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Lord Truscott, Parliamentary Under Secretary of State for Energy
DTI Conference Centre, London, 21 March 2007
At this conference one year ago, Malcolm Wicks, my predecessor as Energy Minister, launched the Governments microgeneration strategy. I was delighted to be invited this year to report on all the progress that has been made since.
I realised the huge importance and potential of microgeneration on my first working day as a Minister. Before I even made it into the office on Monday I visited a school to open their new wind turbine. Fortunately it was a windy day! It was not just the electricity produced by the turbine that was impressive.
It was the engagement of the staff and the students – the turbine was the centre piece of the school’s economics, geography and science projects. It was also the evident pride in what their school was doing – one student had even written to the BBC reporting on what they were doing to tackle climate change. That school is now fundraising for a second wind turbine.
Similar projects throughout the country are having the same impact. Approximately 100,000 microgeneration installations are reducing carbon emissions, reducing energy bills, and inspiring communities to take more action to protect our environment.
Energy policy in the past year has seen an incredible amount of activity.
We published the Energy Review Report in July. Our report set out the two challenges for energy policy – tackling climate change and ensuring secure, affordable and clean energy supplies. It also confirmed microgeneration’s place within our overall energy mix. It has been estimated that microgeneration could provide 30-40% of UK electricity by 2050 and reduce household emissions by 15% p.a. within the same timeframe.
The Stern Review, published last November, underscored the importance of tackling climate change. We are facing a world at risk of an increase in temperature last witnessed between the last Ice Age and today.
But Sir Nicholas Stern also highlighted the opportunities available for business, commerce and science. And this is particularly true for microgeneration – 24 million dwellings provide a huge market base for microgeneration products. There are also the commercial and public sectors to target.
As you all know, tackling climate change requires action nationally, and internationally. That’s why I was encouraged when EU heads of state, meeting at the Spring Council earlier this month, approved an ambitious climate change and energy package. The package includes:
Our draft Climate Change Bill will help the UK play its part in achieving the emissions cuts required by the EU package. It will ensure we achieve our overall target of reducing carbon emissions by 60% by 2050. The Climate Change Bill will create, for the first time, a system of statutory carbon budgets placing an overall limit on our cumulative emissions. The Government will be accountable to Parliament for staying within these carbon budgets. No other country in the world has taken such steps to introduce legally binding carbon emissions budgets.
We have put significant effort into funding renewable energy. Between 2002 and 2008, we have committed £500m to the development of renewable and low carbon energy sources. The Renewables Obligation, along with exemption from Climate Change Levy, will be worth up to £1bn to the renewables industry by 2010.
Last year the Chancellor announced the creation of the Energy Technologies Institute. This is a new partnership with some of the world's biggest energy companies. The institute will take forward concepts proved through Research Council support in order to accelerate the development of secure, reliable and cost-effective low-carbon energy technologies towards commercial deployment. The Institute will be a public/private partnership, and the DTI has announced that it is prepared to provide up to £500 million, creating the potential for a £1 billion Institute over 10 years.
Microgeneration will have a key role to play in helping the Government achieve our ambitious energy agenda. Just last week, the Chancellor of the Exchequer indicated the scale of Government’s commitment to microgeneration. The Chancellor stated his desire to see an eightfold increase in the numbers of households producing their own energy.
The forthcoming Energy White Paper will set out in more detail how we will meet the challenges ahead.
But let’s look in more detail at microgeneration. The benefits of these technologies have been explained many times. The contribution they can make in terms of reducing emissions and reducing reliance on imported fossil fuels are well known. The issue before us now is how we can stimulate the market to make sure that microgeneration technologies can achieve their full potential.
The Microgeneration Strategy was our first step. It identified the barriers that needed to be removed, and actions that could help in this process. One year on, and we have already seen some success:
In December last year, the Communities and Local Government Department published proposals for using building regulations to deliver more sustainable homes. Significantly, the consultation proposed that all new homes are built to a zero carbon standard by 2016. The Code for Sustainable Homes, published at the same time, sets out the step changes required to achieve this target.
The Department of Communities and Local Government will be shortly publishing a consultation on amendments to the permitted development regime - which will aim to remove the barriers which currently exist in the planning system.
But we cannot achieve our aim of a sustainable market in microgeneration products without the help of the industry. We set the framework with the strategy, the Climate Change and Sustainable Energy Act, and the Low Carbon Buildings Programme.
And last year we challenged the industry to take advantage of this framework and deliver. I am now seeing signs of this starting to happen. Solar panels and wind turbines in B&Q, and council tax rebates being offered by British Gas in return for the installation of solar panels.
And today EOn are launching “Sustainable Energy Solutions” – exactly the kind of customer driven approach that should help to make a significant impact on the demand for microgeneration products. But it is not just about large scale companies. Smaller companies have also been blazing a trail with some of the most innovative products in Europe.
Undoubtedly there has been some pain within the industry. It is impossible to make the transition from a small-scale industry making a niche product to a large scale commodity industry without some growing pains. The aim of our policies is to promote microgeneration as a whole; not individual companies.
But a successful, sustainable microgeneration market will provide significant opportunities for all sizes and types of business.
I have been pleased at the level of the industry’s positive engagement with Government. Individuals have been devoting significant amounts of their time to drive initiatives such as our certification scheme. And I want to take time to thank those people. I would also like to thank the MicroPower Council and its members for their constructive contribution to policy development throughout the past year.
Without this level of participation we would not be able to develop schemes that work for the industry. Whilst we may not always agree on final outcomes, your input is immensely valued and always listened to.
Microgeneration is sometimes criticised for being too small to make an impact. But to those critics I say that the greatest achievements happen as a result of many small inter-connected actions. Think of the Berlin Wall coming down. Yes, the political environment was right, but the Wall came down when thousands and even millions of people came together with one purpose.
I believe this Government has created the right political environment. I also believe that we are putting in place the legislative and policy measures that will boost microgeneration. But we all need to act – in business, in the community and as individuals.
Today’s conference is an excellent opportunity to hear in more detail about some of your achievements over the past year. But, also to look towards the future. It is an exciting time, and there are real opportunities for us all to make a real difference.
This Government is fully committed to promoting microgeneration – it has a vital part to play in achieving our energy policy goals of sustainable and secure energy for all. I look forward to continuing our partnership, working towards that elusive goal of seeing microgeneration on every street.
I hope you enjoy the rest of the conference.
