Alan Simpson MP (Labour) in the Commons 21 March 2007
My thanks to Dave Eliott of the Open University for sending this item along.–Paul Gipe
…by far the most successful intervention approach is the one already in use in Germany, which introduced a renewable energy sources Act in 2000. It requires the energy industry to pay customers four times the current market rate for the renewable energy that they put back into the system. The effect has been transformational. The measures resulted in a cavalry charge of German citizens seeking to become part of the renewable energy generating process, and produced a renewables industry that, last year alone, delivered 214,000 new jobs into the German economy, and 24,000 in the last year alone. In that last year, 90 million tonnes of carbon savings were delivered-a huge quantum increase on the combined levels of carbon savings of all the UK schemes. The German system has been successful because it was citizen-driven.
Budget Debate 21 Mar 2007 : Column 914
Lynne Jones (Birmingham, Selly Oak) (Lab):
With our system of renewables obligation certificates, renewable generation has increased from 2 per cent. in 1990 to 4.22 per cent. in 2005. In Germany the increase has been from a slightly higher base, 3.2 per cent., to 10.2 per cent. The costs of the measures are similar. It costs the consumer in Germany about £12 a year, compared with £7 in our system, but obviously the German system is much more successful. I hope the Government will move away from the renewables obligation method to the feed-in tariff. That will be a sign that they are taking their obligation to tackle climate change seriously.
If we had good feed-in tariffs, the grants would not be nearly as relevant. There would be every incentive for local communities to set up community renewable energy schemes. We saw that in Germany, in a village with its own combined heat and power system, which was set up by two farmers who wanted another means of selling their arable crops. They were able to get investment on the back of the amount of money that they obtained from selling the electricity they generated as a by-product of the heat that heated the village.
Similarly, they had a photovoltaic system on the roof of the building where they stored their tractors, and I reckoned that that was bringing them in about €30,000 a year as a result of the feed-in tariff. That tariff also encourages innovation, because although the payment received from a particular investment is consistent over 20 years, a new investment the following year gets a lower payment. The big plus of that system over ours is that it is reliable. People know that they are going to get that income over the 20-year life of a project.
