Energy Security and Net Zero Committee
Wednesday 14th October 2026
Skip to latest contribution
This debate has concluded
(began 3 weeks, 3 days ago)
Watch LiveSkip to latest contribution
This debate has concluded
15:07
Bill Esterson
-
-
Bill Esterson
Examples where businesses offer alternative technologies which are proven , and because their upfront costs are higher, they're rejected by by by the Cap and Thor mechanism, for example, with long duration storage, a number of those examples where actually over the lifetime, they are significantly cheaper. And this seems to be at odds with what you said, Secretary of state a few minutes ago that there is alignment. So, you know, I say again, these are these are the frustrations we're getting.
Do you think that something needs to change?
Do you think that something needs to change?
15:08
Speaker 1
-
Speaker 1
So absolutely, we think that something needs to change. We're not resigning from that. So the same frustrations you are hearing, we are hearing as well. And look, we are doing a huge amount of work across the networks to think about how we speed this up, because it is a bottleneck to us getting to the end destination that we want to. And there is a genuine conversation that we are having around the trajectory of build out, that we expect the ability of our transmission operators to deliver that, and what you then need to do to enable them to.
And that's either dealing with practical barriers like workforce. But it's also thinking about, look, where can the public sector challenge us step in to help us and accelerate the build out? So we're trying to look at it in the round. On the specifics of long duration storage that you mentioned. I think the wider principle I'd say is we absolutely are trying to support and incentivise technologies that can get us through this transition. And I can, you know, quote, lots of different schemes and projects where the department are backing innovation.
And actually, that particular scheme was one in which we had record numbers of companies coming forward. It was actually really successful in that regard. Now, obviously, Ofgem have just consulted on it, and I think companies that didn't quite like the sort of original outcome have had the opportunity to sort of make their case and Ofgem will come forward. But the wider point of we are quite an inflection point where we do need technologies and we need technologies that will deliver for the transition in a cost effective way.
We as a department, are very much trying to create the space in which we nurture that and enable that innovation. I
And that's either dealing with practical barriers like workforce. But it's also thinking about, look, where can the public sector challenge us step in to help us and accelerate the build out? So we're trying to look at it in the round. On the specifics of long duration storage that you mentioned. I think the wider principle I'd say is we absolutely are trying to support and incentivise technologies that can get us through this transition. And I can, you know, quote, lots of different schemes and projects where the department are backing innovation.
And actually, that particular scheme was one in which we had record numbers of companies coming forward. It was actually really successful in that regard. Now, obviously, Ofgem have just consulted on it, and I think companies that didn't quite like the sort of original outcome have had the opportunity to sort of make their case and Ofgem will come forward. But the wider point of we are quite an inflection point where we do need technologies and we need technologies that will deliver for the transition in a cost effective way.
We as a department, are very much trying to create the space in which we nurture that and enable that innovation. I
15:09
Bill Esterson
-
-
Bill Esterson
15:10
15:10
Bill Esterson
-
-
Bill Esterson
Isn't that isn't that exactly the problem though, which is if it's an independent matter for Ofgem, then it's you got government stated policy is more difficult to deliver. If you can't, you know, if you're I mean, you know, there is this dynamic, there is this there is this tension between their independence and government policy. But isn't isn't that the whole, you know, a big part of the problem?
15:10
Lizzi Collinge
-
-
Lizzi Collinge
So stepping back from that, then I just want to come on to the long duration storage. The reason why in the Ofgem review we already have, but we want to firm up the strategy and policy statement is because government sets policy and the regulator implements it. I mean, on the specifics of the capital versus the lifetime costs, I do think Ofgem will have to come back to you on the specific project, but to give you an example, Corey Glass is a very, very high CapEx project.
It is benefits our very long term, and that is one of the ones that got through the cap and floor. 92 decision. Now I have to say, you know, Ofgem are still consulting. They've closed their consultation and they're coming back to their decision. So they're still considering this. But in terms of if you think about the policy goal, which was to get enough long duration storage to create a sustainable system, we do think that the cap and floor and the process so far will do that.
It is benefits our very long term, and that is one of the ones that got through the cap and floor. 92 decision. Now I have to say, you know, Ofgem are still consulting. They've closed their consultation and they're coming back to their decision. So they're still considering this. But in terms of if you think about the policy goal, which was to get enough long duration storage to create a sustainable system, we do think that the cap and floor and the process so far will do that.
15:11
15:11
Speaker 1
-
Speaker 1
Well, so, look, I think CFDs have been a really effective tool. And, you know, I quoted the numbers in terms of investment that we have locked in clean power, and that has been because of the CFD. Countries across the world are looking at us and thinking about how we have used that as a tool. We are constantly reviewing what technologies we use it for and how we use it, and how we get that balance between incentivizing the clean power that we need to get through versus making it fair for consumers.
15:12
15:12
Speaker 1
-
Speaker 1
Well, I won't I won't get into the specifics, but look, what I would say is the job that I see it is we have a tool that I think has been really effective in driving clean power. We will keep deploying that tool where we think it makes sense, but ultimately, the balance that we have got to strike is how we do that and incentivize the technology that we have, but make sure that it is fair cost and reasonable cost for consumers.
And that is the approach that we will take to every single technology.
And that is the approach that we will take to every single technology.
15:13
15:13
Speaker 1
-
Speaker 1
So I don't think we're planning to change it. But my point is at the moment we are trying to think about, look, we the metrics like this, we've done a huge amount. CFD has been a really effective mechanism. And ultimately we've got to constantly be stress testing what it's unlocking in terms of investment versus the. Jonathan, was there anything else you wanted to add?
15:23
15:23
15:23
15:23
Bill Esterson
-
-
Bill Esterson
You might need to reassure some of the businesses in who are using CC s and hydrogen. I mean, it's true, but Melanie represents one part of the cluster. I'm very close to the other part, and that is a real concern to them and is affecting their investment decisions right now. Are you are you having those conversations with them? We
15:23
Speaker 1
-
Speaker 1
are having those conversations. And look, the industry, these are key partners for us. We're on a journey together and we recognize our responsibility to give as much confidence. And the thing that we have said consistently is, you know, we see that CC s will have an important role in the mix and the transition and hydrogen, and we are working out the best way in which we can support within the resources that we have.
15:23
15:23
Speaker 1
-
Speaker 1
Yeah. So look, for me, affordability is our central goal. And I think Clean power does, if you like, the first arc of that, which is if you ask yourself the question, why are bills going up at the moment and why are people under so much pressure? It is because of conflicts miles away that are then playing out on volatile global fossil fuel markets. So that bit around getting home grown energy here that we control is absolutely critical to that, and that helps with the affordability journey.
The second bit is that piece we talked about decoupling. So if you allow that actually more renewables, more nuclear on the system drives prices rather than gas, that helps with affordability. But I come back to the point I'm making. It is the first step and it is really critical. It is necessary, but it's not sufficient. There are other things that we must do to drive out costs in the system.
