Energy Rebates: Highlands and Islands

Alistair Carmichael Excerpts

Wednesday 6th March 2024 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is a pleasure to serve with you in the Chair, Mr Paisley. I warmly congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on acquiring this time for a debate on a subject that matters to his constituents, my constituents and the constituents of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and the right hon. Member for Ross, Skye and Lochaber (Ian Blackford).

As the hon. Member for Inverness, Nairn, Badenoch and Strathspey said, this issue goes right across the highlands and islands, where we have longer, darker and colder winters. We have more houses that are older and therefore more difficult to insulate and heat, and we have virtually no access to the gas grid. Those things all contribute to the perfect storm that he rightly outlined, which is the exceptionally high incidence of fuel poverty. I know that because one of the less laudable claims to fame that the northern isles have, along with the Western Isles—Na h-Eileanan an Iar—is higher rates of fuel poverty than anywhere else in the country.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Much is often said about the colder temperatures and dark winters that we have in the highlands. However, we also need to give consideration to the fact that it is about not just temperature, but about the driving wind and rain that make it feel colder. There are times when the rain is horizontal, certainly in places such as the Isle of Skye and others. Let us remember that these communities are often very isolated. We are talking about single homes. Little protection is provided, so the impact of bad, cold, windy or wet weather on these communities is enormous, which just increases the need to have the heating on to give some protection from the climate.

[Mr Carmichael]

The right hon. Gentleman is absolutely right. We have to be a little careful about how we describe that to people in other parts of the world: doubtless, in a week or two, we will all be back here telling everybody they should come and have their holidays in the highlands and islands. However, we are by no means unfamiliar with the phenomenon of the rain that comes straight at you. Certainly, it is always the surest sign of somebody who has just recently moved to Orkney or Shetland, or who is visiting, that on a rainy day they go out with an umbrella, which is a spectacularly useless piece of equipment in the communities that we are blessed to call home.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey brings us the interesting and constructive proposal of a standing charge rebate. When it comes to the question of energy costs, I have long taken the view that every little helps. Frankly, it does not really matter whether it is a silver bullet: when families are facing the choice not of heating or eating but of starving or freezing, which might be a better characterisation of the situation in the highlands and islands, if there is some benefit to be had, we should take it. That was the view I took on the alternative fuel payment brought forward by the Government last year: it helped a bit, and a bit of help is better than nothing.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey would probably agree that standing charges are a small part of the equation when it comes to the question of energy costs and the actual cost involved in heating people’s homes. The unit price is where the real action is to be found, and it is there that I would like to focus some attention, not least because I understand that Ofgem is carrying out a consultation on a social tariff. That is an interesting idea, and one that I think would command a fair degree of support across the whole House. I therefore hope Ofgem gets on with it—and quickly. Within that social tariff, there surely has to be some mechanism for geographical variation, because social is not just on the basis of income. It has to bring in other factors as well, such as the fact that we live in places that have longer, darker and colder winters.

[Drew Hendry]

The right hon. Gentleman is right to talk about this as being part of a wider package. I secured the debate today to be specific about the need for a highland energy rebate, but that does not negate the sense of what he says about the collective impact. With the social tariff, the highland energy rebate scheme might give an opportunity to put that geographical difference into the mix, in order to achieve the right hon. Gentleman’s aim.

[Mr Carmichael]

The Shetland Islands Council has promoted the idea of a Shetland tariff for years. I understand what the hon. Member says about seeing the energy development; that is something we have lived with in Shetland and Orkney for the past 50 years, as we have kept the rest of the country supplied with hydrocarbons. We have had some significant benefit, but nothing compared with what we could have had. Yes, there are opportunities here. The real fight comes with the energy unit cost, but in the meantime, if we can do something with standing charges, we should.

