My Lords, I thank the noble Baroness, Lady Worthington, for moving the amendment. I hope to explain a bit about the Government’s thinking on this area and then to address the points reasonably raised by noble Lords.
Clause 60 introduces a provision to close the renewables obligation to new onshore wind farms in Great Britain from 1 April 2016—a year earlier than originally planned. There are two key reasons why I believe that that is the right approach. First and foremost, I and the department are committed to delivering the Government’s ambition to end any new subsidies for onshore wind while continuing to combat climate change. I appreciate that that is not something that all political parties or all noble Lords want, but I return to the point that there has been an election. I accept that things were said under the previous Government, but they were a different Government. It may be that the transition is more difficult because they were a coalition Government, but it should not have taken noble Lords entirely by surprise that this Government sought to make a change in this area. Secondly, the Government are committed to keeping domestic energy bills as low as possible.
With that context in mind, let me turn to the amendments. Their purpose is to clarify the terms of the grace period applying to the closure of the renewables obligation to onshore wind, specifically allowing those projects which had applied for planning permission as at 18 June—the date of the policy announcement—to continue to be able to accredit until the original renewables obligation closure date of 31 March 2017. In addition, the amendments would provide further detail about how the grace period would operate in certain planning scenarios and propose extra time for projects that have encountered difficulties in securing financing.
When my right honourable friend the Secretary of State announced the early closure of the renewables obligation to onshore wind, she also proposed a grace period to protect investor confidence, as I think noble Lords are aware. The proposal was to offer a grace period to those projects which, as of 18 June 2015, already have relevant planning consents, a grid connection offer and acceptance of that offer—or confirmation that no grid connection is required—and access to land rights.
At the time of her announcement, the Secretary of State also said that she wanted to hear the views of industry and other stakeholders before framing the terms of the legislation. As such, my department has been conducting an engagement exercise to understand whether our proposed grace period draws the line in the right place. This means balancing the interests of onshore wind developers with those of the wider public. That is what we are considering at the moment. We are still reviewing the feedback and evidence provided by stakeholders in order to inform our final policy position.
I am not in a position today to frame the final terms of the grace period, and it is not right that I should trail a running commentary on where we are, as I have been invited to do by noble Lords who, as I can understand, want to hear more. I must wait until the final terms of the grace period are fully thought through, following the conclusion of the department’s analysis.
I appreciate the understandable wish that all this had happened earlier. The noble Baroness, Lady Worthington, the noble and learned Lord, Lord Wallace,
the noble Lord, Lord Cameron, my noble friend Lady Byford and the noble Lord, Lord Foulkes, all expressed frustration at the fact that we do not know what the grace period proposals will be. I understand why I am being pressed on this, and I will ensure that the House has reasonable notice of the Government amendments.
I agree that 48 hours is insufficient and hope and believe that we can do better than that. If I may, I will provide a commentary on where we are on this by the usual letters if there is any difficulty with bringing the amendments forward in a timely way. I quite understand that the House wants to know exactly what the Government are doing or seek to do in this area. I confirm that we will endeavour to give appropriate, reasonable notice of the amendments ahead of the day and recommittal in the Moses Room.
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On the comment made by the noble Lord, Lord Foulkes, about it being in the Moses Room, it is interesting that there is a division on this within the House. When I discussed this with other noble Lords in trying to ensure that we got that extra day, some noble Lords—not on my side of the House—said that they would prefer it in the Moses Room. I am in a position of not being able to please everybody on that. I am afraid that, because of the government timetable on things such as the Scotland Bill, which the noble Lord will understand, it is not possible to have the extra day in the Chamber. However, I am sure that we will have a good discussion in the Moses Room on these issues.
On the specific issue of moving from planning consent to planning applications, I question whether that is the right approach—in particular, moving the grace period criteria proposed by the Government from projects that received planning consent to those that have applied for it. That would have fundamental impacts on delivering on the manifesto pledge and managing our low carbon spend—the two reasons for implementing early closure of the renewables obligation to onshore wind. Based on my department’s analysis, this change to the grace period criteria could mean that anything up to 7.1 gigawatts or around 250 projects could accredit under the renewables obligation. That equates to the amount of projects that have submitted a planning application but not yet received consent.
Based on our analysis of the time taken for a project to progress from planning application to accreditation, it is highly unlikely that any projects that had not yet submitted a planning application on 18 June 2015 would intend to accredit under the renewables obligation. Therefore, the approach taken by these amendments would not in fact constrain the number of projects coming forward under the renewables obligation in any meaningful way and so would fail to deliver on our manifesto commitment. Furthermore from an affordability angle, because this change could allow anything up to 7.1 gigawatts of additional capacity to deploy under the renewables obligation, we would remain at risk of deploying beyond our best estimate of what we would need to meet our 2020 targets and what we can afford under our low carbon spending cap, which could add more costs to consumer bills.
On providing more time for those projects that encountered difficulties in securing financing, I reassure noble Lords that the department is thoroughly considering and taking on board the matters raised during the engagement exercise, including those in relation to investor confidence and access to finance. As I said previously, I will confirm a position in relation to the terms of the grace period ahead of the onshore wind clauses being recommitted to the House in October.
The noble and learned Lord, Lord Wallace, raised the issue of aviation difficulties and the radar delays. As part of the existing renewables obligation closure arrangements, the Government confirm plans to offer projects that were subject to unforeseen grid or radar delays a 12-month grace period to enter into the renewables obligation until 31 March 2018. We expect that to remain in place for projects eligible for the grace period, but have not confirmed our final grace period proposals. I am trailing a bit of information that I hope is of use to the noble and learned Lord—and contrary to my saying earlier that I would not give a running commentary. I appreciate that this issue concerns noble Lords and I well understand that concern. On that basis, I ask the noble Baroness, Lady Worthington, to withdraw the amendment.