The second bit is that piece we talked about decoupling. So if you allow that actually more renewables, more nuclear on the system drives prices rather than gas, that helps with affordability. But I come back to the point I'm making. It is the first step and it is really critical. It is necessary, but it's not sufficient. There are other things that we must do to drive out costs in the system.
15:24
15:24
Christopher Chope
-
-
Christopher Chope
Melanie asked the question about investment, and you said you're trying to get investment from the private sector. Isn't the offer from Centrica to provide £2 billion towards the gas storage facility at RAF? Just such an investment opportunity? And why is it that the government is not accepting that investment offer from the private sector? Because cold water was poured on it by your colleague Luke Pollard, when responding to the interview that Chris O'Shea, the boss of Centrica, gave earlier on this week.
15:25
Speaker 1
-
Speaker 1
Look, I know Chris really well. We're working really closely with Centrica, including on this question. Look, ultimately, you know, the decisions that Centrica make are commercial decisions. We have engaged and we are engaging in a process because we are clear that storage is an important component. As we're thinking about all the conversation we're having about the the state of the energy system, how we get more generation, but also how we get more storage is absolutely critical.
So we are having a conversation about that in the round. We prefer to have that conversation in private rather than on the media. But that's within the gift of with Chris and other operators. But but it's it's it is not the case that we aren't engaging, we are engaging. But as you can imagine, there are many other propositions as well. And the job of government is to look in the round to say, this is the outcome that we're trying to get to.
What's the most cost effective and efficient and resilient way in which we do that. And that's the process we're in at the moment.
So we are having a conversation about that in the round. We prefer to have that conversation in private rather than on the media. But that's within the gift of with Chris and other operators. But but it's it's it is not the case that we aren't engaging, we are engaging. But as you can imagine, there are many other propositions as well. And the job of government is to look in the round to say, this is the outcome that we're trying to get to.
What's the most cost effective and efficient and resilient way in which we do that. And that's the process we're in at the moment.
15:26
Christopher Chope
-
-
Christopher Chope
That all sounds delightfully vague. So when is there going to be a firm decision in relation to the rough application and particularly their application for support for a, a cap and floor regulatory framework to enable them to recover the costs of their £2 billion investment. And how does that link in with the security of supply and the very real threat that there is, that we will lack sufficient gas later on this winter? And obviously, if we are dependent on overseas imports, then that pushes up the price even more.
So aren't those really critical issues? And can you give us a concise, precise way forward? I
So aren't those really critical issues? And can you give us a concise, precise way forward? I
15:27
Speaker 1
-
Speaker 1
will try and be as concise as I can. Let me take this in two turns. So on the question of security supply, it's really important to emphasise that, you know, we've got a really diverse, resilient and robust security supply. So if I'm thinking about the things that are going across my in-tray, worries about security supply aren't one of them. We've got the sort of diverse mix of sources to get us through this winter and beyond. On the specifics of rough, I think there are two.
There are two parts to this. There is an immediate question about the here and now and what they may do this year. And there is a longer term question about, if you like, the shape of the storage capacity that we build across our energy system, and we're really keen to work through, particularly the latter, but we have to do that in the context of conversations with other potential providers and ask ourselves, as you would expect us to do, and you'd be very cross as a committee if we weren't.
What's the most cost effective way that we are doing this for the taxpayer and for the bill payer?
There are two parts to this. There is an immediate question about the here and now and what they may do this year. And there is a longer term question about, if you like, the shape of the storage capacity that we build across our energy system, and we're really keen to work through, particularly the latter, but we have to do that in the context of conversations with other potential providers and ask ourselves, as you would expect us to do, and you'd be very cross as a committee if we weren't.
What's the most cost effective way that we are doing this for the taxpayer and for the bill payer?
15:28
15:28
Speaker 1
-
Speaker 1
complete? I will use Whitehall speak in due course and imminently. So look, we we are we are engaged in a conversation with them. But my point is that there are two parts of it. There is a question about this year, and then there is a longer term question about storage capacity and the role that rough can play within that. And we're having both of those conversations. And you know, for me, the latter is the one that is absolutely critical, but that has to be taken in the round with other conversations about where we can unlock storage capacity.
I
I
15:28
15:29
Speaker 1
-
Speaker 1
Is that. Absolutely not. So just to be really clear, I have been consistent. I'm on the record. Gas is part of the mix. We are dependent on it in this transition. So that is not the issue. It is genuinely a question of no one negates that we need storage and that we need gas storage. But you would expect me to look at it in the round in terms of the value for money of that proposition versus other proposition, and to have a proper process with the company in question to get to that answer.
15:29
15:29
15:29
Christopher Chope
-
-
Christopher Chope
It's all so vague, isn't it? Anyway, can I turn to something else? And that is, there is rising scepticism amongst my constituents and people in this country about the value or otherwise of net zero policies. And it's well summed up in a letter today in the Daily Telegraph from Doctor Fiona Underhill, who asks how many lives will be harmed by the unaffordable, unachievable and unnecessary net zero fantasy before politicians wake up to scientific and economic reality? What's your answer to Doctor Underhill?
15:30
Speaker 1
-
Speaker 1
I think I would say three things. I think first, it is worth saying that, you know, when we look at this all the time, the majority of the problems, 7 in 10 of the public support action on climate and the transition to net zero. And part of the reason they support it is because they are living and breathing through it. And I don't think anyone that could have lived through the summer that we've just had, where we saw record heat waves, we saw droughts, we saw wildfires, and we saw much worse across the world would think that this is a fantasy.
It's not a fantasy. And why it matters, why it matters is if we do not get this right, it is people's homes. It's their livelihoods, it's their communities that will be impacted. And so we have both a responsibility to people in the here and now. And we have a responsibility to future generation. Now, the thing the second thing I would say is, look, I'm really clear that the job and we have to be intentional about it for all of us is that we do this transition in a way that works and benefits for people.
And so, you know, part of the way that I hope I can counter some of the frustration and skepticisms that I see and I know is growing is to say, look, we will do this transition because we must and it's the right thing. But actually it has a net positive impact in terms of affordability. It has a positive impact in terms of the industries. I talked about the £100 billion of investment that we've unlocked. That is investment in places, that is jobs that we are creating.
That is industries and supply chains that matters for the British economy. And so success to me is I can persuade your constituents that this is the right path, not because I say it, but because I can see the benefits of it in their lives and their communities.
It's not a fantasy. And why it matters, why it matters is if we do not get this right, it is people's homes. It's their livelihoods, it's their communities that will be impacted. And so we have both a responsibility to people in the here and now. And we have a responsibility to future generation. Now, the thing the second thing I would say is, look, I'm really clear that the job and we have to be intentional about it for all of us is that we do this transition in a way that works and benefits for people.
And so, you know, part of the way that I hope I can counter some of the frustration and skepticisms that I see and I know is growing is to say, look, we will do this transition because we must and it's the right thing. But actually it has a net positive impact in terms of affordability. It has a positive impact in terms of the industries. I talked about the £100 billion of investment that we've unlocked. That is investment in places, that is jobs that we are creating.
That is industries and supply chains that matters for the British economy. And so success to me is I can persuade your constituents that this is the right path, not because I say it, but because I can see the benefits of it in their lives and their communities.
