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Lord Ezra: My Lords, perhaps I may express my appreciation of the amendment. When the Bill was in this House we spent much time debating the subject of microgeneration as being potentially a substantial contributor to the achievement of the Government's objectives in reducing carbon emissions.

I had the benefit of a meeting with Mr Stephen Timms, the Minister for Energy, and explained to him the reasoning behind our amendment, even though I accepted that support for microgeneration had been included in the White Paper. He was very sympathetic to this concept but he drew attention to the problem of the targets that had been included, to which the noble Lord, Lord Whitty, referred. I accept that the Government were faced with that difficulty, but I was very pleased that he accepted the concept that the Government should develop a strategy for microgeneration.

It is an area in which I have been much concerned—I declare an interest in it—and I can say that, with this provision, the sector will be only too pleased to assist the Government in developing such a strategy. I very much support the amendment.

Baroness Miller of Hendon: My Lords, we on these Benches are also supportive of and grateful for the amendment.

Lord Jenkin of Roding: My Lords, before the Minister replies, I have a question. Subsection (8) sets
 
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out the capacity that is to be regarded as falling within the description of microgeneration—50 kilowatts of electricity and 45 kilowatts thermal of heat. Is there any particular reason why those figures have been put into the Bill, or is it simply a matter of judgment as to where a line should be drawn? Has there been any scientific study of the equipment that might be available, both for electricity and the combined heat and power systems referred to in the amendment? I should be most grateful for an explanation.

Lord Whitty: My Lords, I am not fully clear about the scientific basis for it but, on the electricity side, the threshold for electricity generation is set at the equivalent definition of micro-CHP in the EU co-generation directive. On the heat side there is not a similar precedent to follow. The general view is that 45 kilowatts thermal ensures that the technologies which are capable of generating heat for small households or community heating projects would fall within the scope of this strategy. There is a less clear answer on the heat part but it is for consistency on the other part.

On Question, Motion agreed to.

COMMONS AMENDMENT
10 Clause 84, Leave out Clause 84

Lord Whitty rose to move, that the House do disagree with the Commons in their Amendment No. 10 but do propose the following amendments in lieu—

10A Clause 84, page 64, line 29, leave out from beginning to "(the" in line 30 and insert "In each of section 4AA of the Gas Act 1986 (c. 44) and section 3A of the 1989 Act"
10B Clause 84, page 64, line 31, leave out from "Authority)," to end of line 35 and insert "in subsection (5)—
(a) for the "and" at the end of paragraph (b) substitute—
(ba) to contribute to the achievement of sustainable development; and";
(b) for "and shall" substitute "and (so far as not otherwise required to do so by this subsection) shall"."

The noble Lord said: My Lords, I beg to move that the House do disagree with the Commons in their Amendment No. 10 but propose that we adopt instead Amendments Nos. 10A and 10B.

We have argued in both Houses that the three pillars of sustainable development—economic, social and environmental—are already covered in legislation. Sustainable development is already taken fully into account when the Secretary of State, Ofgem and GEMA carry out their functions under Part I of the Electricity Act 1989 and the Gas Act 1986. We have questioned whether this additional duty on the Secretary of State would significantly alter the way the work is delivered.

However, on further reflection and having listened to the arguments originally proposed by the noble Baroness, Lady Miller of Chilthorne Domer, and by others both here and in the Commons, the fact that this
 
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sustainable development duty has wide cross-party and stakeholder support demonstrates to us that it might be better to make this clear in the Bill.

I am familiar with the precedent in the Water Act 2003. It is difficult to argue with it. I tried earlier, but I am not sure that I convinced myself, and I clearly did not convince many noble Lords or Members below. We should have a similar provision in relation to the Secretary of State and GEMA in this Bill and, for consistency, in the Electricity Act 1989 and the Gas Act 1986, which were referred to in the original amendment.

We are therefore content to propose that that a sustainable development duty is added to those to which the Secretary of State and GEMA must already pay attention. I hope that shows beyond doubt the Government's intention in this matter.

Moved, That the House do disagree with the Commons in their Amendment No. 10 but do propose Amendments Nos. 10A and 10B in lieu thereof.—(Lord Whitty.)

Baroness Miller of Chilthorne Domer: My Lords, I shall speak to Amendments Nos. 10A and 10B. I express my considerable gratitude to the Minister for listening to all the arguments. As he said, he played a considerable role in ensuring that there was a similar provision in the Water Act 2003, and so he was open to the suggestion that it was important to have such a provision in this Bill, as far as the regulator is concerned.

