Clause 34 - Supplementary provision

Infrastructure Bill [Lords] – in a Public Bill Committee at 4:00 pm on 8th January 2015.

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

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy) 4:15 pm, 8th January 2015

It would be helpful if the Minister clarified a couple of specific points. Clause 34(2)(b) states that the function imposed on renewable projects may include

“the exercise of a discretion”.

What kinds of discretions does she and her Department have in mind? The explanatory notes state that it could cover the type of stake to be offered. Will she clarify what differences there might be between the types of stakes offered to communities? Does she envisage the Government defining those different types of stakes, or does she envisage that being done on a more ad hoc basis?

Subsection (5) states that the CER will

“not apply to a renewable electricity generation facility if development of the facility has reached a stage of advancement”.

What does “stage of advancement” mean precisely? Although the subsection refers to a commencement provision, renewable energy projects do not always have a clear break between construction and operation. In a  turbine array, for example, turbines may become operational before the array is completed, so the distinction between those two points is key for the mechanism’s design. Has any thought been given to that? Can the Minister offer further detail on exactly how that will work? I suspect the final clarity to be in secondary legislation, but it would be helpful to have an indication of the Government’s thinking, because although this may appear to be a semantic point, it could have a significant effect on the way that the measure operates.

Photo of Amber Rudd Amber Rudd The Parliamentary Under-Secretary of State for Energy and Climate Change

Clause 34 is a supplementary provision with the objective of enabling proper implementation of the community electricity right regulations, if they are ever needed. The clause includes three important elements: the conferral of functions in relation to the implementation of the community electricity right; the determination of the exact stage of development at which the regulations would apply; and a requirement to review the community electricity right provisions as a whole once they have been in force for five years. I will briefly explain the first two points.

First, the clause sets out the functions that may be conferred in relation to the community electricity right, including the types of functions and upon whom they may be conferred. That may include imposing duties, such as in relation to enforcing the community electricity right, and exercising discretion, such as in relation to renewable electricity developers choosing the kind of stake offered to communities.

To answer the hon. Gentleman’s point about the wording, discretion is to be exercised in deciding whether a new type of development is exempt from the right. There might be a form of community scheme that is not foreseen in regulations, and the main point about the word “discretion” is that it allows flexibility so that we can assess different projects as they are proposed. There might also be a requirement to consult, such as developers being required to consult the community on the type of stake to be offered, or there might be a requirement to take account of any guidance on the implementation of the community electricity right. Those aspects will ensure that the community electricity right regulations may be implemented successfully, if they are ever needed.

The second aspect of the clause is aimed at providing certainty to industry about which projects will be captured by any new regulations. That is important. Let me make clear our intention that the measure will not apply retrospectively and will apply only to new projects proposed in the development process. The exact stage of the development process to which the backstop powers apply will be determined in any secondary legislation, which addresses some of the hon. Gentleman’s remarks on subsection (5). Secondary legislation would follow a formal consultation and would take on board lessons from the voluntary approach launched in November last year by the shared ownership taskforce.

I hope the hon. Gentleman will allow that flexibility in the Bill. As he is aware, the shared ownership taskforce is a new initiative. We want to give the voluntary approach time to work and we hope to learn from it. We also hope that there will be more detail on the answers to his specific questions when we bring forward further legislation.

Question put and agreed to.

Clause 34accordingly ordered to stand part of the Bill.