15:32
Christopher Chope
-
-
Christopher Chope
Don't you recognise, Secretary of State, that climate is not something which we can control within our own domestic agenda? It's an international issue, and while we are industrializing, our competitors are continuing to emit CO2 emissions in very large quantities, so much so that the International Energy Agency does not think we've got a hope in hell of getting anywhere near the climate targets of CO2 reduction targets for even by the end of this century. So are we not imposing unnecessary burdens on our own people and industry in terms of costs, while ignoring the reality of what's actually happening out there, and probably needing to adapt rather than to pretend it's not happening.
15:32
Speaker 1
-
Speaker 1
Look, the two things I'd say is, of course, it requires multilateral action, but within that, every single country that is in the multilateral race has a responsibility. And often people say, look, we're just 1% of global emissions. And actually lots of 1% add up to about 50%. So every individual country has its own responsibility. I think the second thing I would say is, you know, I talk to my international counterparts and they are looking to the UK with envy.
We are a leader in this world, but we're a leader in a massively growing economy. China is leading the race on clean power. It is a huge global economy. And the thing I say to people who may be skeptical about climate change and how I look at the science and the science is pretty clear. But fine if you're skeptical, even if you don't believe in it, why would you not want to be part of that global economy that is growing? And ultimately, I think the way that I and the government should engage with people who, you know, it's within their gift to be skeptical is to say, look, we need to do this transition in a way that isn't a burden where we are unlocking billions of investment.
You talked about deindustrialization. My view is our route to reindustrialization, which the Prime Minister talks about all the time, is through our sector. There is a massive pipeline. I'm talking to global investors, trillions that they want to invest in the net zero economy, and we can be part of that. Why on earth would we not want to be part of that?
We are a leader in this world, but we're a leader in a massively growing economy. China is leading the race on clean power. It is a huge global economy. And the thing I say to people who may be skeptical about climate change and how I look at the science and the science is pretty clear. But fine if you're skeptical, even if you don't believe in it, why would you not want to be part of that global economy that is growing? And ultimately, I think the way that I and the government should engage with people who, you know, it's within their gift to be skeptical is to say, look, we need to do this transition in a way that isn't a burden where we are unlocking billions of investment.
You talked about deindustrialization. My view is our route to reindustrialization, which the Prime Minister talks about all the time, is through our sector. There is a massive pipeline. I'm talking to global investors, trillions that they want to invest in the net zero economy, and we can be part of that. Why on earth would we not want to be part of that?
15:34
15:34
15:34
Lizzi Collinge
-
-
Lizzi Collinge
Yeah. Look, I mean, particularly having sort of worked very closely through the two two energy crises. So the one we're going through today and the one we went through 3 or 4 years ago, we look very, very closely at how we're going to get our gas. You know, the UK does have a set of different sources of gas. So we have the North Sea, we have Norway, we have LNG terminals, we have import, we have import interconnectors.
And of course we have storage. So what we do and what we've been consulting on is, well, how do we maintain that security of supply? And coming back to the Secretary of State's answer specifically on rough is we need to look across the board at the measures. We have to make sure we have not only security of supply, but security of supply at the least cost. And that's what we'll be doing. And look, very soon, Nisa will set out their winter outlook.
They'll talk about the security supply situation going forward. But as you can imagine, both in this role and in the previous role, gas security of supply is paramount for us because we know the serious consequences were anything to go wrong.
And of course we have storage. So what we do and what we've been consulting on is, well, how do we maintain that security of supply? And coming back to the Secretary of State's answer specifically on rough is we need to look across the board at the measures. We have to make sure we have not only security of supply, but security of supply at the least cost. And that's what we'll be doing. And look, very soon, Nisa will set out their winter outlook.
They'll talk about the security supply situation going forward. But as you can imagine, both in this role and in the previous role, gas security of supply is paramount for us because we know the serious consequences were anything to go wrong.
15:35
Wera Hobhouse
-
-
Wera Hobhouse
Thank you very much. Thank you for coming. And Secretary of State and for what you've already explained. So directly after this meeting, I will chair a delegated legislation committee on the boiler Upgrade scheme with the aim to add thermal energy storage system or heat batteries as a listed technology under section 100 of the Energy Act 2008. This will enable the Secretary of State to provide support to heat batteries. Great, and I'm sure a lot of people will be really happy with that.
But there are other technologies that are still excluded, for example, electric boilers, and they are excluded from grants. They're excluded from emerging AGM and EPC regulations, despite evidence that they can reach a market. And householders, particularly smaller householders with smaller incomes that other technologies cannot. Is it not time that other technologies are being looked at, and that your focus is sort of really an output focus, rather than banking on particular technologies?
But there are other technologies that are still excluded, for example, electric boilers, and they are excluded from grants. They're excluded from emerging AGM and EPC regulations, despite evidence that they can reach a market. And householders, particularly smaller householders with smaller incomes that other technologies cannot. Is it not time that other technologies are being looked at, and that your focus is sort of really an output focus, rather than banking on particular technologies?
15:36
Speaker 1
-
Speaker 1
So it's definitely outcome focus. And look, we're constantly keeping the technologies under review. And the reason why we're putting through the new measures we are is because we've gone through that process. And look, my view is that there are two things that we need to do. We absolutely want to have the boiler upgrade scheme incentivising households and where there are sort of cost differentials against gas boilers, helping manage those cost differentials and ultimately the judgment that the department's always taking, when we think about what's captured in the scheme, is the sort of ease of the technology and how easily it can be adopted by households, it is looking at the sort of emissions impact of it.
And then critically, it's looking at whether it needs to be subsidised. So some of the technologies actually have parity with gas boilers. So the market should just kind of get on with it. But where that isn't the case, it is right that, you know, we often get lots of representation from companies that have different technologies, and we will always look at it and always review it. So if you think about where the scheme was, you know, a couple of years ago, it's pretty narrow and it's been expanded over time as we have reviewed different technologies.
And then critically, it's looking at whether it needs to be subsidised. So some of the technologies actually have parity with gas boilers. So the market should just kind of get on with it. But where that isn't the case, it is right that, you know, we often get lots of representation from companies that have different technologies, and we will always look at it and always review it. So if you think about where the scheme was, you know, a couple of years ago, it's pretty narrow and it's been expanded over time as we have reviewed different technologies.
15:38
Wera Hobhouse
-
-
Wera Hobhouse
Indeed. And I mean, I have to declare an interest very near to bath. There's a company called Northmoor. They are a growing business. They're producing basically electric boilers, and they're zero emission battery enabled boilers. And I saw what they have to offer. And it's particularly, you know, there could be really great for social housing, for example, but they feel frustrated that for some reason, their technology is not really being looked at.
Is that because and they seem to be quite competitive. And in terms of what you've just been saying about EES, they're just install one boiler with another boiler. It's used like a gas boiler. It's just a different technology. Why could you just sort of I mean, not not that I'm a salesperson for that particular company, but electric boilers.