There was some debate around the fact that guidance could be issued for environmental and social requirements and the question of whether that was sufficient. The fact that the Government have had a change of heart and have included a sustainable development duty for GEMA signifies a real step forward for the industry.

All too often, the parts of sustainability are taken separately. The Minister is correct to say that they all need to be considered together. The Government's amendment, which replaces the deleted Clause 84, is extremely welcome and satisfactory.

Baroness Byford: My Lords, we are delighted that the Government have been persuaded. We had long debates at earlier stages in the Bill, and the noble Baroness, Lady Miller of Chilthorne Domer, and I pressed very hard. We took the Water Act through. I am grateful that the Minister has listened to the arguments and has convinced his colleagues at the other end. We support the amendments.

Lord Jenkin of Roding: My Lords, I would like to add my support to this and draw the House's attention to what I have found a compelling report by Sustainability First, Economic regulation and sustainability policy. It took my printer a long time to print it out, but it was worth it.

The main recommendation in that report is that sustainability obligations should be the same for the energy regulator as they are for the water regulator, as
 
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the noble Baroness, Lady Miller of Chilthorne Domer, has said. The Government are wise in moving in that direction. I support the amendments too.

Lord Whitty: My Lords, I am grateful for this support.

On Question, Motion agreed to.

COMMONS AMENDMENTS
11 Clause 100, Leave out Clause 100
12 Clause 101, Leave out Clause 101
13 Clause 102, page 78, line 10, after "extension", insert "of a generating station"
14 Clause 102, page 79, line 13, at end insert—
"36B Duties in relation to navigation
(1) Neither the Secretary of State nor the Scottish Ministers may grant a consent in relation to any particular offshore generating activities if he considers, or (as the case may be) they consider, that interference with the use of recognised sea lanes essential to international navigation—
(a) is likely to be caused by the carrying on of those activities; or
(b) is likely to result from their having been carried on.
(2) It shall be the duty both of the Secretary of State and of the Scottish Ministers, in determining—
(a) whether to give a consent for any particular offshore generating activities, and
(b) what conditions to include in such a consent,
to have regard to the extent and nature of any obstruction of or danger to navigation which (without amounting to interference with the use of such sea lanes) is likely to be caused by the carrying on of the activities, or is likely to result from their having been carried on.
(3) In determining for the purposes of this section what interference, obstruction or danger is likely and its extent and nature, the Secretary of State or (as the case may be) the Scottish Ministers must have regard to the likely overall effect (both while being carried on and subsequently) of—
(a) the activities in question; and
(b) such other offshore generating activities as are either already the subject of consents or are activities in respect of which it appears likely that consents will be granted.
(4) For the purposes of this section the effects of offshore generating activities include—
(a) how, in relation to those activities, the Secretary of State and the Scottish Ministers have exercised or will exercise their powers under section 36A above and section 103 of the Energy Act 2004 (extinguishment of public rights of navigation); and
(b) how, in relation to those activities, the Secretary of State has exercised or will exercise his powers under sections 96 and 97 and Chapter 2 of Part 3 of that Act (safety zones and decommissioning).
(5) If the person who has granted a consent in relation to any offshore generating activities thinks it appropriate to do so in the interests of the safety of navigation, he may at any time vary conditions of the consent so as to modify in relation to any of the following matters the obligations imposed by those conditions—
(a) the provision of aids to navigation (including, in particular, lights and signals);
(b) the stationing of guard ships in the vicinity of the place where the activities are being or are to be carried on; or
 
