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Second Reading

7.29 pm

Moved By Lord Whitty

That this Bill be now read a second time.

Lord Whitty: My Lords, on the face of it this is a simple Bill designed to clarify and help the move towards a low-carbon economy, principally at the local and decentralised level, with various forms of microgeneration. It is a simple Bill, but the background is huge. The largest problem facing humanity is the challenge of climate change and how we mitigate and adapt to that challenge. The Bill provides a smoother path for mobilising small-scale technologies to make a contribution to this greatest of all challenges. This Bill has been skilfully taken through the Commons by Peter Ainsworth MP and was subject to fairly detailed scrutiny. In its present form, it received all-party support, including invaluable engagement by the Government themselves in the form of DECC Ministers and officials. It has also received considerable support out there from the industries involved, from agriculture and landowning interests, and from the campaign groups involved in greener energy.

However, it is important to note that in some ways it is still a modest Bill. Some interesting and more contentious propositions were originally included, but they do not form part of the Bill now before your Lordships and therefore it represents a high degree of consensus. The prize is huge. The Micropower Council and others involved in this field can see major applications of microgeneration helping towards the climate change targets for 2020 and 2050. If we are able to remove the

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inhibitions from the introduction of microgeneration, there is a possibility that by 2050 over a third of the UK's total energy supply could be met by it. That in itself would contribute a 15 per cent cut in overall carbon emissions. Even if the achievement is somewhat less than that, a 5 or 10 per cent contribution by microgeneration would be a major breakthrough and would reduce significantly, although obviously not eliminate, the need for new power in large-scale generator forms such as nuclear power, large-scale wind and marine engineering projects, and schemes for carbon capture and storage. Economically as well as environmentally, households, farms and businesses could all profit and benefit from cheaper decarbonised energy, but we need to simplify the bureaucracy and the process in order for the whole sector to be stimulated and come into effect.

The Bill essentially consists of four substantive clauses. Clause 1 deals with definitions, Clause 2 with microgeneration strategies, and Clauses 3 and 4 with planning for domestic and non-domestic property. Clause 1 defines "green energy" as electricity or heat generated from renewable and low-carbon sources and energy efficiency measures. This reflects the need to recognise the contribution of low-carbon measures as well as 100 per cent renewable feedstocks. This helps technologies such as combined heat and power-here I declare my own interest as honorary president of the Combined Heat and Power Association-which still in part may use fossil-fuel feedstocks, but by reusing the heat greatly reduce the total carbon effect. It also emphasises the importance of energy efficiency measures, particularly in buildings, that will reduce final demand for energy and thus indirectly contribute to carbon saving. Indeed, energy efficiency is or can be by far the most cost-effective way of reducing carbon emissions, thereby reducing the total demand for energy in the first place.

The clause then defines the size and market we are talking about-up to 5 megawatts for electricity generation and 5 megawatts thermal for the use of heat. This will enable consistency of approach to all measures designed to produce low-carbon decentralised energy. These measures would help to ensure that the energy efficiency of our buildings is improved so as to make a considerable contribution to tackling carbon emissions and thus climate change-not by making changes to the fabric of a building but to the sources of generation themselves. At the same time, they will contribute to the achievement of other energy policy objectives aimed at reducing fuel poverty in the medium term and providing greater diversity of energy sources, thus enhancing energy security.

Clause 2 deals with the issue of the microgeneration strategy already required by statute as a result of the Energy Act 2004. Microgeneration in the Bill is based on the definition in Section 82 of the Energy Act and covers biomass, biofuels, fuel cells, photovoltaics, wave, tidal, solar, geothermal and CHP, while Clause 3, which I will come on to, extends this to air source heat pumps and micro wind turbines. This clause amends the capacity limitation on heat from 5 kilowatts to 300 kilowatts, thereby enabling a wider range and greater volume of micro-level cogeneration or trigeneration.

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We have made a good start on the micropower strategy. I understand that there are now over 100,000 installations and the number of different models that have come on to the market has tripled. But everyone still recognises the need to upgrade the strategy, and the Government themselves have indicated that more needs to be done to help increase the uptake of microgeneration. In promoting the case for microgeneration, the Secretary of State is also required to consider the broader aspects of energy policy such as fuel poverty.

