Lords repeat of Commons statement on Energy Security Strategy - Apr 27
Energy Security Strategy Statement The following Statement was made
in the House of Commons on Tuesday 19 April. “With permission, Mr
Speaker, I will make a Statement on the British energy security
strategy. Our strategy provides a clear, long-term plan to
accelerate our transition away from expensive fossil fuel prices
set by global markets we cannot control. It builds on our success
over the past decade in which we gave the go-ahead to the first
nuclear power...Request free trial
Energy Security Strategy Statement The following Statement was made in the House of Commons on Tuesday 19 April. “With permission, Mr Speaker, I will make a Statement on the British energy security strategy. Our strategy provides a clear, long-term plan to accelerate our transition away from expensive fossil fuel prices set by global markets we cannot control. It builds on our success over the past decade in which we gave the go-ahead to the first nuclear power plant in a generation and achieved a fivefold increase in renewables. The British Energy Security Strategy marks a significant acceleration in our ambition. It is confirmation of three mutually reinforcing goals of our energy policy and, indeed, of any well-constituted energy policy: security, affordability and sustainability. We recognise the pressures that many people across our country are facing with the cost of living. This has been greatly influenced, as we all know, by global factors. That is why my right honourable friend the Chancellor of the Exchequer announced a £9 billion package of support, including a £150 council tax rebate this month and a £200 energy bill discount in October to cut energy bills quickly for the vast majority of households. We are also expanding the eligibility for the warm home discount, which will provide around 3 million low-income and vulnerable households across England and Wales with a £150 rebate on their energy bills this winter. As I speak, our energy price cap is still protecting millions of consumers from even higher wholesale spot gas prices. Furthermore, we are investing over £6 billion in decarbonising the nation’s homes and buildings—set out very clearly in last year’s Heat and Buildings Strategy—which saves the lowest-income families around £300 a year on their bills. I want to reassure the House that the Chancellor has promised to review his package of support before October and will decide on an appropriate course of action at that time. Cheap renewables are our best defence against fluctuations in global gas prices. By 2030, 95% of our electricity will be produced by low-carbon means. By 2035, we aim to have fully decarbonised our electricity system. We will double down on every available technology. The strategy sets out a new ambition to propel our offshore wind industry. It will increase the pace of deployment to deliver 50 gigawatts by 2030, instead of the 40 gigawatts committed to in the manifesto. Of that 50 gigawatts, up to 5 gigawatts will be floating offshore wind. The strategy also commits us to slash approval times for new offshore wind farms from four years to one year. We also feel—this is reflected in the strategy—that our solar capacity can grow by up to five times by 2035. As is well known, most of Britain’s nuclear fleet will be decommissioned this decade. We need to replace what we are losing, but we also need to go further. From large-scale plants to small nuclear modular reactors, we aspire to provide a steady baseload of power that will complement renewable technology. Obviously, the right time to take those decisions would have been 20 years ago, but of course the Labour party all but killed off the British nuclear industry. That is why we will be reversing decades of underinvestment and building back British nuclear. We aim to deliver up to 24 gigawatts of nuclear power by 2050, approximately three times more than today, which will represent 25% of our projected energy demand. We are also doubling our ambition for low-carbon hydrogen production. The capacity we aim to reach by 2030 is 10 gigawatts, with at least half of that total coming from green, electrolyser-produced hydrogen. This fuel will not only provide cleaner energy for vital British industries to move away from fossil fuels but will be used for storage, trains, heavy equipment and generating heat. The transition to cheap, clean power cannot happen overnight. Those calling for an immediate end to domestic oil and gas ignore the fact that it would simply make the UK more reliant on foreign imports. It would not, in fact, lead to greater decarbonisation globally. Producing more of our own energy will protect us into the future. We feel that this historic change, this decarbonisation challenge, represents a huge opportunity for the United Kingdom: more wind, more solar and more nuclear, while also using North Sea gas to transition to cheaper and cleaner power. This is a long-term plan to ensure greater energy independence and to attract hundreds of billions of private investment to back new industries that can create hundreds of thousands of high-quality jobs and stimulate business across the UK. This is not only a matter of reaching net zero, vital as that is, but an issue of national security. These are all objectives that everyone across the House, I am sure, shares. We all wish to see a homegrown clean energy system that will protect our people into the future, create good clean jobs, attract private investment and, above all, drive down bills for the British people. I commend this Statement to the House.” 18:45:00
