Carbon Capture and Storage

Alan Whitehead Excerpts

Thursday 19th October 2017 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Surrounded as I am by what we now know is a Teesside collective, who look out on to the North sea, I cannot offer quite such a spectacular view from my constituency. I have a view on to the English channel, which is of course rather less bracing for a dip this time of year, but does not share the North sea’s potential for CCS in the future.

It was good to hear this afternoon from Members across the House about that potential, in terms of what is in Teesside—both in its own right and in conjunction with what is in the North sea. As a country, we must play a role in, among other things, making sure that after the exploitation of the North sea for oil and gas, the industry continues. That can be done by ensuring that the plant, the connections and the various other things currently in the North sea are turned around over the coming period, so that we are the leading country in Europe and the world for storing carbon as well as capturing it—perhaps offering that facility to not only our own country, but all the countries bordering the North sea and more widely.

In that context, it is interesting that that is precisely where Norway is now going. Statoil has been fairly busy recently; I met with its representatives just the other day. It was good to hear from them that although there have been setbacks in the process of getting the Norwegian project under way, it is very much still on track. The aim is to develop the Troll field, essentially as the first part of a European-wide process of storage of carbon in the North sea. They are currently looking at processes of barging captured carbon to an onshore site in Norway and then pipelining it out.

[Alex Cunningham]

The development in Norway is an illustration of why the UK needs to get on its bike and get moving. Yesterday, at the all-party parliamentary group meeting, it was revealed that the cost for projects in this country might be as low as £40 or £60 a tonne, but going to a third party might cost us £100 a tonne. That is an economic argument in favour of our own comprehensive storage.

[Dr Whitehead]

My hon. Friend has exactly anticipated, in rather more eloquent terms, what I was about to say almost immediately. The pace of the Norway project illustrates that we should get our act together as early as possible in making sure that we have the lead on the whole process in the North sea, for all the reasons that my hon. Friend mentions—cost, expediency and proximity. This unparalleled opportunity will probably not come again. If, for example, we close down all the capped wells and sites in the North sea as the oil begins to diminish, we will have lost that opportunity to be world leaders in the North sea. Action needs to be undertaken now, or in the very near future.

I endorse everything that has been said by pretty much everybody in the Chamber today about the importance of carbon capture and storage for the future. I cannot do better than describe it in the exact words of the Committee on Climate Change:

“Carbon capture and storage (CCS) is very important in meeting the 2050 target at least cost, given its potential to reduce emissions across heavy industry, the power sector and perhaps with bioenergy, as well as opening up new decarbonisation pathways (e.g. based on hydrogen).”

The committee goes on, in that report, to talk about the cost of not doing anything as far as carbon capture and storage is concerned over the coming period, which hon. Members have discussed.

The Committee on Climate Change sees carbon capture and storage as absolutely essential. That is what it said in its report, “The Fifth Carbon Budget”, which we in the UK have now adopted. It is incumbent on us to make sure that we respond to what the committee has underlined in that report—the importance of carbon capture and storage.

On that matter, I have been pleased to see that the clean growth strategy not only mentions but more than mentions what will happen with carbon capture and storage. Just a little while ago, the Minister told us in the House that the clean growth plan would be on its way shortly, with further bells and whistles. I would like to think that that mention—all three pages of it—may be a bell or whistle that she personally inserted into the clean growth plan to get a new view abroad of what we can get from carbon capture and storage, how important it is for the future and what the next pathways are.

I cannot be wholly uncritical, because certain things need to be underlined at this stage. Opening an avenue on carbon capture and storage will inevitably be seen by many people concerned about the area as springing from something that hon. Members have also mentioned this afternoon—the shameful passage in our recent history of the cancellation of the two carbon capture and storage pilot projects at the very last moment, in 2015. The cancellation of those projects was not just a tragedy and a disaster for the communities involved in them; it spread a pall of doubt and concern across the whole of the industry about whether carbon capture and storage has a future, whether it is worth investing in and whether confidence can be restored to make it go forward, as we all want. We have to tread a path back to the starting line, and I hope that, given the intentions about carbon capture and storage set out in the clean growth strategy, the Government understand what that setback has done to us and find a way to get back to the starting line. There are a lot of measures in those three pages, which suggests that that can be achieved.

