Mr.
Ainsworth: Clause 3 is yet another victim of the accord,
and I very much welcome the Government’s new clause. It covers
everything that seems necessary at this stage to update and
improve the current microgeneration strategy, and includes in
subsection (2) a duty to consult the microgeneration industry before
preparing the strategy—a wise move—and to
consult “any
other persons whom the Secretary of State thinks it appropriate to
consult”.
When the Minister
replies—I hope that this will be an easier question—will
she say whom might she include in “any other persons”?
For example, will it include non-governmental organisations concerned
with environmental matters or with fuel poverty? We all know—it
was mentioned on Second Reading—of the potential identified by
National Energy Action for air source heat pumps to make a huge
difference to fuel bills and to benefit the fuel-poor. Will she assure
us that organisations concerned with fuel poverty will be properly
consulted? 3
pm Subsection
(5) of the new clause also improves the original draft by requiring the
Secretary of State to take other relevant strategies into account. That
should help with joined-up thinking, which we always like to see more
of, and with keeping the strategy up to date.
Subsection
(7) amends and improves the definition of microgeneration in the Energy
Act 2004. Section 82 of the Act produced the current strategy, which
has generally worked well, but the new definition of 300 kW thermal is
a great improvement on the previous definition of 45 kW
thermal, which has turned out to be far too small to make any
meaningful difference. We want to help not just single properties but
groups of properties, and subsection (7) will help. Again, I commend
the Government on their amendments, which I intend to
support.
Colin
Challen (Morley and Rothwell) (Lab): Will the Minister
explain what
“reasonable
steps to secure the implementation of the strategy”
means as set out in
subsection (6)? Every Government have lots of strategies, but they are
not always implemented as fully as the people who legislate for them
would like. Will she elucidate “reasonable
steps”?
Martin
Horwood: I have a couple of questions and a few comments
to make. My first point concerns the timetable for consultation. The
12-month timetable set out in the original measures has been replaced
by one lasting, effectively, six months to the beginning of the
consultation and six months beyond the end of the consultation, to
final publication. We worry at times that this Government are better at
producing wind through consultations than wind through turbines. It
would be nice to know, in an aspirational sense, when the Minister
expects the revised strategy to be
published. Secondly,
there are a few losses from the original wording that relate, as the
hon. Member for East Surrey pointed out, to the issues to be addressed.
Specifically, the original wording mentioned that the review would
include a focus on existing buildings, the cost-effectiveness of
different technologies, and the active promotion of feed-in tariffs and
how they could be achieved. It would be interesting to hear from the
Minister whether those things could be planned as part of the review as
well. In
terms of who is to be consulted, the original drafting contained
specifics relating to farmers, for instance, and countryside
campaigning organisations, albeit in a roundabout way. Again, it would
be nice to think that such groups would be specifically consulted. I am
not clear why officials saw the need to remove them from the drafting.
Parish councils, too, are in the same category. They were explicitly
mentioned before but are now only implied under other categories of
people that the Secretary of State might see fit to consult. Will the
Minister specify whether she intends to consult parish
councils? Finally,
I am afraid that the Committee will have to suffer the loss of
an opportunity to vote on our amendment (a), as we will not be pushing
it to a vote, in the interests of the smooth progress of the Bill.
However, it raises the issue of whether consultations that have been
completed will be acknowledged as having been part of the process, or
whether the Bill will necessitate further consultations on top of
those. If so, we might enter an endless cycle of consultations. I hope
that the Minister can clarify that point as
well.
The
Chairman: I must clarify that amendment (a) is
associated with new clause 2, and we are discussing new clause 1. We
will come to new clause 2
later.
Martin
Horwood: On a point of order, Miss Begg. I should have
clarified that I was referring to amendment (a) to new
clause 3.
The
Chairman: Right. We will come to new clause 3 as part of
the debate on clause 4 stand part. There is also an amendment (a) to
new clause 2. It does get a bit
confusing.
Dr.
Whitehead: I would like to pursue the point I raised in
respect of this clause in my intervention a moment ago. It may well be
that I am utterly stupid and have misunderstood the effect of the
various new clauses cumulatively on each other in the Bill, and I do
agree that it is rather difficult to follow the new status of various
clauses relative to how they appear, so that new clause 1 will become
clause 3 of the Bill, should it be accepted, and new clause
4—which has already been effectively accepted—will become
clause 1 of the new, revised Bill. If that is the case, then the
definition in new clause 4 of “renewable or low-carbon
source” applies to the whole of the new Act. However, the
definition to which it refers, which is in new clause1—which
will become section 3 of the Act—only refers to that clause. The
“renewable or low-carbon source” in this section
means,
“a source of
energy or technology specified in section 82(7) of the Energy Act
2004.” as
the hon. Member for Wealden has pointed
out. What
therefore appears to be the line of reference seems to be something
which does not define where the legislation is as far as the whole Act
is concerned, but refers to something which does refer to the
legislation as far as one section of the Act is concerned. This appears
to be a problem.