Baroness Blake of Leeds (Lab) On the Statement itself, I will begin with the aspects that we welcome. The last Labour Government gave the go-ahead for new nuclear sites in 2009, which have seen little-to-no progress. It now time for the pace to pick up on Sizewell C and the development of small modular reactors. The establishment of Great British Nuclear, if it achieves its goals, should be welcome, but, frankly, what is needed is action rather than additional bureaucracy and figures plucked out of the air without regard to cost, speed or deliverability. Can the Minister set out a timetable for the establishment of this body and, more importantly, the delivery of the eight reactors the Statement suggests could be set up at a rate of one per year? We also welcome the Government’s target for offshore wind of up to 50 gigawatts by 2030. We need to ensure that developments of this kind lead to creating British jobs, which is not always the case under schemes from this Government. Can the Minister offer assurances that this will be addressed as the strategy is implemented and that other necessary steps to achieve it, such as grid investment in the North Sea network, will be taken? However, the main issue with the strategy is what is missing. In short, these steps, while welcome, will not provide for households struggling with the cost of living crisis. They do not constitute the green-energy sprint that is needed to cut household bills, reduce reliance on Russian imports and cut emissions this decade. Measures that could have made an immediate difference to households and businesses have been ignored. On the cheapest, quickest, cleanest renewables such as onshore wind and solar, the Government have caved to Back-Bench pressure. Onshore wind is four times cheaper than gas and overwhelmingly popular, but hundreds of projects that communities want, and are ready and waiting for, have been blocked. Earlier versions of the strategy showed that the Government were well aware of this, yet this strategy contains little beyond vague platitudes, and nothing to reverse the results of their ban on onshore wind projects in 2015, which destroyed the market, with only 20 new turbines granted planning permission between 2016 and 2021. Doubling onshore wind capacity to 30 gigawatts by 2030 could power an extra 10 million homes, add £45 billion to the UK economy and create 27,000 high-quality jobs. Does the Minister accept that bills will be significantly higher as a result of this failure? The story with solar is not much different. Slashing solar subsidies in 2015 crashed the market, and many projects that could have been enabled are waiting in abeyance. Why have the Government watered down their ambition, rather than properly committing to tripling solar power by 2030? The main hole in the Statement, for all those millions of people paying at least an extra £170 per year on energy bills, concerns energy efficiency. Energy efficiency is the best, quickest, most effective way to reduce energy bills, but there is no new money for it. Vulnerable people in this country need a national emergency plan to insulate homes, which could cut bills for the millions of pensioners and low-income households who need it most. At the same time, it would create new, skilled jobs. Instead, vulnerable people are being condemned to live in cold, draughty homes and paying more than they need to. The Minister previously admitted that the Government were keen to go further. So, who stopped them, the Secretary of State or the Chancellor? The Government have missed another opportunity to close the door to fracking and continue to float the idea of a new coal mine in Cumbria. They have also failed to adopt Labour’s proposal of a windfall tax on oil and gas firms that are making record profits while bills skyrocket. Overall, it is fair to say that the energy strategy is disappointing and underwhelming. We can only ask how the Minister expects to reassure your Lordships’ House of the Government’s commitment to net zero if they continue to act to the contrary.
Lord Oates (LD) The Government had an opportunity to take up my right honourable friend Edward Davey’s proposal: a windfall tax on the super-profits of the oil and gas industry, which the Labour Party has also argued for. That could have unlocked finances to give further support to people who will be desperately vulnerable this winter. As the Liberal Democrats and many others in this House have repeatedly stated, curtailing the wasted energy that leaks out of our buildings should be the No. 1 priority in the hierarchy of measures we take to improve our energy security, reduce carbon emissions and cut costs for households. But there was nothing new in the Statement on this front. I asked the Minister at Questions yesterday why the number of insulation measures installed annually in the UK had fallen from a high of 2.3 million during the coalition to an average of less than 10% of that peak since then. He did not really give me an answer, to be honest, but I do not blame him for that. If he was unconstrained by collective responsibility, he would be able to be clear that it was down to the myopic foolishness of the Treasury, which has kyboshed many of the schemes that have been brought forward in the past. Not least of these is the green homes grant, which was destroyed by its lack of understanding that this has to be a long-term project, not a short-term stimulus measure. I hope the Minister will not be deterred, however, by that myopia, and will continue to urge his government colleagues to take a more creative approach to this issue, including fiscal measures such stamp duty discounts and council tax rebates for homes that improve their energy performance certificate ratings. Can the Minister also tell us when the new ECO4 regime, which he mentioned yesterday, comes into effect? Am I correct in thinking that there is gap between ECO3 and ECO4 coming into effect? If