Sustainable Energy Bill

HL Deb 12 September 2003 vol 652 cc603-24

2.51 p.m.

Baroness Maddock

My Lords, I beg to move that this Bill be now read a second time.

I am delighted to present the Sustainable Energy Bill to the House. It has been skilfully steered through another place by Brian White MP. Having sponsored a predecessor to the Bill—the Home Energy Conservation Act 1995—I know what is involved in the process. I congratulate him on his hard work and tenacity in seeing it through to this stage.

Those who are not familiar with the problems of guiding a Private Member's Bill through another place will gain some insight if I set out the clauses and how we have arrived at them as they now stand in the Bill. In order that people may have some idea of what we are talking about, the Long Title of the Bill is to, Make provision about the development and promotion of a sustainable energy policy; to amend the Utilities Act 2000; and for connected purposes. Clause 1 places a duty on the Secretary of State to publish an annual sustainable energy report on the progress that has been made towards the following: cutting the United Kingdom's carbon emissions; maintaining the reliability of the United Kingdom's energy supplies, a matter that is important considering recent events; promoting competitive energy markets; and reducing the number of people living in fuel poverty in the United Kingdom. These are the four overarching goals of the United Kingdom's energy policy as set out in the government White Paper.

It is very useful to have these provisions on the face of the Bill, but there is no commitment to a timescale; there is no commitment to the amount of progress or improvement to be made; and there is no requirement to report on the progress of combined heat and power, renewables or energy efficiency. This is despite the fact that such reporting commitments are contained in the energy White Paper.

Nevertheless, during the passage of the Bill in another place—first, by the then energy Minister, Brian Wilson, at the first Committee session on 11th June; and, secondly, by his successor, Stephen Timms, at another Committee session on 24th June—we received some reassurances that the Government would use the annual sustainable energy report to report on progress towards the achievement of all of the 135 commitments in the White Paper. There seems to be some confusion about how many commitments there are in that they seem to have become 139 in some other places these days.

I hope that the Minister will today confirm that the annual report will include reports on progress delivering all the aims and objectives set out in the energy White Paper. I refer to the generation of 20 per cent of electricity from renewable resources by 2020; the generation of 10 gigawatts of electricity by combined heat and power by 2010; reductions in emissions of carbon dioxide of 60 per cent, based on 1990 levels, by 2050; and reductions in emissions of carbon dioxide of 20 per cent based on 1990 levels by 2010. The last objective is particularly important and we will refer to it later. I hope the Government are committed to it because, in some places where they have talked to other bodies, this commitment has changed.

Clauses 2 and 3 concern the energy efficiency of residential accommodation. They particularly concern the duties of the Secretary of State and the National Assembly for Wales. As originally published, the Bill contained a clause requiring the Government to take reasonable steps to achieve a 20 per cent improvement in domestic energy efficiency by 2010, based on 2002 levels. This was recommended not only in the White Paper but in the Performance and Innovation Unit's energy review.

After much negotiation, the sponsor of the Bill reluctantly agreed to the two clauses on the face of the Bill, which were written by the Government. These clauses place a duty on the Secretary of State and the Welsh Assembly to designate and take reasonable steps to achieve at least one published energy efficiency aim for residential accommodation. Although those supporting the Bill and, I suspect, those following me in this debate, will feel that this does not go as far as they would like, it is a significant step forward. as long as the energy efficiency aim set pursuant to the Bill is meaningful—for example, the achievements of the carbon savings specified in the White Paper.

When pressed on this on the 24th June, the Energy Minister, Stephen Timms, said: Our aims [in relation to energy efficiency] are set out fully in chapter 3 of the White Paper. It is my job to deliver those aims".—[Official Report, Commons Standing Committee C, 24/6/03; col.58] I hope, therefore, that the noble Lord, Lord Evans of Temple Guiting, can confirm that it is still the Government's intention to set an energy efficiency aim to achieve 5 megatonnes of carbon savings from household energy efficiency by 2010 and a further 4 to 6 megatonnes by 2020, as set out in the White Paper.

I am seeking clarification on this because, in communication with the Environmental Audit Committee, this was omitted by the Government. It looked as though only 4 to 6 megatonnes were to be saved by 2020. On the original website of the Sustainable Energy Policy Network, this figure was also omitted. However, it appears to be on the latest website, and I hope the Minister can confirm that the Government's accurate position is to achieve improvements in household energy efficiency of 5 megatonnes of carbon by 2010 and a further 4 to 6 megatonnes by 2020.

Clause 4 deals with the duties of energy conservation authorities, again with regard to energy efficiency of residential accommodation. As the sponsor of the Home Energy Conservation Act 1995, I know only too well that the lack of statutory targets for energy conservation on the face of that Act has led to very patchy performance by councils in their energy conservation work. Many local authorities have done extremely well but a significant proportion have reported domestic energy efficiency improvements of only I or 2 per cent in the eight years since the Act was passed.

This clause is based on one in a home energy conservation Bill which failed to get through last year. It was tabled by the then Environment Minister, the right honourable Michael Meacher, Member for Oldham West and Royton. Perhaps having so many different Environment Ministers is one of the problems in trying to drive forward these issues. The clause gives a lever to give higher priority to, and obtain more resources for, local authorities' home energy conservation work. Specifically, it provides the power for the Secretary of State in England and the Welsh Assembly in Wales, after consultation with their respective local government associations, to give an energy efficiency direction to one or more energy conservation authorities. If such a direction is given, the relevant authorities will then have to take steps as they consider to be practical and cost-effective to achieve the improvement specified in that direction.

More than 100 local authorities have pledged their support for the Bill. Many authorities have home energy conservation officers, and they are also very anxious for the provision to be in the Bill. However, it is true to say that the Local Government Association was concerned—and rightly so, as it wants to protect its members—that the clause might place new duties on local authorities without them receiving necessary funding to undertake them. That was never the intention of the Bill but, for the avoidance of doubt, assurances were sought in another place. In Standing Committee on 24th June, the Energy Minister Stephen Timms gave categoric assurances that the, Government do not want to place new burdens on authorities without offering funding to meet them in full, so we would not issue directions until the necessary funding could be made available. Until that time, there will be no new financial burdens on authorities".—[Official Report, Commons Standing Committee C, 24/6/03; co1.56.] If the Government were to use the discretion given by the clause, it would mean more money for local authorities to undertake vital energy conservation work.

