(1 year, 7 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
For much of the past 50 years, since the oil crises of the 1970s, we have taken cheap, plentiful energy for granted. Indeed, one of the catalysts for Britain’s economic transformation over that period has been affordable, abundant energy powering our homes, infrastructure, businesses and industry. Yet today, this cornerstone of our prosperity is under threat. Putin’s illegal war in Ukraine and decades of overreliance on imported fossil fuels have combined to push up energy prices. Even though we have very little exposure to Russian gas, we have suffered the consequences of volatile international energy markets. That is why the Government have stepped in this winter to pay around half of the typical household energy bill, and I am pleased to say that that support was extended in the Chancellor’s recent Budget.
The much bigger challenge long term is to bolster our energy resilience as a nation, so that a tyrant like Putin can never again hit the pockets of every family and business in Britain. We must diversify, decarbonise and domesticate our energy supplies to secure the cheap, clean power that Britain needs to prosper in the future. That is why last month the Prime Minister created the Department for Energy Security and Net Zero to give these two closely entwined objectives—energy security and net zero—the full and dedicated attention within Government that they clearly merit. It was a statement of intent to put energy security among the Government’s top priorities. By doing so, we will bring wholesale electricity prices down to among the cheapest in Europe by 2035, drastically reduce carbon emissions and deliver the long-term boost that our economy needs, using Britain’s unique talents and assets to drive the energy transition.
Following the Department’s launch just 50 days ago, I am pleased to announce how the Government will be powering up Britain, including through our energy security plan, which sets out the steps we are taking to become more energy independent by powering Britain from Britain, and through our net zero growth plan, which builds on the measures laid out in the net zero strategy to keep us on track to achieve our carbon budgets. That plan meets our statutory obligations under the Climate Change Act 2008 to respond to the Climate Change Committee’s annual progress report from 2022, and sets out a package of proposals and policies that will enable carbon budgets to be met, to ensure that Britain remains the leader among the fastest decarbonising nations in the world.
Before starting on the announcements, I thank my right hon. Friend the Member for Kingswood (Chris Skidmore) for his excellent work in this area, investigating how to deliver net zero in a way that is both pro-growth and pro-business. In January, he submitted his detailed report and recommendations to Government. I can confirm that we are partly or fully acting on 23 recommendations of the independent review of net zero report’s 25 recommendations for 2025. On behalf of the whole House, I thank my right hon. Friend again for his work.
Let me start on the announcements, if I may. As part of powering up Britain, the Government are launching Great British Nuclear, to put clean nuclear power at the heart of Britain’s energy security and spearhead a busy programme of new nuclear projects, starting with a competitive down-selection this year to choose the best small modular reactor technologies. We are launching the floating offshore wind manufacturing investment scheme, providing up to £160 million to kick-start funding in port infrastructure so that we can move forward with that exciting new technology, and we are publishing plans for investing in carbon capture and storage, a key area for cleaning up energy and one in which Britain can lead the world.
To drive our hydrogen ambitions, we are announcing a shortlist and funding for the first round of electrolytic hydrogen allocation, with a second round to come, and setting out our longer-term hydrogen plans. We are providing an extra £1 billion for energy efficiency upgrades through the new great British insulation scheme, and we are investing to speed up the market for heat pump installation to decarbonise home heating and leverage up to £300 million of overall funding, including private funding.
This country is already ahead of the game when it comes to decarbonising its economy. We are a global leader in offshore wind power and currently have the world’s largest operational offshore wind farm project, named after a town in my constituency: Hornsea 2. We also have the second, third and fourth largest offshore wind farm projects, but the measures we are unveiling today will accelerate our transition, rolling out existing technologies and bringing transformative new technologies to market.
We are truly on the verge of a new industrial revolution, but just like the first industrial revolution, investment will be key to our success, delivering not just energy security and ambitious reductions in carbon but the jobs, exports and productivity gains of the future. With that in mind, we are publishing today a new green finance strategy, which sets out a range of measures to mobilise private investment into net zero. That will support the UK in maintaining its position as a world-leading centre for green finance, and it sets us on a pathway to becoming the world’s first net zero-aligned financial centre.
It is imperative that we do not just focus on reducing emissions at home. The UK will work with international partners through the green transition to share the benefits of an improved environment that is good for business, because all economies need to take decisive steps to reduce their emissions. Indeed, increased investment in net zero technologies globally will unlock innovation and drive costs down, as well as create opportunities for green UK exports—in carbon capture and hydrogen, for example.
As such, today we are publishing two additional documents. The first is the 2030 strategic framework for international climate and nature action, which outlines our vision to halve global emissions, halt and reverse nature loss, and build resilience to climate impacts this decade. The second is the international climate finance strategy, which details our commitment to £11.6 billion of international climate finance up to 2025-26, after we pledged to double it. Both reinforce our climate leadership during what is a critical decade for delivery, showing that Britain is credible and committed to meeting its promises.
It is no exaggeration to say that Britain’s prospects as a nation, our ability to compete as an economy, and our capacity to decarbonise and tackle climate change all depend on energy security. Now, with a dedicated Department to deliver that vital objective, we will not only wean ourselves off fossil fuel imports but deliver cheaper, cleaner energy from domestic renewables and nuclear, protecting British households from turbulent international energy markets and creating hundreds of thousands of green jobs to level up Britain in the process. Making Britain an energy secure, net zero nation is one of the greatest opportunities of our time. Today, we have shown how we will grasp that opportunity for the benefit of everyone in this country for generations to come.
Edward Miliband (Doncaster North) (Lab)
I thank the Minister for his statement, but let me tell him that although there may have been thousands of pages published this morning, this is not the green day that the Government promised, but a groundhog day of reannouncements, reheated policy and no new investment. The documents are most notable for their glaring omissions: there is no removal of the onshore wind ban that is costing families hundreds of pounds on bills a year. There is no new money for energy efficiency to insulate homes and cut bills, just a reannouncement of a feeble offer made last year. There is no net zero mandate for Ofgem, as recommended by the right hon. Member for Kingswood (Chris Skidmore)—to whom I too pay tribute—and as demanded by industry. There is no proper response to the Inflation Reduction Act, even as the rest of the world speeds ahead.
