14:15 Clive Lewis (Labour)

Throughout the debate on the Bill—in Committee, on Second Reading and in the other place—we have heard that Government decisions on energy policy, particularly with regard to renewables, have had a corrosive effect on investor confidence. It is appropriate to go through the list again, because it is quite despicable: the solar subsidy has been cut by 64%; the biomass subsidy has been cut; the biogas subsidy has been cut; the green deal has been scrapped; the renewables exemption from the climate change levy has been ended; and support for community renewable energy products has been slashed.

I will come back to that point. Let us have a look at the renewable energy country attractiveness index, which saw a major reshuffling of the 10 most attractive countries for renewable energy potential and growth. One of the biggest losers was the United Kingdom, which dropped out of the top 10 for the first time since the information was published back in 20013. It was specifically because

“a wave of policy announcements reducing or removing various forms of support for renewable energy projects has left investors and consumers baffled”.

I wonder whether the hon. Gentleman has seen the report from the Climate Action Network, which I understand is an umbrella group of dozens of NGOs involved in climate change, including Greenpeace and Friends of the Earth, which recently ranked Britain the second-best country in the world for tackling global warning, right behind Denmark, and represents a very strong commitment for tackling climate change. I would be interested in his thoughts on that.

I will come back to that. I am informed that it relates to climate change commitments, not the renewables that this Government and the previous coalition Government have invested in, or as my list just demonstrated, have been cutting left, right and centre. But let me give you a counter-quote from Neil Woodford, head of Equity Income, one of the best performing funds. In December 2014, he said:

I will push on. I have a few more of those chocolate sweets I might give away. If successful, the Government will be going back on their own legislation and closing the renewables obligation for onshore wind a year earlier on 1 April 2016, a date that will not be lost on any hon. Members here. If successful, the Government will have adversely singled out the most cost-effective, low-carbon technology available to us, at a time when the Secretary of State herself admits that the UK is on track to miss its legally blinding EU obligation on renewable energy by an estimated 50 TWh hours, a shortfall of almost 25%.

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14:30 Clive Lewis (Labour)

I do not buy this lack of market confidence. Paris and everything else point to a decarbonisation of energy generation. Investors are not going to have that policy pulled from under their feet. That should give plenty of market confidence to the private sector and others to invest. To have them continually drip-fed public money, irrespective of which purse it is taken from, has to stop. If the market pretends to be surprised by that, the Government would be surprised, because our policy was trailed very well months in advance of the election.

A report last week from Bloomberg New Energy Finance research forecast that these measures will see the UK lose at least 1 GW of renewable energy generation, enough to power 660,000 homes over the next five years. The figures suggest that after 2020 the renewables infrastructure will collapse to almost nothing because of a lack of investment.

“The Government’s decision to end prematurely financial support for onshore wind sends a chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors. It means this Government is quite prepared to pull the rug from under the feet of investors even when this country desperately needs to clean up the way we generate electricity at the lowest possible cost—which is onshore wind. People’s fuel bills will increase directly as a result of this Government’s actions. If Government was really serious about ending subsidy it should be working with industry to help us bring costs down, not slamming the door on the lowest cost option.”

As part of the Bill, the Government propose to close the renewables obligation to new onshore wind projects from April 2016, one year earlier than originally planned. As the only current mechanism that enables large-scale onshore wind to enter the power market, the proposed early closure of the RO poses a significant threat to the future of the onshore wind sector and the UK’s growing green manufacturing, export and investment potential, while increasing the difficulty and cost associated with achieving our decarbonisation targets.

Indeed, the Minister stated clearly her intent at the Energy and Climate Change Committee of 20 October 2015, when she pointed out that the primary purpose of the grace periods was ensuring,

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14:45 Simon Hoare (Conservative)

It is a pleasure to serve under your chairmanship, Mr Bailey. Given what the hon. Gentleman just said, I point out to him that as his party has a policy of achieving 100% renewable energy provision in Scotland, so much of it dependent on onshore and offshore wind, when the wind is not blowing there, Scotland—if it is independent—will have to come crawling to a country that will be setting a rate based on what it can sell on the market, rather than being generous. That is a hostage to fortune for any Scotland, future or past.

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15:00 Chris Heaton-Harris

As I said on Second Reading and as I think the Committee has agreed, I was quite happy about the second part of the commitment—a change to the law so that local people have the final say on wind farms—because I thought that that was pretty much the case, until a particular wind farm planning appeal came about. That was the Kelmarsh wind farm appeal, when the planning inspector ruled in favour of the development going through because he said that national policy in the area of renewable energy trumped all local concerns. And those local concerns were huge: they were concerns about a grade 1 listed building built in 1732 and about the site of the battle of Naseby. The inspector said in his report that this wind farm would have a “distinct visible presence” over Rupert’s viewpoint, King Charles’ oak viewpoint, Sulby hedges, the Royal Observer Corps lookout post and Mill Hill viewpoint. These are places and viewpoints from the battle of Naseby which I would argue—and I do argue with my colleagues—was the battle where Parliament fought for itself properly and won properly for the first time. The birthplace of Parliament was going to be overlooked by massive turbines, nearly the size of the London Eye.