Is that because and they seem to be quite competitive. And in terms of what you've just been saying about EES, they're just install one boiler with another boiler. It's used like a gas boiler. It's just a different technology. Why could you just sort of I mean, not not that I'm a salesperson for that particular company, but electric boilers.
15:38
15:38
15:39
Speaker 1
-
Speaker 1
Can I commit to take that away? Because genuinely, the purpose of the scheme is to look at technologies that look. Our biggest challenge is uptake. And our biggest challenge are households that sort of think about different, different types of clean heat technologies and sort of feel that it's a bit of a faff or it's too expensive. So if there are technologies that make that journey easier for people, we should always be reviewing and looking at them.
So maybe if I ask that they get in touch and I have no doubt that the team is reviewing them, but I'll ask those questions because there is no prior reason why we would exclude clean heat technologies. It would go through a series of tests. So it's either gone through a series of tests and not passed those tests, or it's something that we are in the middle of exploring. My
So maybe if I ask that they get in touch and I have no doubt that the team is reviewing them, but I'll ask those questions because there is no prior reason why we would exclude clean heat technologies. It would go through a series of tests. So it's either gone through a series of tests and not passed those tests, or it's something that we are in the middle of exploring. My
15:39
15:39
Wera Hobhouse
-
-
Wera Hobhouse
I mean, the the other thing is because I visited very quickly, I visited the British Standards Institute and very, very fascinating. Anybody who hasn't should see it because it's. There are also restrictions about definitions. So what do you what do you include in a definition that is is included, for example, in particular, help from government. Can you expand a little bit on how that works?
15:40
Lizzi Collinge
-
-
Lizzi Collinge
So look, I'm happy to I mean, one of the things, particularly with heat pumps, is obviously they have a big efficiency advantage over traditional boilers normally because they they maximize the use of electricity. And that's what makes them competitive with gas. So we have a set. We have to have a set of criteria because we have to be able to reassure you and sort of other select committees like the PAC, that we're using the money in the right way, but we are always open to amending those criteria as the technology change.
So there's a lot of technical innovation in heat at the moment. You know, I've spent down some down in East Sussex with a very new company, have a very, very different way of heating water. I think if you encourage the company you have near bath to make sure they've come to us, we can make sure they're in touch with our innovation team and we'd be very happy to apply those criteria. But the reason why we have that specificity is we have to be clear that the money is going to the right place.
So there's a lot of technical innovation in heat at the moment. You know, I've spent down some down in East Sussex with a very new company, have a very, very different way of heating water. I think if you encourage the company you have near bath to make sure they've come to us, we can make sure they're in touch with our innovation team and we'd be very happy to apply those criteria. But the reason why we have that specificity is we have to be clear that the money is going to the right place.
15:41
15:41
15:41
15:41
Lizzi Collinge
-
-
Lizzi Collinge
Yes, yes. So when you look at when you look at our history, product standards have played an incredibly large part in reducing the need for electricity overall, particularly in the early 20 tens. So we worked very closely with with the standards authorities. But equally the criteria for this is slightly different. It's set out in regulations and Ofgem are the ones who apply it. So we can come through both. Okay.
15:41
15:55
Wera Hobhouse
-
-
Wera Hobhouse
Another question. The government has said that the Warm Homes plan will help lift up to 1 million households out of fuel poverty rate, again, with more than 5 billion of funding targeted at low income households. Given that these households have the least ability to actually meet the upfront cost of home improvements and, you know, how does that actually work? And particularly, you know, if there, you know, there might be an underspend, but will actually the warm homes plan funding still be part of the future and is not going to be reduced?
15:55
Speaker 1
-
Speaker 1
So warm homes plan funding will be part of the future. It has to be because the way in which we translate everything that we're trying to do in clean, in in terms of clean power to households is through technologies like solar battery and clean heat. We've got a sort of grant scheme. We've got several grant schemes, the social housing fund, our local grants scheme, and then the Warm Homes Grant scheme, which will essentially be targeted at lower income households.
Our ambition, partly because we want to deliver scale and pace, is to devolve the Warm Homes programme so that we are working with regional government in local government to do far more area based interventions street by street, a state by state. We think there are efficiencies in that, but critically, it means that we can better reach and target households and get the sets and suite of measures that work for them. And success for me is getting to a point where different funding pots.
So whether it is the warm homes grants or it is, you know, the boiler upgrade scheme or it is loan mechanisms that we're looking at those working in concert so that you can do a diversity of households in a particular area, so that we can get the sort of scale and quantum that we need.
Our ambition, partly because we want to deliver scale and pace, is to devolve the Warm Homes programme so that we are working with regional government in local government to do far more area based interventions street by street, a state by state. We think there are efficiencies in that, but critically, it means that we can better reach and target households and get the sets and suite of measures that work for them. And success for me is getting to a point where different funding pots.
So whether it is the warm homes grants or it is, you know, the boiler upgrade scheme or it is loan mechanisms that we're looking at those working in concert so that you can do a diversity of households in a particular area, so that we can get the sort of scale and quantum that we need.
15:57
15:57
Speaker 1
-
Speaker 1
so it will be devolved. And obviously questions about funding are subject to budget and spending review processes. But by efficiency, I was thinking more at the moment. If you sort of think about how we do home upgrades, you're putting up a bit of scaffolding here. You're then putting up a different bit of scaffolding there. And actually, if you're doing a whole street or you're doing a whole estate, it just allows you to do better. And I don't think we will get to the quantum.
So the ambition is, you know, 5 million homes. We ultimately want to upgrade all the homes that haven't been upgraded across the country. I don't think we get there unless we take a far more area based approach. And we do it in partnership with regional government and local government. Thank you.
So the ambition is, you know, 5 million homes. We ultimately want to upgrade all the homes that haven't been upgraded across the country. I don't think we get there unless we take a far more area based approach. And we do it in partnership with regional government and local government. Thank you.
15:58
Lizzi Collinge
-
-
Lizzi Collinge
This chair. Yeah. So I want to ask you about the Warm Homes plan, but also about nuclear power. So I've been speaking to people involved in delivering warm homes with the local authority level. And they flagged some issues. So I wanted to raise them with you as Secretary of state. So some local authority schemes, like the cosy home scheme in Lancashire, have nearly run out of allocation.
They've agreed 90% of the jobs with designers. They're trying to prioritise the remaining 10% to meet, meet the cost requirements, and Lancashire has effectively closed local grant to new applications in year two, and it's already got sufficiently eligible applications to cover the 27 and 28 budget. But the national delivery figures actually look quite sluggish and look like money isn't getting out the door. So there's definitely a postcode lottery going on there. Some local authorities are performing well, and I've been told this is because they usually already had the infrastructure in place.
But because the grant is paid in arrears, local authorities that didn't have that infrastructure already are really struggling and some are not prioritising. It's not statutory and are struggling to get out the door. Now, the impact of this is, is that I I've been told that this and other issues are leading to not only the plan not being delivered, it's leading to a lack of confidence. Because if we're saying we're putting all this money in, then it's not being spent and people aren't seeing the benefits .
