New Clause 3 - Renewable Energy Authority

Energy Bill [Lords] – in a Public Bill Committee at 3:45 pm on 22nd June 2004.

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'(1) There shall be a body corporate to be known as the Renewable Energy Authority (''the REA'').

(2) The REA is not to be treated—

(a) except so far as necessary for the purposes of its function in promoting the development and deployment of renewables set out in subsection (3), as performing any duty or exercising any power on behalf of the Crown; or

(b) as enjoying any status, immunity or privilege of the Crown; and the REA's property is not to be regarded as property of the Crown, or as held on behalf of the Crown.

(3) The REA shall incorporate the Carbon Trust and shall—

(a) promote research and development in renewable energy by grant or contract as is appropriate, and

(b) promote the commercial deployment of renewable energy.

(4) The REA shall be funded from sums paid to it by the Secretary of State.'.—[Dr. Desmond Turner.]

Brought up, and read the First time.

Photo of Desmond Turner Desmond Turner Labour, Brighton, Kemptown

I beg to move, That the clause be read a Second time.

Photo of Mr Bill O'Brien Mr Bill O'Brien Labour, Normanton

With this it will be convenient to discuss the following: New clause 4—Constitution of the REA

'(1) The REA—

(a) shall consist of not fewer than seven and not more than thirteen members; and

(b) shall have a membership comprising both non-executive members and executive members.

(2) The non-executive members shall be—

(a) a chairman appointed by the Secretary of State; and

(b) a number of other persons appointed by the Secretary of State (after consultation with the chairman); and (subject to subsection (1)) it is for the Secretary of State to determine how many non-executive members there are to be in addition to the chairman.

(3) The executive members shall be—

(a) a person appointed by the non-executive members to be the REA's chief executive; and

(b) the other persons (if any) appointed by them (after consultation with the chief executive) to be executive members in addition to the chief executive;

and it is for the non-executive members to determine (subject to subsection (8)) whether there are to be executive members in addition to the chief executive, and (if so) how many.

(4) The approval of the Secretary of State is required for the appointment of the chief executive.

(5) Before—

(a) appointing a person to be the chairman or otherwise to be a non-executive member of the REA, or

(b) approving the appointment of a person to be the chief executive, the Secretary of State must consult the Scottish Ministers.

(6) Subsection (5) may be satisfied by consultation that took place wholly or partly before the commencement of this section.

(7) If there are executive members in addition to the chief executive, each must be a member of the staff of the REA.

(8) Where the Secretary of State so provides by a direction to the REA, the non-executive members must secure that the number of executive members in addition to the chief executive—

(a) is not less than the minimum set by the direction; and

(b) does not exceed the maximum so set; and the direction must not set a maximum of more than three.

(9) The Secretary of State must exercise his powers under this section to secure, so far as practicable, that the number of executive members is at all times less than the number of non-executive members.'.

New clause 5—REA: powers for carrying out functions—

'(1) The REA shall have power, for the purposes of carrying out its functions, to do all such things as appear to it to be likely to facilitate the carrying out of its functions, or to be incidental to carrying them out.

(2) The powers of the REA include, in particular—

(a) the power to promote research and development in renewable energy by grant or contract as is appropriate, and

(b) the power to promote the commercial deployment of renewable energy.'.

New clause 6—REA: Strategy for carrying out functions—

'(1) It shall be the duty of the REA—

(a) to prepare its strategy for carrying out its functions; and

(b) from time to time to revise that strategy.

(2) The strategy prepared must include both—

(a) the REA's strategy for promoting research and development in renewable energy by grant or contract as is appropriate; and

(b) its strategy for promoting the commercial deployment of renewable energy.'.

Photo of Desmond Turner Desmond Turner Labour, Brighton, Kemptown

We have completed our discussions of the amendments to the Bill so we can relax a little, but these new clauses make a serious point, so I do not want the hon. Member for South-West Hertfordshire (Mr. Page) to get over-excited. The new clauses could be described as being serious and probing in nature, but probing none the less.

The new clauses represent the final policy plank that the Science and Technology Committee, on which I served, put forward in its report last year on the subject of moving towards a non-carbon fuel economy. We identified three principal policy legs to provide the mechanism to achieve the Government's declared climate change objective of renewable energy being deployed at 10 per cent. by 2010. We are all familiar with that. However, it will not happen by accident—there must be mechanisms to make it happen.

