John O'Dowd
Upper Bann · Sinn Féin · Northern Ireland
“As I set out in response to the previous question, we have in place the vacant property rate relief scheme and the small business rate relief scheme, which are very successful. I set aside £10 million in the draft Budget for small business rate relief to be invested.”
“I am particularly keen to hear from those impacted by vacant commercial units and especially about how any phased increase can be implemented in a sustainable way that is fair, proportionate and sustainable within the tax system.”
“I outlined my intent to take that approach in my statement on 18 November, alongside the fact that reform of rating policy should support growth, make better use of property and ensure that the system is fair, proportionate and aligned with wider economic objectives.”
“The accelerator will operate alongside our highly successful Back in Business scheme, which has helped to bring over 100 vacant high street properties back into use since May 2024. Those issues have been the subject of considerable interest and comment in the Assembly, and it is right that we grasp the nettle now.”
“There are no circumstances in which a hard border would be good for the people of Ireland; it would not be good for anyone. Those who suggest that are being naive at best and dangerous at worst, in the sense of not understanding this society. <BR /> <BR />Rural communities along the border are one and the same.”
“This announcement represents the next step in that. That said, I also put on record my intention to strengthen support for small businesses. In that vein, £10 million has been set aside in the draft Budget to broaden the impact of the small business rate relief scheme in order to increase the number of businesses that can benefit from it.…”
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“I wish to raise the issue of the Bann Foot in my constituency. It may not be known to many Members in the Chamber. The Bann Foot is a crossing of the River Bann from Charlestown to Columbkille and Maghery. In this day and era, one would hope that there would be a bridge across it to facilitate cyclists, pedestrians and even cars. Unfortunately, that is not the case. I have urged the Infrastructure Minister to bring that forward. She tells me that the council has not brought that forward as part of the greenways projects.”
“<BR /> <BR />Before I conclude, I thank all those who have assisted me in bringing the Bill this far, including the officials in the Bill Office, the Speaker's Office and other departments in the Assembly whose help has been invaluable and my party colleagues. I will conclude on those remarks.”
“I will bring the Minister back to the words he used throughout his original contribution: "it could". "It could" increase costs. Let us explore that one step further through the legislative process. Let us see what we as a legislature can do to support microgeneration and those most in need and ensure that we have sustainable energy provision across a number of areas. Those are the objectives of the Bill. <BR /> <BR />In the past number of weeks, we have seen the erratic and extreme price fluctuations that a reliance on power generated by fossil fuels can cause. Our future must be one of renewable energy. That will not only protect our environment but maintain prices at stable, predictable rates. The Bill is a small but practical step in that direction.”
“If we get to the point where the Department is drawing up a scheme, the Assembly and the Department can protect the most vulnerable from paying for the innovation that is required to bring us to carbon net zero. As I said to the Minister, there is a challenge for us all in this. We know that we cannot continue to do what we were doing on its own. We have to continue to make change.”
“OK. <BR /> <BR />Microgeneration has stagnated. It is hardly surprising that the cost of producing it is higher, given that the innovation, investment and promotion have not been there. You could argue that we should say, "Look what's happened. This is four times more expensive. Let's walk away from it", rather than looking at it and saying, "This forms a significant part of Europe, Britain and Ireland's generation of green energy. How are they doing it? What initiatives are they taking? How do we reduce the cost of it?". There are questions to be answered before you can say, "No. It's four times higher. I'm walking away". The way to reduce cost is to invest and innovate, and that is what we have to do. <BR /> <BR />I come back to the point about who will pay for the investment, and my colleague also raised that.”
“The Minister says that it is four times more expensive, and I take it that he speaks from an informed position.”
“Just give me one minute. Throughout his contribution, the Minister said, "It could". It could be against the directive; it could be against state aid rules; it could cost more. It could. I fully appreciate that it could, but the challenge for the Assembly and the Department, if we get to the stage of producing the scheme, is who bears the burden of the cost. How do we protect the most vulnerable in our society and promote green energy production? That is the challenge.”