so, why is that being allowed to happen? Like the noble Baroness speaking for the Labour Benches, I welcome the extra commitments on offshore wind, but I also share her view that this is a massive missed opportunity for onshore wind. Onshore wind, as has been said, is one of the cheapest ways of powering green energy, and it is absolutely reckless that we are putting it aside. On oil and gas, I hope the Government are really thinking about the danger of stranded assets on any new exploration. That is a dangerous thing. I should declare my interest as a member of the UK Hydrogen Policy Commission in saying that I very much welcome the Government’s commitment to doubling their ambition to 10 gigawatts by 2030, and that for the first time, at least half of that will be green or electrolytic hydrogen. Our ambitions are now similar to those of many of our international competitors, which is welcome, but the funding allocation behind them is completely different. We are not putting in anything like the money that our competitors are. Could the Minister look at that issue in particular? Finally, will the Minister also look at the support that will be needed by local authority planning departments and councillors, which will have to deal with an increasing number of hydrogen-related planning applications? Currently, most do not have the necessary skills or resources to deal with them or to address the inevitable concerns. Will he also look at the regulatory environment that will be required? The hydrogen strategy suggests that regulations will be made on a piecemeal basis as hydrogen is scaled up, but this misses the point that regulatory certainty is absolutely required if the scale-up is to happen at all. I hope he can address a few of those questions.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy (Lord Callanan) (Con) Starting with the vital issue of concerns about energy prices, correctly raised by the noble Lord, the strategy reconfirms that the Government are committed to helping with the cost of living. That includes over £9 billion of help for families struggling with their bills. We are aware, of course, that Ofgem will set the next price cap in August, and we will want to review the current support arrangements at that point, well in advance of them taking effect in October. The noble Lord also raised issues concerning energy efficiency. I know that he and I agree on the critical role that energy efficiency plays in both our energy security and in helping consumers to manage their energy bills. I disagree with him, however, in that this Government have gone further than any other in setting out an ambitious energy efficiency strategy, including through our landmark heat and buildings strategy. I know he will want to push us to go further but, in essence, we are heading towards the same destination—although apparently, we have different rates of getting there. In response to the noble Lord’s question about ECO, there is no gap between ECO3 and ECO4. There is a delay due to legal considerations in tabling the SIs to implement ECO4, but we are certainly in touch with the industry bodies to explain that, and there is no gap in the implementation. The increased budget associated with it, at £1 billion a year, takes effect. The noble Baroness, Lady Blake, raised the subject of onshore wind—I am sure there will be further questions on this as we proceed through the Statement—and also solar. Noble Lords are correct: onshore wind and photovoltaic solar are the cheapest forms of renewable energy. We are fortunate to have more onshore wind that pretty much any other country in northern Europe, and we continue to promote it passionately. That said, both onshore wind and large solar projects —which can be controversial in some circumstances—should be pursued on the basis of local community support. Clearly, where that local backing exists, the strategy includes support for new projects and the enabling national network infrastructure. Offshore wind is an area in which we have been hugely successful, and it has had a transformative effect compared to other renewables. Offshore wind is especially suited to the UK’s geography, and we truly are leading the world in its technology and capacity. It rightly forms one of the centrepieces of the strategy. As the noble Lord, Lord Oates, referred to, we are increasing our ambition to deliver up to 50 gigawatts by 2030, including up to five gigawatts of innovative floating wind capacity. By 2030 we will have more than enough wind capacity to power every home in the United Kingdom. In response to the question by the noble Baroness, Lady Blake, I say that this is all bringing vital investment into the UK, particularly to our coastal communities. It will support 90,000 direct and indirect jobs by 2030. I met the Mayor of Tees Valley last night, who was telling me about some of the enormous projects being built on his patch, entirely to benefit from this expansion of offshore wind capacity. I also welcome the support of Labour—if not the Liberal Democrats—from the noble Baroness, Lady Blake, for nuclear. It is very welcome. Energy security means being able to meet demand even on the coldest days of winter when there is neither sun nor wind. We need a baseload of decarbonised power to complement the renewables we are installing and while most of the current nuclear fleet is reaching the end of its lifespan and will be decommissioned this decade. We will be reversing decades of underinvestment and we will build back British nuclear. In response to the question from the noble Baroness, Lady Blake, about the new body, I say that this will be set up immediately to bring forward new projects backed by substantial funding. We will launch the £120 million future nuclear enabling fund this