I am not sure whether the £100 million—or, to be precise, up to £100 million—that has been set aside for the next phase of the development of carbon capture and storage will be remotely sufficient to get us where we want to go. I hope that, in 2018, when the Government come forward with more plans and details about how the £100 million will be spent and what will happen to it—the clean growth plan assures us that they will do that—the next stage of the road map will set out what we will put in over the next period to make carbon capture and storage work properly and ensure we reach the carbon reduction goals set out in the fifth carbon budget.

In that context, we ought to pay more attention to the excellent report on carbon capture, usage and storage by the Oxburgh commission, of which the hon. Member for Waveney (Peter Aldous) was a member. Although the clean growth strategy says that that advisory group’s advice influenced the Government’s thoughts on carbon capture and storage, the report sets out the investment that is likely to be needed for carbon capture and storage over the next period, and it is substantially more than the £100 million set out in the clean growth plan. It would be helpful for the Government to provide a formal response to that report, which they have not done hitherto, to put on the record which parts of it they think are important, which parts they will try to implement at an earlier stage and which parts they will leave for later. I will leave that thought with the Minister. That would be a very positive thing to do, in the light of what was put forward in the clean growth strategy. We must be clear about the path ahead of us, and we need to learn from the report’s very good insights.

I hope the Minister notes the cross-party agreement in this Chamber about the urgency of the need to develop carbon capture and storage, about the development route we need to take, about the key role that Teesside and the North sea will play in that process, and about the need to work together to realise the carbon capture and storage goals that are so necessary on our path to carbon reduction.

Clean Growth Strategy

Alan Whitehead Excerpts

Thursday 12th October 2017 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I welcome the final publication—after, we have to agree, many delays—of “The Clean Growth Strategy”, and I agree with the Minister that the UK has been, as it should be, towards the front of the pack in action to decarbonise our economy. I also agree that the responsibility for getting us to that position lies with the Members to whom she has paid tribute today. I also welcome the Minister’s clear position that she is fundamentally onside on the need to radically decarbonise our country to meet climate change imperatives—unlike, I have to say, many of her Back-Bench colleagues. I warmly welcome her efforts in this direction and clear commitment to the tasks we have to undertake.

I also welcome many of the additional policy directions that are contained in the document. I particularly welcome the commitment to further rounds of offshore wind to assist with the decarbonisation of the energy sector, and what I hope will be an intention to return to the development of onshore wind. These new policies and commitments, among many others, are important because it is clear that on present policies the UK is set to miss its key targets for decarbonisation, set out in the fourth and fifth carbon budgets, which this House has endorsed. That is surely the point of judgment for the efficacy of this plan: does it do what it is required by the terms of the Climate Change Act 2008:

“The Secretary of State must prepare such proposals and policies”

as

“will enable the carbon budgets that have been set…to be met”?

On that measure, it is clear from the report that the Government have failed in that task.

Even with the additional measures set out in this plan, as the report states on page 41, it is estimated that the UK will over-emit at the conclusion of the fourth carbon budget by 6% above that budget and at the conclusion of the fifth carbon budget by 9.7%. What additional proposals does the Minister have in mind to rectify that deficit—or does she consider that somehow we will get there without anything other than what is in this plan?

On getting there, does the Minister recognise just how far behind in decarbonisation we are in the heat sector? Does she consider that the funding set out for the renewable heat incentive up to 2021, which appears to be a restatement of what is already there, and of the energy company obligation, which appears to be a time extension of present funding for energy efficiency, will get us anywhere near the indicative heat decarbonisation and energy efficiency carbon reductions set out by the Committee on Climate Change in the fifth carbon budget?

