Oral answer (Lords) on World Energy Outlook 2020 - Oct 20

Asked by

Lord Ravensdale

To ask Her Majesty’s Government what assessment they have made of the report by the International Energy Agency World Energy Outlook 2020, published on 13 October.

Lord Ravensdale (CB)

My Lords, in asking this Question I declare my interests as recorded in the register.

The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)

The World Energy Outlook 2020 report examines how the global energy system could develop under different scenarios in the coming decades. We welcome its focus on the impact of the pandemic and the choices needed to enable a sustainable recovery. We also welcome the focus on the path to reaching global net-zero emissions. We will continue to draw on the analysis as we work to accelerate the global energy transition, including through COP 26.

Lord Ravensdale (CB)

My Lords, I thank the Minister for that response. The report recommends faster structural changes and the need for Governments to take decisive actions to accelerate clean-energy transitions, particularly over the next decade. First, can the Minister give any indication of when we can expect the transport decarbonisation plan and the buildings and heat strategy? Secondly, we have been promised an energy White Paper this autumn. I noted the thickening autumn leaves as I walked to Parliament today, so can he reassure the House that the energy White Paper will be with us before the end of November?

Lord Callanan (Con)

My Lords, I am sorry to disappoint the noble Lord. I cannot give him a specific answer to that, but we expect the White Paper to come shortly.

Baroness Blackstone (Ind Lab)

My Lords, do the Government accept that, while they must lead, changes in everyone’s behaviour will be needed? So how do they plan to engage with citizens on what net zero looks like, and the changes in behaviour that will be needed to get there?

Lord Callanan (Con)

The noble Baroness makes a very good point. It is important that everybody’s behaviour is changed. There will be a number of campaigns, both by government and by various NGOs and interested parties in the run-up to COP 26, which we see as a major global lever that we can use to change fundamental behaviours.

Lord Taylor of Goss Moor (LD) [V]

My Lords, I draw attention to my interest in sustainable development and low-carbon heat, as listed in the register of interests. Can the Minister accept that it makes no sense to build literally a million or more homes over the next few years with carbon heating technologies when low-carbon technologies could be cheaply put in place today, leading to zero carbon by 2050, rather than facing householders and government with the enormous costs of retrofitting even more homes than those already built today?

Lord Callanan (Con)

The noble Lord makes a good point; heating decarbonisation will be a crucial part of the race to net zero, and we will be bringing forward a detailed heating decarbonisation strategy shortly.

Baroness Neville-Rolfe (Con)

My Lords, I was disappointed that this report neglects nuclear energy. Its reliable, emission-free 24-hour baseload provides an essential complement to solar and wind, which sadly can be absent for weeks at a time. At a time of unparalleled low interest rates, will the Government’s forthcoming energy White Paper grasp the nettle and propose government support for nuclear via direct government involvement?

Lord Callanan (Con)

I thank my noble friend for her question, but the WEO 2020 report suggests a 10% increase in nuclear between 2019 and 2030. Beyond 2030, the Paris compliance scenarios envisage small modular nuclear reactors taking a stronger role, alongside CCUS and hydrogen. Of course, we will address all these upcoming matters in the energy White Paper.

Lord Broers (CB) [V]

My Lords, the IEA outlook report points out that to achieve net zero in 2050 we need by 2030 to have 50% electric cars and 75% low- carbon electricity. These aggressive goals will be met only with international collaboration. It takes 50 times longer to charge an electric car than to fill a petrol car, requiring an immense number of charging points; at present too much carbon is released in making car batteries; and, to meet the 75% target, more nuclear power will be needed than is planned. Does the Minister think that there is a leadership role for the UK in achieving all of this?

Lord Callanan (Con)

Indeed there is—and we have taken a leadership role by setting our 2050 net-zero targets, by setting a phase-out date for petrol and diesel vehicles, and by introducing policies to incentivise the electric vehicle market. Accelerating the clean energy transition globally is the focus of our work going up to COP 26.

