8 May 2009 : Column 451

House of Commons

Friday 8 May 2009

The House met at half-past Nine o’clock


The Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3).

Mike Penning (Hemel Hempstead) (Con): I beg to move, That the House sit in private.

Question put forthwith (Standing Order No. 163).

The House divided: Ayes 0, Noes 56.
Division No. 114]
[9.33 am


Tellers for the Ayes:

Jeremy Wright and
Mike Penning

Ainsworth, Mr. Peter
Atkinson, Mr. Peter
Barker, Gregory
Baron, Mr. John
Bell, Sir Stuart
Bottomley, Peter
Brazier, Mr. Julian
Burnham, rh Andy
Burns, Mr. Simon
Burt, Alistair
Campbell, Mr. Alan
Caton, Mr. Martin
Chope, Mr. Christopher
Clark, Greg
Cunningham, Mr. Jim
Davies, Mr. Dai
Davis, rh David
Duncan Smith, rh Mr. Iain
Eagle, Angela
Evans, Mr. Nigel
Field, Mr. Mark
Fitzpatrick, Jim
Gale, Mr. Roger
Gove, Michael
Gummer, rh Mr. John
Hammond, Stephen
Harper, Mr. Mark
Harris, Dr. Evan
Hoey, Kate
Hope, Phil
Howarth, David
Hughes, Simon
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Johnson, Ms Diana R.
Jones, Mr. David
Jones, Mr. Kevan
Jones, Lynne
Key, Robert
Lammy, rh Mr. David
Lucas, Ian
Luff, Peter
Maclean, rh David
McCarthy-Fry, Sarah
Merron, Gillian
Mole, Chris
Newmark, Mr. Brooks
O'Brien, Mr. Mike
Simpson, Alan
Skinner, Mr. Dennis
Spellar, rh Mr. John
Stunell, Andrew
Turner, Dr. Desmond
Vara, Mr. Shailesh
Whitehead, Dr. Alan
Wiggin, Bill
Wright, Mr. Iain
Tellers for the Noes:

Mr. Richard Benyon and
Mrs. Maria Miller
Question accordingly negatived.
8 May 2009 : Column 452

Green Energy (Definition and Promotion) Bill

Second Reading

9.45 am

Mr. Peter Ainsworth (East Surrey) (Con): I beg to move, That the Bill be now read a Second time.

First, I would like to offer my thanks to the cross-party group of right hon. and hon. Members who originally sponsored the Bill, and to colleagues who have taken the trouble to be here today. I know only too well that being here on a Friday is not always desperately convenient for hon. Members. I would like to thank the many companies and business groups that supported and promoted the measures, including the National Farmers Union and the Micropower Council. I should like to thank the Public Bill Office, which contributed its secret ministry, and the redoubtable Mr. Ron Bailey, who has performed his usual wonders.

I should like to thank the House of Commons Library, which produced a very useful note on the Bill, but I have to say that it contains a glaring error. It says that the measures apply to the whole of the United Kingdom, whereas clause 7(2) makes it clear that they apply only to England, so anyone who was nervous about that can relax. I should also like to thank the Minister of State, Department of Energy and Climate Change, the hon. and learned Member for North Warwickshire (Mr. O'Brien), and his colleagues—and not only those in his Department but others, too—for working hard to progress the debate on this green energy Bill. There is at last cross-party agreement—something that I have long sought—on the need for Government action to put in place measures to liberate the pent-up ingenuity, creativity and capital of businesses and markets, and the public’s pent-up enthusiasm to engage with delivering real power to the people by decentralising the way in which we create and use energy in this country.

Time is the most precious commodity on a Friday, and private Members’ Bills are fragile vessels in the face of time. I therefore intend to keep my remarks relatively brief, and I implore others to do likewise, despite any temptation to the contrary. Besides, there are other Bills on the Order Paper that certainly merit debate and discussion, so I will resist the obvious temptation to use this opportunity to repeat at length my warnings about the dangers of climate change, and my comments about the opportunities created by the need to come to terms with climate change, and the threat and challenge that confronts this generation globally. This generation will have to deal with the problem of climate change; if we fail, our children and grandchildren will be not only amazed but appalled, and rightly unforgiving. However, may I just mention a new initiative, the Prince’s Rainforests Project launched by the Prince of Wales, which is enormously welcome? I urge everybody who has access to a computer to go on to its website, and to click on the relevant buttons to demonstrate support for that very fine project.