And also supply chain problems with scheme installers, not training staff, not taking them on. And , and in some areas, they don't even have enough staff to deliver the local grant aspect of of warm homes properly. So one, will the ambition for devolution make this better or worse? How will you ensure these issues are addressed and the full benefits, particularly around economic growth benefits are realised?
They've agreed 90% of the jobs with designers. They're trying to prioritise the remaining 10% to meet, meet the cost requirements, and Lancashire has effectively closed local grant to new applications in year two, and it's already got sufficiently eligible applications to cover the 27 and 28 budget. But the national delivery figures actually look quite sluggish and look like money isn't getting out the door. So there's definitely a postcode lottery going on there. Some local authorities are performing well, and I've been told this is because they usually already had the infrastructure in place.
But because the grant is paid in arrears, local authorities that didn't have that infrastructure already are really struggling and some are not prioritising. It's not statutory and are struggling to get out the door. Now, the impact of this is, is that I I've been told that this and other issues are leading to not only the plan not being delivered, it's leading to a lack of confidence. Because if we're saying we're putting all this money in, then it's not being spent and people aren't seeing the benefits .
And also supply chain problems with scheme installers, not training staff, not taking them on. And , and in some areas, they don't even have enough staff to deliver the local grant aspect of of warm homes properly. So one, will the ambition for devolution make this better or worse? How will you ensure these issues are addressed and the full benefits, particularly around economic growth benefits are realised?
15:59
Speaker 1
-
Speaker 1
Well, look, thank you for bringing the specifics to my attention. The ambition is to try to do large scale home upgrades, and so we are hoping that devolution makes it better, in part because actually it puts the regional government, local government and communities in the driving seat of what upgrades are done, where how you align it to different housing stock and what you prioritise. And actually, it's the difference between if you like, individualised interventions versus just scale interventions, because you can do a whole estate or whole street.
So it should make it better. And ultimately, devolution means that there is just more flexibility in the system for local authority and regional authority to make the right decisions in the call, and also to hopefully blend different bits of funding. I always talk about maintenance budgets for estates that sort of sit separately to home upgrade budgets, and actually you could align them and therefore you go into a place and you do one set of interventions rather than multiple interventions.
So I think it will get better. Look, we have made lots of progress on local grant. It has evolved because actually the scheme has been designed in a way where we're constantly getting feedback from local authorities and trying to flex and evolve it in response. So whenever there are both criticisms of how it's not working or issues, I'm desperate for people to keep telling us, and that's the spirit of the team and the department has worked in, because we are always trying to kind of flex it and evolve it.
There is we know that some areas have outperformed and they have, if you like, more demand than the grant that has come through, we will look at how we deal with that across the system, because we've got a massively ambitious target , and I just want to kind of build out. But I'm hoping as we move with the presumption of greater devolution, that will help fully assist it all. But there are there are big challenges.
You know, we we've never done it in this way. We've never devolved it in this way. And there are questions around capacity and capabilities of different parts of the country. And one of the things that we are thinking about is how the Warm Homes Agency, when it's fully established, can help and.
So it should make it better. And ultimately, devolution means that there is just more flexibility in the system for local authority and regional authority to make the right decisions in the call, and also to hopefully blend different bits of funding. I always talk about maintenance budgets for estates that sort of sit separately to home upgrade budgets, and actually you could align them and therefore you go into a place and you do one set of interventions rather than multiple interventions.
So I think it will get better. Look, we have made lots of progress on local grant. It has evolved because actually the scheme has been designed in a way where we're constantly getting feedback from local authorities and trying to flex and evolve it in response. So whenever there are both criticisms of how it's not working or issues, I'm desperate for people to keep telling us, and that's the spirit of the team and the department has worked in, because we are always trying to kind of flex it and evolve it.
There is we know that some areas have outperformed and they have, if you like, more demand than the grant that has come through, we will look at how we deal with that across the system, because we've got a massively ambitious target , and I just want to kind of build out. But I'm hoping as we move with the presumption of greater devolution, that will help fully assist it all. But there are there are big challenges.
You know, we we've never done it in this way. We've never devolved it in this way. And there are questions around capacity and capabilities of different parts of the country. And one of the things that we are thinking about is how the Warm Homes Agency, when it's fully established, can help and.
16:01
16:01
16:02
Speaker 1
-
Speaker 1
So we there are some enabling legislative mechanisms that we have, which will be in the Energy Independence Bill as soon as we get a slot in legislation. But. But we will set it up as a shadow scheme, partly because it will need to be supporting places that don't have the capability or the track record so that the people in those communities aren't left out.
16:02
Lizzi Collinge
-
-
Lizzi Collinge
And very quickly, sorry, sorry, I really want to move on. So I've also had representations about the zero VAT rate on energy materials, solar panels and the installation of those. That zero rate is due to come in and end in April and revert to 5%. Have you made representations to the Chancellor to extend that?
16:02
16:02
16:02
16:03
Lizzi Collinge
-
-
Lizzi Collinge
Is a piece of regulation from the 1960s. It's been heavily criticized for being out of date, and it currently affects my constituency in that it prevents new nuclear being built where they're already two nuclear power stations, which to my community, seems very odd. The government has promised that this would be reviewed. When will we see the new criteria? Okay. I think, as you know, we are reorganising the whole of the nuclear regulatory framework in response to the review.
That work is continuing at pace, and we have the task force who are making sure that that is both designed and implemented. I will take this specific criteria away and just give you a written response, if you don't mind, just to make sure. Thank you. I do want to go on to a wider regulation, actually, but I want to start with regulation and strategic objectives in regulation. So I spend a lot of time looking at things like graphite cracking and how you shut down nuclear reactors.
But currently the office for Nuclear Regulation will not accept duty holders or licensees, including the country's need for energy security, including the risks for things like blackouts or climate change mitigation or economic growth in the decisions it's making. For example, when we're looking at like life extensions at nuclear power stations. Now, just to be clear, my my concern is that we might be shutting down power stations that are perfectly safe to operate because the owner is one very risk averse and two, is not able to take into account strategic considerations when it's making decisions.
Now, the government has said that it would like would make sure strategic factors will be part of risk assessments. Well respected nuclear allies such as Canada have done this. Will you mandate that the owner consider wider strategic factors when it is making its decisions?
That work is continuing at pace, and we have the task force who are making sure that that is both designed and implemented. I will take this specific criteria away and just give you a written response, if you don't mind, just to make sure. Thank you. I do want to go on to a wider regulation, actually, but I want to start with regulation and strategic objectives in regulation. So I spend a lot of time looking at things like graphite cracking and how you shut down nuclear reactors.
But currently the office for Nuclear Regulation will not accept duty holders or licensees, including the country's need for energy security, including the risks for things like blackouts or climate change mitigation or economic growth in the decisions it's making. For example, when we're looking at like life extensions at nuclear power stations. Now, just to be clear, my my concern is that we might be shutting down power stations that are perfectly safe to operate because the owner is one very risk averse and two, is not able to take into account strategic considerations when it's making decisions.