The Minister will recall what emphasis the Committee on Climate Change placed on the role of carbon capture and storage. She mentioned in her statement that the Government now appear to be waking up once again to the idea that carbon capture and storage is a good thing. While I welcome that apparent renewed interest in actually doing something about the establishment of CCS, both for energy generation and energy-intensive industries, does she consider that taking away £1 billion of funding for the development of CCS, as the Government did in 2016, and replacing it with up to £100 million of development funding in this plan will get us anywhere near the level of CCS use that the Committee on Climate Change recommends?

The Minister will be aware of how very important the traded sector is in the UK in terms of carbon emission reductions. The traded sector is kept on track by the EU emissions trading scheme. In her report, the long-term importance of the EU ETS is underlined, yet we currently have no certainty that the UK will remain within the EU ETS on Brexit, or that there will be any commitment, if not, that a substantive and internationally connected UK trading scheme will be established that can continue to keep the traded sector on target. Does she agree about the importance of the EU ETS in this sector? Can she commit today to work towards continued UK membership of the EU ETS in the future?

I agree with the Minister that a low-carbon transition can go hand-in-hand with economic growth, and she has today and on other occasions emphasised that the use of industrial strategy to drive decarbonisation, while providing for jobs, supply chains and manufacturing in the process, is a very important fundamental platform for our decarbonisation approach generally.

Labour has committed itself to attain the key mission of industrial strategy that 60% of all energy—all energy, including electricity and heat—would arise from renewable and low-carbon sources by 2030, the middle of the fifth carbon budget. That would in itself ensure that the targets of the fifth carbon budget were met. Will the Minister today endorse the setting of that target and work with the Opposition to bring it about?

[Claire Perry]

I thank the hon. Gentleman for his refreshingly scientific comments. It is always a pleasure to discuss this subject with him. I will try to answer some of his questions.

I welcome what I think was a compliment; of course I am very committed to this agenda, but I have to say, and he can perceive this from the fact that the Prime Minister wrote the foreword of this document, that from the Prime Minister downwards—she also mentioned this at the United Nations Assembly a few short weeks ago—and right across the Government, we are all completely committed to this agenda, because not only is it the right thing to do, but the opportunities that arise from it are enormous. I would like to reassure him about that.

I want to spend a moment on what the hon. Gentleman points out is the carbon budget page—page 41. To reassure him, some of the estimates we have for our delivery of carbon savings from the policies and proposals in the plan today are very well advanced, and we have included carbon savings from about 30% of the new proposals today. Some of them, of course, we have to continue to work to shape, particularly in the light of issues like the Hackett inquiry around the Grenfell review of building regulations and fire safety, so we will be sequencing our consultations in accordance with such work, and that will enable us to set additional reductions in carbon budgets once we have further developed those policies.

I want to reassure the hon. Gentleman, however, and I have helpfully set out on page 41 the fact that, should we have to, and with the consent of the Committee on Climate Change, we can use flexibilities. My intention is that we do not have to use them. Because we have over-delivered, and will over-deliver so substantially on current projections, up to carbon budget 3, more than enough will have been built up in terms of flexibilities to cover carbon budget 4 with more left over. My sense is that, given the ambition, the pace of change and the extraordinary changes in the cost and adaptation of new technology, we will comfortably exceed these budgets. But he is right that we have a statutory duty to report on this. This is a very good example of legislation making politicians focus on what is important, over the political cycle. I thank him for his ability to question, which enables me to confirm those points.

The hon. Gentleman discussed the EU ETS. I am actually off to Luxembourg tomorrow. The UK’s piloting of the emissions trading scheme was absolutely vital in designing the scheme. We remain a very important partner, and I have been absolutely clear that we will do nothing that in any way disadvantages our own economy or that of our EU partners, as we negotiate the new terms of our relationship with Europe.