Lord Grantchester (Lab)

My Lords, the 2020 report shows above all that renewables will be integral to the future energy mix that will power modern economies. Yet, under this Government, clean energy investment plummeted by 56% in 2017 as a result of cuts to various renewables schemes, and it has fallen each year since. Can the Minister confirm what urgent steps the Government will take to promote clean energy investment? In particular, will the continually delayed national infrastructure strategy contain strong policies in this regard?

Lord Callanan (Con)

Well, the Government’s policies towards clean energy investment have been a resounding success. We are seeing record levels of deployment and the costs of clean energy are falling dramatically—we will see that during the next contracts for difference round next year—but, of course, we keep all these things under review.

Lord Teverson (LD) [V]

My Lords, a strong theme in this report in relation to Covid and energy is that, to quote from the report:

“The worst effects … are felt among the most vulnerable.”

In the UK context, how will the Government protect our vulnerable people as we transition to a clean energy economy?

Lord Callanan (Con)

The noble Lord makes a good point. We are investing record sums in helping vulnerable consumers. He will be aware of the new green homes grant that will provide grants of £5,000, and indeed £10,000 for those on low incomes, to help them insulate their home and make it more energy efficient and, more importantly, get their bills down.

The Lord Bishop of Salisbury [V]

My Lords, the report from the IEA focuses on the impact of the pandemic on macro energy generation and distribution, and it emphasises the vulnerability of the national grid. The pandemic has emphasised the importance of the local, so how does the Minister see the Government’s role in encouraging the rapid development of local micro energy generation?

Lord Callanan (Con)

The right reverend Prelate makes a very good point. Local micro energy schemes will play a key role in our decarbonisation efforts but, of course, fundamental changes are required in the grid to enable us to move to a much more diversified model, away from key energy nodes, and considerable investment is taking place to allow that to happen.

Baroness Hayman (CB) [V]

My Lords, I declare my interests as set out in the register. Does the Minister agree that there are considerable opportunities for the creation of many sustainable jobs for the future in the infrastructure and technology projects needed to achieve net zero? If so, can he assure me that plans are in place for reskilling workers currently facing redundancy or the loss of their job to take up those sustainable jobs for the future?

Lord Callanan (Con)

Indeed, I agree with the noble Baroness. In a previous answer I referenced the green homes grant: £2 billion worth of green stimulus investment that is going to generate hundreds of thousands of jobs. I have been in discussions with lots of contractors that are already expanding their workforce. We have provided training grants to enable them to upskill both existing and new employees. I agree with the point that the noble Baroness is making.

Lord West of Spithead (Lab)

My Lords, nothing in the IEA’s World Energy Outlook 2020 changes the need for the UK to have a viable nuclear power sector producing about 30% of the future daytime electricity demand of 80 gigawatts by 2050, when, of course, we are planning to have net zero emissions. The provision of nuclear power needs planning and a clear programme of build and provision. That cannot be done at the last minute—often it takes decades—yet it appears that the plan for nuclear power is in disarray. When will the Government produce a clear statement of what is planned for the nuclear power provision required by 2050? Is it “shortly”?

Lord Callanan (Con)

It is indeed shortly. We will provide more detail on nuclear power in the energy White Paper, but, as I said to my noble friend Lady Neville- Rolfe, we see much of the future being in small modular nuclear reactors.

Viscount Waverley (CB) [V]

My Lords, how is it believed the pandemic and its aftermath will reshape the energy sector? In that regard, does the Minister have his magic wand as to the long-term outlook for the development of LNG, given the current downturn in energy demand in China and the Far East, as that could directly impact the Government’s sustainable development strategy?

Lord Callanan (Con)

The noble Viscount makes a good point. The short-term impact of Covid-19 on the global energy industry is a reduction in energy demand of something like 5% year on year, which has accelerated the movement away from coal towards renewables. The report highlights the fact that solar PV is now one of the cheapest forms of energy below carbon fuel. The other points that he makes are indeed very valid.