Clause 9 - Promotion of community energy

Climate Change and Sustainable Energy Bill – in a Public Bill Committee at 4:45 pm on 25 January 2006.

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Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith 4:45, 25 January 2006

I beg to move amendment No. 22, in clause 9, page 4, line 36, at end insert ‘projects’.

Photo of Joe Benton Joe Benton Labour, Bootle

With this it will be convenient to discuss the following amendments: No. 23, in clause 9, page 4, line 38, leave out paragraph (a).

No. 24, in clause 9, page 4, line 39, at end insert—

‘()schemes whose purpose or effect is the promotion of community energy projects,’.

No. 25, in clause 9, page 4, line 40, leave out ‘community energy,’ and insert

‘such schemes and community energy projects, and’.

No. 26, in clause 9, page 4, line 41, leave out from ‘of’ to end of line 44 and insert

‘advice and assistance (whether by public authorities or any other persons) to persons establishing and operating, or proposing to establish and operate, community energy projects’.

No. 32, in clause 9, page 5, line 2, leave out from beginning to end of line 18 and insert—

‘ “community energy project” means—

(a)the use of relevant plant for a community purpose,

(b)the installation of relevant plant for use for a community purpose, or

(c)the adaptation of any plant for use as relevant plant for a community purpose;

“community purpose” means the purpose of—

(d)generating electricity for consumption wholly or mainly in qualifying premises, or

(e)producing heat for use wholly or mainly for heating qualifying premises;

“plant” includes any equipment, apparatus or appliance;

“premises” means any building or buildings (and for this purpose “building” includes part of a building);

“qualifying premises” means premises which—

(f)are used wholly or mainly for purposes other than carrying on a trade, business or profession, and

(g)in the case of premises which consist wholly or mainly of a dwelling or dwellings, contain at least five dwellings;

“relevant plant” means any plant which—

(h)in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in section 82(7) of the Energy Act 2004 (c. 20) (microgeneration), and

(i)satisfies the condition in subsection (4).’.

No. 27, in clause 9, page 5, line 18, at end insert—

‘(4)Plant satisfies the condition in this subsection if its capacity does not exceed—

(a)in the case of plant for the generation of electricity, 20 megawatts, and

(b)in the case of plant for the production of heat, 100 megawatts thermal.’.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

The amendments are designed to clarify the provisions for community energy under the Bill. I am delighted that the Government have no objections to clause 9 as it stands, so I shall be inviting members of the Committee to support it at the appropriate time. I am grateful to the Department of Trade and Industry for working with me to draft the amendments, which will strengthen the provisions.

Some amendments are essentially drafting proposals, but I draw particular attention to amendment No. 26. It would make clear that support for a community energy project can include advice and assistance

“to persons establishing and operating, or proposing to establish and operate, community energy projects”.

In other words, support is not necessarily only for the physical infrastructure, but the development of the schemes.

Amendment No. 32 would make it clear that qualifying premises that would benefit from the community energy projects can include premises that

“are used wholly or mainly for purposes other than carrying on a trade, business or profession” and

“in the case of premises which consist wholly or mainly of a dwelling or dwellings, contain at least five dwellings”.

The provision would allow support for community energy projects, and not only for buildings such as community halls. It would include dwellings and flats, as long as there were a minimum of five dwellings involved, constituting a genuine community of some sort. It could be a community of five dwellings or a  much larger one—an entire village or block of flats, or half a town or city—subject, of course, to its being of such a size that it could be regarded as a community.

In that respect, I draw the attention of the Committee to amendment No. 27, which specifies the maximum size of the plant covered by the provision. The upper limit for an electricity generating plant would be 20 MW, and that for a heat generating plant would be 100 MW. Those limits were suggested to me by the Department on the basis that they are twice the size of the largest existing district scheme supported by DEFRA. The view is that the maximums would not impose undue restrictions of size on the development of community energy projects, and would prevent them from being so large that they covered an entire city, or the entire country.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

Clause 9 requires the Secretary of State to promote community energy schemes, and lists the ways in which that could happen. That would set up a cost-effective, flexible way of assisting the set-up or establishment of such schemes. The amendments tabled by the hon. Member for Edinburgh, North and Leith all make a great deal of sense. However, before we skate on in our haste to get through the Bill, I do not want to do without a short discussion of the potential of community energy generation.

