(c) that the electricity has been supplied to customers in Northern Ireland.
(2AB) The matters within this subsection are—
(a) that the generating station, or, in the case of a certificate issued otherwise than to the operator of a generating station, a generating station specified in the certificate, has generated from renewable sources the amount of electricity stated in the certificate; and
(b) that the electricity has been used in a permitted way.
(2AC) The matters within this subsection are—
(a) that two or more generating stations have, between them, generated from renewable sources the amount of electricity stated in the certificate; and
(b) that the electricity has been used in a permitted way.
(2AD) For the purposes of subsections (2AB) and (2AC), electricity generated by a generating station, or generating stations, of any description is used in a permitted way if—
(a) it is used in one of the ways mentioned in subsection (2AE); and
(b) that way is specified in the order as a permitted way—
(i) in relation to all generating stations, or
(ii) in relation to generating stations of that description.
(a) being consumed by the operator of the generating station or generating stations by which it was generated;
(b) being provided to a distribution system or a transmission system in circumstances in which its supply to customers cannot be demonstrated;
(c) being used, as respects part, as mentioned in paragraph (a) and, as respects the remainder, as mentioned in paragraph (b);
(d) being used, as respects part, as mentioned in paragraph (a), (b) or (c) and, as respects the remainder, by being supplied to customers in Great Britain or customers in Northern Ireland or both.”
(7) In subsection (2B), after “(2A)” insert “or (2AA)”.
(8) In subsection (3), after “(2)” insert “or (2ZA)”.
(9) In subsection (4), after “subsection (2A)” insert “or any of subsections (2AA) to (2AC)”.’.—[Malcolm Wicks.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 36
Renewables obligation: issue of green certificates: further provisions
’(1) In section 32 of the Electricity Act 1989 (c.29) (obligation in connection with energy from renewable sources), in subsection (5), after ”supply” insert ”or other use”.
(2) In section 32A(3) of that Act (orders under section 32: supplementary)—
(a) omit “and” at the end of paragraph (a), and
(b) after paragraph (b) insert “and
(c) different provision in relation to generating stations of different descriptions,”.’.
(3) In section 116 of the Energy Act 2004 (c. 20) (issue of green certificates in Great Britain), omit subsection (4)(b) (which amends section 32B(2)(a) of the Electricity Act 1989 (c. 29)).
(4) The requirements of section 32(7) of the Electricity Act 1989 (c. 29) (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of section (Renewables obligation: issue of green certificates) or this section by consultation that took place wholly or partly before the commencement of that section or this section.
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(5) The functions conferred by virtue of section (Renewables obligation: issue of green certificates) and this section on the Secretary of State are not to be exercisable by the Scottish Ministers, except in pursuance of an Order in Council made after the passing of this Act under section 63 of the Scotland Act 1998 (c. 46).’.—[Malcolm Wicks.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 37
Commencement
’(1) Sections 1, (National targets for microgeneration), (National microgeneration targets; modification of section 1 of the Sustainable Energy Act 2003), (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc), (Exercise of powers under section (Sale of electricity generated by microgeneration: power to modify distribution and supply licences etc)), (Functions of the Gas and Electricity Markets authority in relation to microgeneration), (Review of permitted development orders), (Building regulations: microgeneration), (Reduction of greenhouse gas emissions: report regarding dynamic demand technologies), 9, (Parish councils and community councils: powers in relation to local energy saving measures), (Renewable heat), (Renewables obligation: issue of green certificates), (Renewables obligation: issue of green certificates: further provisions) and (Adjustment of transmission charges for electricity) come into force at the end of the period of two months beginning with the day on which this Act is passed.
(2) Sections 2, (Reports under section 1 of the Sustainable Energy Act 2003: microgeneration), (Reports under section 1 of the Sustainable Energy Act 2003: energy efficiency of residential accommodation) and (Reports under section 1 of the Sustainable Energy Act 2003: community energy projects and renewable heat) come into force on 1st January 2007.
(3) Sections (Promotion of reductions in carbon emissions: electricity distributors and suppliers), (Promotion of reductions in carbon emissions: gas transporters and suppliers) and (Consequential amendments) come into force in accordance with provision made by the Secretary of State by order.
(4) The power of the Secretary of State to make an order under subsection (3)—
(a) is exercisable by statutory instrument, and
(b) includes power to make such transitory, transitional or saving provision as the Secretary of State considers necessary or expedient.’.—[Malcolm Wicks.]
Brought up, and read the First time.
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