The biggest indictment of all, buried in the fine print and not mentioned by the Minister, is the admission that the policies announced today do not deliver the promise, solemnly made in front of the world at COP26 in Glasgow barely a year ago, to meet the UK’s 2030 climate target. The Government waited until noon, five hours after all the other documents were published, to release the carbon budget delivery plan—which is more like the failure to deliver the carbon budget plan. This is what it says:
“We have quantified emissions savings to deliver…92% of the NDC.”
A target for less than seven years’ time, and now almost 10% off—what an indictment of all the verbiage we have heard today. All the policies and all the hot air do not meet the promise that the Government made on the world stage under the presidency of the right hon. Member for Reading West (Sir Alok Sharma), to whom I also pay tribute. That means higher bills, energy insecurity, fewer jobs and climate failure.
Let me ask the Minister five questions. First, if the Government really wanted a sprint for clean power, they would go for onshore wind. They even promised to lift the ban last December, but the proposals in their consultation have been written off by industry as doing
“almost nothing to lift the draconian ban”.
The previous Business Secretary, the right hon. Member for North East Somerset (Mr Rees-Mogg)—hardly an eco-warrior—promised to bring the planning regime for onshore wind into line with other infrastructure. Why will the Minister not take that step?
Secondly, there is no new investment in hydrogen. Germany is investing €9 billion in hydrogen, compared with £240 million from the UK. Does the Minister recognise the failure of ambition? Thirdly, it is good that the Government have finally allocated some resources to CCS, although I am old enough to remember the £1 billion CCS competition announced in 2008, 15 years ago, which they cancelled. However, they still appear to have no clue where the up to £20 billion of support is coming from, and it was not in the Budget documents. Can the Minister clear that up?
Fourthly, on the response to the Inflation Reduction Act, British businesses are crying out for action now, yet the Minister’s own documents published today show that the UK is investing less than France and less than Germany, and once the Inflation Reduction Act kicks in, we will be investing less than the USA. Is that not a clear admission that we are falling behind? Finally, can the Minister confirm from the Dispatch Box that as I said, the Government’s 2030 target announced at COP26 will not be met by these policies, and can he tell us how the UK can possibly claim the mantle of delivering on climate leadership when it is way off track to deliver the promise it made at the COP we hosted?
At the same time, the Government pursue their “every last drop” strategy on oil and gas. Let me tell the House what that means: it means funnelling £11.4 billion to the oil and gas companies making record profits, and ignoring what 700 leading scientists told the Government yesterday, which is that new exploration will not cut bills, will not deliver energy security and will severely undermine UK climate leadership. [Interruption.] I think the hon. Member for South Suffolk (James Cartlidge) should listen to the scientists.
We know what a proper plan looks like: in 2030, zero carbon power; insulating 19 million cold, draughty homes in a decade; GB Energy to invest in all forms of low-carbon generation; and a national wealth fund investing in everything from clean steel to ports and electric vehicles to win the global race for Britain. [Interruption.] Yes, and nuclear power, too. This may be the fifth energy relaunch in two and a half years, but it is more of the same from this Government. They can relaunch their policies as many times as they like, but they fail and fail again.
Graham Stuart
I thank the right hon. Gentleman for his response, but Members on the Government Benches will have been listening with a certain degree of incredulity, because we remember that in 2010 he left the people of this country in the worst housing stock in Europe. They were cold, their bills were unmanageable and just 14% of houses were properly insulated. Now it is half, and we need to go further and faster, which is why we have the energy efficiency taskforce. It is why we have announced £6.5 billion in this Parliament, and it is why we are announcing today our new initiative on insulation. It is why there is another £6 billion to be spent between 2025 and 2028. The Labour party failed absolutely on the most basic thing: looking after people in their homes so they could pay their bills.
That is not all, however, because on renewables the Labour party now talks about this transformation by 2030, which no one other than the Labour party—it is not involved, I fear, in an entirely open, transparent, and possibly even honest exercise—believes can be delivered by 2030. What was Labour’s record on power? In 2010, 7% of our electricity came from renewables. If Labour in government had unleashed renewables the way we did, families this last winter would not have needed the Government to step in, because we would not have been so reliant on gas. It was Labour’s failure. It was 7% of electricity then, but it is nearly half today. This Government have transformed our performance, while the Labour party failed in power.
What are Labour’s ideas going forward? What do they consist of? While we have unlocked £200 billion of investment since we came into power, the Labour party, led by the hard left, with whom the right hon. Gentleman has always had more than a passing association, want through its GB Energy to nationalise an industry in which we have brought in global investment. Instead of unlocking renewables, Labour will, if it gets back into power, do exactly what it did in power last time: fail to deliver renewables, reverse the green transformation, fail to meet our carbon budget targets and let down Britain and every family, who will be back in cold, freezing homes with overly expensive bills to boot. That is what the Labour party offers.
We are internationally competitive. It is great that other countries, such as America with the Inflation Reduction Act, are seeking to catch up with us on things such as offshore wind. We support that. On onshore wind, which the right hon. Gentleman mentioned, as I have said, we are committed to reviewing it and ensuring that we can take it forward in a way that runs with the support and consent of local people.
In response to what the right hon. Gentleman said at the end of his words, three quarters of the power of this country today comes from fossil fuels, and we are the most decarbonised country in the G7. The right hon. Gentleman, the Labour party and the Scottish National party do not have a plan to stop using fossil fuels. What they have a plan for—this is unbelievable—is to make sure that we do not produce our own, that we import energy from abroad at the cost of billions and billions, that we make ourselves less energy secure, that we lose the 120,000 jobs, most of which are in Scotland, in the oil and gas industry and that we lose their capability to help deliver the hydrogen and carbon capture and storage industries upon which our decarbonisation path depends. The Labour party failed when it was in power. Its analysis of what it needs to do now is failing, too, and the British people will not be fooled.