We rightly spent a fair amount of time this afternoon extolling the virtues of microgeneration, and talking about our hopes and aspirations for a revolution in that sphere. However, we must equally talk about the fact that in many circumstances microgeneration is not appropriate, or would be difficult to make available. Alternatively, in some cases community energy may be a better option. Heat sources can include conventional boilers using conventional fuels, but, in our war on carbon emissions, we must hope that the phenomenon could trigger a move towards biomass and domestic or agricultural wastes, and, importantly, combined heat and power plants, in which the heat generated by electricity production is captured and used to generate more electricity, or is distributed around the community via a heat network.

I understand that there are now about 1,300 sites in the UK that utilise CHP and that they generate about 6 per cent. of our electricity. It is not just an energy source of the future; it is happening now, and we should be doing what we can to encourage it. Probably the greatest exemplar of its potential, and of what is happening, is Conservative-controlled Woking. Woking borough council has done some extraordinary things. I have not been to Woking yet, but I hope to visit it in the near future. My eyes were opened to what has happened there only by a terrific presentation given to me recently by Greenpeace. They extolled the work, in particular, of Allan Jones, the former energy services manager of Woking borough council.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

In the spirit of consensus, which is all the rage nowadays, I am sure that the hon. Gentleman would accept my assurance that I recognise what Woking has done, and also recognise that the gentlemen to whom he referred has been  recruited by the Mayor of London to take forward proposals for the London climate change scheme. I hope that he recognises the important work that is being done in London, as well as what has been done in the past in Woking.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

Absolutely. I welcome the Mayor’s agenda, which is very exciting and will command a lot of support. However, I am trying to make the point that this is not just for the future—it has already happened. The doubting Thomases need not worry; they can go to Woking. It is still very early days for London, but Woking borough council has already pioneered a network of more than 60 local generators, including co-generation and tri-generation plants, photovoltaic rays and a hydrogen fuel cell station to power, heat and cool municipal buildings and social housing. Many town centre businesses are also connected to that local energy supply.

The Woking energy model has already produced dramatic savings in energy use and reductions in greenhouse gas emissions. With further help from energy efficiency measures, the council has reduced the CO2 emissions associated with the operations of its own estate, including social housing, by a staggering 77 per cent. That is a huge lesson for the Government. I hope that the Minister will join me in going to Woking; the Government estate is woefully behind municipal government on this issue.

Photo of Joan Ruddock Joan Ruddock Labour, Lewisham, Deptford

The hon. Gentleman need not even go as far as Woking; he could go to Lewisham, in my constituency. The borough council has a superb low-carbon energy programme and renewable energy for its buildings and several schools. A housing association in Lewisham is about to install 14 mini-turbines.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

I am delighted to hear that, and may well take up the hon. Lady’s offer.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

If the hon. Gentleman is considering doing a circular tour, he could start in Woking, then go down to Southampton to see the geothermal energy plant that has been working for a number of years. It also undertakes CHP and heats municipal buildings, supermarkets, the college of higher education and the university. A new heating development will use renewable bio-oil facilities and heat 3,000 homes to the west of the city. Having seen all that, the hon. Gentleman could then go to Lewisham and then back home.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

What an exciting day that promises to be.

Although the Woking, Lewisham or Southampton models—particularly the Woking model—are widely celebrated in energy circles, their significance for UK energy policy has yet to be fully appreciated. All the examples that we have heard about show that here and now renewable technologies and co-generation are highly complementary and lend themselves flexibly to an engineering approach as finances allow.

The key lesson—whether in Woking, Lewisham or Southampton—must be that, liberated from the constraints of centralised rules and infrastructure, co-generation and renewables can assert their own competitive potential and work in a competitive marketplace. I really hope that in our enthusiasm for microgeneration we have not diminished the importance and potential of community energy.

I have one niggle, about which I have tabled a further amendment. The Government have been far-sighted and generous to me today, and I am sincerely grateful to the Minister for agreeing to my previous amendment. However, I hope that he will consider something else. I am not calling on the Prime Minister, the Chancellor, the Archbishop of Canterbury or any member of the Royal family, but only the Secretary of State to lay before Parliament each year a report on steps that the Government have taken to promote community energy.