I admire the hon. Gentleman’s shadow ambition for renewable energy, but I want to be clear today that when we look at new technologies, it is important that we apply the triple test. First, the technology must decarbonise sufficiently; secondly, it must be affordable—we have to see a very good cost trajectory; and thirdly, it must build capabilities that Britain can build on, so that we can export and grow our own economy.

I would be delighted to sit down over a cup of coffee and review the hon. Gentleman’s plans for renewables and see whether they meet those tests. I think those are very appropriate tests, through which all technologies should be reviewed as we go forward.

Oral Answers to Questions

Alan Whitehead Excerpts

Tuesday 12th September 2017 Commons Chamber

[Richard Harrington]

I thank the hon. Gentleman for effectively congratulating the Government on the results of the recent auction for energy prices—I, too, was delighted that the cost of offshore wind effectively dropped by half. I also remind him, however, that energy has to remain a mix. Nuclear is part of that mix, and as with all mixes aimed at maintaining continuity of supply, some are more expensive and some are cheaper. What matters is the average price paid, and I think that Hinkley will turn out to be a really good deal for the taxpayer, as it involves no public funds upfront, which is very unusual for this kind of massive development.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I am a little concerned by the Minister’s reply to my hon. Friend the Member for Garston and Halewood (Maria Eagle). The Secretary of State specifically told the BEIS Select Committee in the spring that it was very much in Britain’s energy security interest to continue to participate in the internal energy market. Does the Minister agree with his own Secretary of State on this matter? If so, what action has he been taking to ensure that we can participate in that market after Brexit?

[Richard Harrington]

It is the job of the hon. Gentleman—the Opposition spokesman—to be concerned about everything that the Minister says. I fully accept that. In this particular case, however, I can but reiterate that maintaining continuity of supply is our first priority. That is what my right hon. Friend the Secretary of State says we must do, and that is what we shall do.

Euratom Membership

Alan Whitehead Excerpts

Wednesday 12th July 2017 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. It is quite clear that the legal position is not clear. That stems from the fact that the Euratom treaty is not the same treaty signed in 1957 as the EU treaty. Leaving Euratom would involve separate negotiation of the arrangements for co-operative or associated status alongside any other negotiations in the EU. That is fairly clear.

In that context, I want to raise a concern that I hope the Government have considered, but I suspect they have not, about leaving Euratom under those circumstances and the status of the Hinkley C nuclear power station programme. In autumn 2016, the Secretary of State signed an investment agreement—charmingly known as a SoSIA— concerning Hinkley C with EDF, the French Government and the Chinese Government that contains a number of issues relating to what a qualifying shutdown occurrence would consist of as far as the progress of Hinkley C power station is concerned. That investment agreement defined that a qualifying shutdown occurrence would consist of a Government intervention in the working of Hinckley Point C power station, or its construction, or if the EU were to do that, or if there were a change in treaty arrangements relating to the construction or operation of the power station. If we left Euratom unilaterally, as is proposed, with no alternative position in place, it is likely that that would mean a qualifying shutdown. The effect would be a possibility of the other contracting parties to the arrangement—EDF and others concerned with the power station—walking away from the deal and claiming up to £20 billion compensation for so doing. That seems to be an important consideration that we might think about. I would be interested to hear from the Minister whether the Government have considered the risk of that occurrence.

That concern is not just mine; it was raised by the National Audit Office in its June 2017 report on Hinckley C. It indicated that it thought that the Government had not undertaken any risk assessment relating to the Secretary of State’s investment agreement and that perhaps they should do so. I would be interested to hear from the Minister whether that risk assessment has been undertaken and whether the Minister considers that the Secretary of State’s investment agreement on Hinckley C would be at risk as a result of what has been decided so far about leaving Euratom.