I am a wee bit disappointed that we do not have a better turnout for this debate. It seems to me that the hon. Member for Inverness, Nairn, Badenoch and Strathspey has drawn our attention to something that is really severe for the highlands and islands, but not only there. The hon. Gentleman referred to the disparities between a standing charge in London and in the highlands and islands, or in northern Scotland, which is probably the same thing. For somebody in London paying their bill by direct debit, the current standing charge is 38.5p per day, against the northern Scotland figure, which is 59.38p per day, and the southern Scotland figure, which is 62.08p per day. That is utterly random. I am sure that very clever and complicated sums were done to get those figures, but they have produced what we in the highlands and islands, and elsewhere in Scotland, would probably call mince. If ever there was an illustration that the regulation of the energy market has gone fundamentally wrong and requires root-and-branch reform, that is surely it. In north Wales and Mersey, the rate per day is 62.21p, which is even higher than in the highlands and islands and southern Scotland. People in north Wales and Mersey pay 29.57p per unit, compared with 28.48p in the north of Scotland and 28.16p in southern Scotland.

When we drill down into the figures and the regulation of the market, the other injustice is the rate charged to people on prepayment meters, who by definition are under the greatest financial pressure in relation to energy. The rate charged in the highlands and islands is 62.3p per day in standing charges and 27.19p per kilowatt-hour. If people in the north of Scotland pay by direct debit— I do, and I suspect everybody else in the room does—they pay 59.38p per day, whereas somebody who has to rely on a prepayment meter pays 66.23p per day. In what universe is that a sensible and fair system?

[Jamie Stone]

My right hon. Friend is making an excellent speech. He talks about an injustice. When the national health service was set up, people who lived in Lerwick, Tain, Paisley or Bristol had the same right to see a doctor and to get an antibiotic or treatment to make them well; the situation that he describes flies in the face of the notion of fairness, which is important to our democracy.

[Mr Carmichael]

My hon. Friend makes an important point. Like the hon. Member for Inverness, Nairn, Badenoch and Strathspey, my hon. Friend touched earlier on the health aspects of energy costs, which not only impact the family budget for heating the house but have a much wider application. As the hon. Member for Inverness, Nairn, Badenoch and Strathspey said, they impact mental health, and have serious impacts on those who are elderly and so more vulnerable to the cold and on those who have physical health conditions. For those people, the choice between heating and eating actually becomes less difficult, but only in a bad way: they have no choice. Their medical condition means that they have to give priority to heating.

The fact that we are now so far from the idea of a universal, standard price for energy across the whole country shows just how badly wrong the regulation of the market has gone. As the hon. Member for Inverness, Nairn, Badenoch and Strathspey said, responsibility lies at Ofgem’s door. I wish we could see more proactivity from Ofgem, which had to be taken kicking and screaming to get to the point of consulting on a social tariff. If the Minister could instruct it to look at the issue and achieve meaningful change, she would be doing some genuinely good work.

In conclusion, I congratulate the hon. Member on focusing our attention on the question of standing charges. The situation is bad for the highlands and islands, and it seems even worse for other parts of the country, although they might not be as heavily dependent on heat in the winter as we are.

Of course, I could not sit down without making brief reference to the fact that, for many in our constituencies, the real cost of heating their houses comes from the cost of using heating oil, as that is the only way that they can. There are no standing charges for that, and it is much more difficult to get money into the pockets of people who rely on it. That is baked into the system, and it will not be fixed easily.

[Drew Hendry]

I realise that the right hon. Gentleman is concluding his speech, but it is important to point out that this is an issue that I and others, and possibly even himself, have raised in the past. Ofgem has been delinquent in not regulating for those off the gas grid as well. We need to appreciate those who are reliant on LPG and fuel oil because they need protection as well. Again, when they are using fuel oil and LPG, they also tend to use more electricity, which brings us back to the main thrust of the debate. I thank the right hon. Gentleman for his patience.

[Mr Carmichael]

I am grateful to the hon. Gentleman; as one would expect, there is not a great deal of difference. The one thing I would start with, if I were in Ofgem, would be multi-rate meters, such as Economy 7 and “Total Heating with Total Control”, which many of our constituents use. The standing charges on those are 69.32p per day in northern Scotland and 69.17p in southern Scotland. Again, we see the disparity. That is one standing charge where direct action could have a direct impact on the highlands and islands.