David Howarth: I think that that is okay because the
new clause 4 definition talks about “renewable or low carbon
source” having the meaning given to it by section 3(7) of the
Act. It does not just say section 3; it says section 3(7). If one looks
at section 3(7), one does not look at the words in the section but
merely for the words being referred to, which are in inverted commas:
“renewable or low-carbon source.” It then
says: “means
a source of energy or technology specified in section 82(7) of the
Energy Act 2004.”
I do not think there
is a problem here at all, because of the reference to what will be
section 3(7).
Dr.
Whitehead: But it is contingent on the words “In
this section”. There are two sub-clauses, and one of them is a
definition of what low-carbon energy means.
Martin
Horwood: The hon. Gentleman might find that is not
actually correct. I think the definition as he finds it in new clause 4
simply explains the definition of “renewable or low-carbon
source” using the wording of new clause 1. Only in new clause 1
is the definition contingent on the words “In this
section”. Will he accept that?
Dr.
Whitehead: May I suggest that there are three options
here. Either I am completely wrong, or
alternatively— [Interruption.] That may be
so.
Mr.
Ainsworth: It will not help future generations to
understand what is going on, not that any of us in the room seem to
understand either. It really will not help if the hon. Gentleman
silently reads notes passed to him by officials and then does not refer
to what they say.
Dr.
Whitehead: The hon. Gentleman is right. What I would like
to place on the record is my concern that a definition in the
Bill—and hopefully soon, an Act—which ensures that
low-carbon sources of energy are included, works for the whole of the
Act’s purposes. Low-carbon sources of energy means combined heat
and power and other low-carbon sources within the definition of the
size. It is being suggested that the definition works by
interpretation. I might say that at the very least, it appears to be
drafting for these purposes which needs an interpretation, rather than
giving a clear line right through the original definition which should
be in clause 1. In any event, that is a clause which relates
to the whole of the Act. Without wishing to delay the progress of this
legislation, I would appreciate a note which exemplifies why that is
sound in law. I would also like to know why as far as the Bill is
concerned, the fact that the definition appears to be in the wrong
order may not be, in any way, subversive of the purpose of including
low carbon sources properly within the overall definition. I hope that
is clear.
Joan
Ruddock: I must say to my hon. Friend the Member for
Southampton, Test that I was glad he ended up confusing himself. He
certainly confused all of us and I am grateful to the hon. Member for
Cambridge and the hon. Member for Cheltenham for their assistance in
trying to sort him out.
I fear at
the end of the day, we are all still deeply concerned about this
matter. I would like to say to him that he will get a note, and we will
clearly check carefully and see if we need to do anything in order to
create greater clarity. I can offer him that guarantee.
Returning to
the business in hand, the Government opposes clause 3 for similar
reasons that we have given in the case of other clauses. We have laid
new clause 1, which would replace clause 3 in its entirety. I hope by
way of setting out the provisions of clause 3 which are problematic, I
can explain to Committee members why the Government cannot support the
clause as it stands.
As
originally drafted it sets out a requirement to revise the
microgeneration strategy under “section 82
(microgeneration)” of the Energy Act 2004, in relation
to England. The purpose of the revised strategy would be to promote
microgeneration, defined as the use of plant for the production or
generation of heat and electricity, where that plant has a generation
or production capacity of less than 50kW in respect of electricity and
45kW in respect of
heat. The
Government is keen to promote microgeneration but believes that the
45kW thermal limit for heat technology does not go far enough. The hon.
Member for East Surrey has acknowledged that. We want to ensure that
the new strategy adds real value to work that is already underway, for
example, to allow consideration for larger-scale heating systems. We
believe giving scope in the strategy to consider wider developments
will be beneficial in ensuring that microgeneration plays its part in
meeting the challenging 2020 renewable target and contributing to the
80 per cent. reduction in carbon emissions to which we are
committed.
The clause
also includes specific reference to matters that the Secretary of State
must include within the revised strategy, such as financial and fiscal
measures which in his opinion will ensure the cost-effective promotion
of microgeneration. The Government cannot support unspecified
commitments to fiscal and financial measures as this would lead to
confusion and undermine important work already under way to support
small-scale on-site energy technologies, which I will come to
later. 3.15
pm I
will attempt to set out the intentions of new clause 1,
which seeks to replace the current clause 3 of the Bill. Let me begin
by acknowledging the work that has already been done to move forward
microgeneration in the UK. The Government published a microgeneration
strategy in March 2006 following the Energy Act 2004. We made
significant progress in implementing that strategy and reported in June
2008 on the actions set out in that document. I am sure Committee
members will agree that it is important to go further and build on what
has been achieved to date in the development of microgeneration
technologies. Let me make it clear that stakeholders, and hon. Members
themselves, have played their part in those achievements.
The new
clause sets out clearly the Government’s intention to prepare,
consult on and publish a new strategy to promote microgeneration. The
new clause also requires the Secretary of State to take reasonable
steps to secure its implementation. We must ensure that the new
strategy adds real value and takes account of work that is already in
progress. With that in mind, the new clause makes it clear that the new
microgeneration strategy should have regard to strategies relating to
the generation of electricity or heat from renewable or low-carbon
sources to be published by the Secretary of State after 1 July this
year. This is designed to ensure that the strategy takes account of the
renewable energy strategy and the heat and energy savings strategy. We
want to ensure that we do not duplicate work that is already under way.
