Clause 39

Energy Bill – in a Public Bill Committee at 1:45 pm on 28 February 2008.

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The Northern Ireland renewables obligation

Question proposed, That the clause stand part of the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

This clause allows smooth implementation of a reformed RO in Northern Ireland to allow us to achieve our preferred option of a unified approach to the RO across the UK. First, subsection (1) allows the authority, Ofgem, to carry out work in administering the RO on behalf of its opposite number in Northern Ireland, Ofreg. This is the arrangement at present, which works well. The amendments made by this clause ensure that the authority can continue to act on behalf of the Northern Ireland authority even if articles 52 to 55 are amended by an order under article 56 of the Energy (Northern Ireland) Order 2003.

Secondly, the clause ensures that there are no unnecessary legislative barriers to implementing the reforms in Northern Ireland. The provisions in subsection (2) ensure that the Northern Ireland authorities can pass an order under article 56 to take account of the amendments in this legislation as well as the original sections of the Electricity Act 1989. It will enable the operation of a UK-wide RO regime. While it maintains the requirement to consult in the Province, the clause allows that consultation to be done in advance of the article 56 order, thus allowing timely implementation of reforms.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

The Minister will recall that this morning he had a brief exchange with my hon. Friend the Member for East Devon about the rate of ROCs in relation to other parts of the UK, and some views were expressed that three or five ROCs might be provided in support of marine and tidal technology in Scotland. Will a ROC mean a ROC wherever that type of technology happens to be in the UK, or is there scope for varying levels of ROC support for different technologies in different parts of the UK?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I was saying this morning that it is not the case that in Scotland there are four or five ROCs for marine. There is a great deal of interest in the Scottish Executive in marine energy, understandably given the terrain, the Pentland Firth and so on. Our position is that it makes sense to have an RO regime that is common to all parts of the UK. That will be the burden of our current discussions with the devolved regimes. That position is sensible because we are a united kingdom, and because of investor confidence and so on.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

Will the Minister elaborate on that a little more? I understand that he said earlier today that negotiations are continuing with the Scottish Executive. Given that, clearly, the Scottish Executive wish to provide greater incentive or more ROCs for marine technology and wave power north of the border, will the Minister try to increase the allocation in the remaining part of the United Kingdom to what Scotland wants, or will he try to persuade the Scots to reduce to what he wants?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

The burden of our discussion will be to try and argue that, certainly in this area, it makes sense to have one uniform regime in which one ROC for marine somewhere is worth another ROC for marine somewhere else. That is what we are trying to do. Without that, we start to run into a good deal of confusion.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

The Minister has slightly avoided my question, which was quite clear. Given that Scotland clearly wishes to move towards an allocation in the range of five ROCs for wave power and three for tidal power—the Minister has been talking about considerably less—will he try to persuade the Scottish Executive to reduce to what he wants, or will he persuade the rest of the United Kingdom to move up to what Scotland wants? Can the Minister put some time frame on when those discussions might reach some sort of compromise?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

Those are discussions that we are having already. I cannot quite predict the time frame. I am afraid that I am rather left repeating myself: we would want a common regime. I do not want to say at the moment that the Scottish Executive should reduce to what we say—we have to have a proper discussion about that. But I see the advantages of uniformity. Ultimately, decisions on banding for Scotland are for Scottish Ministers. We are working with the devolved Administrations to try to get a unified system and it is too early to answer that question. It is very much in our minds at present. I am sorry that I cannot be of more help.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

I am grateful, up to a point, to the Minister. But will he not concede that if the incentives were greater in Scotland—given that it is a devolved matter and it is up to the Scottish Executive to set their own levels—that would be a disincentive to investment in the rest of the United Kingdom?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I can see the point, yes. Ultimately, people will invest where there is a strong renewable resource, and I certainly concede that a great deal of the tidal and wave resources are in Scotland, but not wholly—they are around different parts of the United Kingdom shores. These are difficult matters. The issue is devolved. I see the need for some uniformity, and that is how we are negotiating.

Question put and agreed to.

Clause 39 ordered to stand part of the Bill.