I await with interest what the Minister has to say. I share the experience of the hon. Member for Inverness, Nairn, Badenoch and Strathspey; the Minister is thoughtful and prepared to engage. I hope that, having had this brought to her attention, she will use her offices to ensure that, going ahead, the highlands and islands, as well as those who are fuel poor in England, Wales, Northern Ireland and indeed southern Scotland, will not be given this rather shoddy treatment.

--- Later in debate ---

[Amanda Solloway]

Once we have all the responses and have looked at them, I will be very happy to welcome views on the findings.

I turn to transmission and distribution charges. Electricity network charges are the costs that users pay to connect to and use the electricity network. These are charged to suppliers and generators, so eventually the costs are passed on to consumers in their energy bills, some of which is reflected in their standing charges.

As an independent regulator, Ofgem is responsible for setting the electricity network charging methodology. Government officials are working closely with the regulator to understand these charges. Electricity network charges must be cost-reflective, so that those who pay them are charged in a way that reflects the cost that they are placing on the network.

Transmission charges are based on the costs that different users impose on transmission by connecting in different locations. That means that there are higher charges for those whose use of the network results in longer distances of electricity transmission. As hon. Members will know, Scotland is a net exporter of electricity, so transmission costs for Scottish consumers are lower than those for their counterparts in England and Wales.

[Mr Carmichael]

The Minister describes locational charging. That made a degree of sense in the days of generating electricity from hydrocarbons, because there was an element of transmission loss, so we wanted to encourage transmission closer to the point of consumption. As we move to renewables, that argument simply no longer stands, because we are not wasting a non-renewable resource in order to generate and then transmit electricity. Why has the approach not been changed?

[Amanda Solloway]

I thank the right hon. Member for his intervention. These are the kinds of things that we are working through as we respond to the net zero challenge.

Hon. Members have quite rightly talked about the geographical challenges of electricity supply in northern Scotland, such as the area’s size, poor weather conditions, sparse population, mountainous terrain and the need to supply multiple islands. Inevitably, these challenges mean that the costs of distribution are much higher than for other regions in Great Britain. Hon. Members have made that point very clearly.

I also acknowledge that the highlands and islands produce high levels of renewable electricity, although that does not remove the challenges of distribution. We will be looking at that issue.

The hydro benefit replacement scheme provides annual assistance of about £112 million to reduce distribution charges for domestic and non-domestic consumers in the region. That equates to a reduction of about £60 annually per household.

COP28

Alistair Carmichael Excerpts

Wednesday 29th November 2023 Commons Chamber

[Amanda Solloway]

It is always a great pleasure to listen to my right hon. Friend, who reminds us of the history and of how we got to this point. However, we need to acknowledge all the good things that we are doing, and I reiterate that we are looking at ensuring sure that we have a secure energy future.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Is it not just a little bit embarrassing that as Ministers head to the Gulf for COP, the European Marine Energy Centre in my constituency is having to consult on downsizing and restructuring because the Minister’s colleagues in the Department of Levelling Up, Housing and Communities have been unable to provide the three-year funding stream that they had previously undertaken to provide? Will she speak to her colleagues in DLUHC to ensure that some certainty on that money can be given, and that the centre can continue its genuinely world-leading work on the development of marine renewable energy?

[Amanda Solloway]

That is obviously not my Department, but I would be happy to take that away and facilitate a meeting, or indeed have a meeting myself.

Contracts for Difference Scheme

Alistair Carmichael Excerpts

Thursday 19th October 2023 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I congratulate the hon. Member for Strangford (Jim Shannon) on securing this debate, which is timely, given the outcome of the recent AR5. He presented it with the degree of detail and precision that the House now expects of him. It is a pleasure to serve with you in the Chair, Dame Angela, albeit I am mildly disappointed that you are in the Chair; I had rather hoped that you might have moved on to other things by now, but I guess that is politics, and it was not necessarily to be.

[Dame Angela Eagle (in the Chair)]

Such is democracy.

[Mr Carmichael]

I want to pick up where the hon. Member for Waveney (Peter Aldous) left off. While there are a lot of lessons to be learned from the conduct of AR5, it is worth a short pause to consider the successes of contracts for difference. As a mechanism for deployment and growth in renewable energy, they have been remarkably successful. Ultimately, however, they are a tool like any other, and the quality of the product that we have at the end of it is dependent on the use to which that tool is put.