In addition, subsection (6) requires energy conservation authorities, when carrying out their duties under the clause, to "give preference to measures" that they consider would contribute to achieving the fuel poverty objective contained in the Warm Homes and Energy Conservation Act 2000. That will make a considerable contribution to the fight against fuel poverty and will help to ensure proper coordination between local and national efforts to achieve the target that was set out in the 2000 Act to end fuel poverty by 2016. That is an issue that we as a nation should be very ashamed about—that people are still dying in the winter because they cannot afford to keep their homes warm.

Many noble Lords will have had a briefing from the LGA on behalf of local authorities. I hope that I have addressed some of their concerns over finance. I hope that the Government recognise that different local authorities are at different stages and that the situation differs between areas. I hope that everyone agrees that Clause 4 strikes a delicate balance between the role of a government to achieve their national priorities and the rights and influences of local authorities.

Another issue raised by the LGA was the funding of home energy conservation officers. When I proposed the original Bill in another place, I said that it should create jobs, and I am pleased to say that it certainly did so in local government. The authorities that have had specific officers to deal with the HECA 1995 have made the best progress, so there is merit in ensuring that local authorities have enough money to fund them. It is not the fault of myself, or of anyone else who has been involved with the Bill, that that is not included in the scope of the Bill. Unfortunately, Defra did not feel that it could support such a proposal. However, in the light of what I have said, perhaps the Minister could think again or persuade his colleagues to think again.

Clause 5 deals with combined heat and power targets. I should declare an interest here, as I am a non-executive director of a heating company that is involved in combined heat and power. As originally published—a phrase that, unfortunately, I could use when talking about almost every clause—the Bill contained a clause to amend the Electricity Act 1989 as amended by the Utilities Act 2000 to exempt suppliers of combined heat and power from the renewables obligation. Many noble Lords may know that the combined heat and power industry is facing huge difficulties, and that exemption would have given a real boost to combined heat and power suppliers.

Unfortunately, the Government opposed the original clause. They believed that it would reduce the renewables market by as much as 13 per cent, while producing few benefits for the CHP industry. I and others—most notably the Combined Heat and Power Association and the Association for the Conservation of Energy—I know that my noble friend Lord Ezra, who will speak later, did not really agree with this—have a different clause. Our clause places a duty on the Government to specify, before the end of 2003, one or more combined heat and power targets for central government. One of those must be for the year 2010, the year to which the Government have committed themselves in their White Paper to achieving the target of installing 10 gigawatts of good-quality combined heat and power capacity. This clause therefore gives a small but significant boost to the combined heat and power industry.

Clause 6 is a slightly happier story. In their energy White Paper, the Government declared their intention to seek an early legislative opportunity to provide statutory backing for Ofgem's existing informal commitment to produce regulatory impact studies including environmental assessments for all significant new policies. The promoter of the Bill made it clear to the Government that he would welcome their using the Bill as an opportunity to fulfil that obligation. I am pleased to say that Clause 6 is the result. It imposes such a duty on Ofgem, and I believe that it will help to keep environmental and sustainability considerations at the forefront of Ofgem's activities.

Clause 7 deals with money—always useful in this area; there is not enough of it about—specifically the use of certain money held by the Gas and Electricity Markets Authority. It gives the Government a legal basis for using surplus funds in the fossil fuel levy, up to a maximum of £60 million, to promote renewable energy schemes. I believe that other speakers will address those issues. If noble Lords would like further detail on the money, it is well laid out in the Explanatory Notes accompanying the Bill.

It has probably been made clear in my comments that this is not a Bill which I and others sponsoring it would have wanted to see in its present form. Nevertheless, it is progress. If the Government chose and were committed to it, it could lead to very considerable progress. I hope that the Minister will assure us on the points that I have made. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Baroness Maddock.)

3.7 p.m.

The Earl of Liverpool

My Lords, I am very pleased to follow the noble Baroness, Lady Maddock. I congratulate her on giving such a clear explanation of the aims and objectives of the Bill, which she is sponsoring in your Lordships' House. She is extremely well placed to do so. As she reminded us, some years ago, she sponsored the Home Energy Conservation Bill. I read that she is also vice-president of the Neighbourhood Energy Action and a trustee of the National Energy Foundation. I must confess that I had considerable sympathy with her when she expressed disappointment at the way in which the Government have prevailed on Mr Brian White MP to water down his original Bill. Nevertheless, I suppose that half a loaf is better than no loaf at all, and so I support the Bill.

So many opportunities for moving towards sustainable and clean energy are now available to us. As I suspect that most of them, if not all that I am about to list, will be known to your Lordships, I hope that I do not prevail on your patience. I should like to list a few which spring to mind—including offshore tidal power generation, photovoltaics, and solar heating, the technology of which is always advancing. Hydrogen fuel produced by means of photovoltaics is completely pollution free both at the point of manufacture and the point of utilisation. Geothermal heat-pump technology is another example. I should also cite wind farms and the much smaller wind generators with contra-rotating propellers for domestic use. As for combined heat and power—CHP—I am particularly interested in micro-CHP plants for use in private homes. Great strides are being made in that direction. We must also not overlook the very real contribution that biofuels and biomass could make.

Other noble Lords will no doubt speak with far greater authority than I on some of these points; and indeed I do not believe that my list is exhaustive. But the point is that there is a large number of rich seams we could and should be tapping into.

We probably have a once in a lifetime opportunity to take advantage of these technologies. We are already embarked on a massive building programme including hospitals, schools, prisons and homes. Time is of the essence and we must not lose a moment in concentrating our efforts to reduce our dependency on fossil fuels.