Chris Skidmore (Kingswood) (Con)
May I thank the Minister for his kind words about the net zero review, and indeed the Government’s full response so soon after the review was submitted? I hope that the UK’s net zero pathway is now in a better place as a result of the recommendations. I should say that they are not my recommendations, but those of all the sectors I went to speak to and thousands of individuals, businesses and companies that want to get on with delivering decarbonisation, because they see the economic opportunity for the UK.
Does the Minister agree that we now need to slay this myth that somehow net zero will make us colder and poorer? Net zero will make us warmer and richer, and it is the economic opportunity of the decade, if not this century, to create a new economy, just as other countries such as the United States have recognised. Will he also accept that rather than talk down what the US has done, we need to work with our allies and democratic partners in creating a new special relationship around green energy?
Lastly, just to reflect on the comments made by the right hon. Member for Doncaster North (Edward Miliband), net zero is not just about 2050. We cannot keep kicking the can down the road. We do not have 28 years; we have seven years to deliver on the most ambitious nationally determined contribution of a 68% emissions reduction. If the UK achieves that, it is an economic prize that every single country across the world will look to us on how to achieve, and it will deliver further growth. There are economic consequences to not meeting that 2030 target, just as there will be severe economic consequences to not delivering net zero. I hope the Minister will urge both this party and any other climate delayers, who become the new deniers, that ultimately net zero is the future for the UK.
Graham Stuart
I thank my right hon. Friend and again pay tribute to him for all his work. This is the economic opportunity. If we look at a map of Europe, we can see the opportunity around the British Isles, and we will capture that energy. We are also blessed with around a third of all carbon storage in Europe. We can operationalise that to decarbonise the UK and provide a service to Europe, and we will do so. It will lead to the reindustrialisation of the north-west, north-east, Wales and Scotland. The opportunities are immense, and colleagues have been fighting hard.
On the NDC, we have set that ambitious world-leading 2030 target, and we are committed to delivering our commitments, including the 2030 NDC. [Interruption.] The right hon. Member for Doncaster North is a little out of touch. Countries are not due to start reporting to the United Nations framework convention on climate change on progress towards meeting NDCs until 2024, but we have quantified proposals and policies already to cover 92%, and we will go further. Just as we have done with our carbon budgets, we will exceed, not fall short. It was the Labour party that fell short on insulation and renewables; this party has a record of delivery, and our policies are supplemented by others that we have not quantified yet as we work hard to roll out these things. We will meet that 2030 target. We will continue our leadership role as arguably the only major economy in the world that is on that net zero pathway to 2050.
Mr Deputy Speaker (Mr Nigel Evans)
I call the Scottish National party spokesperson.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I think the greenest aspect of these announcements is the level of recycling in them without the actual funding to back them up. Starting with nuclear, there is no successful European pressurised water reactor project anywhere in the world. Hinkley has almost doubled in price to £33 billion, so we know that Sizewell C will cost something like £35 billion. That is a huge, scandalous waste of money that could be better utilised elsewhere. On SMRs, there is not even an approved design with the regulator yet. At £2 billion a pop, SMRs are not cheap either, and it is a myth that they will lower energy bills and provide security. Nuclear is the only energy technology to get more expensive rather than cheaper over the years.
We need more storage. I keep asking about pumped storage hydro. Please will the Government agree a carbon floor mechanism so that SSE can get on with Coire Glas and Drax can get on with the Cruachan extension? While the United States has the Inflation Reduction Act, when we look at the budget for allocation round 5, funding has been cut by a third from £285 million to £205 million, while we have inflationary pressures of 30%. The reality is that it will not deliver what we need it to deliver. Has the Minister looked at the lessons from the Spanish auction, which failed miserably and did not deliver on allocations?
The Minister knows that we need a greater ringfenced pot for tidal. At the moment, tidal stream energy has a 80% to 90% UK supply chain. If the Government do not increase the ringfenced budget, we risk offshoring manufacturing again. If he is talking about being powered by Britain, he needs to increase that funding for tidal stream so that we are building the UK supply chain.
On CCS, Acorn was not even mentioned in the statement. It was promised to us in 2014, and now it is not even mentioned. Is there going to be a definitive funding allocation for Acorn and are there going to be timescales for that funding, or is it a further betrayal when the Government are taking in £60-odd billion in additional oil and gas revenues? The reality is clear: Scotland has the energy, but Westminster keeps the powers.
Graham Stuart
The hon. Gentleman’s party of course opposes nuclear, despite the opportunity it provides to this country, and it means that Scotland does not benefit as it should. He talked about pumped hydro, and I would be happy to meet him to discuss that further.
We are the world leader in tidal energy, although we would be hard pushed to understand that from the hon. Gentleman. We have put a ringfenced number on that, and budgets can be changed. The budgets were set on the basis of those projects that were ready and were coming forward. As that changes through this year, as I very much hope it will, we have the flexibility to change those budgets upwards appropriately. Like him, I believe that tidal has a great future, and I love the fact that we are the global leader. There are many jobs in Scotland and around the rest of the country from it.
On carbon capture and storage, this is a major announcement today. I am delighted about the eight projects for carbon capture that have come forward as part of track 1. Today, we have launched track 2, and we have said in the papers, as the hon. Gentleman will be delighted to hear, that we think the Scottish cluster—and Acorn—and Viking in the Humber are the two best placed at the moment to go ahead, although there will be a competition and we are opening that now. We will be having an extension of track 1, we will be having track 2 and we are cracking on with it. I very much look forward to seeing what the Scottish cluster has to offer, because I know it is particularly well prepared, and that is why it was not a reserve, but the reserve in our track 1 process.
