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Lord McIntosh of Haringey: My Lords, the noble Baroness says that the proposed consultation period is unlikely to be contested. It is important to recognise the nature of the transaction we are talking about. Transferring a licence will involve changes to a large number of contracts with third parties. It is the kind of deal that by its own nature will take time to work through. In these circumstances it does not seem excessive to allow for a minimum period of two months to accommodate the possible breadth of consultation.

I acknowledge that in practice the proposal would not make much difference because the period for consultation, whether it is two months or 28 days as proposed, is a minimum period. However, the draft Code of Practice on Written Consultation issued by the Cabinet Office proposes that there should be a general minimum of eight weeks for public consultation. In my experience, governments are generally criticised for permitting too short a period of

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consultation rather than too long a period. I hope that the noble Baroness will accept that we are doing the right thing.

Baroness Buscombe: My Lords, I thank the Minister for his response. Like the Electricity Association and other representatives we have consulted, we feel that a period of 28 days would make sense because in many cases we are talking about house transfers and simple realignments. The utilities industry wishes to get on the job and carry it out as expediently and as quickly as possible. That is why we have tabled the amendment. I am sorry that the Minister has not reduced the period but we accept what he has had to say on the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4 p.m.

Clause 62 [Obligation in connection with electricity from renewable sources]:

Lord Jenkin of Roding moved Amendment No. 5:

    Page 65, line 34, at end insert--

("( ) The Secretary of State shall ensure that the provisions of an order will provide a suitable environment for investment in generating capacity for electricity from diverse renewable resources in order to meet the targets for production of electricity from renewable resources set by him.").

The noble Lord said: My Lords, in moving Amendment No. 5, which stands in my name and that of my noble friend Lady Byford, I shall speak also to Amendment No. 6. The amendments are slightly different but they are clearly linked.

We come now to the question of the renewables obligation. I remind the House that a new scheme will be set up under this Bill to replace the non-fossil fuel obligation, which has existed for a number of years and has produced the present level of renewables.

Perhaps if I mention a preliminary point now, the Minister may be able to acquire the necessary knowledge to reply to it. I am not entirely clear why hydroelectric power--particularly when there has been a substantial improvement in this field--is not included in renewables. I learnt this fact only recently--I was not aware of it before--and it seems to me to be a fairly strange situation. If ever there is a renewable source of energy, it is hydroelectric--of which, of course, there is a great deal more in Scotland and Wales than in England.

Turning to the issue generally, there was much debate at earlier stages of the Bill on how the new provisions to promote renewable sources of energy will work and whether they will meet the Government's targets--which, frankly, at present seem ambitious. Our present level of renewables is about 2.5 per cent; the Government are aiming at 5 per cent by 2003 and 10 per cent by 2010. The House will be aware that the recent report of the Royal Commission regarded that as quite inadequate. It certainly does not meet the likely changes in other sources--the Minister mentioned nuclear power earlier--and the Royal Commission has recommended that it should be much higher.

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I am grateful to the Minister for meeting representatives of those who are concerned with the provision of renewables. I shall return to that in a moment. Parts of what the Minister said in the meeting was of some reassurance, but they still remain quite unconvinced that the new scheme will produce the additional sources of electricity from renewable supplies that the Government are aiming at. Clearly this stage of the Bill is not the moment to rehearse all the anxieties of those who are concerned in trying to meet these targets; suffice it to say that, as of today, they do not think the scheme will work.

The existence of a price cap, which was put in, clearly, because of the Government's overriding obligation to protect consumers; the refusal of the Government to write into the legislation the long-term contracts which alone will provide the necessary basis for raising loans to finance investment; the refusal so far to recognise in the Bill that different sources which are in different stages of development inevitably involve different levels of cost, and that this should be recognised by different levels of capping, all militate in the eyes of the generators of renewables--particularly the smaller ones--against the viability of the scheme.

These amendments suggest two ways in which the Bill may be improved and may possibly marginally help to achieve the renewables target. Amendment No. 5 seeks to impose an obligation on the Secretary of State to ensure that the provisions of the order that he makes provide,

    "a suitable environment for investment in generating capacity for electricity from diverse renewable resources".

Therefore, as well as considering the views of the generators, he will have to take account of what the bankers and the investment world have to say about the kind of contracts they will be asked to finance. Any sensible banker will want a renewables obligation that lasts longer than the term of his loan in order to ensure that the loan will be repaid. So Amendment No. 5 simply spells out an obligation that, in making the order, the Government must have regard to a suitable environment for investment.

As to Amendment No. 6, the House will be aware that the clause provides a list of those who must be consulted--the Minister has been clear that there will be very firm consultation--but, curiously enough, it does not include the generators of electricity from renewable sources. Here I come to the interesting point of the meeting that we had with the Minister. On my side of the table were representatives of two trade associations--one representing the people interested in biomass and other non-food crops as a source of energy, and the other the Association of Electricity Producers. On the whole, they represent the very small operators who produce electricity from quite a wide variety of renewable resources.

There came a moment when the Minister and his advisers were saying that they had consulted the generators and that the generators were quite happy with the provisions in the Bill. I said, "But on this side of the table you have a lot of generators who are not happy and who do not feel that they are yet being properly consulted". The situation may have changed

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in the past week, but they were quite clear. The smaller generators and the Association of Electricity Producers--which is not a large trade association; it is run on very slender resources and represents, as I said, very small firms (some of them only family firms) that have small sources of electricity generation--want to be quite sure that the Bill places an obligation on the Secretary of State to consult them before making the order.

We have argued this case before and I have had rather unsatisfactory answers. It seems to me that both creating an environment for investment and consulting the generators from renewable supplies will go at least part of the way to allay the concerns that have been voiced. I beg to move.

Lord Hardy of Wath: My Lords, I shall be very brief. I hope that I may be excused, perhaps before the end of the debate, because there is a Joint Select Committee meeting upstairs and I would not wish your Lordships' component of that committee to be inquorate.

Perhaps I may ask my noble friend to consider seriously a point I have made before, both in Committee and on Report. I believe that the Government are right to set a target; they are also right to ensure diversity. What worries me--and I am still anxious despite the earlier debates--is that the quickest way of meeting the target will be from onshore windpower. I am not at all satisfied that that would be the wisest or most acceptable course. Certainly other forms of generation need to be encouraged to avoid an excessive proliferation of windmills over every prominent, and perhaps beautiful, part of our landscape--a landscape which needs to be treasured.

Can my noble friend give an assurance that, if it looks as though the Government may not meet their target, they will not be tempted to lean on local authorities and urge them to give planning permission for such projects? I say that because I have a vivid memory of the period when the noble Lord, Lord Jenkin, was Secretary of State for the Environment and, under successive governments, many of his colleagues sustained the position of the Department of the Environment leaning on planning authorities very firmly indeed to ensure that planning permission was given for open-cast mining development--a development which soured, injured and inconvenienced local communities, perhaps for many years. Indeed, in my part of South Yorkshire, 40 years after open-cast mining farmers cannot grow root crops.

I am not suggesting that there should not be windpower--perhaps offshore windpower is desirable--but I do not want to see a situation in which we are compelled to have a vast number of onshore windmills in order to meet the very tight targets the Government have set. I have made the point before and I await my noble friend's response, perhaps by

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letter. To avoid that disfigurement of our heritage it is essential to ensure adequate consideration is given to promoting diversity.

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