Earlier I mentioned tidal power and I should like to spend a few moments elaborating on this potential power source. We have the second largest tidal range in the world and we also have the technology to harness it. The generating source is free, entirely predictable and, correctly harnessed, is capable of producing 8,000 megawatts of power by 2010, as I read on the Internet this morning. That equates to 10 per cent of our entire energy needs and would achieve the Government's targets for renewable energy in one fell swoop.

Things have moved on a long way from the days when the only way to harness this power was to build a huge barrage across an entire river estuary with all the navigational and ecological problems that would cause. The new generation of tidal power generation is achieved by building offshore impoundment lagoons built of rock, sand and gravel. They would be approximately one mile offshore at the nearest point and would hardly be visible from land. They are environmentally friendly as these large lagoons create habitats and enhance biodiversity for marine and bird life. They create no noise pollution and no CO₂ emissions.

A company in this country has developed that concept and is working on two projects off the Welsh coast at Swansea and North Wales. I do not know exactly what stage its development is at as I was unable to contact it before coming to the Chamber today but I know that its aim is to be privately funded, so there would be no burden on the taxpayer. I hope that the Government will give very careful thought to that energy source and support the schemes.

Apart from publishing annual reports on progress towards sustainable energy aims, the Secretary of State will be required to come up with one big idea or aim for energy efficiency in residential homes each year. I wish her well in arriving at that decision. There are so many opportunities to be grasped and we shall await her decision with great interest.

3.12 p.m.

Lord Palmer

My Lords, I, too, warmly support this important Bill. I am a strong supporter of sustainable energy and we need this Bill to help us along the way to delivering that objective. I hope that the Bill succeeds and I shall do all I can to assist my friend and neighbour, the noble Baroness, Lady Maddock. I am delighted that my noble kinsman Lord Hunt of Chesterton will be following me in the gap.

It is, though, more with sorrow than anger that I wish to make the following comments. There is, I am afraid, a serious omission from this Bill. It covers annual reports on progress towards sustainable energy on a number of fronts but is entirely silent on road transport fuels. I would, indeed, like to ask why this is. As usual, I feel I must declare an interest as a farmer and the unpaid president of the British Association for Biofuels and Oils. I do, however, believe that I do not just speak for that organisation; just about everybody I have spoken to cannot understand the Government's reluctance to give a steer in the right direction on this matter. If I may be allowed, I shall explain the situation.

We now have EU Directive 2003/30/EC on liquid biofuels. I commend it to your Lordships as one of the more useful pieces of EU legislation. Article 3.1 gives indicative EU targets of biofuel usage for road transport of 2 per cent by December 2010. Member states are required to give the Commission their own national target for December 2005 by July next year, and it seems to me that the Bill would have been a sensible place to incorporate that legally binding law into UK law. I would very much like to know why that has not been done.

As a farmer, I first became aware of the unsatisfactory situation that we are in regarding biofuels when I discovered that all my oilseed rape, grown and nurtured in Scotland, was sent to Austria and Germany for conversion into biodiesel. Why do we have so little of that industry here, an industry that could not only help the environment but provide vital rural jobs? The UK has virtually no liquid biofuel industry, in contrast to other EU countries such as Germany, France, Spain, Italy and Austria, where combined production comfortably exceeds 1 million tonnes a year. With new capacity coming on-stream, that is set to increase greatly. At 2 per cent usage over the existing EU members, the requirement will be for 10 million tonnes of biofuels by 2006, a massive new market. UK production this last year, all of which came, unfortunately, from recycled cooking oil, is unlikely to exceed the modest total of 10,000 tonnes.

The DfT policy has been to promote the fossil gas fuels with grants and publicity, and persuade the Treasury to provide a duty rebate of some 40p per litre. Yet the biofuels, which show major energy savings over fossil petrol and diesel, have only the 20p per litre rebate. That also applies to bioethanol. The provision does not come into force until January 2005. I would very much like to know why the Department for Transport has not done at least as much to promote the energy-efficient biofuels. I would also like to ask if the Government's silence over sustainable energy in the transport sector is one of embarrassment over the failure over the years to give any worthwhile encouragement to biofuels.

I would like to give a simple illustration of the energy-saving potential of biodiesel, and the same principles apply to bioethanol. On a full life-cycle basis, for each unit of energy put into the biodiesel process, not less than two units of energy is produced through the absorption of solar energy by the green plants grown to make the fuel. If the efficient agricultural practice of minimal tillage is followed and the by-product straw is burned to produce electricity, more than five units of energy is produced. Existing fossil energy can be made to go between two and five times further if used to produce liquid biofuels. Surely those facts should play a crucial part in government thinking on energy, and I ask again what has prevented liquid biofuels featuring in the Bill.

Some half a million hectares of land in the UK are unproductive under "set aside". That land could provide up to 1 million tonnes of biodiesel for road transport. Most years, we export around 3 million tonnes of wheat. If all that were retained in the United Kingdom, it would produce a further 1 million tonnes of bioethanol, and thus 2 million tonnes of energy-saving biofuels are potentially available from British farms.

This represents more than 5 per cent of total UK road fuel usage (the EU target is 5.7 per cent by 2010) and would result in major energy savings on a sustainable basis. One unit of fossil energy could in this way be made to provide between two and five units of transport fuel energy through the natural action of the sun providing the fuel for energy producing photosynthesis in the biofuel feedstock plants such as wheat, oilseeds and beet.

The omission from this Bill of any reference to the major energy saving potential of liquid biofuels is unfortunate, as is the failure to refer to the mandatory requirement for the UK to set its December 2005 biofuel target on or before July next year. The development of a liquid biofuel industry in the UK would make a useful addition to our sustainable energy policy and provide a useful new role for the rural economy. This is a very important factor. If one looks at the Government's own words in the box at paragraph 5.15 on page 69 of the recent Energy White Paper: Biofuels can potentially deliver bigger carbon savings and wider environmental, farming and rural employment benefits". So why are we not developing that potential? Perhaps we could try to rectify the situation to some extent at least.

