Eastern Link Undersea Cable Electricity Generation
Kenny MacAskill (East Lothian) (Alba)
The Eastern High-Voltage Direct Current Link is a multibillion-pound project, taking up to 4 GW of clean power from Scotland to England via HVDC subsea cables. That is enough to power 2.8 million homes. In cost and scale, it is the largest electricity transmission investment in the UK’s recent history.
Two undersea cables will run—one from Peterhead to Selby, and another from Torness, in East Lothian, to Hawthorn Point, County Durham. Preparatory work can already be seen on and offshore in my constituency, as a transmission station is constructed and soundings are taken for subsea cabling. What can possibly be wrong with that? Of course, it makes sense. Scotland has a surfeit of electricity and power. Scotland has been bestowed with a great natural bounty. Already, almost 97% of Scotland’s domestic electricity supply comes from renewable energy. In the north of Scotland, it has been 100% on many days.
For all its history, Scotland’s geography has been an impediment—distant from markets and with a climate that Scots have more often cursed than blessed. The four seasons in one day is sometimes the reality, not just Billy Connolly’s humour. Now, though, location and climate are of great advantage. Scotland has 60% of Britain’s onshore wind capacity and 25% of Europe’s potential offshore wind. Talk about the “Saudi Arabia of wind” largely refers to Scotland or Scottish waters. Those wind assets are in addition to existing hydro schemes, along with tidal and wave projects that are still largely to be commercialised. But as with floating offshore wind, concept will become reality.
One offshore site alone—Berwick Bank, at the mouth of the Firth of Forth, between East Lothian and Fife—will provide enough power for almost 3 million households. Scotland only has 2.4 million households. That field alone could provide for all of Scotland’s needs, and there are many more.
Jim Shannon (Strangford) (DUP)
Ever mindful of the surplus that the hon. Gentleman has referred to, and given that Northern Ireland cannot generate its own electricity, we fully understand the value of sharing and maintaining good connections across the United Kingdom for electricity use. Does he agree that there must be good connectivity across the whole of Great Britain and Northern Ireland, and that that merits UK-wide investment? We in Northern Ireland deserve equal choice as well.
Kenny MacAskill
I am sure that the Minister will probably concur. We are not just in a UK market, but in a European market, as I will set out.
Transmitting the surplus energy south is sensible and would provide the supply required there from the surplus produced in Scotland, while also allowing access to the European network—and no doubt to Northern Ireland as well. Energy supply, as we have been finding from the Ukraine war, is transnational. Accessing European markets is an economic opportunity for Scotland and a necessity for other lands, as Putin switches off Russian gas. It also provides for the transition that all nations require to make, as global warming threatens our planet.
However, there is a problem, and that is grid capacity. Scotland’s renewable resource cannot get to market, as the transmission system cannot cope with the volume produced. As offshore comes on stream, that will only worsen, and it has resulted in the absurdity of 17.6% of turbines being switched off on an annual basis, the majority in Scotland. Turbines are curtailed not due to a lack of wind, but due to a lack of grid capacity. That absurdity is compounded by the perversity of paying energy suppliers more to switch off than to provide power, and the highest rates are paid in winter. As the House of Commons Library has confirmed, the figure has approached £1 billion over the last five years.
Debates on the debacle of privatising national infrastructure and the urgent need to provide for battery storage, along with those on the opportunities from green hydrogen, are for another day, but these are locally-based solutions that must be progressed urgently. Simply cabling 40% of the Berwick Bank energy directly south is another. Doing so without any compensatory payment to Scotland is theft of a nation’s natural resource —but that, too, is a debate for another day.
James Cartlidge (South Suffolk) (Con)
There is huge interest in this debate in East Anglia, which is another part of the UK that produces an enormous amount of offshore wind. I can confirm to the hon. Member that we would very much like that new capacity to be undersea, not overground. Does he accept that one of the great benefits of the Eastern Link for Scotland and the north of England is protection of the countryside, which will not be despoiled by huge overland pylons, as would otherwise be the case in East Anglia?
Kenny MacAskill
I think many would concur with that, which I also think is a matter for Ofgem, although no doubt the Minister will reply.
Scotland’s natural bounty and the grid constraint clearly show the need for the Eastern Link. That my own constituency has been chosen is also logical. The site near Torness is on the national grid, with the nuclear power station. It is there, and also up the coast at Cockenzie—the site of the old coal power station, which is also on the national grid—that major offshore fields will come ashore. The site in Aberdeenshire has been chosen for similar reasons, and destination points in England are near existing power stations.
