Clause 4 - National targets for microgeneration
Climate Change and Sustainable Energy Bill
3:30 pm
Mark Lazarowicz (Edinburgh North and Leith, Labour)
The new clauses are an alternative to clause 4, and amendment No. 29 is a consequential amendment, dependent on the replacement of clause 4. The clause requires the Secretary of State to establish national targets for the take-up of microgeneration through CO2 reduction or the installation of a number of microgeneration units. I want to replace this clause and clause 6 with alternative provisions that are designed to have the same effect.
I invite the Committee to remove clause 4 and replace it with new clauses 5 and 6 and amendment No. 29. The Government and Department of Trade and Industry officials have put it to me that one problem with the clause is that at this stage it is difficult to say what the targets should be, because the potential for technology is still being assessed and improved. I accept their argument, as it is valid. If a specific requirement to set a target with a specific figure were put in place, the question, “What should that figure be?”, could very well be put. It would be difficult to provide a specific answer, and we might end up setting unrealistic targets. They might be too low or too high, and we might not achieve the objective of providing a clear policy direction, which is the whole purpose of national targets.
What led me to propose national targets was the persuasive argument that moving towards targets is important, because it provides the market with the necessary certainty to persuade investors to invest the hundreds of millions of pounds that is needed to enable the mass production of microgeneration devices. One should expect that to lead to a price reduction for consumers of such devices, and, in due course, a virtuous circle in which price reductions lead to increased demand, leading to further investment, further price reductions and the further installation of microgeneration devices.
The advice that I have received is that in the case of many microgeneration devices, once the stage of mass production is reached, the length of time that a consumer has to wait before they start to see a pay-back from their investment can reduce from five, 10 or even 20 years, as it is at the moment, to three, five or seven years, which obviously changes the whole dynamic of encouraging consumers to invest in microgeneration. We must therefore work towards a situation in which we can set the framework to allow the targets to be introduced once we are clear what those targets should be.
I acknowledge the assistance of the Department of Trade and Industry, as well as of industry, various outside organisations and NGOs involved in discussions about these targets, in drafting the new clauses. Under new clause 5, the Government would be given a requirement to designate national microgeneration targets between 1 November 2008 and 31 March 2009. Under that requirement, the Secretary of State would also be allowed to take into account whether it would be appropriate to designate targets at that point. The factors that he would have to take into account in deciding whether to set targets are set out in new clause 5.