Sir Alok Sharma (Reading West) (Con)
Mr Deputy Speaker, thank you for calling me. Could I start by saying that I welcome the announcements that have been made? I think this does move us forward on the road to decarbonising our economy. I want to thank the Minister and particularly his officials for all of the work that has gone into this and the thousands of pages that have now been published. He made a really important point when he talked about how
“investment will be key to our success”.
I could not agree more. I agree with him that, over the last 10 or 12 years, we have managed to attract tens of billions of pounds of private sector investment, but we have to deal with the world as we find it now. The reality is that the US, the EU and other nations are speeding up and attracting billions and billions of private sector investment right now. Why are we waiting until the autumn to respond to that? Do we not need to speed up and respond now to the Inflation Reduction Act and measures by other nations?
Graham Stuart
I thank my right hon. Friend, and I pay tribute to him for his role as COP President and all the leadership he has given in this area. He is absolutely right to highlight the investment competition, but as I think The Economist mentioned last week, the US approach, with its direct subsidy regime, is not as effective—not as cost-effective—as the UK regime. I am confident in our system, and we are rolling this forward. We have attracted £50 billion of green investment from 2021 to 2022. [Interruption.] Since 2010—when the right hon. Member for Doncaster North, who does not stop chuntering, left power, fortunately—we have had 50% more expenditure per share of GDP in this country than in the US, and we are opening up today the policies to ensure that that continues. My right hon. Friend will be delighted to learn that the CBI has said:
“The package of measures announced by the government represents a gear shift to boost energy security, reduce household bills and re-establish the UK’s credentials as a leader in green technologies.”
That is the CBI speaking for British business, and I believe that the policies today will deliver implementation, which is our main aim as we go forward.
Alex Cunningham (Stockton North) (Lab)
After more than eight years championing carbon capture and storage, I welcome today’s positive news, even the repeated bits, but particularly the projects for Teesside. That said, the Government’s ambition falls short of the industry’s, and the Department’s website shows that projects for CF Fertilisers, Alfanar and Kellas Midstream have not made it. Why is that, and what impact will the decision to ditch the Humber projects, in the Minister’s own backyard, have on the innovative, collaborative and excellent Humber-Tees carbon capture, utilisation and storage project?
Graham Stuart
I think there was some recognition of good news in there from the hon. Gentleman. He and, unfortunately, all the Labour MPs in his area seem endlessly to talk down Teesside, as it goes from success to success under its excellent Mayor. Today is fantastic news for Teesside, and as I have said, this is just the beginning. We are starting projects now, we are accelerating track 2 and we are promising an extension this year to track 1. We are doing it. The hon. Gentleman, of whom I am a friend and admirer, should stop talking down the success of his area, get behind the development and look at how we have moved from the dire situation in 2010 to the world leadership position we hold today.
Nigel Adams (Selby and Ainsty) (Con)
There is much to be welcomed in the Minister’s statement, but excluding Drax from the track 1 CCS projects will come as a surprise to many and a blow to the company’s employees in my constituency and the wider region. I do not think there are any projects in the Humber region that have got through on track 1. The management at Drax will now have to urgently consider what to do with their UK operations, especially when we consider the challenging economics of biomass operations post March 2027. Could the Minister clear something up for me? The Yorkshire Post reported last August that the Prime Minister backed Drax’s BECCS—bioenergy with carbon capture and storage—plans. Can my right hon. Friend confirm that The Yorkshire Post reporting was accurate, and if so, why has the Government’s position now changed?
Graham Stuart
I thank my right hon. Friend for his question, and for being such an active campaigner for Drax and probably the foremost champion of power BECCS in this place. He is absolutely right that power BECCS and Drax are critically important to this country and the future of our net zero strategy. There are no power BECCS projects going ahead in the first phase of the track 1 process due to infrastructure constraints. We remain committed to our ambitious CCUS targets, which include 5 million tonnes of greenhouse gas removals by 2030, and power BECCS has a key role to play in that. That is why we have put so much emphasis on track 1 expansion and track 2, both of which will get further CCUS projects operationalised by 2030. To respond to the specific point my right hon. Friend made, the Department totally understands that we need to work with Drax on a bridging option between 2027 and 2030, and the Secretary of State has charged our officials with working with Drax on what those options look like.
Caroline Lucas (Brighton, Pavilion) (Green)
Just a week ago, the UN Secretary-General said we needed a “quantum leap” when it comes to climate action. This Government have laboured and, frankly, brought forth a mouse. There is no new funding, no street-by-street home insulation plan, no mandatory rooftop solar and no unblocking of onshore wind. Instead, Ministers are gambling with technologies that are slow and costly at best, and unproven at worst. While some CCS might have a role for carbon-intensive industry, will the Minister accept that—given its very high cost, high life-cycle emissions and appalling record of delivery, and since it cannot achieve energy security because fossil fuels will simply be sold on global markets at global prices—CCS cannot be used as an excuse for licensing new oil and gas in the middle of a climate emergency?
Graham Stuart
I thank the hon. Lady for her question. [Interruption.] I think I was disappearing like a mouse underneath the Dispatch Box there. We of course made major announcements in the Budget. What today is all about is giving the detail of how we are going to unlock that. She raises the question of carbon capture and storage. There is not a way for us to get to net zero without using carbon capture and storage. I remember that it was said by the Labour Government in 2003, if I recall correctly, that it was urgent. Here we are, 20 years later, but I am delighted to say—[Interruption.] I am delighted to say that, having had to come into government with nobody insulated and practically no renewables, and a note on a piece of paper saying there was no money left, we are coming forward with proposals to put that right.