The project will ease the capacity issues on the existing grid. It is a sensible project and one that everyone should support. Its construction is not the issue. What is at issue is the benefit to Scotland and to communities both there and south of the border who should gain from offshore wind. Where is the windfall for Scotland from this natural bounty? Where is the wealth that should flow, along with the energy, from this vital resource? Where is the benefit for communities such as my own, which will be able to see the turbines on their hills and off their shores?
Scotland is energy-rich, yet Scots are fuel-poor. It is no comfort to those unable to heat their homes in my constituency that they may see the turbines turning either onshore or offshore. Indeed, that just adds insult to injury. Where is the payment or financial compensation for our renewable energy, which is being taken south or even sold abroad? Where are the jobs in Scotland and its communities from the industry that should follow, never mind the supply chain to maintain it? Where are the businesses that should be locating next to this clean and cheap energy, along with the technology for it and springing from it?
Of course, this is not Scotland’s first natural bounty. There was an earlier one in the 1960s and ’70s: Scotland’s oil and gas. As the McCrone report, commissioned by a British Government, showed, Scotland should have been one of the richest countries in Europe. No wonder they hid it. Across the North sea, Norway, likewise, accessed that bounty. She has prospered and now has a sovereign wealth fund for future generations that Scotland can only look at and weep. Our blessing was used by Thatcher to smash the trade unions and by Blair to wage war in Iraq. The oil and gas remain, though transition we must. What remains and can be used must benefit the Scottish people. That, too, is a separate debate. However, what it shows and why it is relevant to this debate is that we have been blessed once again, but we must not lose out this time.
The Eastern Link project is sensible and required, but it must benefit Scotland. The turbines that are coming off our shores should see our current yards vibrant and almost every estuary in Scotland utilised for their construction, yet BiFab and Arnish lie dormant, and work is going south or abroad, whether to the Netherlands or even Indonesia. That is simply unacceptable, and with energy policy largely reserved, the UK Government must take the blame. That is compounded by the Scottish Government’s incompetence in the ScotWind auction. Scottish fields have been sold off cheap, netting £700 million, while New York garnered $4.3 billion for a quarter of what was on offer in Scotland.
Those mistakes can and must be reversed, but the Eastern Link project is in danger of compounding that. Where are the wealth, jobs and businesses? Where is the payment for the resource being transmitted south? What cash has been received or compensation made for the asset taken? It seems that payment to the Scottish Government amounts to precisely zero. Nothing has been paid in either regular payments or even a lump sum. The only payment will be a very modest remittance to Crown Estate Scotland for the cabling landing on the foreshore. A few bawbees to Scotland is hardly what Saudi Arabia or Norway receive for their natural bounty.
That is nationally, but what about locally? Where is the payment that should accrue to East Lothian and to other communities both north and south of the border from offshore wind coming ashore? The only area that really benefited from Scotland’s discovery of oil was Shetland. There, payments from oil and gas coming into Sullom Voe were negotiated by the island’s council. It was largely down to one man: the council chief executive, Ian Clark. It was not a huge figure, and it certainly was not a disincentive for investment, but the funds it produced allowed Shetland to flourish and to provide facilities that even larger mainland councils could only look at and envy—public and sports facilities in small communities, ferry and bus services operating from early to late, local schools staying open or even expanding. That is how it should have been with oil and gas across all of Scotland. It must be how it is in communities where the second natural bounty is arriving.
The benefits for Shetland from oil and gas must be available from offshore wind in East Lothian, Yorkshire, East Anglia or wherever it is landing. Chief executives in authorities like my own would love to replicate Mr Clark, but they cannot, because while there is legislative provision for community benefit for onshore wind farms, there is no equivalent for offshore. That needs to be fixed. It need not be a sum that would discourage investment, but it would still benefit communities significantly. It should be levied on the producers and paid to local authorities. It should be set by the Government and subject to review to allow for the standardisation of rate and for production cost factors and energy prices to be factored in if required.
Of course, energy providers do make voluntary payments to local communities, but the right to community benefit should be statutory, not discretionary, and it should not be used by the companies for pet projects or simply increasing their profile. It should accrue to the local authority, as in Shetland, so that it benefits the entire area rather than simply a few communities or organisations. It is essential that offshore wind benefits local communities north and south of the border, as well as those in Scotland.