Energy Price Cap

Alan Whitehead Excerpts

Monday 3rd July 2017 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the Government’s intention for an energy price cap.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Following a two-year inquiry, the Competition and Markets Authority found that energy customers on standard variable tariffs were paying on average £1.4 billion a year more than would be the case in a competitive market. That is completely unacceptable, so my party’s manifesto committed to introduce a safeguard tariff to extend the price protection currently in place for some vulnerable customers—those on pre-payment meters—to more customers on the poorest-value tariffs. The energy regulator, Ofgem, has the powers necessary to impose such a price cap without delay, and I wrote to its chief executive on 21 June to ask it to use its powers to do so. Today, the regulator has replied and announced that it will work with consumer groups to take measures, including extending the current safeguard tariff for those on pre-payment meters to a wider group of consumers, and move urgently to implement these changes.

I welcome this initial proposal—it is a step in the right direction—but I will wait to see the actual proposals turned into action to cut bills, as the test of whether the regulator’s changes go far enough is whether they move sufficiently to eradicate the detriment to consumers that the CMA identified. I remain prepared to legislate if they do not, and I hope that such legislation would command wide support across the House.

[Dr Whitehead]

I thank the Minister for his response. Does he recall that during the election his party placed the promise of an overall cap on energy prices at the centre of its manifesto? Indeed, does he recall the Prime Minister stating:

“I am making this promise: if I am re-elected on 8 June, I will take action to end this injustice by introducing a cap on unfair energy price rises. It will protect around 17 million families on standard variable tariffs from being exploited with sudden and unjustified increases in bills”?

Does the Secretary of State accept that Ofgem’s response to his letter of 21 June on energy prices falls far short of implementing that promise and that, although there are welcome suggestions on safeguarding tariffs and capping warrant charges for the installation of pre-pay meters, those measures would affect only 2.5 million customers, leaving more than 14 million SVT customers completely unprotected from price rises over the next period? Will he confirm that his letter did not ask Ofgem to consider introducing a general price cap? Will he tell the House why it did not, even though the chief executive officer of Ofgem confirmed earlier this year that it would have the discretionary power to implement an energy price cap?

Does the Secretary of State intend to pass legislation to require Ofgem to introduce a price cap, or is he now content to let his firm election promise of a cap fall by the wayside? If so, what does he have to say to the 17 million people on standard variable tariffs who thought that relief from rip-off price rises was on its way but will now feel completely betrayed by this policy U-turn?

Oral Answers to Questions

Alan Whitehead Excerpts

Tuesday 27th June 2017 Commons Chamber

[Claire Perry]

Even those who do not think that this is a pressing international issue must surely welcome the fact that there are now more than 400,000 people employed in this industry—more than in the aerospace sector. Britain has shown, in the G7 and the Environment Council meetings, that we are absolutely prepared to stand shoulder to shoulder with our European and international partners to make up any deficit caused by Mr Trump’s withdrawal.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

We were promised the publication of this report in the middle of 2016. In October 2016, the permanent secretary promised that it would be published by February 2017. In January 2017, the then Secretary of State promised that the report would be published in the first three months of this year. Now we hear that it might be published this autumn. A year and a half on from the original promise, we are now clearly defaulting on our commitment under the Climate Change Act 2008, which requires that the plan is published as soon as is reasonably practicable after the order has been laid. Is not the Minister ashamed of this lamentable failure to act on that legislative requirement to produce a report that is important to the future of climate change activity, and will she apologise to the House for the delay?

[Claire Perry]

I would have expected more from the hon. Gentleman. Let me just remind him what has happened since the Committee on Climate Change’s report was produced. We have had Brexit, we have had a general election and we have had the withdrawal of the USA from the Paris climate change agreement. I want to take the time to ensure that this report exceeds his expectations. I will take no lessons from those on the Opposition Front Bench, who have consistently failed to welcome this country’s progress, which the right hon. Member for Doncaster North (Edward Miliband)—who is, sadly, not in his place—was sensible enough to kick off in 2009. I believe in delivery, not promises, unlike the Labour party’s manifesto.