Greg Clark (Tunbridge Wells) (Con)
I had the great pleasure of opening the Siemens wind turbine blade factory in Hull, very close to my right hon. Friend’s constituency, which is living proof that net zero, low-cost energy, energy security and jobs and prosperity can go hand in hand. Does my right hon. Friend recognise the export opportunities for the next generation of offshore wind—floating offshore wind—working with countries including Japan? On nuclear, will he consider accelerating the national planning statement so that developers of small modular reactors do not have to wait until 2025 to plan deployment? And on hydrogen, will the road map include a target date for phasing out polluting grey hydrogen, as recommended in a recent Science and Technology Committee report?
Graham Stuart
I share my right hon. Friend’s enthusiasm for the export opportunities that lie ahead of us. By leaning in ahead of others, as we have done and are doing, we can develop technologies and solutions which can then be exported all around the world, to the good of those other countries and ourselves. It is great to see us brokering support for just energy transition partnerships with the likes of Indonesia and Vietnam, who are great partners for us going forward. We are setting out today our vision for hydrogen and our commissioning of electrolytic hydrogen projects as part of our effort to transform the situation and move to a position where we have no unabated hydrogen as soon as that can possibly be delivered.
Daniel Zeichner (Cambridge) (Lab)
I am not sure what the Minister had for breakfast but it is probably best avoided because his aggressive and belligerent approach has undermined much of the good cross-party consensus that there is on this important issue. No one can look at the home insulation schemes of the last decade and imagine they are anything other than a painful failure, so for cities such as mine that have historical housing and need an insulation scheme, how will the new schemes be different from the failures of the last few years?
Graham Stuart
The hon. Gentleman talked about getting the tone right; perhaps I responded in the appropriate tone to the way that the right hon. Member for Doncaster North (Edward Miliband) addressed me. When I consider that he was a Minister in the Government who so spectacularly failed, it is all the more likely that I might be a little spikey. [Interruption.] If he stops barracking for a moment, I will respond to the hon. Member for Cambridge (Daniel Zeichner), who asked about insulation over the last 10 or so years: we have gone from 14% of homes effectively insulated to half of all homes, and we have set up the energy efficiency taskforce. We are driving forward and putting a budget in place precisely to take this forward and improve it further. With our support for heat pumps, we are looking to green our houses and lower costs for families, as well as meeting the climate challenge, on which the last Government singularly failed and I am pleased to say that this Government are making progress.
John Redwood (Wokingham) (Con)
Who will pay for CCS as it does not generate any direct revenue from retail customers?
Graham Stuart
To decarbonise industry, we will need CCS and hydrogen. We are socialising the funding requirements across the piece to ensure that we deliver what is necessary to meet our carbon targets, at the lowest possible cost to consumers. This year we are also consulting on measures to prevent carbon leakage, ensure that we do not drive UK industry abroad, which I know my right hon. Friend is concerned about, and instead maintain our competitiveness as we move towards net zero.
Wera Hobhouse (Bath) (LD)
If the Government were so serious about climate action why did they need to be dragged into court and told by the High Court that their existing plans are not sufficient? Now we have a new strategy, but there is not very much new in it and still a de facto ban on onshore wind. Will the Minister commit to cancel the planned expansion of fossil fuel subsidies and instead commit to a significant increase in onshore wind?
Graham Stuart
I am afraid the hon. Lady may want to correct the record because she misled the House. The courts did not say our policies were insufficient; they said they wished to have more detail on them. We are responding to that technical point today, providing further detail. [Interruption.] Absolutely, it was not a reflection on the quality of those policies. We have met all our carbon budgets to date and have set out today the way we will meet our carbon budget 6, and, even though it is far ahead, we have already set out policies to cover 97% of it. As I have also said, we are looking to make sure that we come forward with more opportunities for onshore wind, but with the consent of local communities.
Sir John Whittingdale (Maldon) (Con)
I thank my right hon. Friend for his statement and strongly welcome the Government’s commitment to a new generation of nuclear power stations, which are going to play an essential part in delivering both energy security and net zero. Can he confirm that, while a new Chinese-designed reactor may no longer be in prospect, Bradwell-on-Sea in my constituency remains a designated site for new nuclear investment?
Graham Stuart
The current nuclear policy statement identified Bradwell as a site for nuclear electricity, as my right hon. Friend rightly says, until the end of 2025. That statement continues to have effect for any nuclear infrastructure deployable before the end of that year, and of course with the launch today of Great British Nuclear, its first job is to look at the process for down-selecting technologies for small modular reactors, but it will also be involved in a renewed siting policy that will look at both gigawatt and SMR-scale nuclear projects.
Nick Smith (Blaenau Gwent) (Lab)
The Minister talks up energy security but fails to prioritise onshore wind, the best value renewable energy. By when will the Government remove the ban on onshore wind?
Graham Stuart
I have set out our position on onshore wind. The great thing about the CfD system we have set up is that it has helped to reveal costs. Ground-mounted solar might actually prove to be the lowest cost generator, but thanks to the system this Government have set up, we have competition between the various types of energy, and we are continuing with that. Having led the world on offshore wind and transformed the parlous situation we inherited, with just 7% of electricity coming from renewables in 2010, I am delighted to say that wind, both onshore and offshore, has a brilliant future under this Conservative Government.
Sir Jake Berry (Rossendale and Darwen) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I am sure the Minister will have read reports this morning that his Department intends to bring forward a code that will initially be voluntary but will then become mandatory saying that mortgage lenders should ensure that their loan book only includes properties that have an energy performance certificate of C or above. Does the Minister accept that for those who live in an older property, a doer-upper, a national park or a listed property, the net effect of this policy is that they will have zero chance of a mortgage?
Graham Stuart
No policy decision has been made in this area. We have consulted and gone out and found ideas about the best way of doing this. My right hon. Friend is right to identify that any system needs to take account of the particularities of certain property types, and we will ensure we do that so that we both align with net zero and align with the reality of existing properties.
