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Lord McIntosh of Haringey: My Lords, I shall have to read carefully in Hansard what the noble Baroness, Lady Byford, said. Some of her comments do not strike a bell with me at all in relation to these two amendments. If I may, I shall read again what she said and write to her on the issues. I do not believe I am capable of replying to them at the moment. However, I am capable of replying to the amendments and I shall try to do that.

Amendment No. 54 is intended to allow renewables generators to sell their output to more than one supplier. Nothing in the new renewables powers under Clauses 62 to 65 places any obligations or restrictions on generators at all. All obligations are on suppliers. Therefore generators are free to do what they like with the electricity they generate. It is purely a matter of choice and contract as to how many parties they choose to sell their output to.

Amendment No. 59 is intended to allow generators to sell their green certificates separately from their physical output if they wish. Clause 64, to which the amendment relates, is already drafted so that they can. It is fundamental to the certification system that a certificate may be traded separately from the physical electricity to which it relates. There would be no point in having such a provision otherwise. That is why Clause 64 is drafted the way it is. It simply allows the authority to certify that a generating station has generated renewable electricity that has been supplied to customers in Great Britain. A supplier may subsequently present such a certificate to the authority as evidence that he has fulfilled such amount of his obligation under Clause 62 as is certified, irrespective of who has actually been involved in the purchase of the physical output of the generator in question. Indeed, the Government's intention was indicated in Conclusions in Response to the Public Consultation, published in February this year, which stated on page 11 that,

Therefore, although I may not be able to satisfy the noble Baroness, Lady Byford, in terms of the issues raised in her speech, I hope that she will be satisfied that these amendments are unnecessary.

Baroness Byford: My Lords, I find myself in the unusual position of accepting what the Minister said but acknowledging that we may not be speaking about the same things. It would seem logical at this stage, therefore, for me to withdraw the amendment. We will both then have a chance to look in Hansard at the other's contribution. I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 55:

    Page 65, line 42, at end insert--

("( ) The making of an order will not be dependent on the coming into effect of separate distribution and supply licences.").

The noble Baroness said: My Lords, I hope to do better with Amendment No. 55. There appears to be doubt about the date at which this obligation comes into force. It was to have started in 2003. But my latest information is that it will happen next year. Perhaps the Minister will clarify that point.

Whatever the implementation date is, it is clear that it will be some way ahead. It does not make sense to hold a renewables order until all public electricity supply companies have been split. It should be possible for the Government to ensure that an order applies to the public electricity supply companies in relation to their supply function even before they are formally split. I beg to move.

Lord Renton: My Lords, I want to add just a few brief words to what my noble friend has already said. Amendment No. 55 has the advantage of adding to the main purpose of the Bill, which is to enable adaptability to take place in the changing circumstances of the future. It would be a great pity if something to the effect of this amendment were not included in the Bill.

Lord McIntosh of Haringey My Lords, I recognise that Amendment No. 55 addresses a real issue. This amendment is aimed at allowing a renewables order to be put in place before the introduction of separate licensing of supply and distribution. It reflects a concern that there may be an interval between the introduction of separate licensing of supply and distribution and a renewables order. As the clause is currently drafted, we cannot make a new obligation until the separation has taken place. To that extent the noble Baroness and I are in agreement. This is because the clauses are drafted so as to place the obligations on the new category of electricity suppliers as they will exist only after the separation. But I want to reassure the noble Baroness that this will not be a problem in practice.

We aim to introduce a new renewables order as soon as we can, consistent with the timetable we are establishing for full and proper consultation on the detail of the order. Equally, we will waste no time in bringing in the separate licensing of supply and distribution. That is why the Government tabled Amendments Nos. 113 and 114 for consideration today which will allow this to happen before the transfer schemes under paragraph 2 of Schedule 7, which will split the public electricity suppliers into separate supply and distribution companies, have been approved by the Secretary of State.

As a result of these amendments, the only remaining important matter to be settled before we can make the separation will be to finalise the new licence conditions for supply and distribution. And we are already well

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down the path towards that. Therefore I am confident that the separation of supply and distribution will not be the cause of significant delay to the coming into effect of a new renewables order. But even if it were a matter of a few additional months, the practical effect would not be significant. What is at issue here is the legal starting point of a long-term obligation that the Government have said we intend to impose over a period up to 2025. Once we have finished our consultation, it will be quite clear to everyone what the obligation will be and the period over which it will be in effect. So a few months' difference in the actual date on which the order comes into effect would hardly impact on the development of the arrangements to meet the obligations under it. I hope that the noble Baroness, Lady Byford, will accept that this is a problem which does not in practice need to be addressed by this amendment.

Baroness Byford: My Lords, I thank the Minister for those comments. However, I am not sure how to take his response. He has not disagreed with the amendment; therefore I am rather surprised that the Government have not accepted it, particularly as the Minister mentioned that they would introduce a renewables order. According to my humble thought processes it does not follow that the Government have not accepted the amendment. I am somewhat disappointed at that.

Lord McIntosh of Haringey: My Lords, with the leave of the House, I apologise if I have not made myself clear. We have to separate the distribution and supply licences because one cannot introduce an order which applies to the old organisation of the industry; it must apply to licensees as they will exist after the coming into effect of the Bill.

Baroness Byford: My Lords, I understand what the noble Lord is saying. But I believe that he mentioned a time lapse before the separation can take place which could delay the introduction of a renewables obligation. However, I shall read carefully in Hansard what the Minister has said. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford had given notice of her intention to move Amendment No. 56:

    Page 65, line 43, at end insert ("also").

The noble Baroness said: My Lords, I spoke to this amendment when I moved Amendment No. 53. However, the Minister did not respond to Amendment No. 56 at that point. I am not sure where that leaves me.

Noble Lords: Do not move it!

Baroness Byford: I shall not move Amendment No. 56.

[Amendment No. 56 not moved.]

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Clause 63 [Orders under section 32: supplementary]:

Baroness Byford moved Amendment No. 57:

    Page 66, line 23, after ("for") insert ("electricity generated from different specified descriptions of renewable resource both concurrently and for").

The noble Baroness said: My Lords, the Bill as drafted does not properly differentiate between different types of renewable electricity. As my noble friend Lord Jenkin mentioned at Second Reading, our fear is that this will lead to the development of cheaper renewable energy sources such as onshore wind and energy from waste.

The problem is that considerable investment is needed in order to bring forward new renewables--we mentioned these earlier--including offshore wind and biomass. This amendment highlights the opportunity for a renewables order to be "banded".

I have been advised by the CLA, the NFU and the British Biogen, the trade association for the emerging biomass industry, that banding is essential in order to secure the necessary investment, particularly in biomass. It is proposed that an order should require suppliers to purchase a proportion of the renewables obligation from new sources.

The Minister confirmed in a meeting following Second Reading that the Government favour a market solution to developing renewable energy. In the same breath, the Minister confirms the Government's willingness to provide substantial grant aid for new renewables. There is a logical inconsistency in this approach. Our alternative suggested in the amendment is to have a double market approach: one for old renewables and one for new ones. This will ensure that the industry is enabled to finance its own R&D, producing much needed savings in public expenditure. I beg to move.

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