Clause 3 deals with installing microgeneration in dwelling houses as defined here and in Clause 5. Some 27 per cent of all emissions come from houses and flats and there is significant scope for the greater uptake of microgeneration in those households. The clause deals with the permitted development order already in legislation, which allows the use of certain microgeneration technologies by extending it so that proposals for air source heat pumps and small-scale wind turbines can be added to the 2008 definition. This will remove discrimination between different sorts of green technologies and contribute to the 10 million tonnes of carbon emissions saveable from dwellings in the domestic sector, as recently estimated by the climate change committee.

Air source heat pumps in particular will be a relatively cheap and convenient way of installing microgeneration and thereby saving carbon. They were not included in the 2008 definition because at that stage the standards had not been sufficiently advanced. They now are and, while there may be a limited number of situations in which they would not be appropriate, in general they can be of significant benefit to households. The main objection raised in this context has been on the grounds of noise, but the industry looked at a number of situations in which noise might have been a factor and has found that none of them created problems if they had been properly installed. Indeed, the 45-decibel threshold in the permitted development order would be a tighter restriction than is often the de facto position in individual planning authorities.

Clause 4 would extend the permitted development criteria to buildings other than dwelling houses, such as farms, commercial premises and public buildings. This seems eminently sensible, subject to the same limits and safeguards being applied as for domestic property. The Government will have to bring forward appropriate regulations in relation to both these clauses. In the case of Clause 4 where there is no existing list, the rest of the clause deals with the process of consultation on that amendment. Clause 5 deals with interpretation and Clause 6 with timing and the Short Title. To clarify the reference to territorial extent, I should say that the Bill will be part of the law of England and Wales but its effect would be only in England as matters of energy efficiency are devolved to the Welsh Assembly.

As I have said, this is a modest and clear Bill that fills a gap and should speed up the adoption of microgeneration in buildings, thus allowing it to make an important contribution towards the climate change and carbon saving targets for 2020, and a very significant contribution indeed to the targets for 2050. I beg to move.

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7.38 pm

Lord Giddens: My Lords, as the author of a recent book on the politics of climate change, one cannot stress too strongly that climate change is not a left/right issue. We see in the United States the danger of what happens when it does become a polarised issue, where President Obama's climate change Bill runs the risk of not even passing through the Senate. Here there is a pleasing degree of political consensus, as my noble friend has said, visible in the Climate Change Act, the Energy Act, and in the work-up to the Bill before us. I congratulate Peter Ainsworth MP on introducing it. In the discussion in the Commons, he quoted Gandhi:

"'The effect of an insignificant action is greater than the effect of no action by an infinity'".-[Official Report, Commons, 3/7/09; col. 595.]

It is possible to disagree with this. David MacKay, who is now the Government's new climate change chief scientific adviser, in his very good book on sustainable energy, says:

"If everyone does a little, we'll only achieve a little".

However, Mr MacKay sees a big future for one of the main sources of microgeneration, to which my noble friend has just referred, and that is air source heat pumps. He wants them eventually to have a big role and to replace gas on a large scale as a source of central heating. These pumps can work even when the temperature outside is very low. They have been in use in Sweden for a long while and they can work at low external temperatures and still generate heat. As with other microtechnologies, they have the advantage of devolving control to the consumer. If conjoined to insulation, air source heat pumps, ground heat pumps and small solar panels can quite readily provide effective heating and sufficient hot water for domestic dwellings on a regular and universal basis, and not only on a sporadic basis.

The UK is not exactly covering itself in glory in promoting renewable energy technologies, so any further prompt will help. Britain ranks next to bottom among EU countries in the proportion of energy delivered by renewables. According to Mr Ainsworth, currently only just over 1,000 air source heat pumps and roof-top wind turbines exist in the UK as a whole, which is a minuscule number compared with other countries in the EU and elsewhere.

The Bill follows in the wake of similar legislation in Wales, pioneered by the very energetic Environment Minister there, Jane Davidson, whose work I much admire. It does not cover exactly the same technologies but it is parallel legislation.

In concluding I pick a different quotation from the two I mentioned earlier. It is from Chairman Mao:

"The longest journey starts with a single step".

I am happy to endorse the Bill and I hope it will achieve passage through Parliament.

7.42 pm

Lord Hunt of Chesterton: My Lords, this is an important Bill which shows the way to producing green energy on a smaller scale. As I am involved in climate science, I should perhaps mention that climate

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warming seems on the way up again. I looked today on the door of my colleague, Professor Mike Davey, at University College, where he regularly has the El Niño temperature, and it is definitely on the rise. So, despite some scepticism on the Benches opposite, we can be sure that the climate temperature is on its way.

