Energy Bill

My Lords, I want to follow one or two of the points that have been made and say at once to my noble friend Lord Freeman, who is chairing the Select Committee, that it is a pity we are having this debate before we have his report. It would have been a valuable addition to our armoury of arguments, but there we are: these things do not always come in the right sequence. My noble friend made a point about a cap, and I listened with great care to what the noble Lord, Lord Whitty, said. We have had a lot of evidence about it from a variety of organisations, but I have been impressed by the desire of many people to say, ““Look, we are not dealing with a system that is competitive with the ROCs. It should be complementary””. At the right level of cap, the system will be complementary. If, on the other hand, the cap were placed too high or if, as the noble Lord, Lord Whitty, appeared to argue, there should be no cap, I fear that it would be seen as competitive with the ROCs and would undermine the confidence of the substantial number of investors who are contemplating investment in various renewable technologies and who are going to rely on the ROCs. The Government have recognised that and have given commitments to continue the ROCs system for many years ahead. However, like my noble friend Lady Wilcox, I believe that there must be a cap on the renewable tariffs in order to avoid the creation of a competitive system. Secondly, I want to endorse what has been said about the importance of heat. Subsection (7) of Amendment No. 5 makes it perfectly clear that renewable heat must be part of the system. The noble Lord, Lord Hunt of Kings Heath, was kind enough to meet us to discuss some of the amendments to the Bill. He said that today he would be listening to the views expressed in different parts of the House to ensure that when the Government frame their amendment they take account of these things. I say to him firmly that if the scheme does not take account of heat, there will be a great deal of disappointment. It should be able to do so because the technology exists. To try to limit it solely to electricity generation would be to narrow its scope too much: it should be capable also of dealing with gas. The noble Lord, Lord Whitty, mentioned digestion plants and so on. He is right in saying that the methane which comes off them is a renewable source. The cows go on for ever and that, too, should be encompassed within the scheme. However, I am not entirely clear about how far the amendment goes. There has been confusion in my mind and I would like to believe that I am not the only one. We are talking about renewable tariffs, but there is the quite separate argument for other forms of microgeneration. As I have indicated in a number of debates over the years, I have always supported the view that in its right place and with the right framework, the encouragement of microgeneration must be an important part of the whole energy mix. We always talk about the energy mix, but microgeneration might not necessarily be renewable. I have received a letter from a manufacturer of plant that would clearly qualify for microgeneration. It is in a sense a combined heat and power and therefore might come within subsection (7) of the amendment. However, there are other forms of microgeneration; for instance, the ordinary air heat pump. I am sure that I am not alone in that my swimming pool, in the days when I could afford one, was warmed by a heat pump and it was very economical. It used electricity so it was not a renewable source, but I have always believed that if one is going to try to encourage that sort of thing, particularly in rural areas where people are not connected to a gas supply, they should be able to use air compression pumps for both heating and hot water, and then feed surplus capacity into the grid. This is where we are continually talking about the need for feed-in tariffs. I see this whole area as covering not just the wind pump and other renewable sources but a system that can provide for microgeneration, which will be an increasing part of the total mix. At the other end must of course be the major plants producing the base load—nuclear plants, combined cycle gas power and, as we have said earlier, perhaps coal, with carbon capture and storage—but a whole range of technologies is now available. I hope that the Government’s amendment will be wide enough to take account of these other technologies, which would require a proper feed-in tariff if they are to become economical. Their capital costs are often the major obstacle. If one can be assured that there will be a return for the surplus power or heat used, it is some recompense. The amendment must take in the whole of this. I support the view expressed around the House that heat must be an integral part of it. We look forward with great interest not only to hearing what the Minister says today but also, and perhaps more importantly, the amendment that he will bring forward at Third Reading. I echo what my noble friend said from the Front Bench: please could we have it in time to be able to study it effectively, take advice and, if necessary, table amendments. It cannot just come in a day beforehand. We have had one or two instances of that in other cases, and it is rather embarrassing: you simply have to say to people, ““Well, I’m sorry. You’re too late with your advice. We’ve debated this; it’s gone””. We must have enough time.