News

The Secretary of State for Energy and Climate Change (Mr Edward Davey):

I am grateful to the Opposition for this opportunity to set out the many things the Government are doing this winter, and in the winters to come, to help people to keep their energy bills as low as possible and to keep their houses warm. I am under no illusion about how hard it is out there this winter. Times are tough, many people’s incomes are not going up, and the cost of necessities such as food is rising. I understand that higher energy prices are hitting some people hard, so let me make it very clear that rising energy bills are one of my greatest concerns.

We need to set the story straight on why energy bills have been rising. They have been driven remorselessly up by wholesale fossil fuel prices, as the right hon. Member for Don Valley (Caroline Flint) admitted. Global gas prices were 50% higher in the five years to 2011 than in the previous five years, and they have continued to rise. Sustained higher world oil and gas prices have taken some by surprise because, in the past, prices have fallen when the developed world has experienced recession and low growth. But today, probably for the first time in modern history, the fast-growing economies of China, India, Brazil and other parts of the emerging world are all demanding oil and gas. So world oil and gas prices have remained stubbornly high, and are likely to remain high.

Mark Reckless (Rochester and Strood) (Con):

My right hon. Friend referred initially not to rising oil and gas prices but to rising fossil fuel prices. Is it not the case that, although coal prices have fallen significantly, we are seeing no benefit from that because we are closing coal-fired power stations, including Kingsnorth in my constituency on 17 December, because of an EU directive?

Mr Davey:

My hon. Friend is not quite explaining the situation fully. There is an awful lot of coal being burnt in this country and elsewhere, because of its low price, but that has not changed the picture because of the high price of gas.

Britain cannot control the global market. We cannot drive down international wholesale prices, but we must still do everything we can to help the people and businesses facing those rising global prices, especially the most vulnerable and those in fuel poverty—and, despite what the right hon. Member for Don Valley said, we are doing that.

Government policy is designed specifically to drive a wedge between global energy prices and energy bills, now and in the future. It is designed to enable us to cushion and insulate people from the hikes in global fossil fuel prices as best we can. The coalition has a plan to tackle ever-rising energy bills. When the Labour Government were in power, they talked big but did very little. They did not effectively target help on those who needed it most, they did not establish a new market in home energy efficiency and they did not reform the electricity market. We are doing those things. We are acting, whereas they just talked.

Caroline Lucas:

Will the Secretary of State explain how promoting a major new nuclear power programme, which will require a subsidy of about £4 billion a year and which will inevitably push up prices, is compatible with trying to reduce the impacts on people in fuel poverty? It is going to make energy far more expensive.

Mr Davey: Two things surprise me about the hon. Lady’s question. First, she seems to know the details of the ongoing negotiations between EDF and the Government. I pay tribute to her if she knows them, but I have to tell her that her figures are completely wrong. Secondly, I would have thought that, given the real threat of catastrophic climate change, low-carbon energy would have changed a number of people’s views on nuclear power, if we can make it cost effective without public subsidy, in line with the Government’s policy.

David T. C. Davies (Monmouth) (Con):

Does my right hon. Friend agree that it is deliciously ironic that the Green party should be attacking the coalition Government for pursuing a form of energy generation that requires some kind of subsidy when it is determined to festoon the country with wind farms that require enormous subsidies to generate anything at all?

Mr Davey: My hon. Friend tempts me down a particular road, but it does not relate to the motion, so for reasons of time I am happy to get back to what I want to say.

Charles Hendry:

I was delighted to go to the constituency of my hon. Friend the Member for Monmouth (David T. C. Davies) to help open a wind-turbine manufacturing plant, which is keen to take advantage of this technology. That was not, however, the point I wanted to make in this intervention. Does the Secretary of State agree that the Labour did not just talk, but blocked progress? When the Minister of State, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), and I proposed a green deal as an amendment to the Energy Bill under the last Labour Government, Labour vetoed it. We could have seen progress two years earlier than it has happened.

Mr Davey:

My hon. Friend is absolutely right, and he is an authority in the House on this issue. It was not just the green deal or nuclear or other things that Labour failed to do when in government; they failed to get investment into the energy system in the UK, and we are having to make up the backlog.

We are helping people now, in the short term, by intervening directly—getting extra money into the pockets of those who need it to pay their bills and looking after those who are struggling most—through the warm home discount. We are helping people now and in the medium term by helping everyone to be able to help themselves to cut their bills by saving energy through the green deal. We are ensuring through the Energy Bill that our country and future generations are not hit by future volatile fossil fuel prices, as we are being hit by major reforms for a more competitive, more diverse market of suppliers and energy sources. Let me deal with each of those areas in turn

Richard Fuller rose—

Mr Davey: Before I do, I shall give way to my hon. Friend.

Richard Fuller:

We all recognise the differences between this Government and the last Government. This time money is short, whereas the last Government spent like drunken sailors money that they did not have. When we deal with fuel poverty, we thus want to ensure that the funding is focused on those who really need it. Will the Secretary of State address the issue that under the last Government schemes were not targeted on those who really needed them, and tell us what this Government are doing about it?

Mr Davey:

My hon. Friend is absolutely right, and I am coming on to talk about that right now. Looking at the actions we are taking, it is clear that we are helping the poorest and most vulnerable with targeted extra money to help with winter bills. We need to make sure that those who feel the cold most sharply and those who can least afford to pay can put on the heating in the knowledge they will receive extra help to pay for it. For many pensioners, winter fuel payments make a valuable contribution to paying their energy bills. That is why we have protected winter fuel payments in line with the budget set out by Labour. Last year, we made over 12 million payments to over 9 million households at a cost of around £2.6 billion.