We have already established that principle, and it is important that, in order to maintain the focus and attention of the House of Commons, and through it, the greater world outside, we allow Parliament the opportunity to quiz and hold accountable Ministers of this and any future Government, because this programme is long-term. I have no doubt that we will need to hold Ministers to account for many years to come before we can be truly satisfied that we have reached the full potential of community energy.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith 5:00, 25 January 2006

I was tempted to intervene on the hon. Gentleman when he started to discuss in detail the virtues of Woking, but then my hon. Friends the Members for Southampton, Test, and for Lewisham, Deptford, referred to their constituencies, too. Just to complete things, I add that interesting things are going on in Edinburgh, too, but I shall not now invite hon. Members to visit—of course, they are welcome to do so—because the clause does not apply to Scotland.

At the beginning of the sitting, in speaking about a possible interest of mine in relation to the promotion of schemes, I referred to my involvement in the development of a community energy scheme in my area. Once one becomes involved, one finds that an incredible range of organisations want to take up exciting ideas about decisions on energy use, energy saving and energy efficiency locally.

The clause has incredible potential, and I am delighted that the Government will accept it, as I understand it. Although they have in the past promoted community energy in various ways, I think that this is the first time that a specific duty to promote community energy in a wider sense will be incorporated in legislation, although there were certain specific provisions before. The direction that we are taking has potential for application in many ways. As we suggested, it can provide heat and/or power for one building, multiple buildings or entire communities, and it can apply to homes, schools, universities, hospitals, leisure centres and offices. Initiatives can be run in a range of ways involving the  community, co-operatives, mutuals and various other organisations. The clause has real potential, and I think that it will resonate in many parts of the country.

Although the clause will not apply to Scotland—I will not say that I regret that, because as a strong supporter of devolution I am always keen to ensure that matters are devolved where they can be—I certainly hope that the approach will be taken up in those parts of the UK to which it does not apply as a result of the devolution settlement.

Photo of Nia Griffith Nia Griffith Labour, Llanelli

I very much welcome this aspect of the Bill, as it is extremely important that we promote community energy. We have heard about many laudable projects that have already been put into action, but I ask my hon. Friends and Opposition Members to join me in investigating and promoting the opportunity to connect the training machines in the Palace of Westminster gym to a power generation system. That would enable all hon. Members, including Ministers, to show their commitment to producing energy and using it in the House. It is a rather ambitious project, and plans are on the table at the moment, but I see that as another community energy project. We could use that human energy, which is being used to get rid of excess fat and make people healthy, to produce light for use here in Westminster.

Photo of Malcolm Wicks Malcolm Wicks Minister for energy, Department of Trade and Industry

I am reflecting on that informal amendment. I suppose that the logic would be that when were all voting and not in the gym, the lights would go out. We need to think through the technicalities.

We live in interesting times. The Conservative party spokesman, the hon. Member for Bexhill and Battle, used the word “revolution” about three times. I understand that the Conservative party is seeking to move to the left, but I recommend that it goes through a Fabian gradualist stage first. Then we hear that one of those revolutions has taken place in Woking; that is about as unlikely as a whale in the Thames and Wigan beating Arsenal, but we live in strange times. Seriously, I, too, have heard about developments in Woking. We could go on the long march to Woking together, but if we took in the constituency of every Committee member who wanted to namecheck their locality, it would indeed be a long march, perhaps longer than the original one.

We are committed to community energy schemes, and not only because they reduce emissions through the use of low-carbon forms of energy. Their real significance lies in the engagement of whole communities in the energy agenda. Indeed, part of the excellence of microgeneration is that it reconnects the citizen to energy sources. The schemes inform and may even enthuse communities about the benefits of low-carbon energy and the need to use energy efficiently.

The Government already do much to support community energy schemes. The clear skies initiative and the major photovoltaics demonstration programme provide funds for renewable installations  in the community. So far, we have funded 370 community installations through the clear skies programme, and another 46 community projects through the major photovoltaics demonstration programme. That work will be carried on by our £30 million low-carbon buildings programme, which will be launched in April.