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(c) the taking of other measures for the purposes of, or in connection with, the control of the movement of vessels in that vicinity.
(6) A modification in exercise of the power under subsection must be set out in a notice given by the person who granted the consent to the person whose obligations are modified.
(7) In this section—
'consent' means a consent under section 36 above;
'offshore generating activities' means—
(a) the construction or operation of a generating station that is to comprise or comprises (in whole or in part) renewable energy installations; or
(b) an extension of a generating station that is to comprise (in whole or in part) renewable energy installations or an extension of such an installation;
'the use of recognised sea lanes essential to international navigation' means—
(a) anything that constitutes the use of such a sea lane for the purposes of Article 60(7) of the United Nations Convention on the Law of the Sea 1982 (Cmnd 8941); or
(b) any use of waters in the territorial sea adjacent to Great Britain that would fall within paragraph (a) if the waters were in a Renewable Energy Zone.
(8) In subsection 'extension', in relation to a renewable energy installation, has the same meaning as in Chapter 1 of Part 3 of the Energy Act 2004.""
15 Clause 102, page 79, line 22, at end insert—
"( ) In subsection (1) of section 35 of the Coast Protection Act 1949 (c. 74) (operations not requiring consent under section 34), after paragraph (g) insert—
(ga) subject to subsection (3) of this section, any operations comprised in offshore generating activities carried out in accordance with a consent under section 36 of the Electricity Act 1989 granted after the commencement of section 102 of the Energy Act 2004;".
( ) After subsection (2) of that section insert—
"(3) Operations in or as regards Scotland fall within paragraph (ga) of that subsection only if and to the extent that the Scottish Ministers by order made by statutory instrument so provide.
(4) A statutory instrument containing an order under subsection (3) shall not be made unless a draft of the instrument has been laid before and approved by a resolution of the Scottish Parliament.
(5) In that paragraph 'offshore generating activities' has the same meaning as in section 36B of the Electricity Act 1989.""
16 Clause 103, page 79, line 32, after "extension" insert "of a generating station"

Lord Triesman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 11 to 16.

Clauses 100 and 101 on navigation were introduced by noble Lords on Report. We recognise the importance which the shipping and ports industries attach to including navigational matters in the Bill. At Second Reading in the other place, the Government gave an undertaking to retain the substance of these two clauses. However—I say it with great respect to those who drafted the clauses—in their original formulation, both clauses had a number of shortcomings which meant that they would be difficult to implement in practice and could create confusion which might well lead to litigation.
 
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The main shortcomings were, first, that Clause 100 did not make it clear who had the duty to ensure that installations and the safety zones around them do not interfere with the use of recognised sea lanes essential to international navigation. Secondly, this clause was almost the same as Article 60(7) of the United Nations Convention on the Law of the Sea, but there is no express link to that article in the clause. Thirdly, Clause 101 took no account of the devolved competence of Scottish Ministers.

Commons Amendments Nos. 11, 12, 14 and 15 address these shortcomings, while retaining the substance of Clauses 100 and 101. Amendments Nos. 11 and 12 remove Clauses 100 and 101 from the Bill. Amendment No. 14 places the duties in relation to navigation encompassed by Clauses 100 and 101 on the Secretary of State and Scottish Ministers who have responsibility for deciding whether to grant a Section 36 Electricity Act consent for the construction, extension and operation of a generating station. At the same time the Secretary of State must also take into account how she has exercised or will exercise her powers in respect of safety zones.

The Commons amendments go further than the strict requirements of the amendments made by your Lordships' House. Amendment No. 14 provides at subsection (2) for the Secretary of State and Scottish Ministers to have a general duty to have regard to the nature of any obstruction or danger to navigation in deciding whether to give a Section 36 consent for an offshore generating station.

It was clear from our debate on navigational issues that noble Lords—including the noble Lord, Lord Greenway, who I see in his place—were concerned to see a general reference to the safety of navigation in the Bill. We have listened to those concerns.

This consolidation of duties in respect of navigation into Section 36 of the Electricity Act 1989 has the benefit of ensuring that a comprehensive assessment of the impact of a proposed installation and any safety zone around it on navigation forms an integral part of the process of deciding whether to grant a consent for a generating station.

DTI Ministers will continue to work with the Department for Transport—and more particularly the Maritime and Coastguard Agency, which has responsibility for marine safety—in carrying out these duties. They have already built a close relationship with the MCA on the first round of offshore wind farm projects.

The effect of Amendment No. 15 is to disapply Section 34 of the Coast Protection Act 1949 where consent has been obtained for a generating station under Section 36 of the Electricity Act 1989 after Clause 100 of the Bill has been brought into force. Section 36B(2) to (6) do the same job as Section 34 of the Coast Protection Act, so it can be disapplied. With regard to Scotland, the amendment gives Scottish Ministers a power to make an order which disapplies Section 34 of the Coast Protection Act.
 
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Amendments Nos. 13 and 16 are purely drafting amendments designed to make it clear that the reference to "an extension" in 36A(1)(b) and Clause 103(2)(b) means an extension of a generating station. These amendments ensure that these references to an extension of a generating station tie in with the definition of offshore generating activities at Section 36B(7).

I commend the Commons amendments to the House. They address the issues which caused some concern in the House and are now in a form that would not give rise to litigation.

Moved, That the House do agree with the Commons in their Amendments Nos. 11 to 16.—(Lord Triesman.)

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