In another place, Mr Brian Wilson assured Standing Committee C on 11th June that Clause 1 of the Bill would have wide effect. He said that, as part of the overall reporting progress, we shall report on the 135 specific commitments in the White Paper".—[Official Report, Commons Standing Committee C; 11/6/03; col. 7.] Well, in March next year the Government are, according to their Sustainable Energy Policy Network website, committed to publishing a hydrogen and biofuel assessment. And by July this has to result in a national target under our obligations in EU legislation.

So my question to the Minister is simple: can he now assure the House that the reporting under this Bill on "all commitments" will include reporting on measures taken and proposed, and on progress made towards achieving the .commitments and the targets set for biofuels?

A simple "yes" to those questions would not, unfortunately, set the industry alight—but it would give those of us producing biofuel crops a strong signal that our role in a sustainable energy policy was being taken as seriously as the other limbs of that policy. In short, it would help the industry. A "no", however, will further depress the industry and continue the export of crops to Austria and Germany, with the resulting adverse effect on rural job creation.

I feel that my brief contribution has been highly technical and that I have quoted too many figures. But I ask for the Minister's assurance for a boost to the industry that will also greatly help the environment, farming and rural jobs.

3.23 p.m.

Lord Hunt of Chesterton

My Lords, I should like to speak in the gap, after my noble kinsman Lord Palmer. I apologise to the House that my name appeared earlier on the list of speakers, due to some confusion.

I welcome the Bill and add my congratulations to the noble Baroness, Lady Maddock, on introducing the debate on this important step in sustainable energy. For sustainable development, especially in a period of climate change, we need to act on both mitigation and adaptation. Housing and planning are capable of contributing to both objectives: reducing the contribution of greenhouse gases by residential accommodation, and by ensuring that the lives of people, especially those living in cities and old people, are bearable in the accommodation and the environment available to them as the climate changes. This summer was a lesson in these problems.

Sustainable housing has to be more efficient for keeping people warm in winter and cool in summer, and, in an increasing number of places, to enable recovery from flooding. The landscape is also an important part of planning and an essential part of sustainable communities.

I support the legislation for setting targets and for helping the leadership of local authorities which are already making an important contribution. I have two main points to make which might be incorporated into the Bill.

As German colleagues have pointed out, information is most effective in influencing people's behaviour when making decisions—in this case about their house purchases or when buying equipment for their house. The energy efficiency of every house should be known to every house purchaser together with the steps that have been taken by the previous owners in improving them. This would obviously have some impact on the economic value of the house. It could be a national or local authority obligation.

My second point refers to the important Clauses 5 and 6 and the role of combined heat and power and electricity authorities. CHP and renewable energy have enabled one or two local authorities in the UK already to make substantial reductions in energy consumption. The borough of Woking reduced its energy consumption by 40 per cent, but that has required it to develop its own electrical grid; in other words, to move off the national grid. Perhaps the Minister can explain whether Clause 6(2)(b) will enable and help other local authorities to develop more of such effective arrangements in this somewhat unusual way. I declare an interest as chair of CERC Limited, which undertakes consulting in wind energy.

3.26 p.m.

Lord Ezra

My Lords, I want, first, to congratulate Mr Brian White on introducing the original Bill last March in another place. I extend those congratulations to my noble friend Lady Maddock, who introduced the present Bill and was responsible for the important Home Energy Conservation Act 1995.

The purpose of this Bill is to give legislative backing to the Government's energy policy White Paper of February this year and to fill in some of the gaps; notably the lack of a specific target for energy saving. However, as previous speakers have pointed out, during the course of the Bill in another place, particularly in Committee, the Government insisted on major changes, which seriously reduced the impact of the Bill.

We are presented here with a special difficulty. I understand that if we were to proceed to propose amendments in Committee, the Bill would risk falling. That is the last thing we want to happen. Would it therefore be possible either on this occasion or on a future occasion to avoid that unfortunate situation?

Lord Roper

My Lords, I thank my noble friend for giving way. I have been concerned in the debate on a number of Private Members' Bills which we have been considering—the Fireworks Bill a few days ago and one of the Bills we debated today—about the unsatisfactory situation which occurs in this House when Bills reach us from the other place in this way. My late noble friend, Lord Harris, when he was the Liberal Democrat Chief Whip, was equally concerned about the problem.

It is a most unsatisfactory situation when we are presented with Bills in the same way as we are presented with affirmative resolutions—we can take them or leave them. But whereas in the case of an affirmative resolution the Government can immediately reintroduce the measure, in this case if we amend the Bill it falls.

In those circumstances, I believe that there is a serious procedural matter to which the usual channels must give consideration, including the possibility of carrying over Private Members' Bills which we could otherwise not amend.

Baroness Farrington of Ribbleton

My Lords, I understand the strength of feeling expressed by the Liberal Democrat Chief Whip and I will ensure that the usual channels are aware of the concern. I know that he does not expect me to comment on any possible solution to the problem.

Lord Ezra

My Lords, I am obliged to my noble friend for his very positive intervention and for the response from the Government Benches.

Unfortunately, on reading the original version of the Bill and then the reports of the Committee and Third Reading debates in the other place, one could not avoid coming to the conclusion that the Government might be wishing to draw back from some of their commitments entered into in the White Paper. Looking at the Bill as such, and leaving aside for a moment the assurances given by Ministers during the debates in another place, that view is supported by the specific amendments introduced in the various clauses. For example, in Clause 1 the Government pressed for the omission of targets mentioned in the White Paper—targets to which Ministers had frequently and vigorously reaffirmed their commitment. It is a source of surprise to us that the Government should have wished those targets, which seem to be writ firmly in the hearts of Ministers, not to be confirmed in the Bill. No doubt the noble Lord will explain to us why.

There is also the omission of the detailed points which were intended to be covered in the annual report. These points would have dealt with many of the issues raised by the noble Earl, Lord Liverpool, and the noble Lord, Lord Palmer. It is unfortunate that those points—all of which are referred to in the White Paper—should have been omitted from Clause 1 of the Bill and replaced by very general phrasing. Therefore, whether or not those issues will be dealt with specifically remains to be seen.

