Clause 106 - Extent

Energy Bill [Lords] – in a Public Bill Committee at 11:00 am on 21st June 2011.

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Amendments made: 27, in clause 106, page 82, line 2, after ‘Wales),’ insert—

‘(ea) section [Energy efficiency aim],’.

Amendment 19, in clause 106, page 82, line 11, at end insert—

‘(ca) section33(5A) (green deal appeals: revocation or amendment of delegated legislation by Scottish Ministers),’.—(Gregory Barker.)

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 11:15 am, 21st June 2011

I beg to move amendment 68, in clause 106, page 82, line 15, at end insert—

‘( ) Section [Renewable heat incentives in Northern Ireland] (renewable heat incentives in Northern Ireland) extends to Northern Ireland only.

( ) Section [Power for Gas and Electricity Markets Authority to act on behalf of Northern Ireland authority in connection with scheme under section [Renewable heat incentives in Northern Ireland]] (power for Gas and Electricity Markets Authority to act on behalf of Northern Ireland authority in connection with scheme under section [Renewable heat incentives in Northern Ireland]) extends to England and Wales, Scotland and Northern Ireland.’.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

With this it will be convenient to discuss the following: Government amendment 71.

Government new clause 15—Renewable heat incentives in Northern Ireland.

Government new clause 16—Power for Gas and Electricity Markets Authority to act on behalf of Northern Ireland authority in connection with scheme under section [Renewable heat incentives in Northern Ireland].

Government amendment 79.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The coalition Government intend shortly to introduce to Parliament regulations to establish the long-awaited renewable heat incentive scheme, which will be the first scheme of its kind in the world to incentivise and drive forward renewable heat. The RHI primary powers currently extend only to Great Britain—in other words, England, Scotland and Wales, but not Northern Ireland. The intention was to have a UK-wide  scheme, but timing issues meant that the Northern Ireland Assembly could not pass a legislative consent motion during the passage of the then Energy Bill 2008 to allow us to legislate on its behalf, which is important because heat is a devolved issue.

The powers contained in the amendments and new clauses will grant the Northern Ireland Executive primary powers for renewable heat, which will allow Northern Ireland to introduce its own specific support scheme to facilitate and incentivise renewable heat generation there through secondary legislation. The scheme is expected to be administered by the Gas and Electricity Markets Authority on behalf of the Northern Ireland Authority for Utility Regulation. I hope that, given the widespread support for RHI across the Committee, hon. Members will therefore support the amendments and new clauses.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I am pleased to support the amendments and new clauses, which are right and proper. As a former Wales Office Minister, I am familiar with how timetabling in devolved Governments and Assemblies can sometimes be out of kilter with UK Parliament time scales, so I understand the need for the change.

Does the Minister have any idea of the extent of the existing and the potential RHI sector in Northern Ireland? Certainly, renewable heat could be a major boost to the Northern Ireland economy in the form of green jobs and green economic growth. However, recognising what he said in his opening remarks, what does he mean by “shortly” in relation to the introduction of RHI regulations? Does it mean in a few days, in a few weeks, before the summer, when we come back in October or in the autumn? I am sure he can clarify that broad term.

Some of our debates in Committee are fascinating. One of the memorable phrases that I will take away, and which reminds me of my time as a Wales Office Minister, is the Minister’s phrase, “heat is a devolved issue”. For many of our constituents, that will be complete double Dutch, but I understand what he means and it is right and proper that such devolved competencies are respected and recognised. What does the Minister mean by “shortly”, and what is the potential of the RHI for the Northern Ireland economy?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am happy to provide clarification. As a former Minister, the hon. Gentleman will know that when I say shortly, I mean very soon. Actually, the regulations are to be laid in Parliament this week.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

On the hon. Gentleman’s point about Northern Ireland, I am happy to write to him with detailed economic analysis about the potential impact there of the RHI. As he will be aware, the Northern Ireland heat market is very different from that of Great Britain. Northern Ireland is largely dependent on oil, with a developing natural gas market. There are also differences in fuel prices between Great Britain and Northern Ireland, and in the amount of people’s income that goes towards heating their homes.

Finally, Northern Ireland’s geography is obviously different from Britain’s. It is more rural and has fewer larger cities, so it has a different heat intensity. All those factors have meant that it has been appropriate for a separate consideration to be given to a specific scheme for the Northern Ireland context. Nevertheless, we believe, as I am sure the hon. Member for Ogmore understands, that there are almost more arguments for the particular economic benefits. I will write to him to give him greater detail.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

When the Minister writes to me—and I am happy if he writes to other Committee members—will he update us on the progress in the year’s hiatus before the full introduction of the RHI on a domestic basis? That will affect England, Wales and Scotland, I understand. Part of the justification for that was to trial the efficacy of various types of RHI, whether air source thermal, ground source thermal or whatever. Perhaps the Minister will tell us in writing about the uptake of RHIs and his ambitions for that. Before we fully introduce the RHI for domestic appliances we must be confident that we will have a scale of take-up, over the next year, that will allow him to make some well-informed decisions before the full launch.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I shall not divert the Committee for too long, because I do not want to ski off-piste too far.

We hope to launch the renewable heat premium payment within the next couple of months. The scale of the scheme in the UK will be large in the first year of its life. We anticipate that it will cover as many individual customers as would have been likely to have taken it up had we started with the RHI in full. However, in the first year we will require a greater level of feedback and monitoring of the appliances, particularly those involving the more innovative technology, such as ground source and air source heat pumps, and so on. There has been less consumer-facing take-up of such technologies in the past. It is very important that we trial the scheme effectively to ensure that there is neither mis-selling nor misunderstanding.

Invariably, many of the trials have found that it is not that the technology is faulty or that it is not there, but that it is sometimes misapplied. That is why interaction between the technology and the consumers, in their homes, is really important. We want to ensure that we have learned the lessons before we go to a full market roll-out.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I asked the question because I am probing whether the lessons that will be learned over the next 12 months will be shared with all the devolved Governments, including, in relation to the amendments, the Northern Ireland Assembly, so that they, too, can adapt and modify their way ahead.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Of course, we have an excellent relationship with all the Administrations and we work closely on this shared agenda. I anticipate that we will be fully engaged with them all on those issues.

Amendment 68 agreed to.

Amendment made: 20, in clause 106, page 82, line 18, leave out ‘28’ and insert

‘[Early repayment of green deal finance]’.—(Gregory Barker.)

Clause 106, as amended, ordered to stand part of the Bill.