Energy Bill

I should like to join in the congratulations to the hon. Member for Nottingham, South (Alan Simpson) on bringing forward new clause 4, and on the elegant and persuasive way in which he proposed it. I am happy and honoured to be one of the new clause's co-signatories. The hon. Member for Nottingham, South has gathered an extraordinary coalition to support new clause 4. At the last count, 276 hon. Members had signed the early-day motion, and the hon. Gentleman has managed to unite the right hon. Member for Wokingham (Mr. Redwood) at one extreme with the hon. Member for Bethnal Green and Bow (Mr. Galloway) at the other—something that must be virtually unique. He has also brought the National Farmers Union together with Greenpeace, and the TUC with the Country Land and Business Association, and he has generated wide support in the renewable energy sector. For me personally, though, the icing on the cake is that the hon. Member for Nottingham, South has got the support of Lily Allen. That is extremely welcome: I am sure that he will agree that ““All Right Still”” is a work of genius, and that ““Lily and Friends”” is a much underrated show. If the Minister were to accept new clause 4, I am sure that the hon. Gentleman would put in a good word, so it is possible that we will see the Minister on Lily's sofa before too long. That would be great. More seriously, the Government's direction of travel on this matter has been positive, but once again it seems to be leading us towards more consultation, and possibly yet another energy Bill. The Government seem reluctant to accept even the modest and flexible powers set out in new clause 4. Oppositions are quick enough to criticise Ministers who want to take on too much power, but this Minister should seize this opportunity to be praised from all sides of the House for taking on at least some powers that we all want him to have. More delay would be a serious concern, as it would mean that we would drift on with this matter into 2009 or 2010, with further primary or secondary legislation—perhaps both—needing to be discussed. The question is why would we need to delay further, when so much work has been done already? The Government commissioned a world-leading piece of work to analyse policies for climate change mitigation in detail. It is called the Stern report, and it addresses the question of feed-in tariffs in some detail. Stern says:"““Comparisons between deployment support through tradable quotas—" in other words, the sort that we have already—"““and feed-in tariff price support suggest that feed-in mechanisms achieve larger deployment at lower costs. Central to this is the assurance of long-term price guarantees…the levels of deployment are much greater in the German scheme and the prices are lower than comparable tradable support mechanisms””." Stern goes on to say:"““Contrary to criticisms of the feed-in tariff, analysis suggests that competition is greater than in the UK Renewable Obligations Certificate scheme. These benefits are logical as…uncertainty…discourages investment and increases the cost of capital as the risks associated with the uncertain rewards require greater rewards.””" In other words, the price guarantee delivered by feed-in tariffs offers a better environment for investment. The investment that has been delivered in Germany is striking, as it has engaged a far wider array of investors than the traditional energy companies. The Renewable Energy Association has pointed out that just 10 per cent. of investment in the German feed-in tariff scheme has come from the major energy companies, while 90 per cent. has come from private individuals, private investors and municipal energy companies. That is a remarkable opportunity and a key part of the success of the German scheme. That is why the German Federal Environment Ministry expects the scheme to save 52 millions tonnes of CO2 in 2010 alone, and why Germany has 10 times more wind power than us, according to Greenpeace, and 300 times more solar power. That is why Germany benefits from 170,000 people working in the renewable energy sector, which is worth €8.7 billion to its economy. If Stern is not enough, there is further Government-commissioned advice. Their specialist low-carbon technology agency, the Carbon Trust, has also addressed feed-in tariffs. Its July 2006 report said:"““The most efficient solution in terms of cost per unit of energy and achieving maximum offshore wind capacity by 2015 involves moving away from the current RO towards a fixed mechanism… Feed-in tariffs have been proven to be successful elsewhere (Spain and Germany) in generating significant deployment of low-cost renewable energy. The analysis suggests that a Renewable Development Premium””—" a feed-in tariff—"““in the UK will result in 8.8GW of additional wind capacity by 2015, when combined with additional funding… This is c.3.5GW more wind capacity than the base case representing the current RO policy””." If all the work, the views of the agencies and the consultations are not enough, will the Minister listen to the Secretary of State? On Second Reading, he said:"““Germany has benefited from a consistently supportive policy for renewables since the early 1990s, and it is paying dividends. That clarity and consistency of approach has been a big part of Germany's success, which we celebrate with our German colleagues…UK renewables investors have highlighted certainty and consistency as two of the factors that will be crucial to continued and rapid growth and development of renewables in the UK.””—[Official Report, 22 January 2008; Vol. 470, c. 1368.]"