Renewables Obligation Order 2009

I would be delighted to do that; I am sure that I will make a better job of the letter than I am making at present in this fairly difficult area. I reassure the noble Lord that we are fully seized of the point that he made during his earlier speech, and I offer at least some reassurance on that. I will write a letter which is not only reassuring but, I hope, deadly accurate in comparison to the rather broader generalisations that I can manage from the Dispatch Box at this stage. The preferential treatment of energy crops is intended to develop energy crop supply chains, not just for short-term greenhouse gas savings. The greenhouse gas effects of all fuels are the subject of ongoing research, not just in this country but Europe-wide. The noble Lord also asked whether I could comment on other issues that might be different from the Energy Act. That is rather a tall order to ask of me. That is how I interpreted what he was saying. The noble Lord is enormously knowledgeable in these areas, and I know that he can press me very hard. He will know the limitations in preparation for an order of limited dimensions. I am reassured by the fact that I have my noble friend alongside me, but I will not even press him for a quick resumé of the changes and developments that might be consequent upon the Energy Act—that would test the patience of us all. I wanted to emphasise that where we are able to talk more specifically about issues of electricity prices—for instance, we suggested that the introduction of a banded RO might increase prices by 7 per cent by 2015, against a 5 per cent increase if we make no change—it will relate to today’s changes. The cost of the renewables target for 2020 is a more difficult issue for us to analyse. The noble Lord asked me about combined heat and power stations. They will receive more support under the RO than stations that generate only electricity. That reflects their greater efficiency, which we want to encourage. The noble Lord, Lord Teverson, cheered me up by being positive in his general position on the order. We had many debates on the then Energy Bill on this, and he appreciates the significance of this strategy in terms of our overall policy objectives. He asked me about the boundary between ROCs and feed-in tariffs. That is also a difficult and complex issue. We will be consulting on it over the summer so I am not in a position to be definitive, but we recognise that this issue is important and we are going to do a great deal of work on it. We hope that we will make progress in answering that question before long. The noble Lord also asked me whether the renewables obligation could be expressed in simpler terms, and he castigated us somewhat about the English in our memorandum. We all know that technicalities can overwhelm the soul in this area. The RO sets out specific definitions. The difference specified between "ROCs" and the "renewables obligation certificates" is to ensure that the England and Wales order is quite clear when speaking about certificates issued, against the position of the Scottish or Northern Ireland orders. We are obliged to take on what the noble Lord was suggesting was a certain abstruse quality to our language, in order to identify just which area we are talking about. The noble Baroness, Lady Wilcox, also broadly supported the order. I reassure her that we have looked again at our financial support mechanisms for renewable electricity generation to ensure that we maximise contributions on all scales. We are well aware of the challenges that we face with regard to the policy, and she is right to remind us of them. I do not underestimate the challenges that face the Government in this important area of policy, and I was grateful for the emphatic way in which she made that point. On the whole, I commend the measure. It is predicated on the Act that we debated so extensively last year. I remember an amendment being passed at the time, against the Government’s better judgment, which will be reflected in the way in which we implement the policy because it is now part of the law of the land. The obligation is the Government’s key mechanism for encouraging the development of renewable generation in the UK. Since its introduction in 2002, we have seen a step change in the number of developments coming forward. Banding will bring forward another step change necessary to launch us towards the 2020 target. I think that we are all excited by aspects of the new technology that may come on stream. The noble Lord, Lord Jenkin, referred to the Severn barrage but there are other technologies, with very interesting potential dimensions, which use aspects of tidal flows and currents to supply electricity. That is why this is such an exciting area. But by the same token, it is an extremely difficult area about which to predict with any certainty. That is why the challenges from the opposition Benches, which I accept are entirely legitimate, are bound to be met with a rather vague response from the Government. We are dealing with uncertain developments but the targets we have to hit and the objectives of the public policy are clear. This order is an important part of that and I commend it to the Committee. Motion agreed.