We are already embarked on a massive programme of grid renewal. The National Grid has published at length its proposals for how to roll it out. Obviously it cannot be done overnight, but we have made it clear that we are looking to build, with billions of pounds of investment, overwhelmingly from the private sector, a completely new grid that will do exactly as the hon. Lady says and permit a new relationship—a two-way, more equal one—between the consumer and the producer, and allow for the adoption of these diffuse new technologies. She is right that while the old grid is still there, there are certain barriers, but wherever possible and wherever it makes economic sense, we are keen to work with local communities and district network operators to help them overcome those barriers and to see what can be done within a reasonable economic cost. She is right that there are still barriers, but my Department is working proactively to try to overcome them.
I hope that the House appreciates that I am sympathetic to the intention behind amendment 47 to create a green power auction market—bringing onboard these disruptive new entrants is the key aim. GPAM is a means to an end, however, rather than an end itself. No one solution is inherently good; what matters is what it can deliver, and there are several ways of delivering the agreed outcome while navigating in slightly different directions. Our concerns stem from the fact that GPAM is effectively a fixed feed-in tariff, as it provides the generator with a guaranteed price for all the power it generates. As a result, the generator would have no incentive to manage its imbalance risks, as these would be taken away from it, which could work out more expensively for the consumer.
Although I welcome and fully appreciate the aims of GPAM, we have to be careful, despite having all the right motives, not to create an expensive, long-term solution to what might turn out to be a short-term problem. CFDs will undoubtedly improve conditions, which I know have been challenging, in the market for power purchase agreements, enabling independent renewables projects to get off the ground much more easily. They should not only help the smaller independents out there now and doing a great job, but attract—I hope—new entrepreneurs into the market. Although I have issues with GPAM, therefore, I want to make it clear to the House that I am not complacent and am not saying that we have all the answers.
I fully recognise that there is an issue at stake, which the GPAM amendment endeavours to address, but the route-to-market issue is complex. It is such a technical issue that we perhaps cannot do justice to it in a debate on the Floor of the House. However, it is an issue that my officials, with all their skill and expertise, are absolutely committed to tackling. At a political level, I am personally committed to finding a solution to it, albeit a solution that must be workable and not lead to greater costs for consumers.
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We need to do more work on this issue. I am pleased to say that my Department is working constructively with those in the industry, who have been extremely responsible in their engagement with it. I am extremely grateful for their patience. With hindsight, perhaps we could have engaged with them a little earlier or more effectively earlier, but I am confident that the current level of engagement and the commitment on both sides will enable us to find a solution to the problem. I greatly welcome the constructive way in which the industry—this includes both stakeholder groups and companies directly—is working with us.
I realise that that is less than satisfactory as a response at this point in time and that I am unable to provide a definitive response on the issue today, but I stress again that it remains under active consideration; I hope I have spelt out to the satisfaction of the hon. Member for Southampton, Test what active consideration means in this context. I can reassure the House that the Government will respond more fully on GPAM in the course of the Bill’s passage through Parliament. On that basis, I hope that the hon. Gentleman will not press his amendment. I look forward to hearing the views of others in the House on these important issues.
This group also includes Government amendments 100 and 135, and new clauses 11 and 12. I encourage the hon. Members for Southampton, Test and for Brighton, Pavilion and my hon. Friends the Members for Christchurch (Mr Chope) and for Gainsborough (Mr Leigh) not to press their amendments and new clauses. The Government are actively considering the issues raised by amendments 1 and 47. Although it may be disappointing that there is no definitive answer at the moment, I encourage the right hon. Member for Don Valley (Caroline Flint) and the hon. Member for Southampton, Test not to press their amendments and to allow the Government to continue the active work stream that is already in hand.
Whether it is opening electricity markets to exciting new technologies, creating new dynamic markets for electricity demand reduction and demand response, welcoming in new and disruptive companies and entrepreneurs, or empowering communities and consumers to generate their own electricity, this Government are driving a decentralised energy revolution, but one that I believe finds support right across the House.