“The problem that we are trying to solve is the stagnation in the Department's support for microgeneration. There is a stagnation there. We are trying to solve the issue of producing energy through fossil fuels, and it is recognised across these islands and in Europe that microgeneration is part — a part — of the answer to tackling climate change and the climate emergency that we are in.”
“A number of the questions are valid. The state aid one is a valid question. If there is an issue, it can be overcome. If there is an issue with the electricity directive, it can be overcome. The cost for the administration of the scheme is realistic in the figures that I have provided. The Minister will obviously and quite correctly have an eye on his strategy and what that can deliver, and he asked whether legislation is necessary at this time or in the future. That is a valid question.”
“She had concerns that some of the micro-green energy programmes that are identified in the Bill may have the unintended consequences of doing harm to the environment. She wanted to ensure that there were environmental impact assessments for each scheme. <BR /> <BR />The Member also made an interesting point about limiting the number of generators that a family home, business or farm could have. That is an interesting point, and it deserves more scrutiny as we move the process forward. No doubt, Clare and her colleagues will have more input to the Bill if there is an opportunity to move it forward. She is generally supportive but has concerns about aspects of the Bill and the production methods. <BR /> <BR />As the Minister said, he set out the Department's case in a letter to the Committee a number of weeks ago.”
“That detail would be in the scheme. My view is that, if and when a Minister or permanent secretary identified a flaw in a scheme, they would have to stop it. They would then have to look at compensation arrangements for the old entries, and we have seen that in recent times. <BR /> <BR />It is something that would require further scrutiny and detail. It would have to form part of the offer made under the scheme, so that applicants were fully aware of what they were signing up to at that time and what actions may or may not be taken at any time during their contract in that grant scheme. <BR /> <BR />I move to Clare Bailey's comments. She is supportive at this stage but raised concerns that the scheme may be abused.”
“Grants were distributed in the belief that we were producing green energy, which we were, but we were having a detrimental impact in other areas. Again, the clause is open to scrutiny, but it allows that, in the future, where there is a defensible reason to stop a scheme and to stop funding, a Minister can act. They will receive legal advice on that. It is broad, but it is deliberately broad for that reason.”
“It is largely a catch-all clause. You referred earlier to the perverse outcomes of incentives that are well-intentioned. It might be a year down the road before you realise that your incentive has created something that you did not want. However, if you do not have the get-out clause, you are stuck with that. <BR /> <BR />We have seen examples, in RHI and in other Departments, in a range of things where a well-intentioned policy direction from the Department or the Minister has ended up going in the wrong direction. You can see some of that even in the most recent renewables programme. You can see where there was no proper engagement between planning, energy and environmental health. All those things, which should have been consulted on and brought in at an earlier stage, were not.”
“I used to be Chair of the PAC, and I often found that, when investigations came before the Committee — this latest report is a classic example of it — it is not that you need to invent new governance arrangements; you have to make sure that the governance arrangements that are in place are properly implemented. When I read that report, and the Committee's analysis of it, it was quite clear to me that — I did not say this directly to Mr Frew — common sense is not that common. There are things in it that should jump out at anyone with any level of experience in developing public policy, and they should have been corrected much sooner.”
“We can do things differently. We can learn from the mistakes and opportunities of the past and target those whom, we believe, need to be targeted most. <BR /> <BR />To paraphrase Mr Frew's contribution, the energy industry is complicated because a lot of people make a lot of money out of it. That is true, and it goes back to Caoimhe's point. Energy production is still a very profitable industry to be involved in. However, we need to make sure that producers are not making profit from those least able to pay it. Certainly, the scheme can look at that, but I am not so sure that the Bill can. <BR /> <BR />John Blair welcomed the Bill at this stage. Like his colleagues, he will scrutinise it further. <BR /> <BR />Roy Beggs is supportive of the Bill in principle. He referred to the recommendations of the PAC report into the NIRO scheme.”
“However, some of that is for the energy strategy, not for this legislation. <BR /> <BR />You raised other points, which I covered, about costs being passed on to the consumer, and concerns about those from socially disadvantaged backgrounds, etc.”