In Clauses 2 and 3, in place of the home energy efficiency target of 20 per cent by 2010, which, we understand, although not specified in the White Paper, is, indeed, the Government's objective, they have proposed the designation of, at least one energy efficiency aim". Precisely what does that mean? It could mean that they will reinstate reference to the 20 per cent target, in which case all would be well. But it could mean simply an exhortation to people to turn off the lights when they leave the room. That seems to give the Government the unending capability of either supporting the commitments they entered into in the White Paper or of going back on them. I find that a very unsatisfactory situation.

We really must have a confirmation of the commitment to a 20 per cent improvement in energy efficiency in domestic dwellings by the year 2010. That is where we are failing as a nation. Indeed, the EST—the Energy Saving Trust—has gone further than that. This organisation, set up by government, has asked for a further 20 per cent saving up to the year 2020. Therefore, I should be very glad to hear what the Minister has to say about that.

Clause 5 deals with combined heat and power. I declare an interest here as chairman of Micropower, which is promoting micro-CHP. This is an area which the Government strongly support, and that support has been reiterated very clearly in the White Paper. The Government regard combined heat and power as one of the prime ways in which efficiency can be improved in terms of energy production and usage. The many obstacles currently standing in the way of CHP development have been referred to by noble Lords who have already spoken.

This would have been an opportunity for the Government to restate their intention of supporting CHP and alleviating the present problem, which is certainly likely to lead to under-achievement of the Government's target of 10 gigawatts by the year 2010. But, instead, the Government have replaced that with an obligation on the Secretary of State to introduce a target for the Government's own usage of CHP. That really seems to me to be de minimis.

The Government have been long committed to supporting CHP. In fact, there is a major scheme in Whitehall, introduced by the Government some years ago. We did not need a restatement of that. We wanted to know what they were going to do about CHP as a whole. Were they going to move in and try to overcome the present difficulties and, in particular, were they going to accept the proposal, which they have not, of ensuring that CHP installations were not subject to the renewables obligation as they are at present? Those are areas where we must raise question marks about the Government's intentions.

Indeed, it is regrettable that, faced as we are with so many serious energy issues, including growing import dependence, the security and reliability of electricity supplies and climate change risks, the Government should not have seized the opportunity presented by the Bill of reaffirming their commitment to solve these problems. As time has gone by, that commitment seems to have become progressively weaker.

The PIU report of February 2002 clearly set out a number of targets and objectives to deal with prospective energy difficulties. Some of those were included in the White Paper but some were replaced with aspirations. Now, in the Bill, the Government have insisted on the withdrawal of any reference to energy targets. If this situation were to be dramatised and converted into a television play, a title for it could be, "The Case of the Vanishing Targets". As time has gone by, the targets have diminished until they have disappeared altogether in formal documentation.

There have been assurances by Ministers in another place that the commitments calculated as amounting to 135—I am glad that Ministers have totted them up; the rest of us have not done so—from the White Paper will stand. We shall need a great deal of reassurance in this House that that is indeed the position; that the Government remain at least committed to the targets and aspirations contained in the White Paper and that they will render a detailed annual account of progress towards their achievement.

3.37 p.m.

Baroness Miller of Hendon

My Lords, like other noble Lords, I too not only congratulate the noble Baroness, Lady Maddock, but thank her for the clear and interesting way in which she introduced the Bill.

We agree that there is a need to report progress on policy goals, as required by clause 1…and we are willing for that to become a legal requirement". [Official Report, Commons, 28/3/03: col. 599.] Those are not my words but part of the opening remarks of the Parliamentary Under-Secretary for State for Trade and Industry when the Bill was debated at Second Reading in the other place on 28th March. Clause 1, to which the Minister referred, was Clause 1 of the Bill as originally presented to the other place and not the Clause 1, nor indeed the Bill, that we now have before us.

Despite those fine, warm words from the Minister, what the Government proceeded to do in Standing Committee was, in the words of my honourable friend the Member for Christchurch, to fillet the Bill of all of its important targets, an example of the usual practice of this Government of very fine words but no delivery and in this case announcing as soundbites ambitious targets and then preparing excuses in advance for failing to meet them. Usually, government targets are downgraded in the event to mere aspirations, but I notice in this case the Minister used the new and even more ambiguous phrase of "policy goals".

The object of the Bill, when introduced by the honourable Member for Milton Keynes North East, Mr Brian White, a former energy Minister, was to hold the Government to account for their energy policy targets. One can feel enormous sympathy for the honourable gentleman who, having won a high place in the Private Member's Bill lottery, and having produced a carefully drafted Bill, which had full cross-party support, found it ostensibly supported by the Government on the one hand while on the other, to repeat the phrase, they took a filleting knife to it.

For the benefit of those noble Lords who did not have the opportunity of studying that Bill as originally presented, and which the Government said they supported, the key Clause 1 was replaced by a completely new Clause 1. Clauses 2 and 6 were replaced by new Clauses 8, 9 and 10, and Clause 3 was replaced by new Clause 11. I simply cannot imagine what the Government would have done to the draft Bill if they really had not liked it.

In the end, at Third Reading in the other place, the sponsor was reduced to conceding that what he called the "stringent targets" in his Bill were changed by what he called "a long series of negotiations" to "a generalised proposal". For "a long series of negotiations" read "serious arm-twisting by the Government" and for "a generalised proposal" read empty rhetoric.

In the final stages in the other place my honourable friend the Member for Christchurch was persuaded by the Bill sponsor from pressing an amendment to restore some of the original teeth to the Bill because it was clear that the Bill would be lost.

However, it is our intention in Committee to reintroduce provisions deleted in the other place, to enable the Government to have the opportunity simply to persuade your Lordships' House both of the appropriateness of their wholesale redrafting of the Bill and to repeat to your Lordships, on the record, the assurances given to a handful of honourable Members attending Standing Committee. It is right that this House should actually hear what happened.