I hope that AR5 is a warning shot—if I may put it that way without mixing too many metaphors—and that in future there will be a better dialogue between Government and industry, because the outcome that we got was pretty much the outcome that the various industries had been predicting. It is, I think, for the Government to keep engaging with industry to learn lessons and see the continued growth in our renewables. Quite apart from the need to meet our net zero targets, for which the growth of renewable energy will be absolutely critical and essential, the question of energy security will be dependent on this. Had we taken some of these decisions earlier, pushed them with more vigour and better resource and used the tools differently, we might be in a better place for energy security today, but we are where we are, and what is important now is that we are able to build the industries for the future.

I will concentrate and focus in particular on the development of marine renewables—that is probably the least surprising news of the day for the Minister. That is something in which I have had 20-plus years of involvement, and it is important to my constituency, playing host as we do not just to the European Marine Energy Centre, but to a number of successful projects in the AR4 and AR5 rounds. The decision to include in AR4 a ringfenced pot of £20 million for tidal stream energy generation was absolutely transformative for the industry. I was in a call with the people from EMEC this morning, and although it was not the purpose of the call—we came to it during the course of the conversation —they were talking about how the development that we have had as a consequence of AR4, and now AR5, has helped them to grow their business case. There are still issues that have to be dealt with—the Minister knows some of them; they are not germane to the debate—but that shows what is possible when the right decisions are made here.

By following that with £10 million minima in AR5, which led to the deployment of 50 MW of capacity, the sector saw an uptake that exceeded the 10 MW minimum. That demonstrates the way in which the sector is ready and able to go further to help the Government meet their declared policy aims. We have 90 MW deployed in 11 projects across Scotland and Wales.

What more do we need to do? Obviously, there will need to be a continued ringfenced pot. We are not yet at the stage of commercialisation where marine renewables would be capable of competing with the other technologies in the auction, so that continued ringfencing will be important. We also need bigger minima in the next round—the AR6—and the sector keeps saying that it wants a target for deployment in the region of 1 GW by 2035. Again, that should be attractive to the Government. If we are to learn the lessons of AR5, listening to the sector—seeing what it comes forward with and what it wants to produce—will be absolutely critical. There is one way in which the Minister can demonstrate that he is listening to and engaging with the industry, and perhaps restoring some of the confidence that was damaged as a result of AR5.

The opportunities are still here and, particularly in relation to tidal stream, need now to be followed by opportunities for wave power—there has to be a route to market for wave power. Tidal stream has demonstrated what is possible; it is now for the Minister to look at how we allow other sectors and developing technologies to come forward and take the same opportunities that were given to tidal stream. The lesson of AR4 and AR5 and the ringfenced pot for tidal stream is that the mechanism works. If it can work for tidal stream, surely it can work for wave power as well.

There are some opportunities here. We have taken a bit of a knock with AR5, but that should not lead us to challenge in any fundamental way the suitability and durability of contracts for difference. I hope that the Government will continue with CfDs, but that in using that tool we find routes by which we can engage better with the industry—as the Government should do in the interests of meeting their own targets and aspirations.

--- Later in debate ---

[Graham Stuart]

Having been chided, my hon. Friend is of course—quite rightly, and characteristically—straining to justify his position, and I have a lot of sympathy with it. I have said that we would ideally have got the window in a way that better matched that reality. But there are reasons for having the annual auction. We always come up with a window that industry says is not enough. We have managed to bring down the costs by 70%. It is hard to overestimate the importance of this. This country, the CfD mechanism and, I have to say, this Government have transformed the economics of offshore wind—not just to the betterment of UK consumers, but to the benefit of the whole world. It is only because of what has happened here with this approach, which every year is in a state of tension with industry, that we have been able to show and reveal these prices. We are now able to export our expertise to the north-east of the United States, to the Gulf, to Taiwan—all over the world—as a result of this process.

I said that I wished we could have better attuned the window to the realities—they changed even after we set the prices in November. That was precisely why we decided on having an annual auction. To put it another way, if what someone offers is always accepted, they might want to consider whether they are overpaying. That is not to say that I in any way revel in the fact that we did not get offshore wind in that round, but I am glad that we had the foresight to move to an annual system and that we are able so swiftly to move on. It will just be the middle of next month when we set out the core parameters for the next round, which will happen next year.