“He said that he is disappointed in the scale of the Bill. I accept that any legislation has to do something, which, I think, is how you put it. It has to be authoritative in what it wants to do. I accept that fully, but I do not think that any private Member could bring forward a Bill that does what you wanted it to do, simply because of the capacity to deliver such detailed legislation. A private Member works largely on their own, with great support from the Bill Office and others — there is no question about that — but I do not think that any private Member could bring forward a Bill of such detail. I have listened to you on many occasions expressing your concerns about the governance of SONI. I am aware of the regulator's report on all those things. There is a valid commentary in all that.”
“The Chair of the Economy Committee is behind me. I do not know whether we have any time in our forward work programme for that, but it is a valid point. <BR /> <BR />Paul Frew is disappointed. I think that Paul is disappointed in me generally.”
“We need to learn from them around all these things.”
“However, the Bill sets the context for what we are about. <BR /> <BR />You and Mr Nesbitt mentioned the cost of connection, which is unbelievable. It is exorbitant. I am not sure that the Bill, given its parameters, will be able to deal with that, but that issue certainly has to be dealt with. It may be dealt with through the Minister's energy strategy, if we are to promote microgeneration or green energy. <BR /> <BR />Mr Frew talked about inequalities. He gave the example of a business coming in to a field, paying for the network and then a business coming in beside it and paying only for the connection. That is deeply unfair. There has to be a fairer way of doing those things. You, Steve, referred to what is happening in Scotland and elsewhere. Many jurisdictions are struggling with these questions. Some have come up with the answers.”
“That brings me to your remarks. You referred to your experience in the energy industry and the experience of Denmark. A number of Members mentioned the role of the Utility Regulator. Obviously, storage capacity is a very important issue. I do not claim to be an expert on these matters, but you commented about electric cars being used for storage. That seems to be common sense. Maybe someone will argue against that. <BR /> <BR />You said that we need to be linked up across not only the island but the islands. I certainly have no objection to that. That all makes sense in terms of energy production. Your contribution was very interesting, but some things that you said may be beyond the parameters of the Bill. I will come on to Mr Frew's remarks, some of which may be beyond the scope of the Bill.”
“Just give me one second, Steve. <BR /> <BR />There are lessons for every Department. You could have a noble objective and set out a funding scheme for that, but the funding scheme could, as you said, become perverse in its delivery of that, and you could end up going off in a totally different direction from what you expected. I will come on later to Mr Beggs's remarks about the most recent PAC report. There is a lot of evidence in that. The point is that common sense is not that common. <BR /> <BR />Go ahead, Steve.”
“Any incentive in any scheme has the ability to pervert the policy objective that is set out. I fully accept that. There are lessons for —.”
“Yes, certainly. That is a valid point about where this journey is taking us in relation to generating power. This is not about the major power suppliers but the smaller-scale provision of power. We are on an interesting journey. <BR /> <BR />Steve Dunne questioned the cost to the public. That was with regard to the £1 million that I mentioned. That is an estimate of the cost to the Department of introducing this legislation and the scheme. It is not the estimated cost of any future grants that may or may not be provided. He raised the issue of the cost to social housing and the cost to those of a lower socio-economic background. Earlier in my remarks, I raised the point that we have the ability to correct that. I believe that we have the ability to correct that in the next phase of the process, if the Bill goes through.”
“That is an important question that has to be answered, maybe in this legislation, or maybe the Minister's energy strategy is looking at those sorts of matters.”
“<BR /> <BR />A point that Steve Aiken raised is that the legislation or the scheme must look at the storage potential of micro energy production: the ability of households, farms or businesses to store energy and, when needed, put it back on to the grid. It may even be the case that a business or farm has a microgenerator and does not use it for domestic consumption but sells everything to the grid. He raised valid points around that, and I think that another Member also mentioned storage. <BR /> <BR />The grant is intended to incentivise people on to the scheme. If we get to the next stage, I will go on to look at the next phase, which is the scheme. Perhaps that needs to be looked at in relation to the grants. Should the grants be simply for production or should they also be for storage?”