We are doing more for the poorest pensioners and for many other vulnerable households through cold weather payments. When the coalition came to office, cold weather payments were at £8.50 a week and had only temporarily been raised to £25. As cold weather payments target the most vulnerable when they need it the most, the coalition decided, despite the tough financial situation, to keep cold weather payments at £25 a week and to make that permanent, investing an extra £50 million a year. About 4.2 million people are currently eligible—older people on pension credit, disabled adults, families with children under five on an income-related benefit. They can now be sure that—year in, year out—if the temperature drops dramatically, they will get help with energy bills. We should be proud of that.

Mrs Main:

The Secretary of State is making an enormously persuasive argument, far more persuasive than simply continuing with Warm Front, which was not targeted and certainly did not reach the people it should have reached. This is a much better use of public money.

Mr Davey:

I will come on to the energy efficiency part of our measures; at the moment, I am showing how we are using money very effectively to help people with their bills.
Several hon. Members rose—

Mr Davey:

I want to make a bit more progress.
In addition to the winter fuel allowance and cold weather payments, the coalition brought in the warm home discount—a legal obligation on the energy companies that we introduced for direct cuts to the energy bills of the most vulnerable. The Opposition rarely mention this, although to be fair to the right hon. Member for Don Valley) she mentioned it today. She will know that so far this winter, more than 1 million low-income pensioners have already received the warm home discount to help keep them warm—and, with them, almost a million other vulnerable households with mandatory rebates worth £288 million this year alone, automatically cutting the bills of the most vulnerable by £130 a year.

The Opposition do not normally mention that because it is clear evidence that we are doing everything we can to tackle fuel poverty, despite the financial situation we inherited. Even before cold weather payments can be claimed, a poor pensioner over 80 is guaranteed to receive £430 of help with their energy bill. Under Labour, a vulnerable household was not guaranteed anything, but with the coalition’s warm home discount, they can get £130 off for sure. That is real help.

Nia Griffith (Llanelli) (Lab):

How can the Secretary of State say that a pensioner over the age of 80 was not entitled to £400 under Labour, when they were entitled to £400 under Labour’s winter fuel scheme? Will he come clean and tell the House that his Government have cut that to £300, at the same time as cutting the £250 to £200? Can he tell us one week in this winter in which the cold weather payment has been paid to people in the UK?

Mr Davey:

First, cold weather payments are related to the weather, which the coalition Government do not control, as the right hon. Member for Don Valley was at least good enough to acknowledge. I am afraid that the hon. Lady’s figures are wrong. Under Labour, £300 of winter fuel payments went to all pensioners, but through the warm home discount we guarantee £130 off their bills from the energy companies, so that amounts to £430 off for elderly pensioners. That did not happen under Labour.

Hywel Williams (Arfon) (PC):

One thing the Government could do is make winter fuel payments earlier so that people who are off grid and buy large amounts of oil, gas, coal or wood got more value from the money the Government are giving them. Will he consider that? Such a proposal was made by my hon. Friend the Member for Angus (Mr Weir) in a Bill that was blocked by Government Members.

Mr Davey:

As the hon. Gentleman will know, the Department for Work and Pensions administers that benefit, and I am sure that he has made that request to the Secretary of State for that Department. My Department has been encouraging people in many parts of the country who are off grid to buy early, because they can get much better deals than if they leave it until later.

Although the extra payments are welcome to those who get them, they are not received by everybody. They do not address the fundamental problem of homes and appliances that waste energy and money. Britain’s draughty homes account for a quarter of the UK’s greenhouse gas emissions. Millions of homes do not have full double glazing. More than half do not have enough insulation or an efficient condensing boiler.

Most do not even have proper heating controls. The single most effective means of bringing bills down for people, including for the most vulnerable, is to help people waste less energy. Energy efficiency is about using less energy to provide the same warmth, or more. That means lower bills and lower carbon emissions.

Caroline Flint: I quote the written ministerial statement from today:

“The Warm Front scheme has been an important policy in tackling fuel poverty among private sector households in England though the installation of a range of heating, insulation and other energy efficiency measures”—
and since 2000 it “has helped around 2.3 million households vulnerable to fuel poverty.”

Given that this budget has a £50 million underspend, will the Secretary of State explain why he is not urging his colleagues in Government to extend the Warm Front deadline so that the budget can be spent to help the very people he has just been talking about?

Mr Davey:

I am coming to the Warm Front scheme, because the right hon. Member for Don Valley made much of the fact that we are closing it down. Under the previous Government, the Warm Front scheme was the vehicle by which some vulnerable households were helped, but we consider the scale of the fuel poverty challenge to be much greater, and, as she has admitted, there were problems with the scheme. We are far more ambitious, because fuel poverty must be tackled and Britain has some of the oldest and, therefore, draughtiest, housing stock in Europe. If we are serious about climate change and tackling high energy bills, we should not help just those who are at risk of fuel poverty, although they should of course be a priority. We believe that everyone should have the opportunity to green-proof their house and achieve lower energy bills in the process.

Warm Front will be closing, as announced more than two years ago, but applications will continue to be accepted up to 19 January, and the work will be followed through, for all who apply up to 19 January. I have set out to the House today in a written statement how that transition will work. Even before 19 January, we brought in Warm Front’s successor—the affordable warmth scheme, which the right hon. Lady did not mention, and which is part of our new energy company obligation. Affordable warmth is up and operating, and low-income households who previously could get Warm Front can now get affordable warmth. It and the energy company obligation, which are both now in operation, will support our most ambitious policy of all—the green deal.

This is a transformative moment. We shall see the full launch of the green deal this month. From 28 January, all households will be eligible for it. They will be able to make energy-saving improvements that will be paid for, over time, through their energy bills and the savings that they make. This is an affordable way of retrofitting millions of homes, making them cheaper to heat and lowering carbon emissions at the same time.

