Asked by
To ask His Majesty’s Government what plans they have to increase
the number of renewable energy generation licences.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, the acceleration in renewable deployment will be
supported by the UK’s main renewable energy scheme, contracts for
difference. The latest round delivered almost 11 gigawatts of new
renewable projects, almost double that achieved in the previous
round. The next CfD round will be brought forward to March 2023,
and future rounds will run annually to further drive deployment
of renewable power. The majority of CfD applicants are exempt
from the requirement to hold a generation licence.
(GP)
So far, it has been much more difficult to get renewable
licences. One thing that might help, as well as the Government’s
investment, is if the Minister could go back to his government
colleagues and ask them to stop taking party donations from
fossil fuel companies. That might give renewables a fair chance.
(Con)
I thank the noble Baroness for that, which is totally unrelated
to the Question she tabled. There have been almost 1,000
generation licences issued. It is a demand-driven process. All
generators below 50 megawatts are exempt from having a licence in
the first place.
(Con)
My Lords, could my noble friend the Minister indicate what has
happened in recent days, as temperatures have fallen so low and
there being no wind, to the cost of electricity as a result?
(Con)
My noble friend makes an important point. I suspect that he knows
the answer to his own question: because it has been relatively
still, there have been relatively small amounts of wind in the
power sector, so the other sources of power—nuclear, imports,
gas, et cetera—have moved in to fill the gap. That is how a
diverse system should work.
(LD)
My Lords, getting a grid connection, never mind a generation
licence, for any kind of generation is increasingly difficult,
and indeed is even beginning to restrict housing developments.
Will the Government instruct Ofgem to increase the pace of grid
investment to avoid a literal energy gridlock?
(Con)
The noble Baroness raises a good point. We are seeing a total
reconfiguration of the grid away from large nodes, such as
coal-fired power stations, to a much more diversified system of
generators. That requires massive configuration of the grid,
which is extremely expensive and, I might add, politically
controversial. Many people do not want new pylons, et cetera,
going through their neighbourhoods. Nevertheless, work is ongoing
to reconfigure it. Considerable sums are being invested, but
clearly we need to do more in that area.
(Con)
My Lords, I have asked my noble friend this question before, and
to an extent it follows up the question from my noble friend Lord
Forsyth. Where are we with tidal power?
(Con)
Tidal power is an interesting technology. A number of schemes are
being rolled out. For the first time ever, in the last CfD round
a number of schemes were awarded licences. We need to continue
supporting and developing it, but we must not run away with the
idea that this will be a long-term, sustainable solution for
large amounts of power. At the moment, it is on a relatively
small scale. We need to continue supporting it, and we will.
(Lab)
My Lords, the biggest tidal power project is, of course, the
Severn barrage. Will the Minister receive a delegation to brief
him on the potential for that? It is equivalent to two nuclear
power stations, and it is lunar, and therefore generates
predictable baseload energy. Frankly, it is a no-brainer.
(Con)
I understand the point the noble Lord makes. A Severn barrage
scheme has been talked about since I was an electrical
engineering student, way back in the 1980s; it is not a new
scheme. It all comes down to the cost and the environmental
damage that would result from implementing it. We continue to
keep all these things under review. I assure the noble Lord that
both I and the department know all about the details of the
scheme.
(Con)
My Lords, I add my comments to those made in relation to both
tidal and wave power. We have the second-largest tidal range in
the world. Some 40 years ago, I lobbied the Government on the
Severn barrage, but there are many alternatives. They are not
small power generators but potentially very substantial
generating powers, particularly wave power.
(Con)
The barrage schemes are potentially large-scale schemes. I meant
that some of the bottom tidal schemes are on a relatively small
scale. It all comes down to cost. The costs of these schemes fall
on bill payers. The Government’s general approach is to support
forms of renewable power that offer the best value for money for
taxpayers—principally solar and wind, but we are starting to
support some of the other tidal schemes as well. The barrage
schemes are extremely expensive and very long term, and there are
a lot of environmental implications.
(Lab)
My Lords, we note the increase in the frequency of contracts for
difference allocation rounds every year. Can the Minister expand
what impact this will have on deploying more energy regeneration?
