Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008

rose to move, That the Grand Committee do report to the House that it has considered the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008. The noble Baroness said: Within their wider energy policy context, the Government are firmly committed to a major expansion of renewables and low-carbon technologies as part of a diverse energy mix. Generating low-carbon and renewable energy depends on developing reliable technologies, particularly appropriately installed microgeneration. Through this statutory instrument, the Government are seeking to define more precisely those sources of energy that they have already recognised as microgeneration and create a legal framework within which developing and possible future technologies can be encouraged. This statutory instrument is also influenced by the development and marketing of air source heat pumps since the list was originally drawn up in 2006. Accordingly, it expands the major statutory definition of ““microgeneration”” to include technologies which wholly or mainly rely on, "““heat from air, water or the ground””." The Committee will be familiar with the term ““microgeneration”” which is widely used to define either low-carbon or renewable energy technologies that produce under 45 kilowatts for heat and 50 kilowatts for electricity. Roof-mounted photovoltaic panels and small and micro wind turbines are increasingly common but there are also micro combined heat and power units, micro hydro technologies, domestic biomass generators, fuel cells and various kinds of heat pump. The Climate Change and Sustainable Energy Act 2006 defines ““microgeneration”” for the purposes of that Act and is relied upon in the Electricity Act 1989, the Gas Act 1986 and the Electricity and Gas (Carbon Emissions Reduction) Order 2008. The legal definition of ““microgeneration”” is set out in Section 26(1) of the Climate Change and Sustainable Energy Act 2006, and provides that, "““microgeneration”” means the use for the generation of electricity or the production of heat of any plant (which, for this purpose, includes any equipment, apparatus or appliance)—""““(a) which, in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in subsection (2), and""(b) the capacity of which to generate electricity or (as the case may be) to produce heat does not exceed the capacity mentioned in subsection (3)””." The capacity mentioned in subsection (3) is 45 kilowatts for the production of heat and 50 kilowatts for the generation of electricity. The list of sources and technologies is set out in Section 26(2) of the Climate Change and Sustainable Energy Act, which can be expanded or amended. Section 26(4) provides that Section 26(2) may be amended by adding to the list of sources of energy and technologies when the Secretary of State considers that the use of that source of energy or technology would cut emissions of greenhouse gases in Great Britain. The Secretary of State considers that the use of heat from air, water or the ground would cut emissions of greenhouse gases in Great Britain. The Energy Act 2004 also provides a statutory definition of microgeneration for the purposes of that Act and is relied on in the Income Tax (Trading and Other Income) Act 2005, the Taxation of Chargeable Gains Act 1992, the Town and Country Planning (General Permitted Development) Order 1995 and some sections of the Climate Change and Sustainable Energy Act 2006. That definition is found at Section 82(6) and (7) and is framed in the same manner as the definition in the Climate Change and Sustainable Energy Act 2006. Section 82(7) includes the same sources or technologies as are currently in Section 26(2) of the Climate Change and Sustainable Energy Act 2006, but with an additional category: "““other sources of energy and technologies for the generation of electricity or the production of heat, the use of which would, in the opinion of the secretary of state, cut emissions of greenhouse gases in Great Britain””." This statutory instrument will not affect the definition of microgeneration in the Energy Act 2004. In accordance with Section 82(7)(j), however, since the Secretary of State is of the opinion that the use of heat from the air, water or the ground would cut emissions of greenhouse gases in Great Britain, the definition of microgeneration in that Act must be read as including heat from the air, water or the ground. Noble lords will be aware that the heat pump is a technology that transfers low-grade heat energy from a medium such as the ground, the air and water to another location such as a building. Air-source heat pumps work on similar principles to ground-source pumps, but they are generally regarded as less efficient since the ratio of heat energy outputs to energy inputs is less. Instead of using coils in the earth, a fan is exposed to air. The pump can be attached to the exterior wall of a building such as a ventilation unit. Interior air-source heat pump units can be fitted in kitchens and may resemble a domestic fridge freezer. At the time of the passing of the Act, it was the intention that the definition of microgeneration included ground-source heat pumps. The Government wish to put the issue beyond doubt. ““Geothermal”” generally refers to heat from geothermal heat. While that can be found near the surface, for example in Iceland, in the UK it would require deep boreholes, such as the one in Southampton which is 1,800 metres deep. Ground-source heat pumps that do not use boreholes draw on solar energy stored in the ground. Although solar energy is in the current list, that generally refers to photovoltaic panels that absorb energy directly from the sun’s light, rather than to solar heat energy stored in the ground. Water-source heat pumps work on similar principles to other heat pumps but use coils submerged in water. The Government are seeking to put these issues relating to heat pumps beyond doubt. Consultations on this proposed amendment have taken place with Defra, Ofgem and the microgeneration industry. They fully support the inclusion of the proposed amendment to the list. I commend this draft order to the Committee and I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)