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15:30 Philip Boswell

If the Minister is worried about the impact of electricity subsidies on billpayers, she must get the briefing on how we will hit the heat target. To do so through the renewable heat incentive alone would require a budget in excess of the entire budget for the Department of Energy and Climate Change. The Minister will not save money by cutting back on this important area. She will almost certainly incur a much bigger liability for the taxpayer unless she can tell us that we are on track for our heat and transport targets, but we all know that we are not.

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15:45 Simon Hoare (Conservative)

The Minister confirmed this morning—we are absolutely right to keep to this regime—that an aggrieved applicant would still be able to trot off to the Planning Inspectorate to appeal a decision, in the same way as the Secretary of State will be able to recall an application that may have been determined favourably by the local planning authority. Again, both an aggrieved applicant and an aggrieved third party will still have recourse to the courts for a judicial review, but the wording of the national planning policy framework—I am afraid I do not have the paragraphs to hand—provides a strong and reliable crutch to the inspectorate. It says that national planning policy, such as decarbonisation and so on, will trump a number of the key topics that my hon. Friend the Member for Daventry was talking about: areas of outstanding natural beauty, sites of special scientific interest, heritage and listed buildings and so on.

When it comes to the costs of balancing to account for the increased variability, which is a product of moving towards a more decarbonised and flexible energy system, gas is far, far more expensive than wind. For 2014-15, 7% of the costs of balancing the grid were due to payment to wind. In the equivalent year, the balancing costs associated with gas amounted to £240 million, which is five times as much as the costs associated with wind. So we need to bring some sense to the debate about what these technologies do and, in a sense, approach it—as I hope the Government still do—in a technology-neutral manner.

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16:00 Andrea Leadsom (Aberavon) (Lab)

The worrying signal that this policy has sent, not just for investor confidence, is that the Government have abandoned their previous commitment to a technology-neutral approach at a time when the overriding priority must be decarbonisation at the lowest possible cost, regardless of what technology best aids that. So I support the Bill as it stands and I oppose the amendments.

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16:15 Andrea Leadsom

Developers build risk into their decision making. Even before the changes were introduced, there was never a guarantee that the projects will build out. There are all sorts of risks involving planning permission— access to grid and issues with military radar. There are all sorts of reasons why projects do not come to fruition. Equally, the Government have been clear that our absolute No. 1 priority is energy security, and then decarbonising at the lowest possible cost to consumers. That means that we need to get the balance right between the costs on bills and our decarbonisation targets, to which we remain absolutely committed.

I am sure, then, that the hon. Gentleman will be delighted about our commitment to further deployment of offshore wind and to the new nuclear programme, both of which are a low-carbon future for the UK. Targets for decarbonisation and new gas, and a big decarbonisation away from coal and into gas, are the bridge to a low-carbon future. I am sure that he will welcome the certainty that we have given investors with that, and the opportunity for UK plc to get more jobs, more growth and more business in the supply chain as a result of our changes in policy.

I am grateful to the hon. Member for Greenwich and Woolwich for his insightful points about NISMs and the associated costs. It is exactly right that a NISM does not mean that the lights are about to go out, and the associated costs are actually relatively small. As we have said all along, energy security is our top priority and we are not prepared to risk it in anything that we do. He also rightly points out that we are trying to decarbonise at the lowest cost and that we totally support renewables. As many hon. Friends have already pointed out, 98% of solar has been deployed since 2010. In 2015, the UK increased its investment in renewables by 25% compared with 2014. At the same time, EU investment decreased by 30%. This Government have shown a strong commitment to renewables deployment. I hope that hon. Members are reassured by that.

Even in its most early design, as set out in the announcement by my right hon. Friend the Secretary of State for Energy and Climate Change on 18 June, the grace period drew a clear bright line for developers while protecting investor confidence and that of the wider onshore wind industry. That approach has underpinned our engagement with industry and wider onshore wind stakeholders. We have been told that the industry ultimately supports our approach. We have also heard anecdotally that some projects that did not meet the grace period criteria have already fallen away, so to change the goalposts at such a late point would be fundamentally unfair to developers who may have chosen not to continue their projects in the light of our original announcement.

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16:30 Dr Whitehead

I thank the hon. Member for Aberdeen South for tabling new clause 15. My understanding is that he wants only Scottish Ministers, and not the Secretary of State for Energy and Climate Change, to be legally able to close the renewables obligation to onshore wind in Scotland. I remind hon. Members that energy policy across Great Britain is reserved to the UK Government. The power to make a renewables obligation closure order is reserved to the Secretary of State for Energy and Climate Change under section 32LA of the Electricity Act 1989, which was inserted by the Energy Act 2013 specifically to ensure that closure could be effected consistently across Great Britain. Because the policy is reserved, the provisions to close the RO early to onshore wind in the present Bill will also apply to Great Britain.

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