Why is the process so prescriptive? It has “lack of ambition”
written all over it. Surely more flexibility is the key to
encouraging more investment in zero-carbon technologies. Are any
plans coming forward to make Britain the clean energy superpower
it deserves to be?
(Con)
I disagree with the premise of the noble Baroness’s question. We
are already a renewable energy superpower. She talks about lack
of ambition. In the last auction, round 4, we delivered more than
11 gigawatts and 93 renewable power projects—enough to power 12
million homes. We have the largest offshore wind capacity in the
whole of Europe and the second largest in the world. We want to
scale-up that ambition and deliver more, but I think the noble
Baroness should give us some credit for what we have already
achieved.
(CB)
My Lords, I remind the House of my interests in the register. Now
that the feed-in tariff has ended, there is not much incentive
for people to install more capacity on their homes than they use
themselves. The smart export guarantee pays typically between
only 1p and 5p per kilowatt-hour, which is not enough to
encourage people to install excess generating capacity. Does the
Minister agree that a peer-to-peer trading facility that allows
people to sell their excess power to their neighbours might
increase returns to generators and improve the incentive, and
also reduce the cost of power to neighbours?
(Con)
It is an interesting concept. As the noble Lord knows, the smart
export guarantee is a market-driven mechanism, and it is for
suppliers to determine the value of the exported electricity to
them, taking account of their administrative costs. There are a
number of schemes, such as the one mentioned by the noble Lord,
and I am certainly very happy to look at it. However, we always
have to bear in mind that any subsidy offered to certain
generators is paid for by every other customer on the network.
(Lab)
My Lords, all this talk of tidal power makes one think of ships.
Noble Lords will be glad to hear that I am not going to ask a
question about ships. There is going to be a huge growth in
demand for electrical power. The only certain way of providing
electrical power, no matter what the weather and completely
green, is nuclear. What is the actual percentage that we are
looking for in the provision of nuclear power, looking to the
future of electrical supply within this country?
(Con)
The noble Lord is right: we need to expand our nuclear
production. We have just agreed the contract for Sizewell, only a
couple of weeks ago, and other developments are planned. We have
not set a specific target for nuclear production, but we will
need to replace a lot of the aging plants that will come offline
in the next 10 or 15 years or so.
(Lab)
My Lords, the Minister, in reply to several questions, has said
that it comes down to cost. Could he assure us that the full cost
of continuing to invest in fossil fuels is factored in when that
equation is calculated? Fossil fuels come at a cost to the
environment and certainly to our climate change ambitions. Can he
assure us that this is fully taken into account when those
balanced decisions are taken?
(Con)
There are of course no subsidies given to fossil fuel generation.
In fact, it is the opposite: they are paying into the system
record levels of taxation. This is a gradual transition. To all
those who want to get rid of fossil fuels, I say great, but 80%
of our heating is gas heating at the moment; are we going to turn
off people’s gas boilers overnight? I suspect that the answer to
the noble Baroness’s question is no. Of course we want to roll
out renewable generation, which is what we are doing, but it is
intermittent, as the question from my noble friend Lord Forsyth
intimated earlier. We need back-up generation for that; that
could take a number of different forms, and nuclear is one of the
possible options. In the short term, as we move to a more
renewable system, we will need fossil fuel generation.
(Con)
My Lords, I want to ask my noble friend the Minister about the
long-term thinking in the department. Looking at the developments
in technology, particularly in storage capacity and micro-
generation, might there be a day when there really is no
incentive for people to feed into a grid, and they can generate
all their energy locally? What sort of long- term thinking has
there been on the impact on the grid of more local generation and
storage?
(Con)
My noble friend makes an important point. There will be, and has
been, an increasing amount of microgeneration. I am told by the
suppliers that there are record demands at the moment for things
such as solar panels and PV generation, as people respond to high
electricity costs. Many people will want to install systems that
will save them money in the long term. Of course, the higher
electricity prices are, then the pay-back period for
microgeneration schemes becomes less and less. It comes down to
the question that was asked earlier about the reconfiguration of
the grid. There would be much more small-scale generation rather
than the big node operators that we are used to. A considerable
investment is going into the grid to bring that about. We also
have schemes such as smart metres; 50% of the country is now
connected to a smart meter, and they enable better charging
regimes, demand-management schemes, et cetera, all of which will
contribute to what the noble Lord suggests.