Now, the government has said that it would like would make sure strategic factors will be part of risk assessments. Well respected nuclear allies such as Canada have done this. Will you mandate that the owner consider wider strategic factors when it is making its decisions?
16:05
Speaker 1
-
Speaker 1
Well, so look, I I'll have to sort of take away the specifics or sort of defer to Jonathan. What I'd say is that we're very clear that they should be taking those strategic objectives into play. Now, there may be a conversation or a sort of question that we need to ask ourselves about the right mechanism to do that. But the policy intent is very, very clear.
16:05
Lizzi Collinge
-
-
Lizzi Collinge
Okay. Well, that's good , because currently the message is not that that's not being taken into account and that decisions are not able to take into account wider risks. So let me give you an example. The risk of a nuclear reactor having a serious problem is, is what more than 1 in 1,000,000. So it's a very, very rare event. If you look at the risks we're looking at on the government risk By looking out on the government risk register for things like.
16:05
16:05
Lizzi Collinge
-
-
Lizzi Collinge
That's significantly more likely risk. So what I want to know is that the owner, when it's looking at decisions about shutting down power stations, is also taking into account those wider risks. But I'll move on now. I want to talk about Fingleton. So going kind of up from some of the more specific ones, which I wanted to get on the record, the Advanced Nuclear. Framework and the Fingleton Review concerns have been raised with me about the pace of decision making and the pace of.
regulatory reform. So looking about, for example. decisions on.
regulatory reform. So looking about, for example. decisions on.
16:06
16:06
Lizzi Collinge
-
-
Lizzi Collinge
The advanced nuclear. framework and also the. legislation needed to implement the Fingleton review fully. When will the Fingleton review be implemented fully, including all relevant legislative changes? That's my first question. And how will you keep the pace needed to ensure that new nuclear. technology is ready to. deploy to provide both baseload but direct energy to industry, because that is one part of the.
decarbonisation of industry. If I do the first question on legislative and then if you do the second question. So look, we we are we recognize the urgency and industry have been pretty clear with us and pretty robust with us. We are sort of like at the behest of the parliamentary. timetable and getting a legislative slot in a very busy, busy session. We, as you imagine, are making the representation because we think this is a really.
important enabling bill.
decarbonisation of industry. If I do the first question on legislative and then if you do the second question. So look, we we are we recognize the urgency and industry have been pretty clear with us and pretty robust with us. We are sort of like at the behest of the parliamentary. timetable and getting a legislative slot in a very busy, busy session. We, as you imagine, are making the representation because we think this is a really.
important enabling bill.
16:07
Speaker 1
-
Speaker 1
We are ready as a department. It is a question of when parliamentary time allows. Okay. So I mean, we should point out that we have recently announced the Sizewell B extension. So we are we are trying to extend nuclear power where we can. We are working on all 47 recommendations from the review. Secretary of state has laid out that that is subject to parliamentary time, but I would point out there's a there's a number of things there that don't need.
legislation that we are.
legislation that we are.
16:07
16:07
Speaker 1
-
Speaker 1
And we know that this is time critical. I should also add, we are working with international partners to make sure that we are aligned on sort of what I describe as new nuclear technologies. I think we should emphasise that we have very recently signed the deal with Rolls-Royce on SMRs, and I cannot emphasize strongly enough how that is a . Global
16:07
16:08
16:08
16:08
Speaker 1
-
Speaker 1
I think Rolls-Royce are becoming a global leader in a new technology. On the advanced nuclear framework. We are in deep conversation with companies already. Now, clearly there's a set of things they need to submit to us to satisfy us, that we can take them through to the next stage. But we're very keen to make sure that we keep growing this sector, and we think it has high potential, not only for the UK,
16:08
16:08
Bill Esterson
-
-
Bill Esterson
as a sector that will support. Reindustrialisation in the future. Thank you, thank you, thank you very much. I'm just struck by both the questions on Warm Homes plan and on nuclear. regulation that we have in both cases with Warm Homes Agency. The comment Secretary of State you made about sitting between NES and Ofgem and with the office for Nuclear. Regulation and the points that Lizzie Collins was making about whether it's risk appetite is in the right place.
We have this sort of difference between what these arms length bodies are doing and what government policy needs them to do. Which goes back to my opening question. Do you accept that is a a very.
We have this sort of difference between what these arms length bodies are doing and what government policy needs them to do. Which goes back to my opening question. Do you accept that is a a very.
16:09
16:09
Lizzi Collinge
-
-
Lizzi Collinge
Of of what you find in your in-tray as you come into the role? So yes, in part and what I'd say is that there are many players. So if I think about where the system is getting strategic direction, there are many players within that . And that's within the regulatory space. That's Disney's that's Niso. And actually one of the things that we. considered and put forward. recommendations on when we were thinking about the Ofgem review, is how we try to consolidate some of that.
architecture so that it is far more. coherent and it's aligned, and we've got different players working together. But the reason I say it's partial is that I do think government has a. responsibility here. And so we need to be much, much better. And in fact, one of the outcomes of the Ofgem review is that actually policy statements coming from government should be really clear about what it is that we want the system to deliver and really robust than that.
And so that there is a if you like, there is a clear line between strategic direction, which must sit with government and ultimately ministers so that we are held accountable. Implementation and regulation. And I think to date, it's been a little bit too woolly. And so. accountability lines of accountability have been less clear. So I accept the characterization. But I also think it's a bit of a cop out for government.
And I think . Ultimately it's
architecture so that it is far more. coherent and it's aligned, and we've got different players working together. But the reason I say it's partial is that I do think government has a. responsibility here. And so we need to be much, much better. And in fact, one of the outcomes of the Ofgem review is that actually policy statements coming from government should be really clear about what it is that we want the system to deliver and really robust than that.
And so that there is a if you like, there is a clear line between strategic direction, which must sit with government and ultimately ministers so that we are held accountable. Implementation and regulation. And I think to date, it's been a little bit too woolly. And so. accountability lines of accountability have been less clear. So I accept the characterization. But I also think it's a bit of a cop out for government.
And I think . Ultimately it's
16:10
16:10
16:10
16:10
16:10
16:10
16:11
Mike Reader
-
-
Mike Reader
16:11
16:11
16:11
16:11
Lizzi Collinge
-
-
Lizzi Collinge
implementation panel? So haven't you come prepared with that information? So I don't have it with me at the moment, which is why I'm very happy to write to the committee and bring it forward. But look, I think the kind of key point is there is no desire on our part to go slow on this. This really matters. And it matters not for industry, but it matters for government. It matters for our strategic objectives. So we are running at this and some.
recommendations can be done quickly.
recommendations can be done quickly.
16:12
16:12
16:12
16:12
16:12
16:12
16:12
Lizzi Collinge
-
-
Lizzi Collinge
And we are. prosecuting that case. What I would say is that it is quite a slim and defined bill. So if I think about the other bill that we're trying to get through the system, that is a very big bill that will take a year. Whereas this is quite a sort of defined bill. And actually . There's lots of
16:13
16:13
Lizzi Collinge
-
-
Lizzi Collinge
with Ofgems assessment of Nyiso? So look in part, but I think look, my view coming into the role is, you know, back to the chair's point, that we've got a very. complicated governance structure. And actually, you know, one of my criticisms of where the system has got to is that we have lots of different.
