Energy Saving Initiatives (Hansard, 24 February 1997)

§ Baroness Miller of Hendon
My Lords, under the energy efficiency standards of performance set for public electricity suppliers by the Director General of Electricity Supply, approval has been given to projects with forecast savings of 5,139 gigawatt hours. In addition, since 1994 initiatives taken by the Energy Savings Trust have yielded estimated lifetime energy savings totalling some 17,975 gigawatt hours.

§ Lord Ezra
My Lords, I thank the noble Baroness for that reply. I feel that Offer is to be congratulated on those results. However, in the circumstances, does she agree that it is regrettable that virtually no initiative has been taken by Ofgas? Can she say how the Secretary of State and the director general consider that they are carrying out their duties under the Gas Act 1986 to improve the efficiency with which gas is used?

§ Baroness Miller of Hendon
My Lords, first, let me say that the gas regulator has agreed that all gas suppliers should be obliged to provide energy efficiency advice. But the Director General of Gas Supply expressed a concern that she was not happy to raise significant sums from consumers in a way that had many characteristics of a tax without parliamentary authority being granted in the normal way.

§ Lord Dean of Beswick
My Lords, is the noble Baroness aware that a large proportion of the figures 901 she gave as savings can be attributed to the shut-down of factories in the manufacturing sector, some of which were heavy users of electricity? That manufacturing sector is essential for our survival economically. Will she admit that that is not a saving but is in fact wastage resulting from closing down factories and the production that came from them?

§ Baroness Miller of Hendon
My Lords, I regret having to disagree absolutely with the noble Lord, for whom I have great admiration, but what he says has nothing to do at all with the matter. This Government have done more for energy conservation through proper means than has any of the suggestions from the noble Lord opposite. Let me give him an example—not to belittle the amount of money saved—which he might find amusing. Just one gigawatt hour is equal approximately to 1 million 100 Watt lightbulbs burning for 10 hours or the output of one large 1,000 megawatt power station for one hour. The Secretary of State for the Environment, my honourable friend in the other place, has had enormous influence on advising and promoting energy conservation throughout the country.

§ Lord Skelmersdale
My Lords, is my noble friend aware that both the supplementary questions which were given effect by the primary Question and her Answer have shown up a distinct lack of communication between the Director General of Electricity Supply and the Director General of Gas Supply? Is it not about time that the Government knocked heads together, so that they could have a common approach?

§ Baroness Miller of Hendon
My Lords, the two directors general—the Director General of Gas Supply and the Director General of Electricity Supply—are not only independent of each other but are independent of government. Independence of the regulators is the cornerstone of the Government's policy for regulation of the utilities. It means that regulators on occasion may exercise their discretion by coming to different conclusions. So far as the Government are concerned, they are independent. If their conclusions have been reached by proper methods, we are pleased about it.

§ Lord Ezra
My Lords, that may well be. Nonetheless, is it not a little surprising that the Director General of Offer is positively stimulating the efficient use of electricity and carrying out what he is obliged to do under the Act, whereas at the same time the Director General of Gas Supply is doing precisely the opposite and indeed has gone back on what her predecessor was doing? Should not the Government be intervening in such a situation?

§ Baroness Miller of Hendon
My Lords, the principle of regulatory independence was reaffirmed by Parliament in the Gas Act 1995. Parliament had 902 an opportunity then to impose an energy efficiency levy on the gas industry in passing that Act and chose not to do so. That is the position.

§ Lord Dubs
My Lords, if, as the Minister just said, the gas regulator does not wish to introduce schemes, which are so effective on the electricity side, because of the lack of a statutory basis for so doing, what view do the Government have about what is clearly a request from the gas regulator for such legislation?

§ Baroness Miller of Hendon
My Lords, the Government believe, and I think that the regulators themselves believe, that competition will stimulate both industries to come forward with energy conservation programmes for equipment and also for promoting better use of energy by the consumers. That is the position. I think it was the noble Lord, Lord Ezra, who suggested that the electricity position was different. But the fact remains that the Director General of Electricity Supply himself imposed and agreed to only a very small levy of, believe, £1 a year per consumer. At the end of the day, both the regulators believe that the best energy conservation methods will come about when the markets are open to competition. We on this side of the House believe that competition is very much the best way of achieving the aims that everybody wants.