Nor do we want to treat microgeneration in isolation from policy
development in other areas. It must be integral to our long-term plans
to increase the use of low-carbon energy.
The new
clause requires the Secretary of State to consult producers and
suppliers of the equipment for microgeneration in preparing the
strategy. We believe
this is important and we want to involve industry and other stakeholders
in that process. We are already talking to industry and, indeed, this
has confirmed the need to do more than revise the previous
microgeneration strategy. We need to bring forward a new strategy able
to take account of the live and relevant developments taking place in
this
area. I
would just like for the benefit of the Committee to raise some
of the issues that are already current. We know that more
needs to be done on information provision to inform consumers and build
confidence in microgeneration technologies. Those consumers who want to
install microgeneration technologies require easy access to relevant
information to inform their purchasing decision.
Similarly,
we need to look at supply chain issues, and work is already in progress
to develop industry skills in relation to microgeneration. I understand
that SummitSkills is doing excellent work in developing the required
standards and qualification units for both new entrants and existing
workers. We want to reduce some of the current confusion in the
marketplace and make it easier for designers and installers of
microgeneration technologies to know what training is required and how
to go about it. We believe the strategy may be able to help facilitate
work in this
area. It
has been suggested that the strategy should consider a systems approach
as opposed to a technology approach, which is clearly an important
issue. This looks at how microgeneration technologies interface and
integrate with each other and within systems rather than focusing on
individual
technologies. Certification
also has an important role to play in providing assurance on the
performance and quality of microgeneration installations. We have made
some progress on certification despite numerous challenges.
The microgeneration certification scheme is now making good progress,
although there is still more work to do. It has been opened up to new
certification bodies, which should help to create a competitive market
for certification services. We might also be able to do further work on
the strategy on grid connections and smart grid
developments. Finally,
we could review the standard assessment procedure—the
SAP—to ensure the tool aligns with our policy objectives to
deploy renewable and low-carbon technologies in new buildings and for
retrofit. Those are the issues—quite a significant
number—that we could consider, but as I have said, the
consultation will cover them in greater detail.
The new
clause sets out a clear timetable for the preparation of the new
strategy. It will require—and this is a response to one of the
questions posed—the consultation to commence within six months
of the Act coming into force and for the Secretary of State to publish
the strategy within six months of the end of the consultation. I
believe that that offers clarity and means that we need to publish the
revised strategy before the summer of 2010. We will need to publish the
revised strategy before next summer.
In terms of
microgeneration as it relates to this clause, the new clause refers to
section 82 of the Energy Act 2004. I know that the hon. Member for East
Surrey is keen to see the strategy maintain that link with section 82.
However, new clause 1 gives scope to consider the contribution of the
production of heat above
45 kilowatts thermal. We believe that it is important to
align the strategy with, for example, recent changes to the eligibility
criteria for funding for heating technologies for the low-carbon
buildings programme. The Government have recently extended that
programme with an additional £45 million, as hon. Members will
know, and a specific change to allow support for heat technologies up
to 300 kw thermal. We know from experience—and,
again, this has been referred to already in the debate—that the
45 kw thermal limit is restrictive for schools and community projects
that could otherwise make use of microgeneration heat technologies at
those larger
scales. Raising
the limit to 300 kw thermal will also allow us to consider, as part of
the microgeneration strategy, the important role of small scale
community heating networks and what further work is required to ensure
greater deployment of these networks in local communities. More
broadly, raising the limit gives scope to consider a wider range of
issues that may be usefully included in the new strategy than might
otherwise have been the case under clause 3, as originally drafted. The
new clause does not include a specific reference to the financial and
fiscal measures that I have indicated, which appeared in the previous
clause. It is important that we are specific about what we intend to do
in terms of financial measures. Anything vague only creates confusion
and unnecessary uncertainty. The Energy Act 2008 provides for the
introduction of the feed-in tariff and the renewable heat incentive. We
therefore already have the powers to bring forward effective incentives
to encourage the take-up of microgeneration technologies. We plan to
consult on feed-in tariffs this summer and on the renewable heat
incentive later in the
year. I
was asked about our various consultations and the form that they might
take. It was put to me that we were losing some of the named persons
who might have been consulted. I was also asked specifically about
whether there would be consultation with green non-governmental
organisations. We would, in approaching the consultation, do what we
did with the previous microgeneration strategy, which included setting
up a steering group with industry participation and wider stakeholders.
All actions in the previous strategy were completed with that approach.
It is a common approach taken across Government and it would be very
appropriate, for the whole range of consultations, but the particular
one we referred to on the microgeneration strategy.
The hon.
Member for Cheltenham implied that we consult too much. That is not the
view of those consulted. That is not the view of those consulted. They
wish to be consulted. They press us to be consulted. It takes time to
make proper consultations. We must then properly examine our returns
from consultation, and we shall continue to do so. I assure him and the
hon. Member for East Surrey that we shall be consulting in the broadest
range possible on matters that will meet the questions that they
asked.
| 