The right hon. Member for Don Valley rightly wanted to talk about Warm Front and the details of its budget. I shall deal with that now, although she herself admitted that there will problems with Warm Front. As she said, we have spent £38.4 million of the £100 million budget, and £15.5 is committed. We expect to spend about £70 million by the end of the year. We will not return the remaining £30 million to the Treasury, as the right hon. Lady implied, because we want to do all that we can to address fuel poverty, and we have worked hard to ensure that the money is spent on tackling it, organising a local authority competition for cash from a special fuel poverty fund. I told the House yesterday that about £30 million was being provided for local authorities across the country to spend on local energy efficiency projects for low-income and vulnerable households. There will be no waste. As it comes to the end of its life, Warm Front is being recycled, and what is replacing it is infinitely better.

Opposition Members seem to think that Warm Front was a fantastic scheme, but people had to apply for it, whereas under affordable warmth the energy companies will have to go out and find people in order to help them. I should have expected Opposition Members to support that.

Joan Walley (Stoke-on-Trent North) (Lab):

The Government announced yesterday that extra money would be available under the affordable warmth scheme. In Stoke-on-Trent, it will amount to £290,000, which could help 200 homes. However, when a quarter of the population are in fuel poverty, that is a drop in the ocean.

Mr Davey:

Opposition Front Benchers criticised me for not spending the money. I have just told the House that we are spending the money, and now I am being criticised again. I am afraid that sometimes one cannot win.

Richard Fuller:

Will my right hon. Friend give way?

Mr Davey: I want to make a bit more progress.

Caroline Flint:

Will the Secretary of State give way?

Mr Davey:

I will give way to the right hon. Lady.

Caroline Flint:

When—in, I believe, October 2012—the Secretary of State announced the competition for local authorities seeking to win money to help energy efficiency locally, did he make clear that it would be Warm Front money? He has said that £30 million will go towards the scheme. What is happening to the other £20 million of Warm Front underspend?

Mr Davey:

The right hon. Lady was clearly not listening when I said that we expected that amount to be spent by the end of the year. [Interruption.] It would help if the right hon. Lady listened now. She will know that uncertainties are involved in schemes such as this—even Labour could not macro-manage everything—but we expect to spend about £70 million.

The right hon. Lady asked whether we had announced that the money would come from the Warm Front scheme. We did not do so, because we were not absolutely sure what we would be spending on Warm Front by the end of the year. I wanted to ensure that we were making fuel poverty a priority, and that any underspend from Warm Front or anywhere else was targeted at it. Now the right hon. Lady is criticising me—

Caroline Flint:

The Secretary of State has misled Parliament. [Hon. Members: “Withdraw!”]

Mr Davey:

I certainly think that the right hon. Lady should withdraw that. Being accused of misleading Parliament, even from a sedentary position, is serious, and I think that she will wish to withdraw that accusation.

Caroline Flint:

I am happy to withdraw it, but I will look into the facts to establish whether it was made clear in that announcement that the money would come from Warm Front.
 

Mr Davey:

We did not need to.

Through targeted intervention to help the most vulnerable and by helping people to insulate their homes, we can help them to keep their bills down, but if we are to keep bills as low as possible in the long term, we shall need to ensure that there is a competitive market of diverse suppliers and diverse energy sources in which consumers can obtain the best possible deal. The Energy Bill, which is now before Parliament, is designed to do just that. We had a full debate on Second Reading just before Christmas, so I shall not go into the details of the Bill now, but I will say something about tariff switching, because I think that that has already been raised in the debate.

Switching has been the principal way to ensure suppliers compete for customers and to enable more suppliers into the market, but some statistics suggest the system is not working as well as it might and the majority of consumers do not seek out the best deals. Some 75% of consumers are on their supplier’s standard variable rate tariff, which tends to be more expensive. We therefore need to shake up the market.

We shall do so in two ways. First, we must help the vast majority of consumers who do not shop around to get the cheapest tariff their supplier offers that is in line with their current preferences. Secondly, we need to help and encourage people to shop around for even better deals, with better and more helpful and simple information on bills.

Many Members will by now know about my personal focus—some might say obsession—on collective switching, as it can help cut bills, promote competition and address fuel poverty. That is a collective solution to fuel poverty that the Labour party never thought of in 13 years. It is about encouraging people no longer to be passive consumers of energy, but to be active consumers, clubbing together to strike a better deal than they can get alone, and using the weight of thousands of voices—or whole local authority areas—to drive a harder bargain. It was not the Labour party that first pushed this idea into the political debate; it was this coalition Government and, if I dare say so, myself and the Liberal Democrats in particular. This is about rekindling the spirit of co-operatives.

I have spoken many times about the many examples of this policy working, including examples in Belgium, the Consumers Association’s “Big Switch”, and examples involving South Lakeland district council and Cornwall Together. Yesterday, I announced the winners of “cheaper energy together”, a £5-million competition I set up last year to stimulate collective switching across the UK. I was thrilled so many councils and community groups applied. There were 114 bids, and the 31 successful bids cover 94 different local councils, so this year millions of people will have the opportunity to take part in collective switching schemes.

New ideas such as collective switching are part of the answer to high energy bills and fuel poverty, but no single measure will bring bills down, keep bills down and end fuel poverty.

Today I have outlined a series of measures that will help people, both this winter and in winters to come, to keep warm at an affordable price, to save energy and to change the dynamic in the markets. While no Government can control global energy prices, we will do everything we can to limit the impact on people.

Taking all our policies together, by 2020 the average household energy bill will be 7%, or £94, lower than if this Government were not pursuing our energy and climate change policies. Last year, our independent review of fuel poverty suggested that our policies are reducing fuel poverty: we are doing the right things. That is good news, but there is no room for complacency.

No party in this House has a monopoly on compassion. When there are reports of people having to choose between heating and eating, we are rightly determined to make sure that we help the most vulnerable. I will do everything I can with my colleagues across Government, as well as working across the House and with business and consumer groups alike, to make sure that the choice between heating and eating becomes a thing of the past.