The opportunities before us are enormous. Rebuilding the economy as if the earth mattered is an enormous task, but it brings together an array of interlocking benefits—not just sustainable economic growth and safe green jobs, but enhanced global and national security, improved social justice at home and abroad, and a more thriving and robust natural environment. I think that
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the whole House will agree that bringing those things together is a worthy task, but it will require vision and courage, relentless attention and, above all, hope. In that mighty context, this little private Member’s Bill may seem a trifling affair. It is indeed a modest Bill—modesty befits private Members’ Bills—but I believe that if it succeeds, it will play its part in helping the clean energy sector to grow, and helping all of us citizens to find it easier to play our part in the green revolution.

Let us take a quick look at what the Bill contains. Clause 1 defines the various terms used. Many of them originate in existing Acts, and these definitions have been adopted, where appropriate. Clause 2 defines the term “green energy” and specifies that the principal purpose of the Bill is to promote it. It includes energy efficiency because the energy that we do not use is the greenest energy of all. Green energy is defined as

An important point about this definition is that it includes efficient small-scale district heating systems and micro combined heat and power systems.

David Howarth (Cambridge) (LD): I welcome the Bill, especially its mention of heat pumps, which are a potential major contributor to energy efficiency, but it does not specifically mention solar thermal installations—heating water in houses from solar power, which is already worth while to install. Does the hon. Gentleman’s definition include that, or would it be a worthwhile change to the Bill in Committee?

Mr. Ainsworth: The Bill includes those technologies by reference to a previous Act—the Climate Change and Sustainable Energy Act 2006 introduced by the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz). They are not mentioned specifically.

I hope the whole House will recognise the importance of cutting household and business fuel bills, especially at a time of recession. Clause 2 promotes the cause of alleviating fuel poverty. Work carried out by National Energy Action has shown that installing air source heat pumps in homes off the gas main can cut heating bills by 75 per cent. and CO2 emissions by 66 per cent., so green energy can also help end fuel poverty.

Mr. John Gummer (Suffolk, Coastal) (Con): Does my hon. Friend accept that one of the things that we have so far failed to get over, not least to the Government, is that the purpose of many of these technologies is not just to meet the overwhelming pressure of climate change, but to help people in the downturn, and particularly to help the poorest? This is a win-win-win situation and one which, sadly, the Treasury seems not to have understood.

Mr. Ainsworth: I am grateful to my right hon. Friend, who has an immensely distinguished record in this matter. He is right. The Bill is not just about being green—being good for the environment and the natural world. It is about being good for human beings, especially the least well off, who stand to gain most from such measures.

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Clause 3 calls for the Government’s current microgeneration strategy to be reviewed. The present strategy was drawn up following the Energy Act 2004. It has worked quite well, but there is general agreement that it needs to be updated. The Government accepted that last year and are, I hope, already working on a new strategy. I look forward to hearing what the Minister has to say on that subject later in the debate. As industry sources have said,

I hope the Minister will also clarify the Government’s position on implementing the new feed-in tariff system for small-scale electricity generation, which offers clear rewards to people who go green. As the experience of Germany has demonstrated, this reform alone has the capacity to engage the public’s imagination, attract major investment and create tens of thousands of jobs.

Clause 4 requires the Government to review permitted development orders, with the purpose of removing unnecessary bureaucratic obstacles, which currently impede the installation of green energy measures in non-residential and agricultural premises. An example of the problem that the clause is intended to address is that it is currently possible for a head teacher to install a small wind turbine on his home, generally without having to get planning permission, but impossible for him to do it at his school, which is rather silly and an anomaly that the clause seeks to put right.

The inclusion of agricultural premises is, I hope, significant for the farming industry. The opportunity for farmers in this context is immense. A report from the Carbon Trust last year suggested that the rural potential of small-scale wind power is more than four times that of the potential in urban areas. But if we can harness the potential of anaerobic digestion on farms, linking biogas up to the gas grid, the consequences could be hugely beneficial as a result of cutting greenhouse gas emissions from farming and creating sustainable energy from waste.

