Energy Bill

I am not going to devote any of my precious minutes to the nuclear question for the very simple reason that, as my hon. Friend the Member for Nottingham, South (Alan Simpson) said, it is quite irrelevant to the scale of the challenge facing us. Even if they are built, not one single kilowatt-hour will be provided from a new nuclear station to address the coming energy gap, or to help us to meet our climate change demands. Enough of nuclear—it is renewables that seriously matter at the moment, for various reasons. My right hon. Friend the Secretary of State, in opening this debate, put the issue fairly in the context of climate change. He made that the central issue, and it is a yardstick by which the Bill must be judged. I have to say that when I opened the Bill I was painfully disappointed at its lack of promotion of renewable energy. It has essentially only one provision relating to that matter, and I am afraid that I want to argue about it. Having said that, I guess it is not such a bad Bill, provided that it is very significantly amended. But without significant amendment, it is a feeble Bill that does not address the real issues. The EU renewable energy target is 20 per cent. of total energy, not just electrical energy. That figure translated into British terms means, according to various estimates, that between 37 per cent. and 47 per cent. of our electrical generation will have to come from renewables by 2020. We are struggling badly enough to meet our existing renewable electricity generation targets. We will miss the 10 per cent. target—there is no doubt about that—and 20 per cent. by 2020, if we continue on a business-as-usual basis, is looking pretty sick. Now is the time. There is a need, an absolute imperative, to make a commitment to make a step change in our energy policy. Now is the time to address that issue in the Bill, but it is not there. I find that deeply strange, deeply worrying and more than a little disappointing. Let us talk about some of the possible prospective changes. I shall jump into the renewables obligation certificates versus feed-in tariffs argument as well. I am not just following—the records will show that I have been advocating feed-in tariffs, as opposed to ROCs, for years. The ROC is just about the most inefficient, expensive and administratively cumbersome way of promoting renewable energy that anyone could possibly think of. It is very British. One just has to look at the comparison between the German experience, with its feed-in tariffs, and our own. The Germans have deployed about 10 times as much renewable energy in the same time for no greater public cost. Therefore, per gigawatt of renewable energy deployed in Germany, the feed-in tariff system has been much cheaper to the public purse. I know that the Government are concerned about investors. They want to protect existing investors, and they do not want uncertainty, but the ROC system has uncertainty built into it, in that the value of a ROC is not certain. With a feed-in tariff system, the values are certain and investors can invest with confidence and certainty. Whether one goes ahead with the ROC system and bands it or uses feed-in tariffs, grandfathering arrangements must be made to protect existing ROC holders. Does it therefore matter whether one is grandfathering for a banded ROC system or a feed-in tariff system? I am confident that, if we take the opportunity to move to a feed-in tariff system now, we will have a much greater chance of succeeding in our objectives than if we do not. It is worth doing and will get us more gigwatts for the buck. I want to consider Ofgem. During the passage of the Energy Act 2004, I tabled an amendment in Committee to give Ofgem a primary responsibility for promoting renewable energy. It was passed—the first time, as far as I know, that a Government had been defeated in Committee since the Rooker-Wise amendment approximately 30 years ago. I was very popular with the Chief Whip. Of course, the amendment was overturned on Report, but, as the Bill progressed through the House of Lords, Ofgem was given a secondary duty towards sustainable energy. Has that made any difference to Ofgem's performance? I cannot find anyone in the industry who has noticed it. Ofgem pays serious heed only to its primary responsibility. If we are to get more out of Ofgem, we must make sustainability a primary duty. In the modern context, sustainability is far more important than Ofgem's current obsession with security of supply. There is no need to worry about security of supply if we operate a proper energy policy. We must amend Ofgem's remit. Ofgem has not performed impressively on consumer protection. Did it succeed in stopping the energy companies making billions in windfall profits as a result of the failings of the first phase of the EU emissions trading scheme? No. Is Ofgem succeeding in protecting consumers in any way from the oil price increases that are fed straight through by the energy companies to consumers, putting, as my hon. Friend the Member for Nottingham, South reminded us, another 500,000 people into fuel poverty? No, it blatantly is not. Has Ofgem managed to help with grid connections, over which it has a great deal of influence? No. However, Ofgem was seriously influential in forming our current British electricity trading and transmission arrangements, which include transmission charges, based on location. The further a generator is from a notional centre just north of Birmingham, the greater the charge. Where are the renewable resources in this country? They are as far as possible from that centre in Birmingham. That must be revisited. Time is against me. I have a list of prospective amendments, which my hon. Friend the Minister for Energy will receive in due course. We have an opportunity to make a difference. The Bill in its current form will not, and it must therefore be seriously amended and improved.