Where are the jobs in those communities that should be flowing from this bounty? As with the turbines, they are largely heading south or abroad. The construction contracts for the transmission station have gone to big corporates, so local business and labour are excluded. Filling a few hotel rooms or hiring a few security guards should not be the only work available in East Lothian as a result of this bounty.
What about the businesses that should be locating to where energy is flowing ashore? There should be an incentive—indeed, it should be common sense—to locate there, but they too seem to be heading south with the energy that is arriving. There will be only four permanent jobs at the transmission station at Torness. That is perhaps understandable, but what about the businesses that should be opening and clustered near it? That is why the battery storage and hydrogen projects mentioned earlier are essential, as is ending the absurdity of higher energy prices being levied in Scotland where the energy is being produced.
Scottish businesses should be booming and not constrained by higher energy costs. Jobs should be flourishing across Scotland, especially in the communities where the energy is landing. It looks remarkably like our bounty is being taken with no payment being made—let alone any benefit accruing to our country or communities. The Eastern Link project deserves support, but there must be compensation for Scotland for the energy flowing from it, and it must benefit the communities where it lands. Following its first natural bounty in oil and gas, Scotland has been blessed with a second in offshore wind. It is essential that our country and our communities now benefit from it, and that we do not get fooled again.
The Minister for Climate (Graham Stuart)
I congratulate the hon. Member for East Lothian (Kenny MacAskill) on securing this important debate. The Government are leading the world on offshore wind. We have the most installed capacity in Europe. In our energy security strategy, we aim to go much further with an ambition of 50 GW of offshore wind and 5 GW of floating wind by 2030. As he knows and has set out, Scotland has a vital part to play and there are many green jobs around that work in Scotland.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
That suggestion simply does not stand up. The organisation Scottish Renewables has frequently told me that the best that the Scottish people can hope for from the renewables boom is to become service engineers for heat exchangers, which is simply not good enough. There are no meaningful jobs in construction or offshore maintenance in my constituency, which looks out at the Seagreen development off the Fife coast, so the Minister’s assertion is not borne out by the facts or the numbers.
Graham Stuart
I have a lot of offshore wind off my constituency as well. What we have done with the contracts for difference, and leading the world in the deployment of offshore wind, has been tremendous for increasing renewables and for transforming the economics of offshore wind. There are benefits not only domestically but globally, and there have been many jobs.
Given our global leadership, I share with the hon. Member for East Lothian the question of whether we have created as many jobs and as much of the industrial capability and community benefit as we would like; I leave that question in the air. My feeling is that in the expansion of offshore wind and the coming technologies, such as hydrogen and carbon capture, we must not just deploy at the lowest cost, but capture their wider value in the right way that balances and gives the best possible value for our constituents.
Scotland is home to Hywind Scotland and Kincardine—the world’s first and largest commercial floating wind farms, respectively—and Scotland’s plentiful supply of stormy skies holds vast promise. The Scotland Crown Estate’s recent ScotWind licensing round kick-started 20 new projects totalling around 28 GW of installed capacity—a frankly enormous figure. This is all sterling stuff, but increasing our renewable energy capacity is key for delivering on our net zero 2050 target, which I am sure the hon. Gentleman and the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey) would strongly support. It is also crucial for guaranteeing security of supply at a time when Putin’s appalling invasion of Ukraine threatens to drive up prices and drive down thermostats, because wind energy is not just renewable, but secure and increasingly affordable.
However, installed capacity is only one part of the story. One of the challenges we have to address is how to get the electricity we are generating to the households who need it. The stakes are high, because it is not just households; it is schools, hospitals and businesses too. Right now, there are significant network constraints between Scotland and England, and no matter how many kettles are boiling across Yorkshire, when the network is at full capacity, Scottish renewable energy generation, as the hon. Member for East Lothian laid out, has to be curtailed.
With more projects coming online each year, it is all the more vital that we transform our electricity network to unlock Scotland’s potential. That is why transmission links on the east coast joining our two countries are so crucial, particularly for projects such as Berwick Bank, off the coast of the hon. Gentleman’s East Lothian constituency, with connections in both England and Scotland. In July, Ofgem approved two of these links in their final needs case—one between Torness in East Lothian and Hawthorn Pit in County Durham, and the other between Peterhead in Aberdeenshire and Drax in north Yorkshire. These links will ensure that, before 2030, no Scottish renewable energy potential will go to waste, and they will reduce any potential constraint costs caused by limited capacity.