However, I fully accept that we cannot allow a free for all. There must be safeguards against proposals that threaten to create noise nuisance or visual blight. It may well be that any review will need to consider a range of planning options to promote microgeneration projects on agricultural and non-domestic premises. The important thing is that such projects are generally promoted and not impeded by Government policy.

Clause 5 relates to permitted development rights in domestic premises. Considerable progress has been made on this issue by the Climate Change and Sustainable Energy Act 2006. I had the pleasure of supporting that Bill during its progress. The Act removed much of the hassle involved in installing solar thermal or photovoltaic technologies in domestic premises, but it did not extend to micro wind installations or air source heat pumps. The Government have said that they want to put that right, and the Bill aims to do just that.

Planning obstacles, whether valid or not, have proved a major barrier to small-scale wind technology in particular. I have heard of one company that has 25,000 applications snarled up in the planning process. But again, I am not advocating a complete free for all.

8 May 2009 : Column 455

The schedule sets out criteria that I recommend to the Government when considering these issues. In particular, it contains safeguards relating to noise, visual intrusion and buildings protected for heritage reasons. Perhaps most importantly, it requires microgeneration installations to comply with a certification scheme. This should deal with the problem that has arisen with wind turbines, for example, which have been installed with worthy intentions in places where they are largely ineffective because there is not enough wind.

Clause 6 is intended to encourage the Government to consider the anomaly whereby businesses and home owners who improve their property by installing green energy units may be penalised later by higher non-domestic rates or council tax valuations. I look forward to the Minister’s comments on whether he believes there is a contradiction in relevant Government policy.

Finally, this is, as I said, a modest Bill, but I hope it is a helpful one. It brings its own array of interlocking benefits. It is meant to be helpful to industry and investors, who are urgently looking for clear and simple support from legislation affecting their businesses. It is meant to be helpful to the farming industry in developing its potential as a significant source of energy generation in rural areas. It is intended to be helpful to people living in fuel poverty, and to all who are struggling to pay for electricity and heating, and who are dependent on inefficient fossil fuels; helpful to all who want to play their part in reducing CO2 emissions; and helpful to the Government in meeting their own targets on fuel poverty, renewable energy and climate change. I commend the Bill to the House.

9.58 pm

Dr. Alan Whitehead (Southampton, Test) (Lab): I congratulate the hon. Member for East Surrey (Mr. Ainsworth) on his foresight and imagination, on securing the place that he received in the ballot and the Bill that he decided to put before the House, and on the understanding that he exhibits of where we are now in terms of microgeneration, where we need to be, what the impediments to microgeneration development are, and how we can move forward. He says that this is a modest Bill, but I do not agree. It may be modest in its extent and language, but it will have a substantial effect on the progress of microgeneration, its installation and its development, should it be enacted in the way that he has set out, as I am confident that it will.

I say that because, as the hon. Gentleman knows and has underlined, microgeneration appears to be modest in its ambition with regard to the individual installations that provide the electricity and heat, and modest apparently in terms of the amount of electricity or heat that is produced by each microgeneration device, but the overall effect that the widespread installation of such devices will have on our heat and electricity supply is potentially very far from modest. As he underlines, these devices do not simply assist in providing greener energy, but they cut people’s fuel bills, which can be a hedge against the continuing issue of fuel poverty in domestic dwellings, and they can make a tremendous contribution towards the development of sustainable energy sources.

Andrew Stunell (Hazel Grove) (LD): I support what the hon. Gentleman says about reducing fuel poverty and saving energy as a consequence, and I am a strong
8 May 2009 : Column 456
supporter of the Bill, but will he acknowledge that these private Members’ Bills often achieve these objectives in legislation, but they are not implemented by the Government? May I draw his attention to the Sustainable and Secure Buildings Act 2004, which the hon. Member for East Surrey (Mr. Ainsworth) supported and I proposed, which still awaits implementation? So many opportunities are lost even when Bills get through on a Friday.

