Feed-in Tariffs (Closure, etc.) Order 2018 - Motion to Regret

Part of the debate – in the House of Lords at 6:48 pm on 4th March 2019.

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Photo of Lord Teverson Lord Teverson Chair, EU Energy and Environment Sub-Committee, Chair, EU Energy and Environment Sub-Committee 6:48 pm, 4th March 2019

My Lords, I thank the noble Baroness, Lady Jones, for raising this issue and bringing it to the Floor of the House. I commend her passion about the subject; it is completely justified. We should remember that feed-in tariffs have been amazingly successful. As we see from the Explanatory Memorandum and the commentary from the Secondary Legislation Scrutiny Committee, some 800,000 feed-in tariffs have been applied over the period in which they have been in force. One of the great things about them is that they democratise the fight against climate change. Whether they are microschemes or smaller schemes, they allow households, communities, small groups and small businesses to participate in providing renewable energy to the energy system and decarbonising our economy.

I am proud to say that FiTs came in in 2010 and were implemented by the coalition Government as part of the work of the previous Labour Government. The announcement that they would end came in 2015—a dreadful year for climate change—when the Conservative majority Government took over and we had announcements about this, the end of carbon capture and storage experiments, the end of zero-carbon homes and many other examples of decarbonisation and “all that green crap” disappearing from our legislation and our climate change targets.

As was shown during the coalition period, Liberal Democrats agree as much as anybody else that renewables and the public money put into them need to provide value for money. I have no problem with tariffs being brought down to reflect cost levels, as long as that is done in a smooth way that industry can predict, whereby the rate of return remains sensible for investors, whether they are firms or households.

What we have here is the stopping of the system altogether. Once again, it is an example of the green vandalism we have seen so much of in renewables, affecting jobs and green industry. There has been a failure to provide continuity of employment and skills, and no growth of private-sector green businesses. This secondary legislation is an example of that. We have taken away one of the ways in which communities, households and small businesses can participate, resulting in another body blow to the small-scale renewables industry.

The noble Baroness referred to the export tariff. I find it unfathomable. Claire Perry, the Minister for climate change, said that there will be export payments, but there was a major gap between that and the original announcement of this government policy. That meant the industry had a major shock, and only later was that repaired by some very vague references. The consultation period has not ended. We come to the end of FiTs on 31 March, and we are bound to have a gap during which the industry will not know what is happening. I do not know what went through BEIS’s mind as a department. From 1 April—very appropriately—consumers were going to give free energy to major energy companies. This was one of the greatest ironies and a huge political mistake. Yes, the department has decided to change that, but very late and leaving a gap. We still do not know what the change is.

Turning to another government policy failure, I would like to ask the Minister about smart meters. Monitoring what is exported by customers through smart meters is the only way I can see the export tariff being repaired and brought in. That seems the way the Government are likely to go. Will SMETS 1 meters, which are often installed when people change electricity supplier, be able to cope with future export tariffs? Can the Minister tell us when the communications issues that almost completely stopped SMETS 2 meters being used in the north of the UK will be solved? Only after that is done can I see any future form of export tariff working in practice.

The issue comes back to the Government’s inability to carry out its smart meter rollout program. How do they get SMETS 1 meters to actually communicate with the DCC? How quickly will that happen? When will we sort out the communication problems with SMETS 2 meters that affect half the UK?