[Mr Carmichael]

Will the Minister give way?

[Graham Stuart]

I will make a little more progress, if I may.

The CfD scheme is a major UK success story. It has secured more than 30 GW of capacity, including 20 GW of offshore wind, since 2014. It has driven down the price of offshore wind by about 70% in that time, helping to grow the industry and its supply chain both in the UK and globally, although as the hon. Member for Manchester, Withington says, I have previously publicly expressed the desire to do more. We are coming forward with non-price factors as a way of encouraging more of the supply chain to be in the UK. But have no doubt: this has been a phenomenal success for us, for British jobs, for British consumers and for the world. We have the four largest offshore wind farms in the world, with more than 14 GW already in operation and a further 77 GW in the pipeline. It is a pleasure for me that of course the largest offshore wind farm in the whole world is Hornsea 2, named after a small town in my constituency. The UK is a world leader in floating offshore wind, with one of the largest amounts of operational capacity anywhere in the world, at 80 MW to date.

The hon. Member for Strangford says that the results of allocation round 5, which concluded in September, were disappointing because the total capacity secured was less. As I have said, I do not accept the characterisation of that round, because it has in fact realised the highest amount, on an annualised basis, of any of the rounds we have ever run. It resulted, in fact, in more projects—95—than we have ever seen successfully done, even though it covered just a one-year window. The round delivered a combined total of 3.7 GW, which is enough to power the equivalent of 2 million homes. As I have said, there was more than double the number of onshore wind projects. We also secured—I have touched on this already—another good result for solar, and four times as many tidal stream projects as AR4 did.

I pay tribute to the right hon. Member for Orkney and Shetland (Mr Carmichael) for his doughty support for the sector. I did not realise that his involvement had stretched to 20 years, but when I visited his constituency he was there to characteristically champion the industry. For the first time in our CfD, we had success with geothermal. This vital new renewable capacity was procured in a competitive auction set against, as I say, a backdrop of highly challenging macroeconomic conditions.

--- Later in debate ---

[Graham Stuart]

The hon. Gentleman always makes an extremely plausible and effective advocate for the ideas that he espouses. I—and the Government, I am sure—will remain open to discussions with those in Northern Ireland and with the hon. Gentleman to find solutions. We talked about some of the challenges of staying on the overall net zero pathway. Of the four Administrations, Northern Ireland is potentially the most off track, so there is a real need to find solutions and we always stand ready to work constructively to find the best way forward.

I continue to believe, however, that the development of a bespoke support scheme offers the best and quickest way for Northern Ireland to secure the investment in renewable electricity generation that it needs to achieve its net zero goals. I have not said it explicitly but, of course, energy is devolved, so we are looking to the institutions in Northern Ireland, on behalf of the people of Northern Ireland, to take this on. That is what we would profoundly like to see. I commend the work done by the hon. Gentleman and the Department for the Economy so far, and I encourage us all to support their efforts.

I will try—I hope reasonably briefly, with your permission, Dame Angela—to respond to a few of the other points that have been made. My hon. Friend the Member for Waveney chided me in return, to ensure that we do not rest on our laurels and that we respond appropriately to IRA and perhaps EU initiatives in the space. He talked about creating incentives, picking up on the supply chain development issues that many Members have touched on, and ensuring that seabed auctions are a good place to do that. As he knows, I set out the work that the Crown Estate is already doing to put conditions on at that stage, in addition to changes to the CfDs.

I take on board my hon. Friend’s points about the administrative strike price, and ensuring that we get it in the right place in order to balance keeping costs down for consumers with getting the generation that we want and need. We will set out the pot details in just a few weeks, so I will leave commenting on his appeal for a ringfenced pot for offshore wind. On his request for the pot to reflect the pipeline, that is the mechanism we use for the CfD. That is one of the reasons for setting out the core criteria in November and providing more details in March—precisely so that we can match the budget and the other elements that make up the CfD with a realistic assessment of the pipeline in place. His Majesty’s Treasury and the Chancellor will have heard my hon. Friend’s points on the issues that, sadly or otherwise, sit with the Treasury rather than my Department.

