Energy Bill [HL]

My Lords, this Bill will bring energy efficiency into our buildings through the Green Deal, enhance our energy security and encourage investment in the next generation of low-carbon energy. The Bill also proposes to take powers to require the cheapest tariff information on energy bills, to create a new energy company obligation to reduce carbon emissions and to introduce new energy security measures to make sure that sufficient gas is available during an emergency and allow us to monitor the adequacy of our electricity supply. Some provisions in the Bill extend to Scotland, Wales and Northern Ireland. We have worked closely with the Scottish, Welsh and Northern Ireland Governments in drafting the Bill, and we will continue to work closely with them on implementation by, for example, consulting devolved Ministers on secondary legislation so that we can get delivery across the UK. The Energy Bill is only part of the picture. The consultation on electricity market reform published last week looks at carbon price support, feed-in tariffs, capacity payments and an emissions performance standard. The market reform will not only give us a stable and predictable market but put us on track to decarbonising the economy. We need to improve energy efficiency and to reduce carbon emissions from existing buildings as well as build energy-efficient new ones. The Green Deal’s financial framework will let people install energy-saving measures to be paid for in instalments via energy bills. This is not a loan, so no individual is at risk of the lender calling in the whole amount. The meter is attached to the property and will stay with the property when the inhabitants change. There will be a golden rule that the instalment payment for the energy-saving measures should not be more than the expected cost savings on an average bill for the duration of the arrangement. Those costs can be spread over 25 years. The Bill also puts in place mechanisms to ensure the proper accreditation of measures and their installation and it will ensure wider protection for the consumer to guard against, for example, mis-selling. My Lords, the Green Deal offers the private rented sector a real incentive for both landlords and tenants alike. For example, the residential private rented sector has the largest proportion of band G properties of all tenures. In the non-residential sector, just over 60 per cent of properties are rented. Just under 18 per cent of registered non-residential buildings have an EPC rating of between F and G. Landlords will have no upfront capital costs to pay for their improvements. Tenants will repay the costs through their energy bill savings while enjoying lower bills. After the Green Deal has been running for a year, there will be a review. If landlords as a whole do not take advantage of the Green Deal, we will not hesitate to enforce it through legislation. The Bill will give us powers to make landlords honour requests from their tenants to make their home energy efficient where there is finance available through the Green Deal or the ECO. In addition, the worst-performing properties might be targeted through local authority-led action if the review confirms the need. Complementing the Green Deal, we plan to replace the existing energy company obligations—the carbon emissions reduction target, CERT, and the community energy saving programme, CESP—with a new energy company obligation focusing on driving carbon savings and helping vulnerable energy households. When CESP and CERT expire at the end of 2012, a simpler ECO will work alongside the Green Deal to ensure that the Green Deal works for vulnerable people and supports heating improvements. The Green Deal will also support anyone in hard-to-treat housing. Pensioner households benefit from a wide range of benefits, including the winter fuel payment of £250 for those up to 79 years old or £400 for those aged 80 or over. The cold weather payment of £25 per week is paid to vulnerable low-income households when the weather is really cold. In addition, we have announced the warm home discount to provide further support for the vulnerable. The Green Deal will help reduce energy bills for the long term and make our houses more energy efficient, but there is a wider issue of energy security. Fossil fuels are not infinitely available. Supply diversity and resilience are, of course, critical. Look at the past four winters, including the current one. We have 40 per cent of Europe’s wind energy and 11,000 kilometres of coastline at our disposal, but to reap those benefits we must connect wind turbines directly to the grid. The Bill proposes to amend provisions in the Energy Act 2004 and the Electricity Act 1989 to let us do that. The Bill will also help encourage new entrants to this sector and stimulate competition, innovation and the supply chain. The Bill will also improve our security of gas supply by enabling Ofgem to strengthen commercial incentives on gas market participants to meet their contractual supply obligations during a gas supply emergency. In turn, this will sharpen incentives to avoid a gas supply emergency in the first place and help underpin commercial demand for additional gas supply infrastructure, for gas storage and import facilities and for long-term contracts. Our security is enhanced by using a mix of energy sources, so the Bill will cut the chances of external factors affecting our gas supply. The Bill will also introduce a special administration regime for gas and electricity supply companies similar to that already in place for network and distribution companies. If, for example, a major supplier becomes insolvent, this Bill will ensure that customers continue to be supplied with gas and electricity as cost effectively as possible until the company in difficulty is rescued or sold or its customers are transferred to other suppliers. This will reduce the risk of financial failure spreading across the energy market, maintain market stability and protect consumers. To conclude, this Bill will bring energy efficiency to homes and businesses across the UK. For too long now, energy efficiency has been on the back burner, but it will now be at the forefront. The Bill will help protect the most vulnerable from fuel poverty and, importantly, bolster our security of supply. I look forward to hearing noble Lords’ advice and comments. I beg to move.