As you have said, Madam Deputy Speaker, there are many amendments in this group and I will try to be as brief as possible in explaining each set.
The first set, amendments 1 to 15 and amendment 90, extend the decarbonisation provisions to Northern Ireland in order that any decarbonisation target range would cover the whole of the UK power sector. That was always our intention, but it was right that we should seek the agreement of the Northern Ireland Executive before making these amendments. The Assembly has since passed a legislative consent motion to confirm its support.
Turning to part 2 of the Bill, Lords amendments 25, 27 and 29 give effect to three substantive changes to contracts for difference. The remaining amendments on this topic—amendments 16, 19, 22, 23, 26, 28 and 30 to 34—are consequential.
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The first substantive change, Lords amendment 25, gives the Secretary of State the power to issue and revise standard terms for contracts for difference. Lords amendment 27 provides for the Secretary of State to set out how the system operator will run the allocation process, particularly through an allocation framework. Lords amendment 29 gives the CFD counterparty the power to agree minor and necessary modifications to the standard terms prior to contract signature. Those three new clauses provide clarity on how the contracts for difference will operate. In doing so, they ensure that appropriate flexibilities are in place to manage CFDs for the years to come at least cost to consumers.
Several Lord amendments on electricity market reforms are in response to recommendations of the Delegated Powers and Regulatory Reform Committee in the other place. The Government are grateful for its recommendations, which are given effect by Lords amendments 17, 45, 46 and 102.
Lords amendments 18, 47 and 103 make explicit provision that any regulations relating to contracts for difference, capacity market or investment contracts are not to be treated as hybrid. Lords amendments 24, 48, 63 and 98 to 101 are further minor and technical amendments to clarify drafting and confirm intentions.
On electricity demand reduction, Lords amendment 49 adds a statutory reporting requirement. The Government have previously committed to report to Parliament the results of the electricity demand reduction pilot, and the amendment puts that commitment on a statutory footing.
Lords amendments 50 to 53 relate to the important matter of access to market for independent renewable generators. They allow the Secretary of State to establish a scheme to promote the availability of power purchase agreements, which could provide generators with access to an off-taker of last resort. That mechanism aims to benefit both investors and independent renewable generators by providing a guaranteed backstop route to market at a specified price, and is intended to enable independent generators to use a wider range of possible off-takers and to contract for shorter-term PPAs. We expect it to result in greater competition among PPA providers and to support smaller suppliers, as generators will not have to rely on large incumbents with strong credit ratings to sell their power in the market. Ultimately, the off-taker of last resort aims to help level the playing field, bringing more competition and innovation into both the generation and off-taker markets. The Government are committed to consulting on the introduction of the mechanism and, subject to that, we intend the scheme to be in place by the time the first CFDs are signed.
Lords amendments 54, 58, 91, 92, 94 and 97 provide the Government with the power to close the renewables obligation to new capacity in Great Britain, and enable the Northern Ireland Executive to make similar provision. That will ensure consumers and industry have confidence that the planned renewables obligation closure will take place consistently across Wales, England and Scotland.
Lords amendments 55 to 57 remove the power for regular reviews of support levels under the fixed-price certificate scheme, and require the Secretary of State to exercise certain fixed-price certificate scheme powers in a manner that replicates the renewables obligation where that is reasonably practicable, providing greater certainty for investors.
Lords amendments 60 to 62 and 106 to 108 provide that, as I told the House earlier, fossil fuel plants with a complete system for carbon capture and storage will be exempt from the emissions performance standard for three years, starting from the point at which a project is brought into operation. The matter was raised early in the Bill’s passage through this House, and I hope that such a policy amendment is welcome. The exemption will be available to all future carbon capture and storage projects until the end of 2027.
On part 3 of the Bill on nuclear regulation, Lords amendments 64 and 65 respond to a suggestion from the other place to define “associated sites”. Lords amendments 66 to 72 are in response to recommendations from the Delegated Powers and Regulatory Reform Committee, and provide greater parliamentary oversight. The remaining amendments to this part—Lords amendments 73 to 75 and 109 to 112—are minor changes for greater clarity and drafting accuracy.
Lords amendments 76 to 86 relate to the important matter of domestic tariffs and the need to ensure that consumers are put on the cheapest tariff that suits their preferences. The amendments make it clear that the information that suppliers will be required to include on bills must be clear and easily understood. They make the order-making power in clause 127 subject to the negative resolution procedure. They also give the Secretary of State the power to require energy suppliers to provide a breakdown of their costs to consumers, including the costs of environmental and social programmes.
Amendment (a) to Lords amendment 76, which was tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), would give the Secretary of State the power to require suppliers to supply customers with a breakdown of their fuel mix for electricity generation, and to provide details of the corporation tax that they have paid relative to their profits. On the first of those suggestions, I hope that she will be pleased to hear that suppliers are already required, through their licence conditions, to provide their customers with a fuel mix disclosure that sets out the sources from which the electricity that they supply has been generated and the environmental impact of generating electricity from those sources.
On the corporation tax proposal, the level of corporation tax that is payable by a supplier is not directly related to the volume or price of the electricity and gas that are supplied. It will be affected by other things, such as the treatment of any tax losses that are carried forward from earlier periods, group tax arrangements and group funding structures. Attempts to link the corporation tax that is payable in a certain period with energy bills are therefore likely to be misleading. The Government therefore do not support amendment (a) to Lords amendment 76.
The amount of corporation tax that is paid by a company is disclosed in its annual report and accounts. We have asked Ofgem to consult on any further steps that are needed to build confidence in the market through greater transparency in revenues, costs and profits. We
have also asked Ofgem to deliver a full report on the transparency of financial accounts and on ways in which that could be improved.
The Government passed Lords amendments on fuel poverty, feed-in tariffs and smoke alarms. I hope that the House will welcome the introduction into the Bill of those three new areas in the other place. We are committed to tackling fuel poverty. Lords amendments 87, 93 and 95 amend the Warm Homes and Energy Conservation Act 2000. Under those amendments, we will put in place a new statutory target for tackling fuel poverty in England. That target will be supported by a new strategy that is informed by the improved definition of fuel poverty that we are adopting, which was proposed by Professor Hills in his independent review of fuel poverty.
That definition will replace a flawed measure that included higher income but inefficient homes, which should not be the focus of fuel poverty policies. The sensitivity to energy prices of the old definition created an ever-changing picture of the households that were fuel poor, making the design and implementation of effective policies extremely difficult. The amendments in the other place have put in place the right framework to ensure that successive Governments have the needs of the fuel poor at the heart of their energy policies and that they can be held to account for the effectiveness of their actions.
Those amendments have been welcomed by the chair of the Fuel Poverty Advisory Group, Derek Lickorish, and by the largest fuel poverty charity, National Energy Action, because they put in place a framework for continued action on fuel poverty. The Energy and Climate Change Committee has also agreed that an elimination target was not the right approach.