16:32 Dr Alan Whitehead (Southampton, Test) (Lab)

The important additional point is that the deployment of renewables through FITs is, as I mentioned, adding to the nation’s installed energy generating capacity and the loss as projected in the central scenario in the impact assessment to the order of 5.7 GW by carrying out the cap option is a real loss to installed generation capacity over the medium period. FITs-eligible installations do not get any sort of reward for being there to generate because they already have some assistance through the FIT, but other, non-renewable generation now does through the mechanism of the capacity market—auctioning assistance, essentially, for agreeing to be there to generate if generation is required, although not actually generating, as renewable energy would do if it were installed.

Instead of that, the measures represent a capitulation to limits that dismantle policy in favour of a sterile nightwatchman view of deployment, which cannot be acceptable with the low-carbon energy emergency that we face. We must have a better way of dealing with the deployment of renewable energy—with the capacity and the future asset that it represents—than to cap its deployment in the way described in the statutory instrument.

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16:49 The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)

In recent years, we have made enormous progress in encouraging the development and deployment of renewable energy and building a successful renewables industry. The feed-in tariff, or FIT, scheme has been a vital part of that achievement. The Government recognise the significant role FIT has played in engaging non-energy professionals in the electricity market and also the role small-scale generation can play in future on a path to subsidy-free deployment.

The Government are committed to cost-effective decarbonisation of our electricity supply and to protecting consumer bills by controlling costs under the levy control framework, or LCF.

The Government are committed to cost-effective decarbonisation of our electricity supply and to protecting consumer bills by controlling costs under the levy control framework. The LCF projections published last July showed a significant overspend due to, among other things, demand-led schemes such as the FIT providing unchecked support for the renewables industry, so urgent intervention to manage spend has been necessary. It is important to remember that the FIT scheme is funded by consumer electricity bills—bills that are paid by all regardless of whether they benefit from the scheme. Uncontrolled spending on FITs therefore has a direct impact on the energy bills of consumers, including families and businesses.

Yes is the answer to that; we have absolutely considered that option, as we always do. Of course, the capacity market is an insurance policy for security of supply. In three or four years’ time, we hope and expect that energy storage will have been deployed to a greater extent. In those circumstances, the hon. Gentleman might be right that, for future years, we may be able to say that, owing to such storage, solar and wind are despatchable power. However, he will recognise that our energy trilemma is to keep the lights on, keep bills down and decarbonise.

The capacity market is an insurance policy and therefore it is despatchable power that bids into that market. At the moment, solar and wind are not utterly reliable technologies. It is not negotiable: we will keep the lights on. I hope that is a reasonable answer, but I can assure the hon. Gentleman that we look at this from both ends of the telescope, and in the past year, my Department has done a lot of work to look at precisely how different policy changes affect every aspect of our energy trilemma. We always consider the questions, “What does this do to energy security? What does it do to the cost of bills, and what does it do to our targets for decarbonisation?” We never look at just one aspect of our energy policy. I hope that response gives him some reassurance.

I remind the Committee that the changes to the FIT scheme are part of a package of cost control measures to deliver our manifesto commitment to keep bills as low as possible. The Government want to protect bill payers, ensuring technologies can stand on their own two feet while also meeting our renewable energy commitment. To annul the order and remove the cost control measures—measures intended to protect bill payers—simply will not do. I commend the instrument to the Committee.

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17:17 Dr Whitehead

My case—the hon. Gentleman will perhaps join me in at least part of this—is that trying to save customers money on their bills essentially by closing down substantial parts of renewable deployment, but at the same time spending large amounts of money and costing customers a lot more money on their bills by trying to procure non-renewable, high-carbon capacity on the other side of the equation, may well lead to us completely losing the opportunity to decarbonise our energy supplies at a good cost to customers over a longer period. I hope that a review might result in a discussion emerging on the real net cost over that period and perhaps a more realistic view of what the levy control framework is going to do on deployment.

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