Policy and ownership responsibility for the UK shareholding in Urenco has transferred from the Secretary of State for Energy and Climate Change to the Secretary of State for Business, Innovation and Skills.

This parallels other recent moves to consolidate government shareholdings within the Shareholder Executive under the Business Minister Michael Fallon and will strengthen the ability of the Government to utilise commercial expertise in the future management of its Urenco shareholding, including in the ongoing work on a possible sale.
 

Introduction

It’s a great pleasure to be here today to launch the National Solar Centre and mark a real mile stone in the development of the sector.

The last two years have seen the industry go through an extraordinary period of growth but also face the most enormous challenges.

I know just how difficult recent months have been for many of you but the industry has come through this testing period – and has definitely emerged leaner, wiser and certainly larger!

1.8GW of solar PV is now deployed and in operation in the UK – enough energy to power around 450,000 homes. Three times as much deployment as was anticipated by the original, unreformed FITs scheme.

Now, as we prepare to pass the 2GW threshold, we can rightly say that solar is coming of age. It is reliable, accessible, increasingly affordable and totally scalable.

My department has also been through a steep learning curve too. With the help of many of the people here today, we have brought solar into the mainstream of the UK energy mix, solar is now rightly recognised as one of DECC’s priority renewable energy technologies and an essential part of our energy future.

But we are now standing at a crossroads.

The Coalition’s new Energy Bill is set to revolutionise the investment opportunities in renewables – delivering a fundamental change to the way we generate power in the UK to 2020 and beyond. Solar must be part of that.

So there could be no better time for the National Solar Centre to launch, to ensure the industry is in the best place to be an important part of the UK’s energy mix.

Thanks to dramatically falling costs, costs that will….and must, fall further, solar PV will play a critical role in helping the UK meet its vital renewable energy targets. And we in the Coalition Government are absolutely committed to working with you to make that happen.

At Christmas, the Renewables Roadmap Update set out our ambition. We have the ability – and more importantly, the ambition – to see a 10 fold increase in solar power by 2020.

20GW is a big, bold and transformational goal. But to achieve such a dramatic shift, we will need a real partnership:

• Partnership between the Coalition Government and the private sector.
• Partnership between manufacturers and developers.
• Partnership between academic research and those deploying solar in the real economy.

Key to this will be a continued drive to reduce costs.

Whether that’s innovation to bring down the costs and increase the efficiency of solar PV products, a critical mass of activity which brings economies of scale, more cost-effective installation process or innovative financing. All these drivers will need to play their part.

But to achieve this potential, the sector also needs real champions; champions with the vision, the ambition and the resources. To lead the charge on the next stage of the solar power revolution.

The National Solar Centre can be at the spearhead of this effort.

So I want to be clear today about what I believe the National Solar Centre can achieve.

But first let me reflect on how far we have already come – warts and all.

The last year

This last year or so has been a difficult period of adjustment.

The levels of deployment under the original FiT tariff simply wasn’t financially sustainable at that level of deployment, and the bumper double-digit 25-year returns funded from energy bills of consumers already struggling with the cost of living were in danger of bringing not just the scheme, but the whole industry, into disrepute.

Now the industry is not to blame for that. That lies squarely on the shoulders of the architects of the original scheme. But while I believe we had no choice but to act, it wasn’t easy or itself without difficult consequences.

But despite all the adverse publicity these changes generated, one fact remains true. Solar is still a great deal.

There’s been much disinformation out there on how solar is now just uneconomic and unaffordable.

The opposite is true. Unit costs have fallen dramatically. And it’s worth underlining – the rates of return under the new bands actually remain broadly similar to those when the FITs scheme was first launched in 2010. Together, we need to get that extremely positive message out to the wider public.

This message is starting to feed through into real-life activity. This last week’s installation figures under the FiT have shown encouraging signs that the market is stabilising with nearly 1500 installations equating to 5MW. Now we have a long way to go to drive up levels of deployment. But the industry isn’t flatlining.

What’s more, we are determined that the new subsidy levels under both the FiT and the Renewables Obligation (including the enhanced band for building mounted solar) should set the solar sector in the UK on a predictable and sustainable long-term footing.

But subsidies alone will not deliver what the sector needs.

That is why I am working hard in DECC to make sure our new Solar Strategy is ready for launch in the spring.

And I will be working closely with the industry to make sure that sets out a real, meaningful programme for you and us to work together. To ensure that I will be setting up a new formal process by which the sector can feed into the strategy. Through it we can, together, identify the critical barriers standing in the way of achieving our shared vision for solar in the UK and work together to overcome them.

2013 is an important year for the economy, as we do everything we can to drive responsibly sustainable growth in the economy. I want solar to be part of Britain’s growth narrative.

I want the industry to embrace the changes taking place. There are real opportunities here for you to...

• Use the Green Deal to market Solar PV as an energy saving option.
• Use the commercial Green Deal to drive solar’s part in the distributed energy revolution. Offering companies from SMEs to FTSE Giants solutions to generating more of their own electricity, building greater resilience and certainty into their business models as they go.
• Take opportunities to capture new markets with the support of Government. For example over the coming month I will be hosting a series of networking events where the sector can sell its pitch to some key potential customer groups – Registered Social Landlords, Local Authorities, the Building Sector.

Key to seizing these opportunities will be getting the message out, mutual supportive action to help the industry grow and develop in a sustainable way.

This is where the National Solar Centre comes in.

The National Solar Centre

I am delighted to announce the creation of the new National Solar Centre (NSC) at St. Austell, Cornwall in April this year.

The new National Solar Centre (NSC) will play a pivotal role in supporting the solar industry not only in the UK but with International Renewable Energy Associations.

