On the 16 March 2016 the Bishop of Salisbury, Rt Revd Nicholas Holtham, took part in a debate to approve the Government’s draft Renewables Obligation Closure Etc. (Amendment) Order 2016. Baroness Featherstone also tabled a Motion to Regret the change. The draft instrument closes the renewables obligation from 1 April 2016 (12 months early) to solar PV generating stations at 5 megawatts and below. It applies both to new generating stations and to existing stations that wish to add additional capacity up to the 5 megawatts threshold. The Bishop’s speech is below and the vote on the Regret Motion can be seen here.
The Lord Bishop of Salisbury: My Lords, it is curious to rehearse the same arguments so soon after the recent debate on feed-in tariffs. It is very disappointing in the wake of the success in Paris of COP 21, and the enthusiasm engendered from that about a new level of ambition in response to human-caused climate change. I feel as though the Minister is in a position of defending the indefensible. The noble Baroness, Lady Byford, made a very good point about the place of subsidies and pump-priming. Therefore, it is disappointing that the Government are not working more effectively with the renewable energy sector to build on the considerable success of that industry.
In its analysis of the impact of the changes to feed-in tariffs, DECC estimated that there could be a loss of 18,700 jobs. There is no equivalent analysis in relation to the impact of the withdrawal of renewable obligations, but going towards no subsidy will undermine a sector that is moving rapidly to a position of needing less subsidy. The House’s Secondary Legislation Scrutiny Committee has been critical of the analysis of this in the EM by not highlighting the level of opposition to, or the paucity of support for, the proposed changes, or acknowledging the concerns expressed by a large number of respondents about the methodology used by DECC to justify its proposals. The desire for increasingly competitive pricing would be a good deal more compelling if this were a feature of the whole electricity market, but last week the Government’s Competition and Markets Authority drew attention to the highly uncompetitive features of the market, dominated as it is by the big six companies.
The desire to cap the levy control framework has introduced two thought errors into the Government’s proposals. The first is that, if the costs of decarbonisation are not to fall on already hard-pressed consumers, further support will be needed in addition to the LCF. However, as has already been pointed out in this debate, the additional cost to the consumer is estimated to be less than £1 per annum. This does not feel like the right way to address this issue. The second point is something that I have referred to before. The desire not to exceed the LCF cap means that we are content with hitting mid-range targets, whereas we ought to be seeking to exceed them on renewable energy in order to escalate the process towards decarbonisation. Many Members of the House want the Government to go back and think about this again. The issue is one of creating a strategy for energy that addresses the need, which was identified in Paris, to move rapidly towards a low-carbon economy.
Lord Bourne of Aberystwyth: [extract]: …I know that the right reverend Prelate the Bishop of Salisbury is very interested in this area and has been very supportive of some of the action the Government have been taking, including the designated closure of coal and so on. He asked why we are aiming for the mid-range of solar. We are not. After the action we have taken today, and based on the best estimates we get, deployment is still above the top level of the estimate set out under the last Government: it will be 12.8 gigawatts, and the top level of what was considered necessary by the last Government was 12 gigawatts. Therefore, even after the corrective action we have taken, we are still ahead of that.
I understand some of the concerns that have been expressed, but in relation to this measure I can say only that we do not need this subsidy. There is deployment without it, and we would be wrong to subsidise where it is not needed. We would be wrong, as a Government, not to take action on a subsidy where the evidence is that it is not needed.