The other point made by the climate change committee is that step changes are needed in the way in which we deal with energy. I welcome the fact that the Government are finally getting ahead with nuclear energy, which of course enables France to have 80 per cent of its electrical energy producing no carbon emissions. In this county, it will be a slow climb to that kind of level but both large and small-scale green energy measures are necessary.

I have been going around the UK and have seen some small schemes along rivers which, at the moment, are full of bureaucratic difficulties. In some ways, the bureaucratic difficulties are because producing energy then affects other parts of the environment-for example, the way eels and fish go along these rivers-which have to be considered. Therefore the Environment Agency's caution has some merit. However, the point of the Bill is to push this along.

The important point about Clause 1(2)(b) is that it refers to energy efficiency measures. Some of the best uses of smaller-scale energy are not necessarily to feed into the grid but to provide wind energy for pumping water. There was a nice scheme in the south-west of England which essentially uses wind for recirculating sewage and making it decompose much more quickly.

As the noble Lord, Lord Whitty, has mentioned, combined heat and power has been an effective method. For example, Woking has made its famous reduction of 50 per cent in energy in council facilities and 70 per cent of its carbon emissions over a 10-year period, which is, of course, still an unbeaten record in the UK.

I follow my noble friend Lord Giddens on the politics of this aspect. One of the important features of the political aspects of small-scale power is that there is a devolution of power, if you will excuse the pun. This enables communities to have their own sources of power, which is important. We saw this, for example, in Woking, near London, when there were power cuts in the rest of London and it stayed on in that area.

This is very much a Secretary of State Bill. Nowhere do we see in the Bill the fact that the responsibility for local initiatives should come from county councils or local regional government. I suggest that there might be some amendments to the Bill along those lines. I speak as a former city councillor in Cambridge, where we carried out a few devolved activities in other aspects of the environment. I see that Wales is cited and this is an important aspect.

The other important point on which this and much of our legislation fails is the concept of integration. If you go to Rotterdam you will see dykes there protecting against the floods, and on the dykes you will see windmills. That is an interesting example of so-called combining adaptation and mitigation. Some of the measures being taken against rising sea levels and storms can also be used for local power, but this is not happening very much in the UK. I feel that there

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should be another dimension to the Bill of local integration. For example, wherever roads are built, you can place windmills and solar collectors and you will have a natural channel for your electrical power. With those two caveats, I endorse the Bill.

7.47 pm

Lord Teverson: My Lords, it is good that on the second day after the Recess we come back to the debate about renewable energy and climate change. I welcome very much the efforts of the noble Lord, Lord Whitty, to persuade and cajole us to agree to the Bill; which I do not think will be too onerous a duty.

I live in Cornwall and I am a member of Cornwall council. During the Recess, we agreed the Cornwall declaration, which is an initiative led by the cathedral in Truro, which allows individuals to sign up to the delivery of the Copenhagen new deal. It was interesting that the executives of the council were keen on this and said, "As part of this, once we have signed it, we must go up and lobby Westminster and the Government to make sure that they are positive about Copenhagen". So I warn the government Front Bench that the Cornish hordes will be there. However, I reminded them that their lobbying might be more effective if, as a planning authority, they passed a few more local wind turbine schemes, which would help practically, rather than just using rhetoric and invective. I am pleased that the Bill at least helps us to approach this, although as I travelled up to London this week, of course, every wind installation was absolutely still because of the gorgeous weather we have been having. But that does not in any way reflect on the importance of the Bill.

We have huge targets to meet in Europe under the 2020 package, of which Britain is a part: 15 per cent of renewable energy by 2020 is quite a target. Will the Bill help towards that? Yes, it is an important ingredient, but it is only a very small proportion. The real importance of this kind of Bill is that it should have the ability to allow businesses, citizens and individuals to contribute, without hindrance or barrier, towards the targets and the spirit of Copenhagen. That is why that is important, with the whole other range of initiatives that households can get involved in.

As I read the Bill, I found that the thing I really liked about it was the regular use of the word "must". When it comes to microgeneration strategy, the Secretary of State "must" prepare and publish a strategy, "must" consult and "must" publish that strategy within six months of the end of the consultation. It goes on to say, although this is not quite so strong, that,

"The Secretary of State must take reasonable steps to secure the implementation of the strategy".

