Dynamic Demand Appliances Bill [HL]

Part of the debate – in the House of Lords at 12:52 pm on 24th March 2006.

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Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary, Department of Trade and Industry, Parliamentary Under-Secretary (Trade and Industry) (Science and Innovation) 12:52 pm, 24th March 2006

My Lords, the issues raised in the Bill are extremely important, and for those of us wrestling with the Company Law Reform Bill, which has 980 clauses, a Bill of two clauses has an immense attraction. While we are not supporting the Bill, its concerns are ones which the Government intend to address. I therefore welcome the opportunity given us today by the excellent speech by the noble Lord, Lord Redesdale, to respond to the noble Lord's proposal, and to set out how the Government are looking to understand the contribution that dynamic demand appliances can make to energy efficiency and security of supply.

I hope that, by the end of my comments, the noble Lord will see that there is little difference between us in the overall belief that these technologies can make a contribution to energy efficiency. There may be differences in the implementation, but I hope that I can demonstrate to noble Lords that, in general, the Government are on the same wavelength as the noble Lord.

Dynamic demand technologies are technologies which enable the consumption or generation of electricity to be controlled or adjusted automatically according to network frequencies. They are devices that can adjust the demand of our appliances to help balance the load on the grid. If they sense, through an assessment of the frequency levels, that demand is growing, then they will, for instance, turn the fridge down. In theory that will help energy efficiency as well as security of supply at peak periods. We all know of the surge that takes place at half-time during cup finals. These appliances ought to help manage the demand/supply relationship at those times.

The overall benefit of these technologies is that a smoothed demand pattern leads to reduced need for back-up generation. The figures that I have suggest that that could save up to 0.6 million tonnes of carbon per year, although I suspect that both my figures and those of the noble Lord are speculative.

We are already taking steps to see how we can harness this technology. As the noble Lord said, Clause 15 of the Climate Change and Sustainable Energy Bill currently making progress in the other place will impose a duty on the Secretary of State to publish a report on the contribution that dynamic demand technologies could make to reducing greenhouse gas emissions in Britain. The report will also address whether it is appropriate to take any steps to promote the use of such technologies, and, if it is, what those steps might be. We will produce this report no later than 12 months from commencement. I can assure the noble Lord that appropriate resources will be found to produce a thorough report. Noble Lords might like us to go further than that, but without this initial work it will be difficult to target any support or understand where there might be a market failure. We have done very little proactive work in this area to date, although we have kept up to date with developments. It is clear that these technologies deserve closer investigation to establish how much of a contribution to energy goals they can make. Clearly, any such study would have to address the three questions which the noble Lord raised before we could get an understanding of the benefits and costs.

Also, within our liberalised market we need to understand who stands to benefit from an uptake in these technologies. It would seem that the system operator might benefit, as might suppliers who pay more for their electricity during the peak periods. Generators too have a stake in that the decision to invest to cover the peak periods is often a difficult one—investing to build capacity that may be used for only a few hours a week needs careful consideration. However, if private business is to benefit, it should have a role in developing and encouraging the take-up of these appliances. That, among other issues, is something we need to explore.

The noble Lord's Bill also asks the Secretary of State to establish a standard for dynamic demand appliances. I am not sure why the noble Lord wants to leap immediately to a legislative and regulatory solution. It might be worth while for industry to consider its own voluntary scheme before we burdened it with more legislation from Parliament. I agree with the noble Baroness, Lady Miller, that of equal interest is how manufacturers can work to minimise the amount of energy used in domestic appliances. I am not talking only about when appliances are being used, which is important, but also when they are not. We all know about the waste caused by the standby button. Strange though it may seem, a typical microwave oven consumes more electricity powering its digital clock than it does heating food. While heating food requires a hundred times as much power as running the clock, most microwave ovens stand idle in standby mode more than 99 per cent of the time.

Moreover, if we are deeply concerned about obesity in children, perhaps we should encourage them to stand up and walk to the television to turn it off.

These issues will be covered by Defra in its market transformation programme, which the noble Lord, Lord Redesdale, mentioned, and which is looking with industry and other stakeholders at the environmental performance of products. Could dynamic demand appliances be included in the Climate Change and Sustainable Energy Bill? The short answer is that in theory there is no reason why dynamic demand appliances cannot play a part. I am sure that we will debate that further when that Bill comes to this House.

Dynamic demand technologies are already here and they can support our energy goals. However, we need to be sure that any approach we wish to take will help to accomplish that in the most beneficial and cost-effective way. I congratulate the noble Lord on drawing the House's attention to the opportunities that the technologies open up. I also hope that my comments offer sufficient reassurance to noble Lords that the Government are determined to understand what contribution dynamic demand appliances can make. If our report shows that the work is needed to help deliver the potential, we will do so.