The Minister for Energy (Malcolm Wicks): I beg to move,

It is a privilege to serve under your chairmanship, Mr. Martlew. To set the context with something we are familiar with, the Government are fully committed to a major expansion of renewables and low-carbon technologies as part of the UK’s diverse energy mix. I hardly need remind hon. Members of the urgency of tackling climate change, and of the need for energy security through distributed energy and other means, as well as the potential of renewables in tackling fuel poverty. These are both challenges and opportunities which can also secure business, employment and innovation benefits.

Low-carbon and renewable energy from microgeneration can play an important role in meeting our EU 2020 targets. As hon. Members will know, last week we launched the renewable energy strategy consultation. This will define our policy going forward, culminating in our final renewable energy strategy in spring 2009 once the EU renewables directive has been agreed. Being able to generate low-carbon or renewable energy locally, even in our own homes, is good for the environment as well as for our economy.

Through this statutory instrument, the Government seek to expand the definition of microgeneration to clarify it in relation to some of those energy sources already recognised as microgeneration and to amend the legal framework within which development and possible future technologies can be encouraged. The Government therefore seek to expand the major statutory definition of microgeneration to include technologies that wholly or mainly rely on

This is in some senses, therefore, a technical measure, although I think it is an important one.

The background to this statutory instrument is a recognition in recent months by the Government, and in particular by my hon. Friend the Member for Stroud, that the statutory definition of microgeneration requires expansion. I congratulate my hon. Friend on highlighting this important issue in his Microgeneration Definition (Amendment) Bill, which sought to include air as a source of energy for microgeneration.

In fact, the Government were in the process of consulting on this issue. The main reason for seeking to amend the definition is the development and availability of air source heat pumps since the list was originally drawn up. In plainer English, we liked my hon. Friend’s Bill so much, we thought we would have it for ourselves.

The term “microgeneration” defines energy technologies that are either low-carbon or renewable and which produce heat and electricity: roof-mounted photovoltaic panels and small and micro wind turbines are increasingly common. There are also micro combined heat and power units, micro hydro technologies, domestic biomass generators and various kinds of heat pumps. The list of sources and technologies is in section 26(2) of the Climate Change and Sustainable Energy Act 2006, and section 26(4) of the Act provides that section 26(2) may be amended by adding to the list of sources of energy and technologies when the Secretary of State considers that the use of that source of energy or technology would cut emissions of greenhouse gases in Great Britain. The Secretary of State considers that the use of heat from air, water or the ground would cut emissions of greenhouse gases in this country and should therefore be included in the definition.

The Energy Act 2004 also provides a statutory definition of microgeneration for the purposes of the Act, which is also relied upon in the Income Tax (Trading and Other Income) Act 2005, the Taxation of Chargeable Gains Act 1992 and, as I am sure hon. Members know, the Town and Country Planning (General Permitted Development) Order 1995, and also of course some sections within the Climate Change and Sustainable Energy Act 2006. I think the hon. Member for Northavon is about to remind me of an Act I have forgotten.

Steve Webb (Northavon) (LD): On the Town and Country Planning Act, the Minister used the phrase “permitted development”. Will he flesh out for us whether, by approving this statutory instrument, we are making it easier for people to get planning permission to install air source heat pumps and so on? What are we doing by including this on the list from the point of view of town and country planning and permitted development?

Malcolm Wicks: The Department for Communities and Local Government has recently—if the hon. Gentleman will pardon the expression—liberalised its approach to these matters, and has made it far easier for people to have microgeneration in their own dwellings. That is not a general provision. There are still some developments awaiting wind turbines, for example.

Externally fitted air source heat pumps can emit a noise like that from a ventilation unit. For this reason, they were not covered, unlike other microgeneration technologies, by general permitted development orders from 6 April, nor were wind turbines. They await development. Work is going on to link them to MCSs. Obviously, I could tell hon. Gentlemen what MCSs are, should they so wish, but later on.

For the purposes of permitted planning, MCS imposes certain restrictions and standards. Work to bring forward permitted development for ASHPs is unlikely to be completed before this autumn. Once permitted development for ASHPs is in place, installations that do not use MCS products and installers may go ahead but such installations will have to get planning permission. MCSs are micro-certificate schemes.

Jeremy Corbyn (Islington, North) (Lab): Will the Minister give way?

Malcolm Wicks: In a moment.

The upshot of that is that the Department for Communities and Local Government has now enabled a much easier regime for permitted development for most microgeneration units—solar planning and photovoltaics, for example—but because of some noise issues which apparently affect this technology and may affect micro wind turbines, there is still process going through.

Jeremy Corbyn: In terms of perceived or approved development, how does this affect listed buildings, conservation areas and areas of outstanding natural beauty?

Malcolm Wicks: In brief, the liberalisation in terms of permitted development is for most dwellings but there are still restrictions when it comes to houses or buildings of special heritage significance. It is not a general position. If my hon. Friend is particularly interested, I can write to him and put forward more details of the DCLG position. I take it that the point my hon. Friend was raising was that this might not always be appropriate.

