Feed-in Tariffs (Amendment) (No. 3) Order 2015 — House of Lords, 2016-02-02
Topic: Energy
Bryony Worthington (Labour, Centre-left): My Lords, I follow the comments of the noble Lord, Lord Deben, by saying that, obviously, the most important thing we have to focus on is finding the lowest-cost ways to decarbonise our economy. As someone who worked very hard on the Climate Change Act to make it a flexible and technology-neutral approach to tackling climate change, I think it is very important that we focus on the things that really matter: greenhouse gas emissions and carbon intensity, which we do not talk about enough, because renewables help us only in so far as they reduce the carbon intensity of the electricity we use. That is something we need to keep focusing on. Therefore, although I completely understand the sentiment behind the approach the Liberal Democrats are taking today, in my view the fatal Motion goes a little too far. That is not to say, however, that there is not a very important job that this new Government need to do, which is to restore investor confidence, because a whole host of their policies have severely damaged that confidence I totally understand the sentiment behind some of the actions taken: the desire to make sure that we get the best value for money and do not put costs on people who cannot afford to bear them. However, we have behaved in a rather cavalier manner in our interaction with the renewables sector, which is an important sector for this country; its growth is bucking trends in other parts of the economy. Noble Lords may say that that is purely to do with subsidy but it is not true: it is growing because there is an urgent need to find a cleaner and better way of powering our homes and businesses. The renewables sector and other clean technologies have a big role to play in moving us to an energy system that is fit for this century. The Government must deal with that industry seriously and give it all due respect when they introduce changes and try to manage the transition from a system that relies on subsidy to one that can stand on its own two feet and compete in the marketplace I want to pick up on something the noble Lord, Lord Deben, said about carbon budgets. We have had conversations about this and I declare an interest in having helped to bring these about. He said that the carbon budgets, though brilliant, have a fatal flaw in their interpretation to date: emissions in the electricity sector are based not on actual emissions in the UK, but on a traded allowance that is calculated from a European system. That has to change. Noble Lords will remember that we passed an amendment to the Energy Bill that changed the counting system for carbon budgets, from the fifth carbon budget on, to one that counts actual emissions in this country. That is a very important principle I know the Government are not persuaded that they should keep that amendment. However, I urge all noble Lords who consider that climate change is real and that we need to do something about it, but who are also concerned about cost-effective ways of doing this and technology-neutral approaches, to accept that carbon budgets are our friend but will work only if they are full carbon budgets. If they are half-budgets, with half being set by Europe, they do not do the job for us and do not give the clarity that investors need to invest in decarbonising our electricity sector beyond 2020. That is really important, as 2020 is fast approaching. We will have no more European legal targets for renewables beyond that date. I happen to think that is a good thing, but we need something that replaces that and that gives confidence. The carbon budget could be it, but only if we change the counting rules, as we successfully did during our debates on the Energy Bill. I look forward to returning to this issue, and I hope that between now and then we can persuade the Government that this is the right approach.