The amendment concerning fiscal regimes, which was moved in my absence last Thursday, contained one of those mechanisms: a proposal to replace the present renewables obligation regime with a carbon tax and carbon tax credit system to provide the fiscal incentives for the development of renewable energy, clearing the potential hurdles, as we did with the amendment on the statutory duties of the Secretary of State and the regulator. I was not criticising the regulator, but if the regulator were to take as read the statutory duties included in the Bill as currently drafted, that would be disadvantageous, as we know from recent experience—until the past few months, when the regulatory regime fortunately changed.

The final recommendation was the establishment of a renewable energy authority. The Bill already—quite rightly—establishes a nuclear decommissioning authority. That important and complex job must be done, and I agree that it is best done by a dedicated authority. In tabling proposed new clause 3, we suggest that deploying renewable energy is just as important in the current context as nuclear decommissioning. It is possibly more important, because if we do not deploy renewable energy as we need to at the rate at which we need to, we will not fulfil our climate change objectives.

Just as, after the war, the United Kingdom Atomic Energy Authority was set up to drive through the establishment of nuclear power stations, so we could usefully establish a dedicated renewable energy authority, which would subsume the responsibilities of several bodies that currently exist—for example, parts of the DTI, and the Carbon Trust—and their budgets, and bring all their functions together in one body. Its sole purpose would be to drive the deployment of renewable energy from research and development through to deployment on the ground or in the water, as appropriate. There would be savings in administrative costs, because there would be one agency instead of several separate administrations, as at present, but more importantly there would be a critical mass that would produce results. I shall not press the proposed new clauses to a vote; they are probing, but with serious intent. I commend the policy of a renewable energy authority to the Minister as worthy of consideration.

Photo of Joan Walley Joan Walley Labour, Stoke-on-Trent North

I welcome you back to the proceedings, Mr. O'Brien, which seem to be going along at great pace this afternoon. I want to speak briefly to the proposed new clauses that have been moved by my hon. Friend. I am slightly relieved to hear that he is not going to press them to a vote.

I want to take the opportunity to obtain more information from the Minister on the progress that the DTI has made and is making in respect of delivering on the whole agenda. How will we get a dedicated policy to deal with renewable energy? I am not sure whether it should be a renewable energy authority as such, or whether in the short or medium term we could set up a sustainable energy policy agency. Such an agency was recommended by the Environmental Audit Committee in our 2001-02 report, entitled ''A sustainable energy strategy? Renewables and the PIU Review''.

We must be assured that we are finding a way to promote the development and deployment of renewables. The new clauses would incorporate the Carbon Trust and ensure the commercial deployment of renewable energy. The Carbon Trust does a good job, but how much more could we do if we brought all the different strands together under one authority or one agency? We want to see a greater take-up of the available renewable energy. There is a feeling that we are not progressing quickly enough.

Could the Minister give us more information about the progress that the Government have made? I refer him to the Government's response to the Environmental Audit Committee's report, which said:

''The Government does not believe that we need new structures or organisations to support the delivery of the ambitious programme, as set out in the Energy White Paper. Instead, the Government will strengthen the analytical and strategic capability of the DTI in the area of energy policy. This will serve as the focal point of a network—a Sustainable Energy Policy Network—of departmental policy units that will be involved in delivering the White Paper's commitments.''

The agenda has moved on. The Environmental Audit Committee's eighth report of 2002-03 points out that there are many split responsibilities. We have already heard how the Department for Environment, Food and Rural Affairs has responsibility for energy efficiency. The Office of the Deputy Prime Minister is responsible for planning permissions, and the DTI has a focus on energy policy, but it is not alone.

If we could move more quickly towards a dedicated authority that could bring all these strands together, we would be in a much better position to exploit the commercial adaptation of renewables that we want to see. That would take us much more quickly on the way towards the carbon-free economy that we want and to meeting our renewable targets. There is no coherent overview of how we deliver policy on renewables. These new clauses give the Minister an opportunity to provide an update of how he is adding more coherence to delivery on renewables. We want to see progress on this issue as quickly as possible.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I warm to these new clauses, but to give justice to their contents would take a great deal of time. The

Committee will be delighted to know that I do not intend to go through them all in great detail. We have plenty of time. I understand that another two days of Committee stretch ahead of us, so it is not as if we are coming up against any time barriers. I hope that the Committee is relaxed about that.

We have to ask the basic question: why have these new clauses been tabled at all? It is not as if they are small amendments pushed in to get and elucidate information. Nearly two pages are covered with the details of the new clauses, so they were not thought up on the back of an envelope. The hon. Members involved are making a serious point. We must ask why new clause 3 is designed to establish a renewable energy authority? Why does the new clause incorporate the Carbon Trust? New clause 4 relates to the setting up of the board and its secretarial functions. It is just about the way in which the body should operate.