Jeremy Corbyn: I thank the Minister for that. So that he does not have to write an extraordinarily long and over-detailed letter, my concern is about wind generation on historic buildings and photovoltaic cells, which I generally support, can be damaging to the visual impact of historic buildings such as those with stone slates. I just hope there is some degree of sensitivity being operated in that respect.

Malcolm Wicks: Indeed there is, which is why this Parliament is not yet festooned with photovoltaics, as some enthusiasts would wish. I can reassure my hon. Friend on that.

I mentioned the Climate Change and Sustainable Energy Act 2006. I was about to say that that definition is found in section 82(6) and (7) and is framed in the same manner as the definition in the Climate Change and Sustainable Energy Act 2006. Section 82(7) includes the same sources or technologies as are currently in section 26(2) of the Climate Change and Sustainable Energy Act 2006, but with an additional category, namely under paragraph (j),

We do not believe that this statutory instrument will affect the definition of microgeneration in the Energy Act 2004. In accordance with section 82(7)(j), the definition of microgeneration in that Act can be read as including heat from the air, water or the ground.

The heat pump, to get to specifics, is a technology that transfers low-grade heat energy from a medium such as ground, air or water, to another location such as a building. That is achieved using a refrigeration loop which compresses a refrigerant to a high temperature which transfers heat to a heating distribution system. Ground source heat pumps require coils in trenches dug in the surface of the earth to tap into heat energy stored in the ground or they require boreholes into the earth which may also draw to some extent on geothermal heat which is, of course, planetary heat.

Air source heat pumps work on similar principles, but are generally regarded as less efficient than ground source heat pumps since the ratio of heat-energy outputs to energy inputs is less. Instead of using coils, a fan is exposed to air. The pump can be attached to the exterior wall of a building, rather like a ventilation unit. Interior air source heat pump units can be fitted in kitchens and may resemble a domestic fridge-freezer.

At the time of passing the Climate Change and Sustainable Energy Act it was the intention that the definition of microgeneration included ground source heat pumps. However we feel that that was not as clear-cut as it could be, so we are seeking to ensure that the issue is beyond doubt and clarified that ground source heat pumps are likely to use both planetary/geothermal and solar energy. “Geothermal” generally refers to heat from planetary sources. While this can be found near the surface in, say, Iceland, in the UK it would require deep drilling, such as in an installation in Southampton which has a borehole 1,800 m deep.

Those ground source heat pumps which do not require boreholes but trenches draw on solar energy stored in the ground. Although solar energy is in the current list, this generally refers to photovoltaic panels, for example, which absorb their energy directly from the sun’s light, rather than to solar-heat energy in the ground. Water source heat pumps work on similar principles to other heat pumps, but use coils submerged in water. The Government are seeking to put these issues relating to heat pumps beyond doubt. We have consulted with relevant Government Departments and industry, who fully support the inclusion of the proposed amendment to the list. On that basis, I commend this draft order to the Committee.

Charles Hendry (Wealden) (Con): It is a pleasure indeed to serve under your chairmanship this afternoon, Mr. Martlew. That was a masterly explanation from the Minister of what this SI is about. It is the first Statutory Instrument Committee that I have ever been to where the speech was longer than the SI itself. It would clearly have been longer still had it not been for the raft of abbreviations that he brought in. I thought at one point he was going to give us a sentence with no words whatsoever, just a series of abbreviations and numbers, but it has been a very helpful introduction to this debate. I apologise to the hon. Member for Stroud that I have not so far studied his micro-definition amendment Bill, but it is clearly something that we shall look at in more detail later on. Normally it is a Tory policy which becomes Government policy, rather than the other way around, but I can see you are urging us to address the details in front of us, Mr. Martlew.

I think this is a very timely and appropriate change and we will be supporting it. There are a couple of issues that we wish to explore a little further. It is clearly desirable to give the Government more general powers to amend in future, because this is an area in which the technology is moving fast, where scarcely a month goes by without some new development, and clearly it is in the interests of a rapid roll-out of microgeneration that it should be as easily encompassed as possible within the regulations.

It is interesting that we are having this debate just a couple of weeks after the Government have been setting out in detail how they believe they can meet the EU targets. The Minister said, intriguingly, that low-carbon technologies can help us meet those targets. My impression is that these are renewable targets, not low-carbon targets. Would the Minister clarify whether the targets are being broadened from the energy that we will get only from renewables to energy we can get from low carbon, because many of us think that may have to be an important part of this whole process? Indeed, many of us feel that it is right that the direction in which we are moving should be reducing carbon rather than seeing only renewables as the right element in that mix.

Perhaps the Minister can also give us more detail about how the Government envisage they can meet those targets because, to everybody outside, they are incredibly challenging. Microgeneration clearly has an element in it, but the Minister is not going to do that today, because it goes beyond the remit of this particular statutory instrument. But we will need clarity from the Minister.