“We have to learn from those examples. <BR /> <BR />Stewart Dickson is supportive of the Bill at this stage. He suggested — this goes back to the conversation with the Minister — that our lack of ambition means that we are losing out on green energy production. The question is whether the Bill, the Department, or whatever it may be, is ambitious enough. <BR /> <BR />Thankfully, Caoimhe Archibald was supportive of the Bill. She pointed out that there are no active green energy support schemes at this time. <BR /> <BR />If my memory serves me, Keith Buchanan is an electrical engineer, so I will not argue the ins and outs of the points that he made. Again, however, they were very valid points about the figure set, how much energy a household would use and whether, if it used all that energy, there would be enough energy to sell on.”
“I view that as allowing the Department to encourage investment in new technologies and ideas in order to ensure that companies and individuals who are involved in production are encouraged to maximise the opportunities available through microgeneration. I will come on to his points in a moment, but Steve mentioned a number of companies that are now doing work in Scotland, because, owing to excessive costs, they cannot deliver their products here. We have the technology companies, but we just need to encourage them. <BR /> <BR />In an engagement with Mr Nesbitt, Mr Frew mentioned a previous scheme involving solar panels on rooftops. I do not know the full details of the scheme, although I was aware of it. That is another example of delivering a programme that did not benefit the householder or the consumer.”
“Perhaps, as I said, my target is not ambitious enough. There is flexibility with it. Your Department is not bringing forward any legislation on the matter in this mandate. You are bringing forward your energy strategy. Every now and again, a Department needs a gentle kick up the backside, and sometimes that is done by way of a private Member's Bill. At the end of the day, there is a valid opportunity for Members to decide whether the legislation is necessary. <BR /> <BR />Mr Nesbitt also mentioned clause 2(1)(a), which would allow regulations to:”
“Good ideas have come forward, and we need to build on them. <BR /> <BR />Sinead McLaughlin said that the SDLP is supportive of the principles of the Bill but wanted to scrutinise it and to see a reduction in energy consumption. That is a point that a number of other Members rightly made. Mr Mike Nesbitt asked why we are prescriptive on the 5% figure. Although we want to set targets for the scheme, I am not wedded to the 5% figure. I believe that it is an achievable figure. If, however, as part of the scrutiny of the Bill, evidence comes forward that that figure is too high or too low or cannot be achieved in the time frame, I am more than happy to work with Members to amend the Bill in that regard.”
“<BR /> <BR />A number of Members asked whether costs would be passed on to consumers. The current practice in energy provision is that costs are largely passed on to the consumer. That is current practice, however, and, although I am not suggesting that we are going to be able to change market forces with the Bill, the scheme can mitigate the level of cost that is passed on to the consumer. Rightly, a number of Members raised the issue of whether the scheme, if introduced, would place a higher burden on those with lower incomes and the socially disadvantaged. Again, that is a genuine concern. The scheme could do that, but surely we can mitigate its effects. We have learnt from previous experience of energy schemes where mistakes have been made and where things have been done properly.”
“Let me turn to the issue of state aid. I am not an expert on state aid, but I very much doubt that, were the Department to offer grants to potential suppliers, that would breach state aid rules, given the level of that financial intervention. I would also question whether it would even be classed as state aid. Nevertheless, that is a question that the Committee can scrutinise, alongside the issue of the electricity directive. Those are legitimate concerns that could be raised about any such piece of legislation. <BR /> <BR />Is there a breach of the electricity directive? As with any directive, it is a question of the motivation for the proposed deviation from it. The Bill's motivation — green energy and microgeneration — is sufficient grounds on which to deviate from that directive. Again, it is an issue for the Committee to examine.”
“If, as is most likely, the scheme includes grant support and incentives for providers, that will obviously be an additional cost. However, that is part of the scheme deliberations.”
“That does not mean that it is bad legislation or should be dismissed. The principles of the Bill are relevant to this jurisdiction. <BR /> <BR />Mr Weir and others echoed concerns around a number of issues, including the costs associated with the Bill. I have put forward an estimation on the cost of delivering the scheme, not of delivering any support for those who are involved in the scheme — for example, grants — of approximately £1 million. Members may have heard me say before that, when I work on the basis of £1 million, my head clicks into, "That employs around 30 teachers". Any Department that has 30 members of staff working on one scheme would be delighted. It is s a good estimate of the cost to the Department of bringing forward the scheme.”
