| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Whitty: In order to benefit from the renewables obligation, we have to specify technologies that are specified in the renewables directive. That is not the way that the Germans are supporting the coal methane industry. They are doing it by means of a system which they refer to as a "feed-in tariff", which results in favourable pricing of the methane connection into the system. However, the German scheme does not include coal mine methane under a renewables obligation. That is no different. That is what would fall foul of the state aid rules, from which support for renewables has to have an exemption. It can only be those renewables that are referred to in the renewables directive.
Lord Dixon-Smith: I can understand the distinction which the Minister is drawing. If the renewables obligation defines technologies, I can understand why that is not a route we can use. However, why can we not use the route that the Germans use—which, although it is obviously outwith that, appears to be acceptable?
Lord Whitty: This may not be an entirely satisfactory answer, but the bit of the renewables obligation which would benefit coal mine methane concerns recycling of the fossil fuel fund. By any definition, that is clearly state aid. The feed-in tariff is not state aid because effectively no money is forgone or provided to the coal mine methane sector. Therefore, it does not fall foul of the state aid obligations.
Lord Williams of Elvel: I have listened very carefully to the debate and I feel that noble Lords opposite have a point. Why can we not do what the Germans do regardless of the renewables obligation?
Lord Whitty: Even if we could do what the Germans do, that is not what this amendment says. This amendment is calling for its use. So even if I accepted my noble friend's strictures on this, I could not accept this amendment. We would therefore have to return to the issue, as I suspect we will do in any case. However, tariff structures—unlike a straight payment—are not part of the normal definition of state aid.
The DTI is looking at the various options and other matters related to coal mine methane. That report should be available in a couple of months. The Defra reports will take slightly longer. We shall have to see
whether the DTI report throws any light on this issue. Either way, I think that this amendment is ruled out in relation both to logic, as coal methane cannot really be regarded as a renewable, and to the legal provisions under state aid rules.
Baroness Miller of Hendon: It may very well be that Amendment No. 132A does not meet the definition of renewable obligation and the other points which the Minister mentioned. It may well be that we cannot do what the Germans seem to do. However, the Germans have gone right ahead with their industry in this way, while we are still thinking about it. The DTI is still thinking about ways that it can make it happen. The report may come out in two months, but it may not cover this particular matter.
I think that the Minister needs to go back and talk with his officials to see whether something can be done. I am quite certain that my noble friend will put his thinking cap on and find a way which is acceptable on Report. However, it would be far better if the Minister could persuade the DTI to think about how the Germans can do it. If they cannot do it within the next couple of weeks, I very much hope that they will be able to provide an answer before the Bill goes to another place for consideration there.
Lord Ezra: It seems to me that we must pursue this matter; we cannot simply leave it there. I am not convinced by the argument that this is not a renewable source. The coal reserves in this country are virtually unlimited. Be that as it may, if this is not the route to take, I believe we must seriously consider some other route and bring forward on Report something approximating the German system, which apparently does not encounter the resistance which the Government feel our amendment would meet.
Certainly, we cannot miss the opportunity provided by the debates on this Bill while we wait for these leisurely inquiries. After all, we have now been looking into this matter for a number of years. If the Government are really committed to a future with a low-carbon economy in Britain—no one is talking about a non-carbon economy; that is impossible—then this particular proposition, which would make use of colliery methane, would certainly contribute to that, and I believe we must seriously consider that option. I await with interest what the noble Lord, Lord Jenkin, has to say on the matter.
Lord Whitty: Before the noble Lord rises to speak, I should point out that under the climate change levy system we have provided for an exemption for methane, recognising the kind of benefit to which the noble Lord, Lord Ezra, refers. That has also been cleared by the European Commission and it does something which the Germans do not do. Therefore, we all have our different ways of approaching this matter and it is not necessarily the case that, just because the Germans are operating it, we should do exactly the same.
Lord Jenkin of Roding: In the mean time, firms that have been working on extracting, trapping and using
coal mine methane in this country are now emigrating to Germany. That is what they are doing. A few of the big ones may still be here but all the rest are deciding that, if they are to develop and use this technology, they must go to Germany.I should have found the Minister's reply mildly more acceptable if he had shown one iota of sympathy for the case that has been made. We have found—the noble Lord, Lord Ezra, will endorse this—that, in private, Ministers tell us that they have every sympathy with the case that we have made. However, every time a Minister stands up in public, as the noble Lord, Lord Whitty, has done this afternoon, he virtually bans it.