It will help establish infrastructure for industry growth in developing Technical Standards, Due Diligence, Best Practice Planning Guides, Training facilities and driving innovation through R&D.

Innovation, of course is fundamental to the development of any industry if we are to realise our growth potential and break down the barriers to deployment. There are really exciting opportunities for the solar industry and we’re seeing them happening now.

Innovation has always been one of the UK’s great strengths. For example, I recently toured Romag’s factory in the North East but while I was there also visited Naked Energy.

Naked Energy is an award winning British design and innovation company. They are developing “Virtu” – a revolutionary hybrid solar panel that generates both electricity and heat for commercial and residential applications. They should be bringing the technology to market during 2013.

That’s precisely the type of innovation we need to see.

The support the NSC will provide for companies who are developing new and innovative solar products, will provide an excellent opportunity for UK manufacturing and job creation.

Solar also needs to build links with other sectors that are key to the industry’s success. The UK has the expertise to influence new and emerging markets and benefit from “solar going global”, and we believe the centre will be an important catalyst in making this happen.

We welcome the commitment which the Building Research Establishment (BRE) has shown in driving this forward, and value the vast experience they will bring.

Making concrete links between the Solar PV industry and the Building and Construction sector will assist the solar sector in taking its place in the mainstream generation market.

I particularly like to thank Ray Noble for his tireless work over many years to support the development of the solar sector in the UK.

It’s probably fair to say that, without his drive and vision, we wouldn’t be celebrating this launch today. I can’t think of a better person to be heading up this important new initiative!

Conclusion

In conclusion Ladies and Gentlemen, there are still real challenges ahead if we are to achieve our 2020 Vision of a vibrant UK solar sector.

We must commit to working together – Government and industry – to make it happen.

The new incentives which are now in place should provide the foundation on which the sector can build deployment. Whether:

• A householder looking to reduce their own bills.
• A company looking to take better control of their own energy usage
• Large scale PV on brownfield sites.

Government will continue to work with the sector to get the message out there that solar is now on a firm footing to build deployment and a ‘go-to’ solution for energy generation.

We are committed to supporting a sustainable PV industry in the UK.

Industry must do its bit driving down costs through relentless innovation.

But working together we can bring about a solar energy revolution in the UK.

• A win for consumers.
• A win for British business.
• A win for the economy as a whole.

And a win for the future of our planet.

The Warm Front scheme has been an important policy in tackling fuel poverty among private sector households in England though the installation of a range of heating, insulation and other energy efficiency measures. The scheme was introduced in 2000 and has helped around 2.3 million households vulnerable to fuel poverty.  The 2010 Comprehensive Spending Review announced that 2012/13 would be the last year of Warm Front’s operation.

The scheme will close to new applications on Saturday 19 January 2013 to allow time for qualifying applications to be completed, as far as reasonably practicable, before the end of the financial year.  All applications received before 5.00pm on that day will be processed under the scheme.  Warm Front is closing only to new applications.  Aftercare services for households assisted will continue.

For households seeking help and support once Warm Front is closed to new applications, the Energy Company Obligation (ECO) is already available.  Anyone calling the Warm Front telephone line to make a new application after 5.00pm on 19 January will be directed automatically towards ECO. 

ECO came into force on 1 January 2013 and works alongside the Green Deal, with the aims of saving carbon by supporting energy efficiency measures in harder to treat homes and enabling the installation of efficient boilers and insulation into the homes of vulnerable people across Great Britain.  Part of the ECO is specifically targeted at a wider group of low income households than Warm Front, helping them to keep warm and save money on energy bills. A referrals system is already operational for people who call the ESAS helpline. 

This checks customer eligibility against the benefit based criteria for ECO Affordable Warmth support.  Relevant customers will then be put in customers in contact with suppliers participating in the ECO who will then provide a guaranteed minimum package of assistance under this obligation. Householders should therefore contact the Energy Saving Advice Service (ESAS) for advice and access to ECO.

Furthermore, we have also taken steps to ensure that we make maximum use of the full budget for capital spending on fuel poverty.  As set out in a written Ministerial statement to Parliament on 15 January 2013, DECC is awarding some £31m of capital funding to support 61 outstanding local fuel poverty projects, helping 169 local authorities across the country improve the thermal efficiency of homes in their area
 

INTRODUCTION

Ladies and Gentlemen, It’s a pleasure to be with you here today and it’s great to see so many of you here in London.

You are here, of course, to launch the Climate Legislation Initiative.

Each country represented here faces unique challenges.

Climate change will affect each of our countries in different ways.

We face different hurdles in convincing our colleagues, our business people and our citizens of the need to act.

But we share one imperative – heading off the prospect of catastrophic climate change in the future, by taking real and meaningful action now.

So I’m particularly glad that this Globe initiative is aimed at lawmakers, parliamentarians and fellow politicians.

MAKING CHANGE HAPPEN

We understand how to make change happen.

We understand need for political momentum.

We understand that legal frameworks help provide that momentum.

Because legal frameworks provide confidence to investors, confidence that change will happen, confidence to plan for the long-term.

It says to people, this is real, this is happening, we will be held to account for what we do.

This issue of momentum is key – and that is why the Globe Climate Legislation Initiative is so important.

The Doha conference in December has maintained the forward momentum produced by Durban.

It has re-affirmed the commitment to a 2015 global agreement.

But we should be under no illusions.

There is a lot of work to do if we are to succeed in 2015.

And Globe – and you – can play a key role in that.

Putting in place national legally binding frameworks for carbon reductions will create the conditions for international action.

Showing how rhetoric and ambition can be turned into robust targets and real change.

Showing that you can move towards low carbon solutions and still be economically competitive in this globalised world.

This initiative is about making the Durban Platform a reality by changing the game on the ground.

Working from the bottom up.

So that by the time we get to 2015, signing up to international targets will be the natural thing to do.

