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Lord Addington: My Lords, my noble friend has done a very good job of introducing this Bill. It is the sort of measure we should be looking at more closely across the spectrum of ideas. It is a way that we can practically address our power grid and how we reduce CO emissions, without ripping everything up and starting again.

We are always being told that we have to change the way in which we behave, such as switching off appliances. With the best will in the world, if you happen to be a vaguely forgetful person, such as myself, you forget to switch something off as opposed to leaving it on standby. When the Division Bell goes, how many of us leave our computer on standby and do not get back to it? This technology removes that level of human error or thoughtlessness. If it is successful, it will help us cut down energy use. It is exactly the sort of approach we must take to improve energy savings and reduce carbon dioxide emissions. It will require the prodding and pushing that is required by government or somebody in authority to make sure that these things happen by attaching some responsibility—sticks and carrots—to those who produce these items.

The Government will undoubtedly have a scheme or two with a similar approach. But these proposals have been brought forward—now—and the Government can give us an idea about their thinking. If my noble friend has a list of other such schemes up his sleeve, I invite him to tell us about them. This is one area where we should be working together and engaging with one another to make sure we all know what everybody in the field is thinking. I commend the Bill to the House and look forward to hearing what the Minister and my noble friend have to say.

12.48 pm

Baroness Miller of Hendon: My Lords, in introducing the Bill so ably, the noble Lord, Lord Redesdale, has explained that it is to assist with the saving of fuel, to make the best possible use of finite resources and last, but by no means least, to assist in the reduction of CO emissions. And who could possibly argue with any of that? The question is, what are the practicalities?
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In this country, there are more than 24 million households. It is fair to assume that in this modern day and age, something like 20 million of them have refrigerators, but, for the sake of the debate, let us say just 18 million. They have a life of around 20 years. How long will it take before all the fridges will be changed to the new technology—or enough of them to make a difference—and why would anyone want air conditioning that worked late at night when it is cooler anyway or central heating that did not work when it was coldest and at the time of maximum demand?

I digress for just a moment. Perhaps the most immediate and effective dynamic demand device would be if we could persuade people not to leave their TVs, video recorders and DVDs on permanent standby. I read last week that in an average household that can cost more than £30 a year. How much fuel does that waste and how much pollution does that cause?

All that the manufacturers have to do in the interest of world ecology is to remove the standby facility. It is not too long in the past when a TV was either on or off, with nothing in between. A moment ago I used the word "persuasion". I did so because I believe that it is up to industry to produce fuel- and energy-saving devices and, having done so, to persuade the public of the advantages of buying and using them. I do not believe that there is a place for the provision by our Government—meaning, of course, the British taxpayer—giving, as this Bill calls for, financial incentives to the manufacturers of fridges, TVs and other electronic goods. That is especially true when—and this is the sad situation—so many of them are manufactured abroad including in the Far East. That is even assuming that "financial incentives" is not code for a "subsidy" which may very well be illegal under EU law.

Of course the Government have a part to play in encouraging energy saving and the optimum use of energy in every reasonable way, sort and form. My own party will most certainly be looking into dynamic demand technology as part of its present ongoing energy review. But it is up to industry to develop the technology and to persuade the public that they want and need it. I would commend to industry a paraphrase of the aphorism attributed to Ralph Waldo Emerson. If they build a better and more fuel efficient device, the world will beat a path to their door.

12.52 pm

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the issues raised in the Bill are extremely important, and for those of us wrestling with the Company Law Reform Bill, which has 980 clauses, a Bill of two clauses has an immense attraction. While we are not supporting the Bill, its concerns are ones which the Government intend to address. I therefore welcome the opportunity given us today by the excellent speech by the noble Lord, Lord Redesdale, to respond to the noble Lord's proposal, and to set out
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how the Government are looking to understand the contribution that dynamic demand appliances can make to energy efficiency and security of supply.