I say at once that I understand the Bill would be lost if we were to pass any of the amendments. If our understanding is correct—and I know it to he so—I would act very responsibly. But I believe that the House is entitled to hear the reasons for the change and that the Government should give them. I notice this point was made very strongly by the Chief Whip for the Liberal Democrat Opposition and by the noble Lord, Lord Ezra, and I am very grateful for the remarks made by the noble Baroness. Lady Farrington, about ensuring that the appropriate people knew the views.

I hasten to say that the reason I would do that is certainly not because for one minute do I doubt the Minister's word on the assurances being given in the other place, but because of what the Parliamentary Under-Secretary of State said at Second Reading which I partially quoted in my opening paragraph. He said: The Government have committed ourselves to producing an annual progress report, and we are willing for that to become a legal requirement".—[Official Report, Commons, 28/3/03; col. 599.] We want not only to hold the Government to that commitment, but to ensure that the annual report is about real progress on real, firm, binding and achievable targets and not about vague and woolly "policy goals".

The Labour Party in various manifestos has set ambitious targets for renewables and combined heat and power. Since the Second Reading debate in the other place when the Government said one thing and then proceeded to do another, and since "the long series of negotiations" to which the Bill's sponsor was subjected, the Select Committee on Science and Technology has published its fourth report. I want to quote from it. It said: There is no prospect of achieving the target of 10 per cent renewable generation by 2010 or the aspiration of 20 per cent by 2020. There is no chance of meeting the Government's targets for CO₂ reductions if current policies and market conditions remain in place". Let me stress that: there is no prospect either as regards government targets or aspirations. I suppose, ipso facto, that will also apply to mere policy goals.

The problem with the Government's energy policy is that there does not seem to be a coherent one. There is a plethora of confusing and contradictory schemes being pursued by the Government which rely on literally dozens of separate policy instruments. That is why it is essential that the Government must be obliged to set proper targets and to account to Parliament annually about their success—or possibly their failure—to meet them.

Let us look at some of the failed energy policies which the Government are understandingly coy about being required to report about every year. It is currently presiding over the third annual rise in CO₂ emissions; an increase in electricity generation from plants not equipped with clean coal technology; and the collapse of CHP generation.

There is some talk about the wholesale construction of wind farms. But when we debated it previously, I said that I thought it would mean building 22 new ones a week. The Minister challenged that by saying that he did not know where I got my figures. It was from the Government's own Performance and Innovations Unit. But whether those figures are right or wrong, the White Paper reports that 250 megawatts offshore wind capacity has been installed worldwide, but only 4 megawatts of that in the United Kingdom waters.

While the fact that the Government have entered into agreements with developers for a further 1,400 megawatts capacity is of course to be welcomed, when will this actually be built? This same industry claims that a further 3,000 to 4,000 megawatts can be built by 2010. They say, "Can be built", but the question is: will they?

Apart from the capital costs of creating wind farms and the environmental aspects of their siting, there is the unreliability of the source—namely, the wind itself in our climate—which means that it can be only a supplement to other sources and requires substantial back-up. The Government acknowledge the serious problem of what they call intermittency in such sources as wind and wave power. A source cited in the White Paper claims that we have more wind off our coast than anywhere else in Europe. That may be so but, last month, we had hardly a breath of air in this country. That is the problem. When he challenged my figures about wind farms, the Minister referred to other renewable sources, such as biomass, landfill gas and photovoltaics, which, he said, can contribute to our goals in 2010 and 2020".—[Official Report, 24/2/03; col. 54.] However, I notice that he did not refer to coal mine methane or hydroelectricity. Of course, there is a vast difference between "can contribute" and "will contribute". That is why the Bill as originally drafted was so important.

The White Paper also referred to the problems faced by smaller generators due to red tape. I read with great interest the letter from the noble Lord, Lord Ezra, in The Times, in which he advocated the stimulation of localised generation of electricity by small-scale plant to relieve pressure on the grid, which in turn would make use of waste heat. In the same edition of The Times, the president of the Combustion Engineering Association, who of course has a particular axe to grind, complained of "cloud cuckoo land" in the White Paper.

However, his letter, written in the light—or perhaps the dark—of last month's north-east American blackout, calls on the Government to encourage more clean projects such as Coalpower's proposed integrated gasification plant and the use of clean fossil fuels with carbon capture which produce no harmful emissions. He also called for the removal of obstacles to undersea storage of CO₂ and planning for further nuclear stations.

The fact is that the looming gap in our electricity supplies which is arising from the depletion and shortly the exhaustion of our North Sea gas supplies and the fast-approaching obsolescence of our existing nuclear power plants cannot be bridged in the short term by renewable sources, even if the necessary technology existed on a commercial scale. Unquestionably, we will be forced to rely on overseas sources from such places as the Caspian Sea, North Africa and France. Apart from the political implications, there will be a further enormous effect on our already huge balance of payments deficit.

The object of my remarks is not to revisit the debate on the very inadequate White Paper entitled, "Creating a Low Carbon Economy". We discussed that on 24th February. We also touched on one of the problems when we discussed the Electricity (Miscellaneous Provisions) Bill between 3rd March and 3rd April and we discussed clean coal and disposal of CO₂ in the debate on coal mining introduced by the noble Lord, Lord Hardy of Wath, on 9th April.

The White Paper, after stating the problems, of which we are all only too well aware, states what the Government believe to be the solutions—of which we are also well aware. Further than that, on the very day that the White Paper was published—no doubt just by coincidence—the Prime Minister made a statement to the Sustainable Development Commission in which, after challenging the anti-environment stance of the United States of America, he admitted that: Britain is not meeting the scale of the challenge". The purpose of Mr Brian White's admirable Bill was to concentrate the Government's mind both on actual firm targets, not mere aspirations or policy goals, and to hold the Government to account on an annual basis for their achievement or otherwise of them. The government amendments to the Bill have been completely to emasculate it and to make it another piece of window-dressing to give a semblance of credibility to the White Paper.

By the time the Bill leaves your Lordships' House, we hope that the Government will consider restoring some provisions to meet the original intentions of its promoter; namely, to make the Government supplement their words with real action and to compel them to face the music if they do not.