As my noble friend Lady Miller of Hendon said, we await the reports, which may or may not be made before this Bill is enacted. However, that is not good enough. Here is a way in which the Government could hit directly at their CO 2 target—the central thrust of the energy White Paper. The renewables are a means to that end; they are not an end in themselves. The reduction of CO 2 is the end to be achieved if we are to have an impact on climate change. Here is an equivalent source of CO 2 which could be trapped and used and which would make a marked contribution to that struggle, yet nothing has been done.
In a sense, the climate change levy was a sop. It removed a minor disincentive—that is all. However, any effective encouragement to the industry, such as the renewables obligation or, as we heard in a number of our submissions to Ministers in meetings, the equivalent of a renewables obligation—that is, something of the same value but without the tag "renewable"—is absent. Indeed, even since then, work has been carried out which establishes, I believe beyond doubt, that what is left behind when a mine is abandoned are not finite pockets of gas but gas produced by a continuous process of microbial action on the coal. As the noble Lord, Lord Ezra, said, that lasts for hundreds of years and it will continue to be produced. It is not simply the case that, once the pockets have gone, that is the end of it.
What is the difference between landfill methane and that type of methane? I find this debate infinitely depressing. It will not surprise the Minister in the least to know that we shall certainly return to the matter on Report. We shall consider what he said about the apparent magic of the word "renewable", although, as I said, the microbial action is pretty well indefinite. We shall consider what the Minister said and return to the matter, and I know that I shall have support from more than one part of the House. I am most grateful for what the noble Lord, Lord Williams of Elvel, said in his brief intervention. When we return to the matter, I believe that the Minister will need to give a far better reply if he is to persuade the House not to accept our amendment. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon moved Amendment No. 132B:
- After Clause 149, insert the following new clause—
The noble Baroness said: Both the Gas Act 1986 and the Electricity Act 1989 require the energy regulator, Ofgem, to maintain a register containing the details of every determination made by him in respect of a licence. This important requirement does not extend to determinations made by Ofgem under primary legislation.
Ofgem has extensive powers under both Acts to determine disputes. There are compelling arguments that the absence of a duty to publish such determinations is anomalous. This is particularly so in relation to Ofgem's statutory determination of disputes about standards of performance. Those powers arise under Section 33AB of the Gas Act 1986 and Section 39B of the Electricity Act 1989.
The formal significance of these determinations is evidenced by the fact that the legislation specifically makes them final and enforceable as if they were judgments of what used to be called a county court, and is now called a district court. Despite this, Ofgem is not obliged to publish its determinations, and does not do so.
This situation is not compatible with the principles of public access and regulatory transparency. It does not accord with the well known principle that if justice is to be done, it must be seen to be done.
This country does not subscribe to the idea of secret courts or secret judgments. It does not facilitate judicial consistency because, in these cases, Ofgem is acting in a quasi-judicial capacity. It does not enable the companies that are regulated by Ofgem to know what are the standards they will be required to follow, or whether they have been treated in the same way as other companies in the same position.
In other words, the present situation is not compatible with the principles of regulatory transparency and consistency to which Ofgem professes to aspire. There is nothing under the existing statutory regime which prevents Ofgem publishing its decisions and its reasons and making them available to both the two industries but also to customers who have a major interest in the enforcement of standards of performance.
Let me give an example of the need for publication of such decisions. In October 2002, there were widespread interruptions to electricity supplies following a major storm. Ofgem's determination of compensation affected many thousands of consumers.
The provisions of this sort of determination should in future be available to other members of the industry and to the public as of right. As I have just said, there is nothing to prevent Ofgem publishing its decisions, but it deliberately does not do so.
This amendment will rectify that. I beg to move.
"PUBLICATION OF DETERMINATIONS
(1) Section 36 of the Gas Act 1986 (c. 44) (keeping of register) is amended as follows.
(2) After subsection (2)(d) insert—
"( ) every determination made under any provision of this Act;".
(3) Section 49 of the 1989 Act (keeping of register) is amended as follows.
(4) After subsection (2)(d) insert—
"( ) every determination made under any provision of this Act;"."
Next Section
Back to Table of Contents
Lords Hansard Home Page