My Lords, I am grateful to the Minister for introducing these exciting regulations. This is a real step forward; we have been waiting for it and we are pleased that it has finally arrived.
Perhaps I may first ask some general questions on how we are doing on the RHI. We have had previous debates on other orders and I am always keen to know how we are doing in relation to our target. This is a world first and things may not be going as fast as we would like. That is understandable—it is a complex policy area—but it would be good to have an update on where we are in relation to the terawatt hour target for 2015-16, which I believe was set at five to seven terawatt hours. It is not that long away now and I would be interested to know how we are doing.
I have raised the issue of underspend before. There is a budget surplus under the RHI and I hope that we will increase the speed at which we get through this budget and that measures will be installed. The regulations refer to the earlier scheme, the renewable heating premium payments. It was a sensible move to introduce an early scheme in order to assess take-up and it would be interesting to know what the take-up was and how many people came forward to receive payments under that scheme. My questions are related to getting a sense of how we are doing and the background against which this policy should be judged.
On integration with the Green Deal, it is sensible that we should try to join up policies, particularly policies that involve interaction with householders. The Green Deal and the RHI should complement each other well.
How are we going to make sure that Green Deal assessors are fully cognisant of all RHI technologies? Perhaps the Minister could say a few words about how we make sure when training Green Deal assessors that they are fully aware of all of the RHI technologies, how they can be applied and the properties and situations which would be beneficial for consumer take-up. If they are not joined up, they could otherwise become a barrier. If we are not integrating this, people may not be aware of RHI and its availability; equally, there might be a barrier the other way in requiring a consumer to have a Green Deal assessment—if an assessor comes in and perhaps is not aware or does not give information about the RHI, that could be an unnecessary impediment towards the take-up of this technology. I want to make sure that we really are joining up the policy at a delivery level.
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I have a question about enforcement, which I know is a tricky matter. We have gone for a deemed contribution rather than a fully metered contribution, for good reasons as it is about a balance between the effectiveness of the policy and the costs involved in monitoring. However, I wonder about the potential perverse incentives. It is true that if you fit a biomass installation, you have a fuel cost. If you are able to avoid that fuel cost but still get the payments, that creates a perverse incentive. I know that the authority will be able to inspect properties but there is a particular problem if a property, which may be rented accommodation, remains empty or unlet for a period or if it is simply empty for other reasons. How are we to spot these properties and is there a sufficient stick—a penalty—for people who are perhaps trying to game the system?
I looked through the regulations but in the section on enforcement and inspection there did not seem to be a sanction. There did not seem to be a fine or any kind of disincentive. It may be that I am missing something and that the noble Baroness can put my mind at rest. Obviously, we want this scheme to go forward but it would be terrible if it were to get mired in Daily Mail headlines about people using climate change policies to an ill end, so enforcement sanctions are an important part of making this a success. People have to have confidence in the scheme and we do not want to leave any loopholes open for negative publicity, which would set the scheme back.
We have just had a Question in the Chamber on the Green Deal. Clearly, that scheme has not had as much take-up as we would have wanted. I really hope that we can learn the lessons from that and that this policy will be much more successful in meeting the targets set for it. Can the Minister say a little more about promotion plans and how we are going to get it taken up? It is probably fair to say that this is a fairly complex and technical policy. Nevertheless, at the moment we have a population who are focused on their energy bills. They are concerned about being able to pay their gas bills, so it would be a good time to talk to people about
how they can move forward quite considerably to take themselves out of the fossil fuel market and insulate themselves against future price volatility. That would make a real difference to their energy bills. I suppose the question is: will the low take-up of the Green Deal have an impact on the corresponding take-up of the RHI? I would hope not; instead, in an ideal world, the RHI could help the Green Deal’s take-up. However, it would be nice to know a little more about how we are going to promote and encourage the take-up of this scheme.
I am sorry if this question is a little detailed but it is mentioned in the regulations that new build will not be eligible. I can see why, as people do not want to pay for something that is already happening. However, it made me think: if these microgeneration technologies are being installed into new build and they are renewable heat, how are we capturing them and making sure that they count towards our targets? It would be a great shame if, for example, new build were to integrate renewable heat—and that would make sense, as it is the cheapest point at which to do it—if that does not then contribute to the targets. How are we making sure that those 7,000 to 8,000 microgenerating technologies are counting towards our targets, so that we can capture an important point in this policy? The point is that if you can put it into a new build, it will be cheaper and have far fewer barriers to uptake. It will also help to normalise the technologies.
I have one final question—perhaps this is for a subsequent debate, but perhaps I could meet officials to talk about it. I am very interested in the use of bio-oils in the renewable heat market. I know that currently they do not qualify, but I have heard—perhaps I am wrong—that if you have an oil-based heating system, with a few not very expensive changes, you can switch that to run on biodiesel. That seems to me an effective way to get more renewables into the system. If you can keep the existing infrastructure but simply switch the fuel, surely that must be more cost-effective than ripping everything out and putting something new in. We get a lot of representations from bio-oil producers, who are very uncertain about their market in future. It is definitely more efficient to use bio-oil in a heating system than it would be, say, for transport. Can we not do more to promote it? Perhaps when we have the next review of the policy, we can consider how we can encourage fuel switching from oil to bio-oil, which I think has potential?
In summary, despite the number of my questions, we support the policy. It is very exciting. I hope that we will see strong uptake and that with all the measures for degressions, caps on spending and careful management we have not overcomplicated it and lost sight of the biggest picture, which is that we really want people to take this up for it to be a success. We hope that as much emphasis will be placed on promoting, encouraging and publicising it as we have had on trying to ensure that the budgets are not overspent because, in reality, those budgets are often underspent. That is not a sign of success, it is a failure. Let us hope that with this great, exciting step forward, we can look forward to future reports of lots of activity in this policy area, and we wish it all the best and accept the regulations.