Globe provides a great opportunity for lawmakers to meet, to share experience, and learn lessons from each other.

To point out to our own domestic audiences, that we are not alone, that others are acting, that we can’t afford to be left behind.

So being part of this Globe initiative is about taking domestic action, yes, but it can also be about being part of a campaign to deliver an ambitious international treaty in 2015.

And let us also be under no illusion about what is at stake here.

URGENCY

Climate change is something that can seem far away – not just in terms of distance, but also time.

Talk of 2030 projections and 2050 pathways can make the threat seem remote.

But it’s not.

It is real and it is happening now.

The draft US National Climate Assessment released last week doesn’t mince its words.

“Sea level is rising, oceans are becoming more acidic, and glaciers and arctic sea ice are melting.

These changes are part of the pattern of global climate change, which is primarily driven by human activity.”

Carbon dioxide in the atmosphere is at its highest level for 800,000 years.

Global temperatures are rising - by over half a degree in the last 50 years.

As a result, sea ice in the Arctic is disappearing - reducing by over a tenth every ten year – and getting thinner too.

Weather patterns are changing, with the risk of extreme weather increasing.

That means for the UK, the risk of extreme flooding has now doubled compared to a century ago.

And as our understanding of the changing climate grows, so does our understanding of what those risks might mean for our people.

As the Observer newspaper put it this weekend.

“The Earth is set to become hotter, drier, unhealthier, more uncomfortable, dangerous and more disaster-prone place in the years to come.”

This could mean a more brutal environment for our citizens.

So if you are lobbied by those with vested interests in the energy status quo who may try and stop you legislating for a cleaner, safer future, think of the evidence, think of the world we will pass on to our children and our grandchildren.

To keep average global temperature increases to less than 2 degrees, we need to peak global emissions before 2020 – just eight years away.

To achieve that we must rewire the global economy now, becoming more resource efficient whilst delivering more growth.

The decisions that will shape the decades to come are being taken today in boardrooms and staterooms around the world.

And they must be taken in parliaments and in the courts too.

Because only by giving action the force of law can we ensure that the momentum is maintained – and that we are held accountable for what we pledge to do.

So this is about political leadership at all levels.

GREEN GROWTH

Too often, we are told that those who go low-carbon first will sacrifice their competitiveness.

But the real danger is but being outpaced by other countries who are investing in clean, low-carbon business.

This is a boom market of £3.3 trillion, growing at 3.7% a year, with investment in renewables outpacing that in fossil fuels.

For our businesses this can mean opportunities, for our governments tax revenues, for our people jobs, for our societies insulation from the volatility of fossil fuel prices.

So this drive for low-carbon energy can be a real engine of growth for hard-pressed economies around the world.

And key to driving this growth are legally binding targets.

Legislation creates the clarity, certainty and confidence that the action promised will actually happen.

With an independent statutory regime that holds government to account.

This is what business needs to invest in a low-carbon future.

So national laws that set out our own national pathways to a clean energy future will leverage investment faster, bring job faster, drive growth faster.

So let me turn to the UK’s own experience in putting such a regime in place.

I am today making a statement to the House to let Hon Members know that I have asked the UK’s independent nuclear regulators, the Office for Nuclear Regulation and the Environment Agency, to conduct a Generic Design Assessment of the Advanced Boiling Water Reactor (ABWR).

This is the nuclear reactor design by Hitachi-GE Nuclear Energy Ltd which Horizon Nuclear Power intend to use in the new nuclear power stations which they propose to build at Wylfa in Anglesey and Oldbury in Gloucestershire.

In October I welcomed Hitachi’s purchase of Horizon Nuclear Power and the confirmation that it intended to proceed with Horizon’s investment in Wylfa and Oldbury. This showed the willingness of international companies to invest in the UK’s low-carbon energy future and the confidence of the market in the Government’s proposals on regulatory reform of the electricity market.

The Government welcomes all such investment. However, the nuclear industry in the UK is rightly subject to a regulatory regime to ensure safety, security and mitigation of any potential environmental detriment. Generic Design Assessment is now an established feature of our regulatory regime, and, as I told the House in December after the completion of the GDA process for the AREVA European Pressurised Water Reactor (EPR), it has shown itself to be an excellent process for rigorous and transparent nuclear regulation.

I am therefore pleased to be asking the regulators to assess the ABWR through GDA. The application is an exceptional one. It is an application for GDA of a reactor design which has already been in operation elsewhere in the world. And it follows the purchase by the vendor and designer of the intended operator of two sites which have been determined in the Nuclear National Policy Statement as potentially suitable for the deployment of new nuclear power stations, and the purchase of the sites themselves.

I therefore think we are right to conduct a separate exercise for this design. This does not rule out a further round of GDA covering other reactor designs which might be built in the UK and we intend to hold such a round at a future date to be determined by market developments and regulatory resources.

As with previous such assessments, the full cost of GDA will be charged to the Requesting Party which submits the design for assessment.

Plans from Japanese firm Hitachi to build up to six new nuclear reactors in the UK progressed today as Ministers asked the Office for Nuclear Regulation and the Environment Agency to assess the design of their reactor.

Hitachi recently acquired Horizon Nuclear Power and plan to develop new nuclear reactors at Wylfa in Anglesey and Oldbury in Gloucestershire.

A Generic Design Assessment (GDA) will now be carried out on the Advanced Boiling Water Reactor, which is the only Generation III + reactor which has been in operation anywhere in the world, with four ABWRs in Japan, and three others under construction in Japan and Taiwan.

John Hayes, Minister of State for Energy, said:

“New nuclear has a central role to play in our energy future, delivering secure, low carbon power and supporting jobs and economic growth. Hitachi’s commitment to the UK is extremely welcome, and I am determined that we work closely with the company to deliver their planned investment.