16:13
16:13
Lizzi Collinge
-
-
Lizzi Collinge
Lots of different parts of the system, trying to drive things without enough coherence, coordination and strategic direction. And Nyiso takes some responsibility for that. Ofgem takes some responsibility for that, but candidly, so does doesn't. So I'm not going to point the finger at any part of the system because I think we're all culpable. Our job now is to try and get that. coherence and to get that . Direction,
16:14
16:14
Speaker 1
-
Speaker 1
to phase one offers to be made. So look, we are expecting it to be within the within the coming months. We have been working with Nyiso to make sure they get out as quickly as possible. We recognize that is later than we had originally scheduled. That is, in part, they've had some technical issues, as I'm sure you know, and that is one of the reasons I think Ofgem came to their conclusion. But we are working through this at pace.
We are ready, you know, we are ready to begin. Sorry. We are already beginning to set the . Connection offers
We are ready, you know, we are ready to begin. Sorry. We are already beginning to set the . Connection offers
16:14
16:15
16:15
16:15
16:15
Lizzi Collinge
-
-
Lizzi Collinge
Have you got. confidence in NI. So as we go into the winter. Yeah. And so look let me try and disaggregate that I think. There are lots of tools that the, the NI so uses to make sure that it's balancing the system. And the example last week was just it's using one. It was doing what it needed to do. So we have confidence in terms of security supplied and the system is working and it's been tested and it is robust and it has been robust for well over a decade, I think two decades.
So I'm not worried about that.
So I'm not worried about that.
16:15
16:16
Lizzi Collinge
-
-
Lizzi Collinge
Any allegations from whistleblowers we take very seriously. There is obviously an independent review that's going on. Let's see what the outcomes of it are. But ultimately, my job as secretary of state is if there is a problem, we need to sort of see that problem and jump on that problem and fix that problem. But I'm not going to . Prejudice the
16:16
16:16
16:16
Lizzi Collinge
-
-
Lizzi Collinge
Jonathan, does that put the Clean power mission at risk? So, look, I think it puts it under pressure, if I'm completely honest. But looping back to the start of the conversation, it is already under pressure because we've been really successful with generation and build out. It's not as fast as it needs to be. But for me, the critical thing is that we maintain momentum towards clean power. And why I say that is, and I've been consistent on this, it's not the target in its own right.
It's the momentum and confidence it's building in the system. So we have to . Maintain that
It's the momentum and confidence it's building in the system. So we have to . Maintain that
16:17
16:17
Mike Reader
-
-
Mike Reader
and confidence because that is the thing that is unlocking the scale of investment. The chair has sort of raised this in the very first question. We've heard it also in Lizzie's. Are we clear who's responsible? We've got designees Nyiso, Ofgem now, GB grid, Alexon. There's a whole range of organisations here. Does the department have a clear . Hold
16:17
16:17
16:17
16:17
16:17
16:17
16:17
16:17
Lizzi Collinge
-
-
Lizzi Collinge
no. There's the questions you're asking yourself, what's what do you think the solution is? So I think the solution is that we will have to think about how we coordinate and rationalise some of the architecture that exists at the moment, and that coordination process is already happening where niso, us.
16:17
16:17
Lizzi Collinge
-
-
Lizzi Collinge
Other parts of the system are working far more in concert. I think one of the. outcomes of that process with the Ofgem review was design has been much clearer that it is our job to set strategic direction and we need to set it so it filters through the system. But I think we will ask ourselves. The question is, how can we strengthen the architecture to make sure that we are underwriting.
16:18
16:18
16:18
16:18
16:18
16:18
Lizzi Collinge
-
-
Lizzi Collinge
energy grid confuses. simplifies the system, so I think it should hopefully help simplify the system. And look, the don't take my word for it, the proof will be in what we deliver. And the reason I say that is one. I think there is a question. around the planning, the investment, the delivery of grid and how you how you can bring that together. And I think GB grid can help with that.
But then there is a critical question around, look where we are seeing bottlenecks. How can we get other challenges into the system to leverage in private sector investments so that we can build out? And I think that's the bit. So in the end, there is a question of .
But then there is a critical question around, look where we are seeing bottlenecks. How can we get other challenges into the system to leverage in private sector investments so that we can build out? And I think that's the bit. So in the end, there is a question of .
16:19
Mike Reader
-
-
Mike Reader
Coordination, but there's also a question of delivery. And I think GB grid can help with that. If responsibility sits with yourself and Disney's. When Chris Stark came in front of our panel twice, I've asked him about organisational capability and he was very clear last time he saw us. This clean power unit wasn't at full operational capability in terms of being able to deliver. That unit is now being wound down. Chris Stark is leaving.
Is the .
Is the .
16:19
16:19
16:19
16:19
16:19
16:19
Lizzi Collinge
-
-
Lizzi Collinge
Lies a unsuccess. We need to play a strategic role and we need to play that across the system. And we need to give clear signals to every part of the system about the outcomes that we're trying to achieve. But then we need to make sure that other parts of the system are fit for purpose. So we've talked about Ofgem, a big review that is. fundamentally looking at the mandate of Ofgem and how it operates.
There are questions. around Nyiso and how we get that to operate. And then there is a fundamental question of how we bring it all together. So there aren't 101 conversations, but there's one conversation . That is
There are questions. around Nyiso and how we get that to operate. And then there is a fundamental question of how we bring it all together. So there aren't 101 conversations, but there's one conversation . That is
16:20
16:20
16:20
Speaker 1
-
Speaker 1
happens to that capability that was in the Clean Power unit. Where does that go? We still have the Clean Power unit itself. We still have the capability that's monitoring delivery. We are. much further advanced on. understanding the information that we get from networks and others. So we are monitoring things much more closely. I should emphasize, as I'm really conscious, this department is on a journey though. So if you think about some of the things we've talked about in nuclear, we have Sizewell, one of the biggest major infrastructure programs in the country that we are going to have to oversee and we're going to have to support.