Ben Lake (Ceredigion) (PC)
I am pleased the statement mentioned the importance of energy efficiency schemes, both for their contribution to our net zero ambitions and the help they can offer households. The New Economics Foundation estimates that had all homes across England and Wales been upgraded to EPC rating C over the past decade, energy bills would on average have been £530 cheaper per household. I take it that the £1 billion allocated for the great British insulation scheme is in addition to the £6 billion committed at the autumn statement for expenditure post-2025. Is the Minister considering ways of bringing forward some of this spending so that even greater progress can be made?
Graham Stuart
We would be in a very different and much better situation if, instead of inheriting such a tiny—derisory—number of properly insulated homes when we came into power, we had had the 50% we are at today. With the energy efficiency taskforce and my colleague Lord Callanan, we are bringing industry and other stakeholders together, working with the Welsh Government and others to make sure that we have all the right policies, because the best form of energy is energy we do not use: it is demand that we can remove and destroy. That is the cheapest, and it can help us be a lean and efficient economy, and with fewer people in fuel poverty.
Virginia Crosbie (Ynys Môn) (Con)
Anglesey is known as energy island. We have wind, wave, solar, tidal, hydrogen and, hopefully, new nuclear at Wylfa, and we have projects like Morlais, Minesto, bp Mona, the Holyhead hydrogen hub and Lightsource bp, so I welcome the statement to power up Britain. Will the Minister confirm to me and my Ynys Môn constituents, particularly those in Cemlyn, Cemaes and Amlwch, that the UK Government are committed to new nuclear at Wylfa, and will he accept my invitation to visit Wylfa, one of the best new nuclear sites in the UK?
Graham Stuart
My hon. Friend will understand that I cannot make policy commitments to Wylfa on the hoof. What I can tell her is that it has already been assessed as one of the best nuclear sites in the UK and that if the energy focus, determination and sheer drive of the Member of Parliament has anything to do with it, Wylfa has a very positive and strong nuclear future ahead of it. I look forward to working with her. I am sure that if he has not visited already, the new Minister for Nuclear and Networks—the first time this country has ever had a Minister with “nuclear” in their title—the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), will visit her in her constituency.
Richard Burgon (Leeds East) (Lab)
The way to deliver energy security, tackle the climate crisis and lower bills as quickly as possible is through renewables, yet the Government are hooked on ever more oil and gas production, and on handing massive subsidies to polluting companies. Over 700 scientists have written to the Prime Minister to ask him to grant no new oil and gas licences, a call backed by the United Nations Secretary-General. Is it not time that the Minister used his powers to prevent the development of the Rosebank oilfield?
Graham Stuart
We are accelerating renewables as quickly as we possibly can. As I say, we have transformed the dire situation we inherited and we are moving as fast as we can on that, but we are going to need, and be dependent on, oil and gas for decades to come. Under net zero, we will still be using a quarter of the gas we use today. The hon. Gentleman is saying to his constituents, “Let’s pay billions to foreign, sometimes hostile, states, rather than producing our own.” That is economic madness. The gas we bring in on tankers has two and a half times the emissions of our domestically produced gas. On what planet would any rational and reasonable constituency MP want to propose that, unless they had some strange affinity with somewhere like Russia?
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Minister is exactly right that we are on the cusp of a new industrial revolution. Floating offshore wind will be a key part of that picture, so I welcome the confirmation he has given today of the £160 million FLOMIS—floating offshore wind manufacturing investment scheme—port infrastructure package. Will he confirm when he is likely to start awarding that funding? Does he agree with me that it needs to be used in a really targeted way to unlock private sector investment and ensure we capture first mover advantage with floating offshore wind? Will he visit the port of Milford Haven to see the really exciting things happening in the energy sector there?
Graham Stuart
I thank my right hon. Friend who, like my hon. Friend the Member for Ynys Môn (Virginia Crosbie), is relentless in promoting and pursuing these interests. He can see that moving towards net zero and capitalising on the huge natural assets around Wales, can contribute to jobs, prosperity and industrial renaissance, as well as help us to deliver the transition. I would be delighted to visit him. In answer to his earlier question, we want to do that as soon as possible. We announced the opening of it today. We want to move forward. We have to accelerate everything we can do right across the piece.
Deidre Brock (Edinburgh North and Leith) (SNP)
RenewableUK commented that the budget and parameters set for the most recent contract for difference auction are currently too low and too tight to unlock all the potential investment in wind, solar and tidal stream. Tidal alone could produce huge amounts—up to 11 GW —of reliable clean electricity for far less than the cost of nuclear. The Minister claims he supports tidal, so why have the Government cut their funding commitments to it?
Graham Stuart
We have not cut our funding commitments; we have moved to a one-year allocation. The budgets are set based on our assessment of projects and where they are in the planning and permissions process. Those budgets, if projects can come forward and put themselves in a different position, can be altered by Ministers. I think we are in a fantastic position. We are the world leader and we have put in a ring-fenced pot specifically for tidal, so I suggest to the hon. Lady and her constituents that they should be celebrating Government support for tidal. We are the world leader, we are going further and our support continues. I look forward to visiting Scotland, and indeed Orkney, next week with a view to learning more about tidal potential, an enthusiasm for which I share with her.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I commend my right hon. Friend not just on his statement, but on his long-standing passion for this subject. Perhaps he can expand on something he referenced a moment ago: the fact that liquid gas imported in tankers creates two and a half times as many emissions as domestically produced gas in the North sea. Does he not agree with me that it is incomprehensible that the SNP and now Labour oppose domestic production, which is not only bad for jobs, but bad for the environment?
Graham Stuart
My right hon. Friend is, of course, absolutely right. The hon. Member for Leeds East (Richard Burgon) talked about growing our oil and gas. We are net importers of oil and gas, and production in the mature basin of the North sea is falling. Only new investment can unlock the greening and electrification of production, with even lower emissions in sight from the North sea than from tankered gas coming in from abroad. My right hon. Friend is absolutely right. If we did as the leader of the Labour party, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), said at Davos and had no new oil and gas licences, we would not stop using gas; we would just import more of it from abroad with higher emissions attached, with no jobs, no tax and no long-term benefit to the United Kingdom. That is not a tenable policy. I hope that, apart from their far-left colleagues on the far Labour Back Benches, everyone else in the Labour party recognises that is a crazy position and it needs to change.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I take the Minister’s recent comments to be a notification that I will be having a constituency visit from him. I look forward to that.
