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Feeder Tariffs

Volume 508: debated on Thursday 8 April 2010

We are introducing feed-in tariffs to encourage small-scale, low-carbon electricity generation by individuals, communities, businesses and organisations that have not traditionally engaged in the electricity market. The costs and benefits of the feed-in tariff scheme are explained in detail in the impact assessment that was published alongside the Government response to the feed-in tariffs consultation and is available from the Department of Energy and Climate Change website.

It is obviously desirable in principle to encourage people who generate their own electricity to feed the excess into the grid, as long as the costs do not exceed the benefits. Small wonder, then, that the Minister failed to answer the question and tell us that the costs of his new feeder tariffs are put by his experts at £8.6 billion, which is 20 times their assessment of the likely benefits. Given that even George Monbiot thinks that that is barking mad, will the Minister consider a more sensible and economically justifiable system of tariffs?

The cumulative cost to consumers is estimated at £3.1 billion to 2020, and the impact is an average increase of £8.50 annually to domestic bills over the period 2011 to 2030. If the right hon. Gentleman were followed by more people in this country, it would be difficult for the country, its Government and its citizens to tackle climate change effectively, but perhaps some people are following his views, most particularly Conservative candidates.

The introduction of the feed-in tariff will be very welcome to people such as the operators of the Torrs hydropower system in New Mills in my constituency—a community-owned hydropower station, of which I happen to be a shareholder. Is my hon. Friend aware that the big barrier is still the start-up costs of community hydro schemes? The Methodist church in Glossop is considering the possibility of having one on its ground, but what hope can he give those who are looking for help with those start-up costs before they can benefit from the feed-in tariff?

I have seen some of the community enthusiasm for small-scale hydro. For example, I visited a scheme at Tutbury in Staffordshire earlier this year. The feed-in tariff is intended to galvanise such communities by showing that they can make a commercial return on such schemes. I am afraid that I shall have to offer to meet my hon. Friend outside the Chamber to talk to him about possible sources of capital funding for such schemes, but there is interest, for example, from some commercial banks today.