“The Bill is ambitious. It wishes to ensure that those who are now energy consumers become energy providers and play a part in reducing the reliance on carbon-based energy production and thus be part of the climate change strategy. It has the potential to put money into the pockets of working families. It allows farmers and small businesses to diversify and produce energy, and it allows urban and rural communities to form collectives to generate energy and income. <BR /> <BR />Turning to Members' contributions — this is the stage when I try to read my own writing — I think that Mr Weir said that they were sceptical about the Bill but were happy to allow it to move forward for further scrutiny. He welcomed the fact that I was recycling legislation from the Dáil. It is similar to a Bill we brought forward in the Dáil.”
“I thank all who contributed to the debate. I think there were 13, which is unlucky for some, although the Minister brings it up to 14, so maybe that negates that. They raised important points, and the contributions to the debate were informative and detailed. At no stage did I expect to bring a Bill to Second Stage and have overwhelming support for every detail. There would be no point in having a legislative process. The legislative process allows for deeper scrutiny of the clauses, as Members know, and possible additions. It is proper that Members raised questions and concerns. I will cover some; apologies if I do not cover all of them. If we move to the next stage, the Committee can continue the scrutiny of the Bill. <BR /> <BR />It is worth reminding ourselves of the Bill's three policy objectives:”
“The Bill sets out the path that will help to decentralise electricity generation, empower local communities, provide additional income for families and help to tackle climate change. I look forward to the debate.”
“If the Bill is passed, it will give the Department only the authority to establish the scheme; it will not set its parameters other than in a couple of minor points. Earlier today, I said to the Minister, "We will ask the House to do a, b and c, and, if the Bill passes, the Department will have to do d, e, f, g, h, i, j and the whole lot". <BR /> <BR />The Bill has the potential to do tremendous good in tackling carbon emissions and promoting green energy, and I look forward to hearing Members' contributions on the ideas in it. It is worth remembering that, as I said, the Bill is not the scheme under which microgeneration will be delivered. It instructs the Department to bring forward a scheme, fully consulted on and evidence-based, which will come into operation by January 2025.”
“The Member's intervention could have been covered in his contribution to the debate, but I am happy to respond to it. <BR /> <BR />The Member mentioned costs to the taxpayer. If the Department introduces a grant scheme, there will be a cost. However, no direct cost is associated with the Bill in front of Members today, other than the cost of its implementation by the Department. <BR /> <BR />In answer to the Member's second question, the scheme that the Department will develop, if the Bill passes, will involve consulting widely with all interested parties, and any suggestions or objections — whichever the Member may have about the point that he raised — can be dealt with at that stage. The scheme will give the detail of the programme's operation.”
“Clause 4 outlines the rules for the suspension of the scheme, and clause 5 outlines the guidance that the Department may give in relation to the operation of the scheme and its goals. Clause 6 sets out the meaning of specific words and phrases in the Bill. Clause 7 sets out the timing for when it must come into operation, and clause 8 confirms the Act's short title as the Small-Scale Green Energy Act 2021. <BR /> <BR />In conclusion, the Bill has —”
“A microgenerator is defined as a renewable generator with a maximum generation capacity of 50 kW. That is the standard definition in many countries that are introducing microgeneration legislation, including Britain and the rest of Ireland. A major provider is defined as any provider with a market share of 5% or above. That covers all providers in the North, with the exception of Click Energy, which currently has a 3·4% market share. When I carried out the consultation on the Bill, more than twice as many respondents favoured a definition that specified 5% over one that specified 3%. <BR /> <BR />Clause 2 sets out the supplementary regulations for the scheme and a list of stakeholders who must be consulted when regulations are being set. Clause 3 commits the Department to reviewing the scheme as and when economic conditions change.”