However, can I take him back to the question of energy security and just remind him that there is more to energy security than what we produce and where? It is also about the protection of infrastructure and the assets around it. All this week, we have had a Russian tug, the Nikolay Chiker, steaming up and down to the east of Shetland in the vicinity of the pipeline servicing Brent and Ninian. This morning, the tug has gone around to the north-west of Shetland and is now doing the same thing in the vicinity of the pipeline servicing the Laggan field to the west of Shetland. It is a merchant vessel, but we know that the Russian military often purpose merchant vessels in this way. Will the Minister speak to his colleagues in the Ministry of Defence to see, first, if they know what is going on? Secondly, if they do not, will they find out? Thirdly, what will we be doing in the long term to protect these vital national assets?
Graham Stuart
I thank the right hon. Gentleman for his question. Perhaps we can follow up offline on that. As appropriate, I would certainly be happy to engage with my colleagues in the MOD. As a Minister for energy security, I keep all that under advisement. We will formally notify him of my intention to come to his constituency and, whether next week or another time, we can discuss this matter further and make sure I can reassure him on what are very well expressed concerns.
Siobhan Baillie (Stroud) (Con)
I love the energy the Government are putting behind energy, particularly nuclear. I hope that Berkeley and Oldbury will get a small modular reactor, because the western gateway is working really hard. Supersmart Stroud businesses are still coming up against things like planning barriers for solar rooftop and tracking, and Competition and Markets Authority problems for financing options for renewables. The UK also needs to look really lively to win the race on the hydrogen ICE—internal combustion engine. I welcome the big announcements today, but will the Government move the machine to resolve a raft of smaller daily frustrations, so we can unleash some amazing British businesses, many of which are in the Stroud district?
Graham Stuart
My hon. Friend is absolutely right. If there was one priority above all else in the Department, it would be ensuring that we get the grid sorted and the infrastructure in place to allow that transformation. We will publish an action plan this year in response to the Electricity Networks Commissioner Nick Winser’s recommendations, when he reports in June on halving the development time for transmission network projects. However, across the piece, we need to speed up connections, and sort out the queue and perverse incentives in that system. We have a lot to do and we are working at it. Only last week in No. 10 Downing Street, the Prime Minister hosted an event looking at the networks piece. The offshore wind acceleration taskforce had its final meeting this week, which looked at grids, among other things.
I thank the offshore wind champion Tim Pick for all his work, as well as Nick Winser. I also take the opportunity to thank officials in the new Department for Energy Security and Net Zero, who have put a huge amount of work into producing all these policies and are working hard to ensure that implementation can follow as fast as possible. Officials in my new Department have absolutely shone and I look forward to taking forward our work with their help.
Liz Twist (Blaydon) (Lab)
Too many homes in places such as Chopwell in my constituency urgently need insulation and energy efficiency. They, and people across the country, face additional charges of up to £1,000. How will the Government take active steps to address issues such as those in Chopwell, to ensure that they are energy efficient and that people can benefit from better homes?
Graham Stuart
The hon. Lady is absolutely right to highlight the issue. That is why we have set up the energy efficiency taskforce. We are putting in £6.5 billion in this Parliament, as well as announcing the major insulation scheme today. We have another £6 billion between 2025 and 2028. We are absolutely committed to ensuring that homes are insulated. I am pleased that today’s announcements will see 300,000 of the most energy-inefficient homes in the country tackled, reducing families’ bills by hundreds of pounds a year as a result.
Marco Longhi (Dudley North) (Con)
With energy security a key strategic imperative for our Union, I thank the Minister not only for this statement but for his common-sense approach to investments in oil and gas as we transition to a greener economy. Building on other Members’ comments about investment in British nuclear, such projects are notoriously slow at being delivered. Can we look at how to very quickly get spades in the ground and invest in small nuclear reactors for the benefit of the country?
Graham Stuart
The reason for setting up Great British Nuclear is precisely to de-risk, roll the pitch and accelerate technologies. One of the benefits of small modular reactors as opposed to gigawatt scale is quicker replicability. The hope is that it can move to a factory-like process, eliminate errors iteratively and then deliver nuclear energy safely, cheaply and more quickly than previous technologies have allowed.
Richard Thomson (Gordon) (SNP)
In relation to the Acorn project, I get a feeling of déjà vu. It was promised in 2008 and ahead of the 2014 referendum, which to some of us feels like a generation ago. Can the Minister do something that none of his predecessors has ever been able to do: tell us exactly the difference between a track 1 reserve project and a track 2 project? Can he tell us what difference that will make to the timescale for funding and delivery, should the Acorn project finally be favoured by his colleagues?
Graham Stuart
The hon. Gentleman is a little unfair. If one of the two selected track 1 projects were to come off track, the reserve would move up—that was the point. It was an indicator of the maturity and viability of the Scottish cluster. We are moving fast. We have announced the launch of track 2 now. We believe that the Scottish cluster and the Viking cluster in the Humber are the two leading contenders best placed to do it, and we will move forward with speed. I look forward to working with him and colleagues to make sure that the Scottish cluster can play a full part in our future.
Selaine Saxby (North Devon) (Con)
I thank my right hon. Friend for today’s announcements and for his ongoing engagement on the new Department’s work. Will he reaffirm his commitment to rapid delivery of floating offshore wind in the Celtic sea, along with the vital UK-based supply chain and port infrastructure right around the Celtic sea coast?
