My Lords, I once again declare my interest in the energy storage industry. What a Bill—it seems we are all agreed on what we are trying to do, but none of us agrees on how we are going to
do it. Yet we have this very short timetable to complete the Bill, effectively now on Tuesday, although it was going to be Monday.
We have had a big break since the Energy Bill, which has somehow disappeared before it got to my best amendments, so I am extremely disappointed personally that it has been postponed. However, I spent my time well over our various recesses with my chainsaw, sawing up all my homegrown logs—they are three years old, so low-particulate. I spent a lot of time on that and am pleased to say that the Teverson household has not yet turned on our central heating. I hope to get beyond that critical date of 22 October when everyone switches it on.
It is interesting that, apart from the Minister, we have not had a contribution from the Conservative Benches tonight, although they have a past Energy Minister on their Benches, the noble Lord, Lord Marland, whom I enjoyed working with during the coalition Government.
A number of themes have come out clearly this evening. The most powerful, from the Delegated Powers Committee, is the huge range that the Government and the Secretary of State have been given here. Clause 22 was mentioned, but I particularly looked at Clause 13(2), which says:
“The Secretary of State may take such other steps as the Secretary of State considers appropriate in response to the energy crisis.”
I was thinking about what that could include. The most obvious step, given one of the main sources of energy price increases, would be to declare war on the country that is causing us this problem. That power seems to be in the Bill. I assume, despite the chaos of the Government at the moment, that will not take place. It illustrates the huge powers that are in the Bill.
I refer specifically to amending licences. I do not think this has been mentioned in the debate although many noble Lords have mentioned powers more generally. I would be interested to understand from the Minister why that particular power is in the Bill because, despite all the advice we have from energy companies, this is the one that seems to move away from the neutral, reliable, regulatory system that we have and seems to breach it. I would be interested to understand why that is included.
We heard also from many Members of the House—the noble Baroness, Lady Hayman, for instance—about the discrimination that there seems to be between renewables and the fossil fuel industry, both in terms of the way they are treated and whether the cost-plus revenue limit is a tax. It is obvious that it is really, but it does not have the ability to bring back money for investment in the industry. There is a difference in those schemes, with the fossil fuel scheme lasting until 2025, I think, and the powers in terms of the renewable sector until 2027. Why is that there? It is inconsistent and goes against government policy, or certainly declared government policy, and perhaps the Minister could explain that further.
We have little information about the cost-plus revenue limit itself. There are great powers for Ministers again. There has been very little consultation. I understand the consultation is still to happen. Perhaps the Minister could tell us what the timetable will be on that: will it
be microseconds, hours, or maybe even reach to days? It would be useful to understand something that is so important.
I was pleased to hear from the noble Lord, Lord Rogan, about the £100 payment because I was not aware of the situation in Northern Ireland. I am not on a gas system myself, but in England most people are. It was a very interesting point. I do not fully understand the £100. We all know that if you put a round number in a bill, it is a made up number—that is where round numbers come from. If you have any sense, you put it at £98.20 or £102.50, to convince us that there is some science behind how that amount was reached. I would be interested to understand where that comes from. I think it really does discriminate against a lot of rural Britain that is not able to plug into the gas network, as many people say.
I am a great supporter of contracts for difference. They have been a saviour in many ways. They were introduced during the coalition Government, they are well supported by the present Government, and they seem to offer fantastic balance between fairness in terms of cost and certainty in terms of investment. They have worked well. I like the idea of trying to transition many other power producers on to CfDs. We have here a voluntary mechanism to be able to do it. I understand that one of the selling points the Government are giving this is that it takes out risks or gives certainty, but I still find it difficult to understand why organisations or companies would make that transition. I would be interested to hear more from the Government about why that should be the case.
I will finish by saying that the one thing that strikes me most about the Bill, and this whole philosophy, is that there is not an exit strategy. There is no way out of this. The only way out is if, perchance, energy prices themselves come down in the future. There are all sorts of reasons, I hope globally, why that might be the case, but we have no assurance of it. It seems to me that the fundamental obscenity of this situation is that we are likely as taxpayers to pay altogether on the two schemes—what is in this Bill and what has come before—up to something like £137 billion in current expenditure on keeping bills down, yet our energy infrastructure in this country in terms of housing, as the noble Lord, Lord Foster, said, will be as weak and pathetic as it is now after we have spent that money. How much better it would have been if we had previously invested that money to reduce demand, yet we failed to do that. Once we get through this winter cycle, or maybe the one after, or the one after that, we will still have the same inefficient energy structure in this country that we had before. To me, that is the greatest challenge.
The Bill is needed, but the way it is implemented is far from perfect.
6.41 pm