3.49 p.m.

Lord Evans of Temple Guiting

My Lords, my noble friend Lord Whitty has taken a great deal of interest in the Bill during its passage in another place, but he is unfortunately unable to be with us today. That is why I am delighted to be appearing in his place.

First, I join other noble Lords in congratulating the noble Baroness, Lady Maddock, on her able introduction of the Bill. We know that she has a strong personal interest in the issues that it addresses, through her championing, in an earlier career and in another place, of the Home Energy Conservation Act. I am sure that she will guide the Bill through its remaining stages with equal skill and determination.

Sustainable energy policy is of great importance to everyone in this House, the Government and particularly the wider community. The energy White Paper, Our energy future: creating a low carbon economy, published and discussed on 24th February this year, was the first comprehensive forward-looking statement of energy policy for more than 20 years. It reflects and reinforces this Government's commitment to sustainable development, and its scope reflects the enormity of the challenges that we face.

The Bill builds on that White Paper and its commitments—some 135 of them. Some noble Lords expressed reservations about the Government's commitment to the policy and the Bill. I will return to those issues in a moment. The Bill enables us to deliver on some of those commitments earlier than we might otherwise have hoped, and we very much welcome that.

Several noble Lords have expressed, with force and eloquence, disappointment that the Bill does not address particular issues, or that it does not go far enough for their liking in some respects. It is not a panacea. Implementing fully our sustainable energy policy is a task that will take years, not months. We are committed to bringing forward major legislation on a number of issues at the appropriate time.

However, we are making progress. We have established the sustainable energy policy network and published details of an ambitious work programme to deliver our White Paper commitments. For example, we have announced the competition for a second round of offshore wind farm leases, we have issued revised social and environmental guidance for Ofgem for consultation, we have set out a detailed timetable for implementing the EU emissions trading scheme and we have announced a £268 million budget for programmes to support energy efficiency and fuel poverty.

Briefly, given the time, I shall deal with some of the questions raised. If I fail to deal with any question, I promise to respond in writing. The noble Baroness, Lady Maddock, and other noble Lords have doubted the Government's commitment to the White Paper. I can confirm that the Government are enthusiastic about the paper and intend to deliver on it. To use the words of the noble Lord, Lord Ezra, there will be no drawing back.

We will report on progress towards achieving all 135 commitments in the White Paper, on our future commitments, on current and future targets and goals, and on the policies that we propose to deliver them. I assure noble Lords that the Government will work to achieve all 135 commitments.

The noble Baroness, Lady Maddock, asked about HECA officers. Under the use of the power, money would be allocated to meet the direction. It would be up to local authorities to decide how the money is best spent to meet their commitments.

I reiterate the Government's commitment to this policy. I wish to lay to rest the notion that, having supported the Bill, the Government will try to draw back from implementing both the letter and the spirit of it.

The noble Lord, Lord Palmer, was kind enough to warn me of the difficult question that he asked. He said that he would like a "yes" or "no" answer. I cannot give that, but I can give an answer that I am quite convinced he will be happy with. In Standing Committee C on 11th June, Brian Wilson said: "Every commitment in the White Paper about reporting will be met. There are no ifs and buts".—[Official Report, Commons Standing Committee C, 11/6/03; col. 007.] Crucially, the White Paper included a commitment that the Government would produce an assessment of the overall energy implications of both a hydrogen economy and of large-scale use of biomass-based fuels in transport. Work has started on that assessment and it will be published early next year.

The noble Lord, Lord Ezra, asked about targets and why the Government appear to be rather coy about them. We will report on the progress towards achieving all 135 targets, as I have already said, but it is not appropriate to enshrine a particular set of current numerical targets or aspirations in statute, or to require continued reporting on them in perpetuity. It is essential to monitor progress towards our goals, and we will. But it is essential that we retain the flexibility to adjust policies and programmes in the light of experience.

On the energy efficiency targets, we believe that improved energy efficiency can contribute about half of the 15 million to 25 million tonnes of carbon saving that we are likely to need to meet by 2020 to put ourselves on the right path towards 60 per cent cuts in carbon dioxide emissions by 2050. Improvements in residential energy efficiency could deliver about 4 million to 6 million tonnes of annual carbon saving towards that needed beyond 2010.

These clauses are therefore very much in line with our policy on energy efficiency and our wider climate change objectives. We are already working with key stakeholders to develop an implementation plan for the strategy set out in the White Paper, which we will issue by February next year. We therefore envisage designating—

Lord Ezra

My Lords, will Minister clarify the position on the energy efficiency targets for domestic dwellings? He referred to the 4 million to 6 million tonnes of carbon saving. Translated into targets, would that represent a 20 per cent saving by 2010, and a further 20 per cent by 2020? Those are the targets put out by the Energy Saving Trust, which I presume represent government policy.

Lord Evans of Temple Guiting

My Lords, I cannot do the calculation in my head to see whether it is possible to come to that percentage. I realise that the noble Lord, Lord Ezra, asked that question and I will ensure that he gets a proper answer. As it is obviously a rather fundamental issue, I will arrange for all noble Lords who have taken part in this debate to receive a copy of that letter.

To complete the paragraph on energy efficiency targets, we therefore envisage designating one or more aims in that plan under these clauses.

A fundamental point was made that I should answer—that the government amendments in the other place seriously weakened the Bill. We take the contrary view. The Government have supported the Bill since it was first introduced in the other place. We have worked closely and consistently with the Bill's sponsors to get the detail right and reach a deal that can—and so far has—secured cross-party support.

The energy White Paper sets out a framework for a sustainable energy policy for the next 50 years—a strategy for the short, medium, and long-term. We intend to deliver on our White Paper commitments, as I have said a number of times already, and this Bill is a worthwhile piece of legislation that will help us to do so. It made an important contribution to delivering the vision that we have set out and we will report fully and transparently on its progress.