My Department and DEFRA jointly fund the community renewables initiative, which has been instrumental in ensuring the success of many community projects. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has supported the community energy programme. This capital grant programme is aimed at increasing the development and installation of community heating schemes throughout the UK. The programme’s schemes are based mainly on combined heat and power, but several renewable-based schemes have also been supported.

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

It would be very helpful if my hon. Friend could tell the Committee whether applications for that funding can be made now, and what the application arrangements will be.

Photo of Malcolm Wicks Malcolm Wicks Minister for energy, Department of Trade and Industry

I presume that my hon. Friend means applications under the carbon buildings programme. The answer is probably no at the moment, because we are launching the programme in April. I will write to her with the details, however, and tell her if I am wrong.

The programme should deliver more than 28,000 tonnes of carbon a year by 2010 and help more than 29,000 people on low incomes to heat their homes. On Second Reading, I indicated that we did not see the need to have a specific duty in relation to the promotion of community energy. After further thought and after correspondence with our DEFRA colleagues and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, we have agreed in principle such a provision would perhaps be helpful.

In summary, I am happy to support the clause, as amended.

Amendment agreed to.

Amendments made: No. 23, in clause 9, page 4, line 38, leave out paragraph (a).

No. 24, in clause 9, page 4, line 39, at end insert—

‘()schemes whose purpose or effect is the promotion of community energy projects,’.

No. 25, in clause 9, page 4, line 40, leave out ‘community energy,’ and insert

‘such schemes and community energy projects, and’.

No. 26, in clause 9, page 4, line 41, leave out from ‘of’ to end of line 44 and insert

‘advice and assistance (whether by public authorities or any other persons) to persons establishing and operating, or proposing to establish and operate, community energy projects’.

No. 32, in clause 9, page 5, line 2, leave out from beginning to end of line 18 and insert—

‘“community energy project” means—

(a)the use of relevant plant for a community purpose,

(b)the installation of relevant plant for use for a community purpose, or

(c)the adaptation of any plant for use as relevant plant for a community purpose;

“community purpose” means the purpose of—

(d)generating electricity for consumption wholly or mainly in qualifying premises, or

(e)producing heat for use wholly or mainly for heating qualifying premises;

“plant” includes any equipment, apparatus or appliance;

“premises” means any building or buildings (and for this purpose “building” includes part of a building);

“qualifying premises” means premises which—

(f)are used wholly or mainly for purposes other than carrying on a trade, business or profession, and

(g)in the case of premises which consist wholly or mainly of a dwelling or dwellings, contain at least five dwellings;

“relevant plant” means any plant which—

(h)in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in section 82(7) of the Energy Act 2004 (c. 20) (microgeneration), and

(i)satisfies the condition in subsection (4).’.

No. 27, in clause 9, page 5, line 18, at end insert—

‘(4)Plant satisfies the condition in this subsection if its capacity does not exceed—

(a)in the case of plant for the generation of electricity, 20 megawatts, and

(b)in the case of plant for the production of heat, 100 megawatts thermal.’.—[Mark Lazarowicz.]

Amendment proposed: No. 33, in clause 9, page 5, line 18, at end add—

‘(4)The Secretary of State shall each year lay before Parliament a report on steps that he has taken to promote community energy.’.—[Gregory Barker.]

Photo of Malcolm Wicks Malcolm Wicks Minister for energy, Department of Trade and Industry

The amendment would put a duty on the Secretary of State to lay a report before Parliament on steps taken to promote community energy. I have no problem with the idea behind the amendment, but I suggest that such a report should be included in an annual report on implementation of the energy White Paper. Having only one report on our energy policy achievements is a much more coherent approach and probably a more efficient use of energy than having several reports, perhaps produced at different times. On that basis, I am happy to lay before the Committee a new clause along those lines in our next sitting. I hope that that is acceptable to the hon. Member for Bexhill and Battle, and I therefore agree to consider amendment No. 33.

Photo of Gregory Barker Gregory Barker Shadow Spokesperson (Environment, Food and Rural Affairs)

I am grateful to the Minister for that considered response, and I look forward to seeing his proposals at our next sitting. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9, as amended, ordered to stand part of the Bill.