I hope that, by the end of my comments, the noble Lord will see that there is little difference between us in the overall belief that these technologies can make a contribution to energy efficiency. There may be differences in the implementation, but I hope that I can demonstrate to noble Lords that, in general, the Government are on the same wavelength as the noble Lord.

Dynamic demand technologies are technologies which enable the consumption or generation of electricity to be controlled or adjusted automatically according to network frequencies. They are devices that can adjust the demand of our appliances to help balance the load on the grid. If they sense, through an assessment of the frequency levels, that demand is growing, then they will, for instance, turn the fridge down. In theory that will help energy efficiency as well as security of supply at peak periods. We all know of the surge that takes place at half-time during cup finals. These appliances ought to help manage the demand/supply relationship at those times.

The overall benefit of these technologies is that a smoothed demand pattern leads to reduced need for back-up generation. The figures that I have suggest that that could save up to 0.6 million tonnes of carbon per year, although I suspect that both my figures and those of the noble Lord are speculative.

We are already taking steps to see how we can harness this technology. As the noble Lord said, Clause 15 of the Climate Change and Sustainable Energy Bill currently making progress in the other place will impose a duty on the Secretary of State to publish a report on the contribution that dynamic demand technologies could make to reducing greenhouse gas emissions in Britain. The report will also address whether it is appropriate to take any steps to promote the use of such technologies, and, if it is, what those steps might be. We will produce this report no later than 12 months from commencement. I can assure the noble Lord that appropriate resources will be found to produce a thorough report. Noble Lords might like us to go further than that, but without this initial work it will be difficult to target any support or understand where there might be a market failure. We have done very little proactive work in this area to date, although we have kept up to date with developments. It is clear that these technologies deserve closer investigation to establish how much of a contribution to energy goals they can make. Clearly, any such study would have to address the three questions which the noble Lord raised before we could get an understanding of the benefits and costs.

Also, within our liberalised market we need to understand who stands to benefit from an uptake in these technologies. It would seem that the system operator might benefit, as might suppliers who pay more for their electricity during the peak periods. Generators too have a stake in that the decision to invest to cover the peak periods is often a difficult
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one—investing to build capacity that may be used for only a few hours a week needs careful consideration. However, if private business is to benefit, it should have a role in developing and encouraging the take-up of these appliances. That, among other issues, is something we need to explore.

The noble Lord's Bill also asks the Secretary of State to establish a standard for dynamic demand appliances. I am not sure why the noble Lord wants to leap immediately to a legislative and regulatory solution. It might be worth while for industry to consider its own voluntary scheme before we burdened it with more legislation from Parliament. I agree with the noble Baroness, Lady Miller, that of equal interest is how manufacturers can work to minimise the amount of energy used in domestic appliances. I am not talking only about when appliances are being used, which is important, but also when they are not. We all know about the waste caused by the standby button. Strange though it may seem, a typical microwave oven consumes more electricity powering its digital clock than it does heating food. While heating food requires a hundred times as much power as running the clock, most microwave ovens stand idle in standby mode more than 99 per cent of the time.

Moreover, if we are deeply concerned about obesity in children, perhaps we should encourage them to stand up and walk to the television to turn it off.

These issues will be covered by Defra in its market transformation programme, which the noble Lord, Lord Redesdale, mentioned, and which is looking with industry and other stakeholders at the environmental performance of products. Could dynamic demand appliances be included in the Climate Change and Sustainable Energy Bill? The short answer is that in theory there is no reason why dynamic demand appliances cannot play a part. I am sure that we will debate that further when that Bill comes to this House.

Dynamic demand technologies are already here and they can support our energy goals. However, we need to be sure that any approach we wish to take will help to accomplish that in the most beneficial and cost-effective way. I congratulate the noble Lord on drawing the House's attention to the opportunities that the technologies open up. I also hope that my comments offer sufficient reassurance to noble Lords that the Government are determined to understand what contribution dynamic demand appliances can make. If our report shows that the work is needed to help deliver the potential, we will do so.

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