Peers back down over Energy Bill

The House of Lords has backed down in its stand-off with MPs over the speed at which coal-fired power stations should be phased out.

68d0a19e-6285-11e3-bbf8-0a0c0223000020131212T073534
A coal fired plant, as peers rejected a compromise amendment to the Energy Bill

The House of Lords has backed down in its stand-off with MPs over the speed at which coal-fired power stations should be phased out.

Peers rejected by 262 to 215, Government majority 47, an attempt to defeat ministers for a second time on the issue.

The Lords voted by 237 to 193 to defeat the Government on an amendment to the Energy Bill last month following a major Liberal Democrat rebellion, but MPs overturned the setback last week.

And today peers accepted the position of the Commons and rejected a compromise amendment to the Bill, which will now become law.

The vote came after energy minister Baroness Verma warned peers that if they voted in favour of the amendment it would create "uncertainty" and provide an "unacceptable risk".

Leading geologist and climate change expert Lord Oxburgh, putting forward the amendment, said it was intended to "make it clear that a role for unabated coal in the national energy mix is not foreseen beyond 2025 and that, indeed, is the Government's position".

The independent crossbench peer said the Bill already had provisions that would allow coal to be used for longer in the "unlikely event" that it was necessary.

He added: "The amendment is simply to provide an additional crumb of confidence to those who are contemplating investing in new gas-fired power generation."

Lord Oxburgh's amendment would have made existing coal-fired power stations and not just new ones abide by new standards on carbon emissions.

Supporters of the move had raised fears that coal-fired operators would upgrade their plants to comply with European Union directives but continue to emit large levels of carbon.

Shadow energy minister Baroness Worthington, backing the amendment, said it would provide "absolute clarity to the market".

She told peers: "By 2025 all but one of the six plants that this amendment would apply to would be over 55 years old, having emitted together over a billion tonnes of CO2 over their lifetimes - 2025 is well past their close date.

"This amendment is a compromise, but one that still has the benefit of clarity for everyone - clarity for the coal plant, clarity for gas investors and clarity for the environment."

Independent crossbench peer Lord Turner of Ecchinswell, a former chairman of the Committee on Climate Change, backing the amendment, said there was "no believable path" to meeting the UK's legal targets on reducing carbon emissions other than "the almost total decarbonisation of electricity in particular by 2030".

But Tory former energy secretary Lord Jenkin of Roding urged peers not to hold up the progress of the legislation any further.

"This Bill needs to be passed and it should be passed without any further delays," he said.

Liberal Democrat Lord Teverson, who put forward the amendment that defeated the Government last month, said Lord Oxburgh's move would "increase certainty in terms of investors as much as we are able to".

Lady Verma, replying to the debate, said: "No responsible government could or should take risks that would potentially put energy security in danger."

Urging peers not to back the amendment, she said: "I really do think it is time that this House looks at the elephant in the chamber, which is the investors.

"After months of uncertainty investors are looking at us in dismay. The most important thing we need to do is to provide certainty for investors by securing royal assent for this Bill."

Responding to the vote, Greenpeace policy director Doug Parr said: " Lord Oxburgh's amendment to the Energy Bill would have helped limit dangerous pollution from our dirtiest coal-fired power stations, increase security of supply and strengthen investment in cleaner power sources.

"Reducing the amount of coal in the power sector during the 2020s is essential if we are to have any chance of achieving a lower-carbon economy."

Later analysis of division lists showed there were three Liberal Democrat rebels - Lord Teverson, Lord Kirkwood of Kirkhope and the Earl of Glasgow - compared with 43 when the Government was defeated on the issue last month.

There was also one Tory rebel, Lord Renton of Mount Harry, while Labour's Lord Donoghue voted with the Government.