New clause 5 is the guts of the thing and it refers in particular to

''the power to promote research and development in renewable energy by grant or contract as is appropriate''.

Why have that new clause and that point been included? In proposing that there be a new authority to promote research and development, are the hon. Members saying to the Government that they are not happy with what Government are doing in that area? New clause 5(2)(b) refers to

''the power to promote the commercial deployment of renewable energy.''

Again, why is that provision there? Have the Government not got, somewhere in the whole area of their activity, the power to do all those things?

Why have three responsible, senior, important, respected Labour Members of Parliament tabled the new clauses? The hon. Member for Milton Keynes, North-East (Brian White) should not sell himself short, as he is a respected member of the Committee and very knowledgeable on information technology and energy. I listen with a great deal of interest and respect to what he has to say and what he recommends. I am with him on so many of these issues, as he knows. I have supported him on the aims that he wants to achieve. The fact that we have managed to get him to squeak a vote in favour of a proposal only once is by the bye. Now that he has decided to go beyond the line once, who knows? We may get him to do it a second time.

It hurts me to say this, but I believe that the new clauses were tabled because, among Labour Members of Parliament and perhaps others, particularly Conservative Members, there is a lack of trust in the Government. What is in the Bill and what will the Bill achieve? The Committee will be delighted to hear that I will not go through the various aspects of the Bill line by line, but you will agree, Mr. O'Brien—actually, you have to be neutral and above all these things. I do not know about everyone else, but I thought that hon. Members on both sides of the Committee were

shocked by the cavalier fashion in which the Minister simply wiped out clause 1. Suddenly, it was gone; forget it. There is no such responsibility for the Secretary of State. Let me remind the Committee of what the clause said:

''The Secretary of State shall have a duty to ensure the integrity and security of electricity and gas supply.''

When we came to clause 2, we asked whether there could be targets that might be matched for each area of renewables to see how they are getting on, so that we could reach the 10 per cent. target by 2010. The rest of us are as one on that—there is no disagreement—but the Minister disagreed.

When we wanted to support clause 3 on the annual report on energy efficiency—

Photo of Mr Bill O'Brien Mr Bill O'Brien Labour, Normanton 4:00 pm, 22nd June 2004

Order. Far be it from me to want to intervene on the hon. Gentleman, but he is straying from new clause 3. I ask him, given his wide experience, to stick with the business before the Committee.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I stand duly chastised by you, Mr. O'Brien, but in fact, I was going to go back through these points, because the very reason that responsible, senior Labour members of the Committee have tabled these new clauses is that there is a failure in other parts of the Bill to achieve what their new clauses seek to achieve.

If Ministers had not wiped out clauses 1, 2 and 3 in a cavalier fashion to start with, I wonder whether hon. Members would have tabled these new clauses. I was producing examples, Mr. O'Brien, to show why they have been tabled. It is hard for me to think my way into the brain of a Labour Member of Parliament—it is a real leap into the dark, the unknown and certainly the void—but I believe that Government Members have tabled the new clauses because some original clauses were wiped out with no feeling or thought whatever. Why do they want to incorporate the targets and activities of the Carbon Trust?

The aim of clause 3—to report the

''savings from domestic energy efficiency of 5 MtC per annum''— was wiped out. I can understand why new clause 3 aims to incorporate the Carbon Trust, because to do so would return us to those targets that we all wanted in the first place. That is why I spoke as I did, Mr. O'Brien. I made those remarks in a clumsy and inefficient fashion, and you were quite right to reprimand me. I hope that I have explained myself, and if I am not back in your good books I hope also that I have not incurred any opprobrium for the future.

My feeling is that if all the measures in these new clauses were in the Bill, hon. Members would not have tabled them. They felt it necessary to table them because they have nagging doubts that those targets and aims are not in the Bill. I am being absolutely serious on that point; I am worried that the Government have arranged the Bill so that they can weasel out of any commitment to achieving the energy efficiency that we all want.