Dr. Whitehead: The hon. Gentleman curiously seems to have read my mind, or even part of my speech. Sometimes private Members’ Bills, rather like planning permission for microgeneration, appear to run into some difficulties in practice once they reach the statute book. That is true of not only his Bill, but the Climate Change and Sustainable Energy Act 2006 of my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz), which contained clauses that I regret to say arose from an unsuccessful private Member’s Bill that I recently tried to put through the House, the magnificently titled Management of Energy in Buildings Bill, which, among other things, attempted to secure a wider range of permitted development orders for microgeneration devices. One of the issues in today’s Bill is general permitted development orders relating to micro wind and heat pumps, which I would have anticipated might have been sorted out by now. The general permitted development order regime was extended under that Act to other small-scale renewable energy devices, but not to those particular categories, for a number of complex reasons that I will not detain the House with today. Nevertheless, progress that I thought might have been made under that Act has not come to pass, so I am delighted this morning to see that, among other things, this Bill contains a clear statement of where we should go on such orders, the time scale of that, and how matters should progress. That is an important part of the Bill.

Mr. Gummer: Does the hon. Gentleman agree that, in what has not been an easy week for the Government, one way in which they could get some good publicity would be if the Minister today not only promised to implement that part of the Bill that it is the Government’s duty to implement, but all those bits that still hang around in other Bills, so that we all felt that our work in producing these private Members’ Bills would bear fruit? Such a commitment today would cost the Minister nothing and would be valuable to the Government and to the Opposition.

Dr. Whitehead: I am encouraged by the Government’s commitment to renewable energy in general in the range of recent new instruments to incentivise renewable energy and small-scale renewable energy output, and the commitments that have been made and are being made to the development of renewable and sustainable heat and the role of energy efficiency in the development of a sustainable renewable energy strategy. A number of the issues that have arisen from private Members’ Bills are being addressed by such commitments. It is unlikely that the Minister will give a blanket undertaking this morning that every clause of every private Member’s Bill relating to heat, energy and renewable electricity will be implemented tomorrow, but it is fair to say, without any hint of partisan discussion on the issue, that there is a sea change in ensuring that the impediments
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to the development of renewable and small-scale sustainable energy, which have existed over a period of time and which hon. Members have through, private Members’ Bills, among other measures, sought to overcome, are by means of such devices and commitments being substantially addressed.

However, it is true that substantial impediments remain, which come in a number of shapes and sizes. We have the impediment of the fact that renewable energy devices are, unlike traditional forms of energy delivery, up front capital intensive. Substantial capital is required to install them and thereafter the revenue consequences are slight. Once installed, the earning capacity of such devices, is significant, and the introduction of the feed-in tariff and the renewable heat incentive, will, I hope—I remain optimistic on this matter—ensure that the certainty for the capital investment that is required in those devices can be enhanced. Nevertheless, it is still true that to suggest to a small business or a household that they put up front between £4,000 and £12,000 to install such a device on the understanding that, eventually, there will be a payback, when they have been used to paying a quarterly electricity or gas bill for their heating supply, represents a considerable turnaround in how people view their arrangements with their energy suppliers. That impediment might be overcome by the introduction of leasing arrangements for microgeneration devices, so that the capital cost can be avoided and the cost of the running those devices can be rolled up in the revenue stream that is generated as those devices are used over time.

A second impediment relates to the connection of such devices to the grid and, in particular, to the distribution network. Indeed, it would be rather a good idea if Ofgem and the grid operators had a good look at the extent to which the theoretical backwash of energy that should enter the grid from, in particular, renewable electricity devices, in practice never gets near the transmission network but simply goes around the distribution network. If we end up with billing arrangements under which small-scale energy generation, as part of the energy mix, is rolled up with the total cost of transmission and distribution, a significant impediment to microgeneration development will remain.

In the past, such impediments were considered fairly insignificant, because, then, it was thought that microgeneration would have a fairly insignificant role to play in the future. However, given the renewable energy strategy that is developing, and the ambition for microgeneration and small-scale generation to become a part of overall renewable energy generation targets, it is far from small-scale in practice. If we also consider the indicative proposals in the renewable energy strategy for reaching the 15 per cent. target for renewable energy—not for renewable electricity—as part of the energy mix by 2020, we see that out of that 15 per cent., it is proposed that no less than 9 per cent., which, according to my maths is about 1 per cent. of the total energy supply, should be supplied by solar heat.

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