“The Department confirmed that it has no plans to legislate on any aspect of that strategy within this mandate. The Bill before the House today is a practical measure that the Assembly can take now to help to tackle climate change and, through additional income, support homes, farms, businesses and families. <BR /> <BR />I turn to the clauses. Clause 1 establishes a small-scale green energy scheme and lays out the scheme's main goals, which are the provision of a minimum price tariff for microgenerated renewable power exported to the electricity grid and the requirement for major electricity providers to source at least 5% of their electricity from microgenerated renewables. It also sets a number of definitions of terms used in the Bill, such as microgenerated and renewable power.”
“Not only can the growth of renewable microgeneration help us to reduce greenhouse gas emissions, it can create additional income for families and communities, and it can reduce our reliance on fossil fuels, which, as we have seen over the past few weeks and months, are prone to erratic and extreme cost swings that place additional and unexpected burdens on already struggling homes. <BR /> <BR />Despite all the advantages that the Bill offers, and the path to long-term reform that it sets us on, the scheme will cost the taxpayer nothing. It provides a win for families, farms and businesses, for climate action and for energy democracy. With all the positives associated with renewable energy, why is a private Member's Bill required? The Department's green energy strategy is important, but it remains aspirational.”
“<BR /> <BR />The removal of the Northern Ireland renewables obligation (NIRO) and other renewables obligations have produced a stagnant community energy sector. The Bill is intended to be the first step in reversing that trend. It will incentivise the growth of micro renewable energy generation in homes, farms and businesses by creating a minimum tariff that major suppliers must pay for power generated from such sources. <BR /> <BR />The Bill will also place an obligation on major suppliers to source at least 5% of their total electricity from microgeneration. Climate experts around the world agree that microgeneration must play a role in the decarbonisation of our planet. The Climate Change Committee's 2019 report specifically recommended supplier obligations and a feed-in system for the North.”
“<BR /> <BR />The Executive previously set a target of achieving 40% of electricity consumption from renewable sources by 2020. The Department for the Economy is developing an energy strategy for the period up to 2050, which is to be published by the end of the year. The 2019 report on decarbonisation from the Climate Change Committee (CCC), 'Reducing emissions in Northern Ireland', explicitly recommended a supplier obligation and feed-in system. Legislative intervention is necessary to grow rapidly the share of renewables on the grid. One way of doing that is to expand the share of microgenerated renewable energy. The energy market has evidently failed to provide sufficient price incentives for homes, businesses and farms to switch to microgeneration systems.”
“Our society is on the cusp of a massive transition from being one that is powered by fossil fuels to one that is powered by clean, renewable energy. It will be a mammoth task, but it will also provide us with many opportunities for meaningful social change. If we embrace its potential, the green economy will bring new jobs and industries, new technologies and newly empowered communities. <BR /> <BR />One of the greatest areas for potential improvement comes from the opportunity that we now have to create greater energy democracy. Energy democracy will, over time, decentralise power generation and put it, quite literally, in the hands of the people, whether that be through farms, small businesses, schools, community co-ops or individual homes.”
“You are a bit of a mind reader. It is worth noting that there was opposition to the plastic bag levy in the Chamber for a variety of reasons. I think that even some of the Minister's colleagues were opposed to it at the start. It shows that, when you take a bold move, you can progress legislation and make change when necessary.”
“Although there quite clearly needs to be an overarching climate change Bill with achievable targets that arrest climate change and protect the farming and rural community, there needs to be other legislation brought to the House and supported as well.”
“Minister, it comes down to setting targets that are achievable. The private Member's Bill that is sponsored by Clare Bailey — my colleague is involved with it as well — has set ambitious targets that are achievable. <BR /> <BR />I will move on, because you mentioned renewable energy. Tomorrow, my Small-Scale Green Energy Bill is before the Assembly, because small-scale renewable energy, which helps farmers and rural communities to be sustainable, has ground to a halt, and there needs to be legislative intervention there. That is as much about renewable energy as it is about climate change, just as my colleague's Bill about banning fracking is about ending that practice but also protecting the environment and the climate.”
“I thank the Minister for letting me back into my speech.”