Of all that I have said, I would like to put those last two sentences in heavy type and underline them, because I genuinely believe that that is the reason

behind these various proposals. I have every sympathy with what hon. Members are trying to achieve with them, and the Minister will have to work quite hard to convince me that the aims of new clauses 3, 4, 5 and 6 can be achieved through the operation of the Bill. It does not matter to me, as I am just one of an at-risk breed—a Conservative Member of Parliament—but he has to convince three colleagues, and if he does not do so, who knows? Maybe some amendments will be tabled on Report to try to redress the situation.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary, Department of Trade and Industry

Let me help the hon. Gentleman by speaking in words of one syllable and explaining clearly to him why my hon. Friends have tabled these new clauses, even if he does not understand: they care passionately about the environment, have long championed renewables, have shaped Government policy in this area and care about ensuring that this country's energy supply is both safeguarded and, just as importantly, derived as far as possible from renewables. We must not squander the future of our energy supplies, but leave energy available from which future generations can benefit.

My hon. Friends were instrumental in shaping Government policy in this respect, and I hope to offer them reassurance. We have established the Renewables Advisory Board, and I can assure them that the Carbon Trust plays a key part in that board and in shaping the critical agenda it takes on. It includes other appropriate bodies, as well as other Government bodies and devolved Administrations, and it provides expert advice to us on renewables issues.

The commitment of the DTI and the Government to renewables is second to none: as well as £117 million of capital grants to support the round 1 offshore wind farms developments, we are supporting other marine technologies.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary, Department of Trade and Industry

The Opposition may be obsessed with wind farms, but they should consider marine technologies such as the wave and tidal research and development programme, which has assisted a number of UK companies and has already led to a number of full-scale prototype devices. I understand that such progress has established the UK as a clear world leader in that area.

I pay tribute to my constituent, Professor Stephen Salter, who from the 1960s, at the department of mechanical engineering at Kings buildings, was one of the pioneers of wave power. I am sure that he joins me in taking some satisfaction from the fact that we have managed to progress that agenda after years, if not decades, of stagnation.

These new clauses are not being rejected because we doubt the sincerity of my hon. Friends or because we think that their proposals are impractical, but we believe that the purpose of new clause 3, for example—to set up a renewable energy authority—is, if not redundant, certainly largely duplicated by the Renewables Advisory Board and other bodies that are in place.

We believe that the Government have a strategy to cover the renewables energy issues that concern us all. That is the purpose of new clause 6, in placing a duty on the Renewables Advisory Board. The other new clauses would give the body the powers to carry out other functions. This is a coherent set of new clauses, but I believe that the Government are addressing each of the issues covered in a proportionate way and with a commitment that I hope my hon. Friends applaud.

My hon. Friend the Minister for Energy, E-Commerce and Postal Services is committed to that agenda. I know that he has met my hon. Friends on a number of occasions to take on board their concerns and positive suggestions. I believe that in resisting new clauses 3, 4, 5 and 6, we are not rejecting elements of the proposals as we have incorporated them firmly in the Bill. I hope that that reassurance means that my hon. Friends will not press their new clauses for inclusion.

Photo of Desmond Turner Desmond Turner Labour, Brighton, Kemptown 4:15 pm, 22nd June 2004

I thank the Minister for those remarks. He is quite right in his assessment of the motives of those who tabled the new clauses, which are not meant to be deeply critical of the Government, but he must understand that we will never be satisfied: one cannot have too much progress. The support of the hon. Member for South-West Hertfordshire is most appreciated—at least the serious parts of it. I remind him, however, that whatever any of us may have said about the DTI in expressing the feeling that it could do more with greater urgency, the legacy left by the previous Government was that the DTI had hardly heard of renewable energy. It certainly had not heard of marine technologies, and dismissed them as an unworkable, unrealistic solution of no interest whatever.

I am confident that had the political colour of Government not changed in the glorious year of 1997, things would have gone on in much the same way. However, I fully accept what the Minister said, that the DTI is organising things and that the Carbon Trust is involved. The Committee felt that the Carbon Trust lacked urgency, so the point of the proposal is to bind things together and give it a real kick. It does not need a new structure to do that. If the Government are sufficiently determined, they can do so without the structure, but it would make it easier. The three policy elements that I set out were of a piece: the fiscal regime would have enhanced the capital flow through the renewable energy authority, enabling it to do more and to do it faster.

If I am being critical of the Government, it is because we will never be satisfied with the progress; we want more. The targets, which are technically feasible and extremely realistic, will not be achieved unless better mechanisms are installed, but they could be exceeded with sufficient determination. Given the imperative of climate change, we cannot go too fast. I will not press the new clause to a Division, but I want Ministers to think seriously about the motives behind it and to be prepared to think radically about energy policy, so that mechanisms are in place to deliver what

we want. Even Opposition Members are genuine in sharing our desires. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.