month. We intend to take one project to a final investment decision in this Parliament and two in the next—subject to value for money and the appropriate approvals, as always. On the subject of fracking, which the noble Baroness, Lady Blake, also asked about, it is right and sensible that, with wholesale gas prices around 10 times their level at the end of 2019, we review the science and evidence picture around fracking. The strategy commits to assess whether the previous conclusion against licensing has shifted or if scientific developments have changed, and we will do that. I welcome the support of the noble Lord, Lord Oates, for hydrogen. I am happy to look at the comments he made about support for local authorities in terms of progressing hydrogen applications. I am sure we want to provide as much technical support as necessary and I agree with his comments about the importance of regulatory certainty in this area. 19:03:00
Lord Howell of Guildford (Con) Can I draw the Minister’s attention to the section in the energy security policy paper which points out that there is “no contradiction” at all between short-term concerns to boost oil and gas production, referring to the North Sea, and the long-term climate aims? On the contrary, the two are linked together; that is what it rightly says in the paper. Can the Minister extend that thought to say that there is no contradiction in now seeking major oil producers in the Middle East to produce a lot more oil and gas to cause prices to tumble and partly replace Russian exports? It would really help bring down electricity, petrol and gas prices, and begin to meet the further huge increase coming our way like a rolling wave in October. Can I plead that we go back to the great oil producers and press them hard that, unless they do this, they are financing Putin’s child murder in Ukraine? If they do it, we will begin to see a much greater easing of prices than any of the present well-intentioned short-term subsidies and additions we have had so far. That is the aim. Anything else is splendid, but it does not help the huge crisis in energy which will affect 70% of households of this country. I have heard nothing from either opposition party which will do that.
Lord Callanan (Con)
Baroness Jones of Moulsecoomb (GP)
Lord Callanan (Con)
Lord Kerr of Kinlochard (CB) “the Chancellor has promised to review his package of support before October”.—[Official Report, Commons, 19/4/22; col. 75.] Why is he not doing it now? I suggest that, when he looks at it, he looks not just at little packets of money here and there, but at the possibility of indexing the energy element in universal credit to the energy component in the household expenditure of the people on universal credit. That is the most efficient way of targeting it. It is sad to see a long-term strategy which tells us nothing about onshore wind, storage or the improvements to the grid which are badly needed. The more we invest in wind, the more we will need grid improvements.
Lord Callanan (Con)
Lord Rooker (Lab) On the nuclear issue, my noble friend is right in the sense that in 2009 the Labour Government left half a dozen sites for nuclear power stations, but the Statement is correct in that we lost 20 years. The Labour Government Cabinet was discussing this issue in late 2002 and early 2003. I was a simple Minister of State—I was not involved in that—but I remember writing a note for my Cabinet colleague, my senior. That is the kind of thing I remember because it was Christmas Day and I was sitting in Charing Cross Hospital at the time, as a visitor. The issue had been discussed but it was flattened by two or three members of the Cabinet. I will not name anybody, but that was a lost period. The central issue I want to ask the Minister about was not referred to: batteries. The International Energy Agency has said that because of the use and storage of batteries for transport, propulsion and homes, the world will need a sixfold increase in lithium, cobalt and rare earths. Where are they processed? Some 60% of the world’s lithium is processed in China, as is 65% of the world’s cobalt, although it is mined in the Congo, where 40,000 children are involved in mining it. Some 87% of the world’s rare earths are processed in China. Therefore, the issue has to be, what do we do with colleagues and friendly countries—we cannot do it ourselves—to avoid in 20 years’ time being in the same position we are in now with gas and oil from Russia: being hooked to China for the metals we need for batteries? It is a grip that has enormous potential, and it needs dealing with now. I used the word “processing”; China is not mining it all but is controlling the process from the mining. A huge amount of cobalt comes from the Congo but it ends up being processed in China. China has a grip on this and I know people are trying to deal with it—I think the EU is—but the Government have to be part of a plan. They will not be able to do it on their own; they have to work with others. We need to cease dependence on such a large scale on metals that will be vital for our industries and our energy security.
Lord Callanan (Con) The noble Lord is in essence right about rare earths, but the Government are very well aware of this. A number of innovative battery technologies are also being developed but we are looking very closely at the necessity of various rare earths for existing battery technology, such as cobalt and lithium, and at where alternative supplies can be procured.
The Lord Bishop of Manchester
Lord Callanan (Con)
Viscount Stansgate (Lab)
Lord Callanan (Con)
Lord Teverson (LD)
Lord Callanan (Con)
Baroness Foster of Oxton (Con)
Lord Callanan (Con)
Baroness Hayman (CB)
Lord Callanan (Con)
Baroness McIntosh of Pickering (Con)
Lord Callanan (Con) |