James Cartlidge
The fact is that these two connections —the Eastern Link—will cost £3.4 billion and carry 4 GW. At the same time, National Grid is insisting on going ahead with pylons from Norwich to Tilbury, which will despoil our countryside. It refused to consider offshore alternatives. We had to force it, kicking and screaming, to look at such options, and it finally came up with a cost assessment that is for 6 GW—not the 4 GW on the Eastern link, but for 6 GW—that would cost £3.1 billion undersea, which is less than the Eastern Link. Why are we not going to get the same sort of investment in East Anglia, given the huge delivery we are giving, from offshore wind?
Graham Stuart
My hon. Friend is truly an expert in this area and, working with colleagues, is working very hard to ensure that these arguments are heard and that the case is made to ensure that minimum disruption for the maximum facility and benefit is brought to his constituency and those around it.
The Government are working closely with Ofgem, the independent regulator, and industry to ensure our electricity network is ready to harness the power of renewables to deliver for consumers. Our approach is threefold. First, we are working to ensure that transmission infrastructure is planned in a co-ordinated way. In July, the National Grid Electricity System Operator published the holistic network design. This is the first ever strategic plan for the infrastructure needed to bring energy from offshore wind onshore. This streamlined approach will reduce the cost of construction for networks, which also means lower bills for families, including in Scotland. Consumers will save £5.5 billion in costs from 2030 over the network lifetime. By reducing the amount of infrastructure required, it will minimise disruption to communities and the environment too.
We are not just changing the way we build; we are also speeding things up. The Government have committed to reducing end-to-end timescales for the construction of transmission infrastructure by three years. To get to this goal, we have appointed Nick Winser as the Electricity Networks Commissioner to review the development process and identify where it can be made faster. Ofgem recently consulted on speeding up regulatory approvals of network projects, and we expect it to publish a decision later this year. Officials in my Department are working with those in the Department for Levelling Up, Housing and Communities to reduce planning timeframes as well. We will consult on how communities should best benefit from hosting grid infrastructure in their local area.
We are making the way we do things smarter and faster, but we are also exploring new solutions to storage, which the hon. Member for East Lothian mentioned, that promise to alleviate capacity constraints.
Kenny MacAskill
Does the Minister accept that there is a difference between how community benefit is dealt with regarding onshore and offshore wind? I assume that came about through a failure to appreciate that wind would ever go offshore. Is he prepared to meet me and representatives from East Lothian, and perhaps even Aberdeenshire, to discuss how we may accrue some benefit from that offshore energy, which currently applies only to onshore?
Graham Stuart
Like the hon. Gentleman, I have a vision of us leading the world, as we are, and continuing that up to 2030 and beyond, by greening our energy supplies and our whole society, and developing the industrial capability that I mentioned, together with the benefits of coming up with a holistic system that brings maximum benefit and thus carries everybody with us. Every community should be proud to host these developments, but should also benefit from them. I would be delighted to meet the hon. Gentleman were I to continue in this role, and if I do not he can try to hold my successor to that. He has made a powerful case and is, quite reasonably, looking to do the right thing.
One of the most genuinely exciting technologies in this area is long-duration storage, which, as the name suggests, stores electricity when it is not needed by users, and releases it slowly over time when demand is higher than generation. That could enable us to reduce costs by maximising our consumption of cheaper domestic renewable generation, enabling a more efficient seasonal balancing of the system. There is a real chance to save tens of billions of pounds between 2030 and 2050, and we can make sure that those Scottish storms keep Yorkshire’s kettles warm in winter, hopefully within a system that benefits all.
To do so, the Government are developing policy to secure investment by 2024. With that investment, we will be able to deploy enough long-duration storage to balance the whole UK system. We are moving full speed ahead to deliver a clean, secure, and affordable energy supply for all. Today’s debate has highlighted the critical importance of infrastructure in achieving that aim, and for ensuring that the interests of all communities that host or are near to energy production and transmission are understood and met. We want all to feel positive about the outcome of the world-leading effort that we are collectively making in England, Scotland and other parts of the United Kingdom.
Question put and agreed to.