The noble Lord, Lord Ezra, said that he was concerned that we would not deliver the CHP targets. We recognise the difficult market conditions faced by the CHP industry. The White Paper set out several additional measures to assist that will be incorporated into the final CHP strategy, due to be published later this year. We remain committed to the target of 10 gigawatts good quality CHP installed capacity by 2010. Through the target for use of CHP electricity in the central government estate, addressed in Clause 5, we feel that we are leading by example.

I hope that I have got the message across that the Government totally support the Bill. We will not, in any way, draw back. We give it our support, and we hope that the cross-party support that it has enjoyed to date will continue.

The Earl of Liverpool

My Lords, I know that the noble Lord said that he would write to all noble Lords who took part in the debate on issues to which he had not referred, but I spent quite a long time discussing tidal power and the new technologies that are available. Are the Government aware of the progress that has been made? Do they see it, in principle, as a realistic sustainable and non-polluting source of energy for the future?

Lord Evans of Temple Guiting

My Lords, I shall, if necessary, write to the noble Earl, but, as it is not a government Bill, I shall be interested to hear what the noble Baroness, Lady Maddock, says on the issue.

4.2 p.m.

Baroness Maddock

My Lords, I thank all noble Lords who took part in the debate for their valuable contributions. There was a common theme running through many of the contributions.

The noble Earl, Lord Liverpool, talked, in particular, about tidal power, and the Minister threw the issue back to me. It would be nice to be in the position of a Minister, able to do something about it. My understanding, from what the Minister and the Government have said, is that they will consider the matter. However, history shows that, when it comes to putting money into such things, governments think that something is a good idea one minute and not the next. I have been on the end of that.

I cannot really say what the Government will do about the matter. As far as we are concerned, people who care about sustainability will include tidal power as an issue. I know that the issue has moved on. The noble Earl also pointed out the golden opportunity that the Government have, with all the building programmes that are going on—hospitals, schools and housing—to put their money where their mouth is in that respect.

As always, the noble Lord, Lord Palmer, demonstrated his wide knowledge of the issue of biofuels with his usual enthusiasm. The noble Lord posed a question, at which point the Minister nodded at me, although, actually, he partly answered it himself. The noble Lord asked about the areas covered by the Bill. That question has been answered by the points that have been raised about how one gets a Private Member's Bill through the House. The wider the area covered by the Bill, the more difficult it is to deal with departments. Dealing with Defra and the DTI is difficult, with the Treasury hovering in the background. Trying to deal with transport as well would have been a bit of a nightmare. Nevertheless, the Minister showed that the Government do care about that issue. It is certainly something that the proposers of the Bill care about, and Brian White talked about it in another place.

I am grateful to the noble Lord, Lord Hunt of Chesterton, for finding time to join in our debate. He made a valuable point about housing and what happens when houses change hands. It is my understanding that the Government intend to address this issue in the housing Bill; it is in the draft housing Bill. We shall see. I hope that in the Queen's Speech there will be a housing Bill. I totally agree with the noble Lord.

He also touched on what happens in other parts of Europe, which we do not have time to go into today. That is a great disappointment to me. I first became interested in this issue more than 30 years ago when I lived in Scandinavia, where I realised what it was to live in a properly insulated house. I taught English to pensioners who did not know what it was to have arthritis or to be cold. Here we are, all these years later, and what are we doing? Private Members' Bills, not government Bills, are addressing this issue.

As usual, my noble friend Lord Ezra was perceptive about every aspect of the Bill. Indeed, the Minister was forced to reply to many of his points.

I am grateful to those who raised the problems in relation to getting Private Members' Bills through. The noble Baroness, Lady Miller of Hendon, again explained how we all feel so cross about—to use her very good phrase—the filleting of the Bill and said that the Government have a lot of good intentions. But where are the actions to follow up those intentions?

I was slightly worried by some of her comments. I certainly hope that we do not risk losing the Bill through lack of time. One comment I should like to make is perhaps not quite so friendly. The noble Baroness spoke about the Government not wanting to put targets in the Bill. When I was trying to get my Bill through, her own government resisted to the end putting targets in the Bill. So that is something that happens.

The Minister gave quite a full answer to the issues raised. He reassured us that the Government are committed to the Bill, which would enable them to build on "some of their commitments". I thought that was a rather telling phrase. That is the problem; it is building on "some of their commitments". We wanted them to build on rather more. However, the Minister promised major legislation. He did not say when. If pressed, I suspect we would receive the time-honoured phrase, "when parliamentary time permits". We shall see.

However, he also said that the Government are about to produce an implementation programme. We look forward to that. It is eight years since the Home Energy Conservation Act. Virtually all legislation in this area has been driven by people outside this House, driving some of us within the House to bring forward legislation on these matters. The Minister asked why we question or doubt the Government's commitment. From the speeches that have been made today, if he cannot see why we doubt the Government's commitment, well, I am very sorry. It is blindingly obvious. When a Bill comes forward based on matters on which the Government have given promises but have not backed up what they said they would do, is it any wonder that we doubt their commitment?

However, it was good to obtain the reassurances that we did today, particularly on combined heat and power. I fail to understand why the Government seem to be going forward and then going back. There is a great deal of plant out there. It is a wonderful opportunity to use our energy much more efficiently. This Bill has been supported by many organisations, from the Women's Institute to trade unions and, of course, local authorities.

Lord Evans of Temple Guiting

My Lords, I am sorry to intervene. Before the noble Baroness sits down, I should like to say for the record that I do not think said that we are intent on implementing "some" of our policies. What I actually said was that implementing fully our sustainable energy policy is a task t hat will take years, not months.

Baroness Maddock

The phrase I wrote down was: the Bill would "enable us to build on some of the commitments" we have made. I may be wrong, but we shall see what is on the record. That was my point. However, I am grateful to the Minister for intervening on that point.

We have made very slow progress on fuel poverty. It is unheard of in other parts of western Europe. We get many good words and intentions from the Government, but not much money and not much legislation with teeth. This is a small step forward, but we need to do better for those who still die of cold in their homes, for those living in cold and damp homes, for the stewardship of our planet, for our children and for future generations.

On Question, Bill read a second time, and committed to a Committee of the Whole House.