That is slightly weaker, but at least the Bill demands action on ensuring that the strategy is there, that consultation takes place and that it is applied. That is important in terms of taking away some of the barriers to individuals and organisations taking part in renewable energy, although, with regard to air source heat pumps, as well as the ground source heat pumps, I still find it difficult to understand why we allow any building now to be built and installed with conventional fossil fuel heating systems. We should stop that immediately, not in 2016 or whenever.

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My questions for the Minister come down to issues around the feed-in tariff, such as were raised in Questions today: do the Government still expect to introduce the feed-in tariffs in spring 2010, which is their commitment at the minute? Almost more importantly, when, after all these consultations-we all think consultations are good, but when there are too many of them they are counterproductive-will we know what the rate of income to those on feed-in tariffs will be? It will not be until that point that we start to see real investment in some of the larger schemes, probably beyond the scope of the Green Paper, that are still allowed under the recent Energy Act.

I also remind the Government that while it is great and important to have all this microgeneration and these installations, if we do not have a smart grid and smart meters then we will not be able to make the most of the capacity that we will be opening out. Where are we with all the endless consultations about smart meters? Are we indeed on the way to deciding exactly when their rollout will start?

I slightly disagree with the noble Lord, Lord Giddens. It is true that the book Sustainable Energy-Without the Hot Air, of which I have read only the first three chapters so far, says that at the end of the day these initiatives are important but they are not the real deal. As the Ofgem report has shown and the climate change committee report, which I think came out on Friday, has also said, as a nation we are failing when it comes to meeting the targets in our legislation at the minute, let alone those that we need in order to defeat global warming. That is the real issue and, as part of that jigsaw, these Benches very much welcome the Bill.

7.54 pm

Baroness Wilcox: My Lords, the Green Energy (Definition and Promotion) Bill, introduced and championed by the Conservative MP Peter Ainsworth in another place, arrives in this House to be championed by the noble Lord, Lord Whitty, a Labour Peer. That pretty well says it all about the Bill.

The two main elements are to revise the Government's microgeneration strategy and to reform the planning law. The Bill has been well described by the noble Lord and the contributions that have followed that have fleshed it out well, so I will not waste any more of our time here today in doing that.

I shall say only that the Conservatives fully support the Bill. We firmly believe that the United Kingdom needs to use green energy to protect the environment and reduce the impact of climate change. There is no doubt that low-carbon and renewable technology is the future. It is time to rebuild our economy based not just on a housing boom or the financial services sector but on real green industry, as outlined in our Conservative low-carbon economy paper. We therefore support the Bill.

I have a couple of questions of which I have given the Minister short notice, so I am hoping that he will be able to give us a couple of answers today. In the other place the Minister spoke of the Government's planned consultation on permitted development rights. An issue that was raised in relation to this was the matter of consent on listed properties. What consideration has the Minister given to this application of permitted development for listed buildings?

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There are concerns that the electricity infrastructure as it currently stands will not be able to support the level of air-source heat pumps that may be installed as a result of this legislation. What steps is the department taking to ensure that the electricity network will be able to support such a demand?

The Government have stated that they intend to hold a full review of the environment consent process for microhydro power, with the aim of developing recommendations for a streamlined system that is quick and easy for developers but also maintains a high level of protection. Can the Minister clarify what the timeframe for this consultation will be?

With those questions ringing in the Minister's ears, I would like to say how nice it is for us all to be together and agreeing that this will be an extremely welcome contribution.

7.57 pm

Lord Faulkner of Worcester: My Lords, this has been a splendid little debate. I thank everyone who has taken part in it, and I particularly thank my noble friend Lord Whitty for presenting this important Bill to the House. I am pleased that he and other speakers have paid tribute to my personal friend Peter Ainsworth for the way in which he took the Bill through the House of Commons. Mr Ainsworth has made it a great deal easier in this House by agreeing to a series of government amendments as the Bill went through that House, which is why the Government are content with the Bill in exactly the form that it reaches us in today.

The principal purpose of the Bill, as my noble friend has described, is to promote green energy. As such, it is crucial for ensuring that the UK is able to deliver on its energy and climate change targets, for increasing our energy efficiency and for supporting the greater deployment of renewable or low-carbon technologies.

Energy efficiency and renewable and low-carbon sources have an important role to play as part of a long-term energy strategy. By contributing towards a United Kingdom target of reducing emissions by 80 per cent by 2050, they can help tackle climate change and can also increase the diversity and security of UK energy supplies, in exactly the way that the noble Lord, Lord Teverson, described in his speech.

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