My Lords, in general, I welcome this secondary legislation, in that the National Audit Office report from February certainly needed some reaction from the Government on the way that the scheme operates. Just to put it in a bit of context, the audit report included some very interesting figures: between 2012 and 2017, there have been some £1.4 billion-worth of payments, which should lead to commitments of some £23 billion. To me those sound like big numbers but, as we know from smart meters, they are absolutely piffling. There have been 78,000 installations already and there were expected to be 500,000 by 2020. It is estimated that we have got to about a fifth of that original target. To give the Government their due, they have responded to reality in this area and moved some of those targets.
Although the Minister made a strong point about this being a major contributor to our carbon targets, the point I want to make is that, in many ways, it is a small drop in the ocean of what we need to do to meet our carbon budgets in future. The renewable heat incentive is certainly nothing like sufficient to meet those budgets in the heating sector, nor was it ever meant to be. That sector is so important, but it is one in which we still have so few solutions for meeting our targets. In electricity generation, we are well on our way; in transport, we at least have the solutions on hand; but in space heating, we do not yet, and the RHI is never going to get us there. There are big challenges for this scheme.
I was quite surprised to see in the audit report that Ofgem, which is the manager of the scheme, had not really managed to tackle some of the gaming issues and was uncertain on the overpayments side. I guess that all auditors have to find something. Certainly, the report praises the GB scheme in comparison with that in Northern Ireland, where clearly the scheme got completely out of control and caused the political difficulties that we now have there. However, it is estimated that we still have some £3 million-worth of overpayments.
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The noble Lord mentioned biomass heat pumps and anaerobic digestion. One of the things I have installed in my own house, at my own expense, is solar thermal. I do not know whether this will be an area that is targeted in the future. Solar energy for electricity generation has been so successful, and I cannot see why it is not something we should be able to better promote through this scheme.
The issue I would like to raise with the Minister is this: I can think of particular anaerobic digestion operators in the south-west that are really concerned about the amount of feedstock that is available to the industry. On anaerobic digestion, I understand that food waste available to existing AD plants is declining and that gate fees have been declining over some considerable time and in some cases are negative. Under these regulations and future plans, what are the Government doing to make sure that the stream of food waste that can go to anaerobic digestion will be available? I do not know whether this is on the Government’s horizon, but one thing I would like to see is a complete ban on food waste going to land fill and much better food waste collection by local authorities. Are there any Government plans in this area?
It has been pointed out to me that the new tariff guarantee procedure could be used to make sure that, when that process goes through, there is a sufficient waste stream available to the new AD facilities to ensure that the contract can be met over the 20 years. Further, I welcome the assignable rights; that is a very positive move forward.
One thing I had not realised, which came out in the sub-committee I chair, is that the renewable heat incentive scheme is part of an agreement on the proceeds of the EU Emissions Trading Scheme. Some of that, in a sort of hypothecation, has to be ploughed back into certain energy schemes, and I understand the RHI is part of that contract. I wonder whether that, and the
Government’s views about the RHI, will change once we are out of the EU—although I understand from Minister Claire Perry that we are going to remain in the EU ETS during the transition period. However, I would like to understand whether that affects the long-term funding of the scheme—which of course is funded by taxpayers, as opposed to the electricity schemes, which are funded through consumer bills.