So over time, we will continue to build on what Chris Stark built. We'll make sure that we are fully focused on making sure that we are at a strategic level looking at delivery, and that extends beyond Clean . Power
So over time, we will continue to build on what Chris Stark built. We'll make sure that we are fully focused on making sure that we are at a strategic level looking at delivery, and that extends beyond Clean . Power
16:21
16:21
16:21
16:21
Claire Young
-
-
Claire Young
and programmes that we oversee. Okay. Thank you. Claire Young, Thank you very much, chair. If we could go back to nuclear for a moment, but also, I think we're still going to be talking about this issue of different structures. You've got so. gbn we're supposed to be reporting back this autumn on its review of nuclear sites. Are they still on track? Do you think that there is a good understanding in the.
industry of the process that they are going through doing that review. and and as a associated thing, what happens with. GBN owned sites, how private. investors might may gain access to those sites? And do you think that there's an open door policy for local. authorities to discuss proposals that are coming forward in their area and share their local knowledge? Because I think there's. concern . That
industry of the process that they are going through doing that review. and and as a associated thing, what happens with. GBN owned sites, how private. investors might may gain access to those sites? And do you think that there's an open door policy for local. authorities to discuss proposals that are coming forward in their area and share their local knowledge? Because I think there's. concern . That
16:22
Speaker 1
-
Speaker 1
that's not been the case with the A and F. So the the process is definitely underway. And GB are working through identifying potential sites. I mean, if there is an issue with their sort of transparency and their engagement, then I'm happy to pick that up and I'm happy to take that up with the CEO and chair. But we are working . With
16:22
16:22
16:22
16:22
16:22
16:22
Lizzi Collinge
-
-
Lizzi Collinge
I'm not picking concerns now, as you know. delivering any nuclear programme is complex and it's difficult, and there are lots of constraints and. barriers that we're having to operate against, I am confident. But look, we can always stress test it. And what I'd say is if there are parts of the industry that are communicating things to the select committee that they're worried about, they should just come to us and tell us like the the outcome and the objective is aligned.
We want to build and we want to develop a skill because we need to. And so if there are barriers . That sit
We want to build and we want to develop a skill because we need to. And so if there are barriers . That sit
16:23
16:23
16:23
16:23
Claire Young
-
-
Claire Young
sites already for Rolls-Royce, for example. So we are increasingly seeing that these private. proposals are coming forward. alongside private wire off takers. And we've got a limited amount of space in this country for nuclear. If we need nuclear to be part of the mix supplying our national grid, then in some way we need to make sure that that. capacity is there still the capacity to do that.
So obviously, as a scale where you've got complete sort of command and control approach, and at the other end of the scale, you've got a complete free market, open approach to how you you're dealing with these sites. Where do you see the government's approach sitting on that scale, and how do. GEN fit into this? Because they they feel like. A slightly strange.
So obviously, as a scale where you've got complete sort of command and control approach, and at the other end of the scale, you've got a complete free market, open approach to how you you're dealing with these sites. Where do you see the government's approach sitting on that scale, and how do. GEN fit into this? Because they they feel like. A slightly strange.
16:24
16:24
16:24
16:24
Lizzi Collinge
-
-
Lizzi Collinge
it's clear what their purpose is in this. So I think we are in the middle of that scale. I think we need better planning and coordination. I don't think we can have a free for all free market, not for something as critical as nuclear, that underpins something as absolutely foundational as energy. Now, look, when I have when I have. spoken to.
16:25
16:25
16:25
16:25
Lizzi Collinge
-
-
Lizzi Collinge
the public sector is co-investing with the private sector to give to get big infrastructure and technology away. That is the model in a lot of Europe. So, you know, we're doing it with nuclear. I'm really proud we're doing it with nuclear, because I don't think we would be delivering the scale of our nuclear programme if we weren't doing that. We're starting to do that through GB energy as well. And I think that as we ask ourselves the question, what public control looks in the context of generation, it is that mixed model where the public sector steps in.
We do some . Underwriting,
We do some . Underwriting,
16:25
16:25
16:25
16:25
16:25
Claire Young
-
-
Claire Young
Data centres, for example. So we were creating extra demand. And then you just supplying that demand, your net effect on on the grid supply is zero. And that's obviously an extreme, extreme case. But how are you how are you ensuring as a government that that isn't what happens? Because there seems to be a belief in the industry that that's the way that you need those . Income
16:25
16:25
16:25
16:25
16:25
16:25
16:25
16:25
16:25
16:25
16:25
Claire Young
-
-
Claire Young
Which is I I'm concerned that the department has maybe quite a narrow approach of wind, solar and nuclear. And there are many other technologies out there. And in my own patch, tidal and potential for geothermal, for example. So I was told that stack was set up to advise on this. And I just wondered if you could explain what stack have done since they were. created to help Desnos look at.
alternatives and how you see, particularly in the light of the of the potential cuts to your budget that we've been hearing . About
alternatives and how you see, particularly in the light of the of the potential cuts to your budget that we've been hearing . About
16:25
16:25
Lizzi Collinge
-
-
Lizzi Collinge
How you see the working in the future. So I'll ask Jonathan to pick up the specifics of that. But what I would say is, in the end, the job is complicated, but quite simple. We are trying to get to a diverse mix of. technology at the most affordable cost, and that's cost for both bill payers, but also costs for taxpayers. And certainly the approach that I'm taking is that there is no technology that is out of scope.
And ultimately, the conversation that we need to have with industry is, can you deliver and at what cost can you deliver? And what is the level of de-risking and subsidy that's required from the state to get this project away?
And ultimately, the conversation that we need to have with industry is, can you deliver and at what cost can you deliver? And what is the level of de-risking and subsidy that's required from the state to get this project away?
16:25
16:25
Lizzi Collinge
-
-
Lizzi Collinge
That piece around feasibility and capacity to deliver and the cost of doing it are the key binding. constraints when we're having that conversation. But there isn't an a priori position that this technology is out of scope. This is in scope. We test technology across that, acknowledging that actually the cost curve technology changes over time. So something that is incredibly expensive today won't necessarily . Be
16:25
16:25
16:25
16:25
Speaker 1
-
Speaker 1
years. So you have to keep it under review. So look, I mean, we with stack and with our chief scientists and our engineering team, we are always looking out for new innovative technologies. We talked earlier about heat and we are looking at new heating technologies. And that sort of feeds through the value chain into our process. So, you know, stage one is trying to. support early stage. demonstration to make sure the technology is viable.
Then we have a set of schemes, including CFDs, that begin to scale them out. So I think we have quite a strong record in the UK on taking new.
Then we have a set of schemes, including CFDs, that begin to scale them out. So I think we have quite a strong record in the UK on taking new.
16:25
16:25
Speaker 1
-
Speaker 1
Developing through them through that cycle and ultimately scaling them up, and we'll continue to try to do so. Obviously there's a value for money trade off there, so we always have to be conscious that, you know, we need to be confident. We've got something that we think has potential for the long term. But coming back to the story about nuclear, the advanced nuclear framework, and indeed fusion,
16:25
Bill Esterson
-
-
Bill Esterson
There is a whole set of things we're doing there to bring new technologies forward. Thank you. Thank you very much. Before I go to Torkel Crichton, this point about costs comes up again. Are we talking about the day one costs here or the day or the costs after ten years, 20 years, 100 years. If we're talking about tidal, we know the likelihood is it's 100 year plus project, not even longer than nuclear, which is which is long.
Is it you ? The sense we're getting is that too much emphasis is going on . On the
Is it you ? The sense we're getting is that too much emphasis is going on . On the
16:25
16:25
Lizzi Collinge
-
-
Lizzi Collinge
cost and not looking at how it's spread over long time frames. So I don't think that is fair. I don't think that's a fair reflection of the way that we assess costs. It will be the cost over the lifetime of the project. And , and look, I think there are there are two challenges. And that's both a government challenge, but also it's a challenge for.
16:25
14:44
14:44
14:44
14:44