Feed-in Tariffs (Amendment) (No. 3) Order 2015 — House of Lords, 2016-02-02
Topic: Energy
Lynne Featherstone (Liberal Democrats, Centre to centre-left): My Lords, this is an important debate, and it is with regret that I felt that I must table this fatal Motion, as I am aware of the significance of this action, but regard the matter as so serious as to merit such a Motion. The order makes policy changes which will have far-reaching and detrimental effects—effects which will not only put our renewables industries in serious jeopardy but impact on our ability to deliver our legally binding renewable energy targets. Furthermore, the strong economic case for investing in the sector seems to have been ignored, neglecting what could and should be an extremely significant source of Britain’s future economic prosperity The feed-in tariff scheme is the Government’s main mechanism to encourage the deployment of small-scale, low-carbon electricity generation, and the order imposes two caps: one financial and one that controls generation capacity. The financial cap of £100 million applies to all renewables technologies right up until 2018, meaning that they will get approximately £35 million a year between them all for new-build deployment. The generation cap on each technology sets a quarterly maximum which, translated, means that even if there is demand, suppliers will be prohibited from meeting it. That is extraordinary micromanagement of an industry The industry understands that subsidies must end—there is no argument about that—but the economically sound way to respond to that is to reduce subsidies at a rate that allows the industry to continue to grow and move to a stable, subsidy-free footing. That is not what the Government are doing, alas. The rug is being pulled from underneath the industry, reducing the size of the workforce by up to half, just when other countries around the world have spotted the business opportunities in this sector and are increasing their investment. The steepness and abruptness of the Government’s proposals caused shockwaves across the industry—security, confidence and investment all undermined at a stroke The Secondary Legislation Scrutiny Committee states: "We draw this Order to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House" The committee further notes that there was a very high level of opposition to the DECC proposals in the responses to its consultation from the renewables sector, with a total of 54,630 written responses, of which 2,634 were unique responses. The majority objected to the proposed deployment caps and 90% disagreed with the proposed generation tariffs. Following the consultation, the Government made some changes: the reintroduction of the pre-accreditation scheme; the lessening of the reductions to the feed-in tariffs from 87% to 65%; and making tariff bands clearer—which are all very welcome. I have no doubt that the Government will argue in this debate that they moved following those representations, but I do not believe that they have moved one iota beyond their originally intended position Our renewable industries have been remarkably successful. In the new low-carbon sector in the United Kingdom, 11,500 companies are involved with 460,000 people turning over, in 2013, about £120 billion. The major player is solar. This is good for the economy and for the planet. The deployment limits will severely impact on the size of one of the cheapest low-carbon energy options just at the very moment that there is a need for greater deployment of renewables. Only one week ago, Ban Ki-moon said: "I call on the investor community to build on the strong momentum from Paris and seize the opportunities for clean energy growth. I challenge investors to double—at a minimum—their clean energy investments by 2020" However, investors will not come here. We are going in the wrong direction.