“We must however be absolutely sure that any reactor used in this country meets our rigorous safety standards. That’s why I’m asking the Office for Nuclear Regulation and the Environment Agency to conduct a thorough examination of the reactor design proposed for the Wylfa and Oldbury sites.”

David Jones, Secretary of State for Wales, said:
”This is an important step forward for the Horizon Nuclear Power project and demonstrates the UK’s commitment to Hitachi and the building of new nuclear.

“I know that the students of Coleg Menai in North Wales who are working towards a career in the nuclear industry will be pleased that the Generic Design Assessment stage has moved forward so quickly.”

Notes for editors:

1. For more information about the Generic Design Assessment for new nuclear reactors, please visit the HSE website.
2. Generic Design Assessment is the process being used by the nuclear regulators (ONR and the Environment Agency) to assess the new nuclear power station designs. It allows the regulators to assess the safety, security and environmental implications of new reactor designs, separately from applications to build them at specific sites.
3. In December 2012, UK regulators confirmed acceptance of EDF and AREVA’s EPR reactor design following an assessment of its generic design. See the HSE website for more information.

On 19 October 2012, DECC launched a competition for Local Authorities to bid for £40m of funding to deliver projects to reduce fuel poverty, help kick start Green Deal delivery and help consumers to save money on energy bills through Collective Switching. Organisations were able to submit stand alone bids for one of the funds, or joint bids across two or all three of the competitions.

DECC received a fantastic response, with bids received from the majority of local councils in England either for funding for individual projects, or as part of regional based applications. All three elements of the competition were heavily oversubscribed. In response we have been able to allocate £46m to the fund.

• £31million to help vulnerable householders keep warm this winter

DECC has been able to increase the funding available for the fuel poverty element so that we can support 61 outstanding projects, helping 169 local authorities across the country improve the thermal efficiency of homes in their area. This money will be targeted at low income and vulnerable households, helping them cut their energy costs and keep warm this winter and in the future, by installing efficient heating systems and insulation.

In addition to this funding Government is making sure the most vulnerable households get direct financial help from their supplier. Over 1 million pensioners will get £130 off their fuel bills this winter as part of the Warm Home Discount scheme, with the wider scheme helping around 2m households overall this year. And direct from the Government, all pensioner households under 79 will get £200 Winter Fuel Payment this winter and those over 80 will get £300 - these payments will be paid out to an estimated 12.7 million older people in more than 9 million homes.

• £10 million to kick start Green Deal ‘Pioneer Places’ projects

The Green Deal, the Coalition’s exciting new, innovative plan to help households in Britain improve their home and save on energy bills goes live this month. For an introductory period, householders taking out a Green Deal will also be eligible for a cashback incentive. Householders who use the Green Deal to make improvements such as loft insulation, solid wall insulation and new heating systems will qualify. Packages could be worth over £1,000.

To help kick start the Green Deal, funding has been awarded to 40 successful bids for Green Deal projects covering over 150 English councils. The money will be used for Green Deal household energy efficiency assessments, whole house retrofits to demonstrate the benefits of energy efficiency, and local events and other activities to raise awareness of the Green Deal. This ‘Pioneer Places’ scheme builds on the £12m investment already being channelled into seven Green Deal Low Carbon Cities, announced last September, enabling even more areas to benefit.

• £5 million to set up collective switching schemes – ‘Cheaper Energy Together’

Money has also been awarded to 31 successful bids under the ‘Cheaper Energy Together’ scheme, covering 94 local councils and eight third sector organisations in England, Scotland and Wales. Collective purchasing and switching is an innovative way for consumers to group together (through a trusted third party) and use market power to negotiate lower energy bills.

A press notice has been issued today including a link to a list of those projects that are to receive funding. A list of the successful projects have been placed in the Libraries of the House.

132 projects have today been awarded a share of £46million from the Government to help reduce fuel poverty, boost energy efficiency, and encourage collective switching and purchasing in regions across Great Britain.

This funding will be used by local authorities and third sector organisations to help keep people’s energy bills down and ensure homes are warm this winter, and in the future.

Organisations were invited to bid for money under three competitions and the Department of Energy and Climate Change (DECC) received an overwhelming response, with councils requesting funding for individual projects, or as part of regional applications.  Organisations could apply for funding for one, two or all three of these competitions and many submitted bids for more than one of the competitions.

The £46million will be allocated in three areas:

• £31million to help vulnerable householders keep warm this winter 
• £10 million to kick start the Green Deal with ‘Pioneer Places’ projects 
• £5 million to set up collective switching schemes – ‘Cheaper Energy Together’

Energy Secretary Edward Davey said:

"We need to find new ways to help people with their energy bills, working with communities and councils across the country.

“The projects we are funding will help people save energy and save money: helping the most vulnerable to heat their homes, getting the Green Deal market up and running and encouraging people to switch energy suppliers to get their bills down.

“This £46million will help local councils across England upgrade inefficient heating kit as well as creating demand for and installing insulation under the Green Deal in homes across their local areas. 

“Funding will also be used to drive forward collective purchasing and switching initiatives at a local level, helping consumers get a better deal on their energy bills.  I am delighted so many organisations want to run new co-operative schemes to help people, especially the fuel poor, to get the best deals in the market."

Tackling fuel poverty:

The first competition offered funding for local authorities in England to install efficient central heating systems and insulation in the homes of vulnerable local residents who are struggling with rising energy bills.   The aim of this scheme is to help householders cut their energy costs and keep warm this winter, and in the future.  This scheme was significantly over-subscribed, with 136 applications involving the majority of local councils in England requesting over £60million of support. £31million has been awarded to 61 projects involving 169 local authorities across the country. 

Improving household energy efficiency:

There was also £10million up for grabs under a second competition focused on improving the energy efficiency of homes across local authority areas, not just targeted at vulnerable householders. This money is intended to kick start energy efficiency projects to tie in with the launch of the Green Deal, the Coalition’s exciting new plan to help households in Britain improve their home and save on energy bills. 

