§ 2.57 p.m.
§ Lord Ezra asked Her Majesty's Government:
§ Whether, with the object of promoting energy efficiency, they will encourage the application to the gas sector of energy efficiency standards of performance, as operated in the electricity sector.
§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, under the present Electricity and Gas Acts, energy efficiency standards of performance are a matter for the regulators. I am sure that the new gas regulator will, among many other matters, be considering standards of performance in relation to the gas sector. The Government have welcomed the success of schemes carried out under the electricity standards of performance since 1994. These will, over their lifetime, have improved the comfort of over 200,000 homes and cut householders' electricity bills by over £400 million. The standards also help reduce carbon dioxide emissions.
The Government expect, shortly, to publish a consultation paper on the options for achieving their climate change objectives. This will assess the scale of the reductions necessary and the policy options to deliver those reductions. Among the options that will be considered in the consultation will be new energy 160 efficiency standards of performance in the gas and electricity industries in the context of the proposed new regulatory regime.
§ Lord Ezra
My Lords, I thank the noble Lord for that positive reply. I am delighted to learn that this excellent scheme could shortly be extended to gas. Is the noble Lord aware that the CO2 savings achieved under the scheme since it started in 1994 would, if continued until 2010, contribute no less than 12 per cent to the Government's ambitious target? If gas were brought into the scheme that percentage could be virtually doubled. Is the Minister further aware of the cheapness of the scheme so far as consumers are concerned, in that they contribute only £1 per annum—that is less than 2p per week—and that the working of the scheme has shown that the savings cost 1.8 pence per unit of electricity, whereas it costs 2.5 pence to produce that electricity, on top of which there are distribution charges? Does the Minister agree that those figures indicate that it is far cheaper to put money into saving electricity than into producing it?
§ Lord Whitty
My Lords, I agree with most of the noble Lord's statement. Saving under the scheme has been substantial. As the noble Lord said, it will make a substantial contribution towards meeting our rather difficult target. It will, however, be a matter for the regulator as to how far there is a direct read-across into the gas sector. We hope to see some progress on that front, as well. As the noble Lord says, there are benefits to the consumer as well as to the environment and to the sourcing of energy.
My Lords, can the Minister see any virtue in merging the functions of the gas and electricity regulators?
§ Lord Whitty
My Lords, the House may be aware that in July we announced the appointment of the new gas regulator from the end of this month. In January he will also take on the role of electricity regulator. While there is formally no merger, in practice the two regulators will be the same person under the present regime.
§ Lord Ezra
My Lords, does the noble Lord recall that in A Fair Deal for Consumers it was proposed that the Government should give statutory guidance on environmental objectives in order to remedy the present situation in which the environmental responsibilities of regulators have been very unclear? Do the Government intend to produce these guidelines on the environment soon?
§ Lord Whitty
My Lords, the regulators will operate under the current regime but we shall shortly issue a further White Paper on the whole issue of energy sourcing, which will include these environmental dimensions. A consultative paper covering this aspect was issued earlier this year. That will be followed up in the White Paper to which I have referred. It is clear that environmental considerations will play a major role in this new regime.