Graham Stuart
My hon. Friend is a member of a small, elite group of colleagues who are relentlessly focused on ensuring that the energy transition is done in the right way, leading to jobs and prosperity for her constituents and others. I can confirm that. Having announced the launch of FLOWMIS today, we look forward rapidly to supporting the port infrastructure that is critical to the delivery of floating offshore wind, and the maintenance of the UK as the world leader on this vital technology. Estimates show that only about 8% of potential offshore wind capacity globally is on a fixed bed. For those who have a shallow continental shelf like us, 92% is floating. There is enormous opportunity for the UK if we unlock the infrastructure and the jobs, because then we can export that capability all around the world.
Olivia Blake (Sheffield, Hallam) (Lab)
The Minister spoke of making policy on the hoof, so I wonder why the Government’s policy seems to be chasing a unicorn. What happens if the unicorn of carbon capture and storage turns out to be a donkey with an ice cream on its head? Would it not be better to unlock the stables of the reliable horses of home insulation, solar and onshore wind?
Graham Stuart
So can I take it that the hon. Lady’s party is opposed? It failed to support the regulated asset base regulations in Committee to allow new nuclear to go ahead, despite its protestations to the contrary. Now, she seems to be opposed to carbon capture and storage, which offers enormous opportunities for all sorts of industrial parts of the United Kingdom—another failure. On solar, I am delighted to announce the launch of a solar taskforce precisely to accelerate the take-up.
I cannot believe the gall of the Opposition party, which left Government with just 11% of our electricity from renewables, when it is around half now. [Interruption.] The right hon. Member for Doncaster North (Edward Miliband) failed in government, and now he chunters from a sedentary position. We will drive forward the solar taskforce. Having transformed our solar base, which is greater than that of France—despite the larger area—and about equivalent to the radiated country of Spain, we will increase it fivefold by 2035. That is why we have the taskforce—because we deliver. We do not just talk or chunter from a sedentary position. We transform the UK’s energy system.
Scott Benton (Blackpool South) (Con)
If we are truly serious about speeding up the planning process for energy production, the Minister’s new Department needs exclusive planning control over all matters. Is that Government policy? If it is, when is it likely to happen?
Graham Stuart
Talking of making policy on the hoof, my announcement today that the Department would take over the entirety of the planning system would cause something of a Whitehall ruckus. At least twice this week I have met colleagues from the Department for Levelling Up, Housing and Communities to ensure a joined-up approach across Government. That Department is alive to these issues, as is the Department for Environment, Food and Rural Affairs, my Department and the Ministry of Defence, which has equities here. Joining up and working across Government so that this is as seamless as possible—it is never entirely seamless—is at the heart of delivering the changes in the system that we need. My hon. Friend is right that planning is vital to that.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement. I have listened attentively to him, I have read the Government publication and, unfortunately, I did not see any reference to tidal energy. In Strangford lough we have a ready-made project. I was pleased to have the Minister over to visit the Queens University biology station. The scientists there were very happy to see him there and to have his input on the projects that we feel can make a difference. Will he outline whether the potential of tidal energy is getting the appropriate attention it deserves?
Graham Stuart
It was my great pleasure to be hosted by the hon. Gentleman at Strangford lough and to hear all about the potential strengths of the tides. I am delighted to see the growth of tidal energy. For offshore wind, it took quite a while to build up what was a nascent market. People said that we would never be able to lower costs offshore, yet we did. I think that tidal is on that pathway. I hope that the hon. Gentleman will welcome the ringfence, our continued support and our flexibility on budget as and when projects come through. We seek to drive the cost curves down so that, ultimately, we are technology neutral but support and nurse new technologies such as that, which have great potential.
Martin Vickers (Cleethorpes) (Con)
There is much to welcome in my right hon. Friend’s statement, particularly in the Humber region, as he will recognise. He referenced a £160 million fund for port infrastructure. Clearly, improvements will be needed to cope with many of these projects. Can he indicate when that is likely to come forward? I presume there will be a bidding process. Will that be open fairly soon?
Graham Stuart
I thank my hon. Friend for his question. Let me follow up with him to talk about more of the details, but I welcome, as he does, the success of the Gigastack Phillips 66 project, the initial hydrogen project. We are leading the world and, having met with Phillips 66, I know that that type of refinery of the future has a real opportunity to play an important part in delivering the green transition on a number of fronts. It is fantastic to see it successful in today’s announcements.
Peter Aldous (Waveney) (Con)
I welcome my right hon. Friend’s statement. This strategy rightly focuses on security of energy, its cost and decarbonisation. I would be grateful if he could confirm that the Government will also concentrate on the enormous opportunity to create jobs, and that they will come forward quickly with both a skills strategy and a plan for investment in infrastructure, which should include both the grid and ports such as Lowestoft?
Graham Stuart
I thank my hon. Friend for his constructive contribution, as ever. I co-chair the green jobs delivery group. We are working closely with industry to ensure that we get the signals from them across multiple trades, and engaging with the Department for Education to ensure that it can use those inputs to construct various courses to support that. We are absolutely focused. The reason we have a Minister for nuclear and networks is that we recognise that we have to get that infrastructure right. If we get it right—look at the success we have already had and at our investability going forward—it will be a tremendous transition, generating lower-cost energy and making us one of the most competitive economies in the world.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Minister for his statement and for responding to questions for over an hour. Could he stay in his place a little longer, as this point of order relates to him?
Wera Hobhouse
On a point of order, Mr Deputy Speaker. The Minister has accused me of misleading the House and asked me to correct the record. I am happy to do that. My question should read: “If the Government were serious about climate action, why did the Government need to be dragged into court and told by the High Court that their existing policies are lacking detail?” I apologise to the House that I used the word “insufficient” rather than “lacking detail.”
Graham Stuart
Further to that point of order, Mr Deputy Speaker. The Court asked for more detail and I am delighted to say that is precisely what we have provided today. There was no suggestion from the Court that our policies were not adequate. It wished for more detail and we have been delighted to share that.