The money will be used specifically for Green Deal household energy efficiency assessments to see where energy savings can be made in the home, whole house retrofits to demonstrate the benefits of energy efficiency, and local events and other activities to raise awareness of the Green Deal.  DECC received 74 bids under this scheme for £19.5million and money has been awarded to 40 successful projects, covering over 150 local councils across England.

Spurring on collective purchasing and switching: ‘Cheaper Energy Together’

A third competition offered a share of £5million to local authority and third sector organisations in Great Britain to help set up collective purchasing of energy in their local areas, and also encourage residents to work together to switch energy supplier and get a better tariff. The aim of this scheme is to encourage consumers to group together and use market power to negotiate lower energy bills and save money.  This competition was heavily oversubscribed as DECC received 114 bids requesting £14.8 million of funding.  Money has been awarded to 31 successful projects, covering over 94 local councils and eight third sector organisations in Great Britain.

Notes for editors:

1. A full list of winners under the three strands of the competition can be found on the DECC website.
2. The fuel poverty and Green Deal schemes were open to local authorities in England only. The ‘Cheaper Energy Together’ collective switching fund was open to local authorities and third sector organisations across Great Britain. Local authorities who have already received funding under the Green Deal Low Carbon Cities scheme were not eligible for the Green Deal Pioneer Places competition. Full eligibility is set out in the competition scheme guidance:http://www.decc.gov.uk/en/content/cms/funding/funding_ops/lacomp/lacomp.aspx#
3. Government is making sure the most vulnerable households get direct financial help from their supplier. Over 1million pensioners will get £130 off their fuel bills this winter as part of the Warm Home Discount scheme, with the wider scheme helping around 2million households overall this year. And direct from the Government, all pensioner households under 79 will get £200 Winter Fuel Payment this winter and those over 80 will get £300.  Further information on help with bills and energy efficiency can be found at www.gov.uk.
4. The Green Deal will help people pay for home improvements like insulation through savings on their energy bills. Further information on the Green Deal can be found on the Green Deal pages of the DECC website.
5. For an introductory period, householders taking out a Green Deal will also be eligible for a significant cashback incentive, in many cases potentially over £1000.
6. The Government has recently introduced a new Energy Company Obligation to run alongside the Green Deal, aimed both at saving carbon and at getting efficient boilers and insulation into the homes of vulnerable people across Great Britain.  Part of this new scheme is specifically targeted at low income households to help them keep warm and save money on energy bills.   Householders who think they may be eligible for help can contact the Energy Saving Advice Service (ESAS) on 0300 123 1234 for advice.  ECO is expected to provide support to around 230,000 low income and vulnerable households each year, worth £540million per year.
7. The seven Green Deal core cities were announced in September 2012 and more information is available in the DECC press release.
8. Further information on collective switching can be found on the collective switching page of the DECC website.

Abu Dhabi, UAE: 14 January, 2013

Today, during the Abu Dhabi Sustainability Week (ADSW), energy and finance leaders met to discuss ways to encourage greater private sector investment in renewable energy and low-carbon, climate friendly projects as a tactic to mitigate climate change and diversify the global energy mix.

Specifically, leaders focused on the growing opportunities for sovereign wealth funds, development banks and pension funds to view the new energy industry as a growth opportunity, especially in developing economies.

The discussion was hosted by Rt. Hon Gregory Barker MP, UK Energy and Climate Change Minister and Dr. Sultan Ahmed Al Jaber, UAE Special Envoy for Energy and Climate Change and CEO of Masdar.

Energy and Climate Change Minister Greg Barker said:

“This is an important agenda. Not just for the environment but for business. The opportunities for the global, low-carbon economy are huge and growing at an exponential rate. Clean energy and a range of resource efficient projects can expect growing interest in attracting investment as new financial participants crowd into this fast developing market.

“The meeting today helped to lay a foundation to better identify concrete areas of opportunity for investment in developing economies and ideas on how to scale up finance for climate solutions.

“This joint dialogue between the private and public sectors is absolutely vital and the UK and the UAE are working together to drive this agenda forward. I look forward to continuing this collaboration.”

A number of ideas emerged, including contract structures for power pricing, possible dimensions for the Basel rules on finance, and ways in which finance is securitized. Participants agreed to take the discussion forward and establish a working group to explore the suggested proposals more deeply.

Dr. Sultan Al Jaber said:

“Increased collaboration and institutional investment are critical in diversifying the global energy mix and addressing climate change.

“The realities of climate change should be viewed as an economic opportunity. Abu Dhabi is investing in the future of energy by working with investment partners and governments, like the United Kingdom, to build sophisticated, large-scale renewable energy projects that showcase the economic returns, and environmental benefits, of addressing these pressing issues.”

Uniting more than 30,000 participants from 150 countries, ADSW gathered leaders from academia, industry and government to tackle the business, technology and financial challenges required for sustainable development and renewable energy adoption.

Senior representatives from several financial institutions and energy investors including the European Investment Bank, International Finance Corporation, Abu Dhabi Investment Council, BNY Mellon Corporate Trust, African Development Bank, Mubadala Development Company, Citi Corporate and Investment Banking, Bloomberg New Energy Finance, UK Green Investment Bank, Gulf Investment Corporation, World Bank and others.

Notes for editors

1. Masdar is Abu Dhabi’s renewable energy company advancing the development, commercialisation and deployment of clean energy technologies and solutions. The company serves as a link between today’s fossil fuel economy and the energy economy of the future. Backed by the Mubadala Development Company, the strategic investment company of the government of Abu Dhabi, Masdar is dedicated to the Emirate’s long-term vision for the future of energy.
2. More information about Masdar.

• More photos from the event are available on our Flickr site.