Renewables Obligation Order 2006 (Amendment) Order 2007

I thank the Minister for explaining the order at considerable length—I am sure that we have all benefited. Renewable sources of energy clearly have an essential role to play in reducing the carbon emissions that cause global climate change. We on these Benches are committed to supporting the development of a viable renewable energy sector inthe United Kingdom and, indeed, to encouraging the development of renewable generation sources worldwide. The renewables obligation—the Government’s present approach to supporting renewable sources of energy—has increased the amount of United Kingdom electricity coming from renewable sources, which is to be welcomed. However, the policy has not been without its problems. Perhaps the Minister could explain why the renewables obligation presently costs up to seven times more than other government policies per unit of carbon abated and why the Government have hitherto ignored micro-renewable energy sources. Furthermore, it is widely acknowledged that the Government have created perverse incentives whereby generators deliberately limit the amount of renewable electricity they produce. What action are the Government proposing to take to amend the incentive arrangements so that those practices cease? Clearly, there remains an urgent need for improvement. We are looking at ways of reforming the renewables obligation so as not only to put these problems right but also to develop renewable energy sources faster. I have only a couple of further questions for the Minister at this stage and would be most grateful for answers. It appears from note 4.1 to the Explanatory Memorandum that a licensed electricity supplier, producing electricity from a renewable source, will be able to discharge its obligation by producing renewable obligation certificates relating to renewable electricity, which is not supplied to customers. From what the Minister said, I think I understand that this is so that a producer who produces renewable energy for its own use is not adversely prejudiced by the system. That seems right and fair. After all, it would mean that the producer is not using electricity which otherwise might have come from a non-renewable source. Will the Minister confirm that I have got that right and help me with this question as well? How will the order prevent a situation in which a licensed electricity supplier, whose main business is the production of power from a fossil fuel source, might install, say, a wind-powered turbine, in a place where there is adequate wind to produce energy only at times of day when there is no market for it? Although it is a completely spurious project, the company is nevertheless able to claim its full allowance of ROCs. Paragraph 7.2(f) of the Explanatory Memorandum, which I think expands upon Article 3(3) of the order—the Minister spent some time on this—provides that a fuel which is not biomass is to be treated as biomass when it is used with at least one other fuel and 90 per cent or more of the energy content of those fuels is derived from biomass. Am I right in deducing that the purpose of this is to allow the use, alongside biomass, of other energy sources such as straw, which, although they are not defined as biomass—for example, because they are not grown specifically for electricity generation purposes—are nevertheless renewable? Whether or not that is the case, how does the order prevent such materials as—to take an extreme case—diesel, which might have become slightly polluted so that it cannot be used for its intended purpose, being used legally under this loophole? I reiterate that we are committed to and supportive of the development of a viable renewable energy sector. I look forward to the Minister’s answers to these and other questions.