From the right hon. Member for Orkney and Shetland, I heard, as ever, his espousal and support for tidal, and he talked about setting a target for that. The Government remain open and we will continue to consider that, but we have not yet made a decision on whether it would be the right thing to do. It is about doing the right intervention at the right time, based on the stage of development of a particular technology. However, like him, I am proud of the fact that we have been able to see it come on, and see some of the developments in his constituency. The hope to see those operationalised and scaled up here in the UK, with a big and strong domestic supply chain, is one that gives real optimism for the future.

[Mr Carmichael]

I was minded to offer myself as a mediator between the Minister and the hon. Member for Waveney, but they seem to have found a better pitch since that stage in the debate.

On the point of the 1 gigabit target by 2035, does the Minister not take on board the fact that this is now the only technology that does not have such a target? It was sustainable to argue his position in AR4; it is more difficult in AR5, and with every round it will become more difficult still. I say to the Minister again that this is an opportunity to talk to the industry, and engage in a way that works to his advantage by restoring some of the damaged engagement credibility.

[Graham Stuart]

I can go no further than to say that the right hon. Gentleman, as so often, makes a very strong argument. We will continue to engage and will come forward with any decision on that in due course, if that was thought appropriate.

The Opposition spokesman, the hon. Member for Manchester, Withington, talked a little about being able to bring hope to oil and gas communities around the United Kingdom. That is ironic considering the ambition of any Labour Administration, were one to be elected, would be to strangle that industry. Even though, as of last year, we are the most decarbonised major economy on earth, we are still 77% dependent on oil and gas for our primary energy needs.

Over the coming years, due to the precipitous fall in production because of the maturity of the basin in oil and gas production from the North sea, and those expected falls in Norwegian production, our dependence on LNG imports and the like is expected to increase. Having seen the price spikes of the last two years and the risks and issues that arise from not having reliable and ideally domestic energy, the Opposition want to put at threat 200,000 jobs supported by the oil and gas industry —cheered on, bizarrely, by the fortunately ever less popular Scottish Nationalist Government—through wanting to stop any new licences. That is despite the fact that the only alternative realistically available is LNG, which the North Sea Transition Authority recently announced had embedded in it four times the production emissions of domestically produced gas. It is environmentally nonsensical and disastrous for 200,000 jobs. Just as a small addition, the industry is expected to bring in £50 billion of tax revenue over the next five years—goodbye to that as well.

It is absolutely crazy to have an Opposition spokesman saying he is here on the side of oil and gas communities—he absolutely is not. We have an integrated energy system encapsulated within a legal framework in the Climate Change Act 2008, which means we are making the transition. We are leading the world on making that transition, but we will not speed it or help it, but in fact weaken it, if we do not support new oil and gas licences in order to minimise the necessary inevitable reduction in oil and gas production in our waters. It is bad for jobs, for the environment, for the economy and for tax. On no front does it make any sense at all.

I have gone on long enough. I thank everyone for their contributions, not least the hon. Member for Strangford who led the debate. I am happy to keep engaging with him. I admire his tenacity. I recognise what drives him to want to find a solution in Northern Ireland and I entirely share that desire to see something happen. I am confident in our CfD system. It has been a world leader. AR5 was a success even though it did not deliver the way I would like it to have done in offshore wind. I am extremely confident about AR6, where we will again balance getting the generation we seek with ensuring that we look after the interests of consumers and the long-term interests of the United Kingdom.

Offshore Wind Contracts

Alistair Carmichael Excerpts

Tuesday 12th September 2023 Commons Chamber

[Graham Stuart]

I thank the hon. Gentleman, not least for his attempt at a gag. I can tell him that what he says is the whole basis of the system—that it learns from each round. The most real economic data that we get is from an auction round. Moving to annual rounds, there will be ebb and flow as the right balance is sought between getting the generation that we require, set against our extremely ambitious deadlines, and not paying too much. That is the balance that we strike. We have 3.7 GW and I imagine that we will do even better next time.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I feel as if I am almost taking my life in my hands, but I do want to commend the Minister for one small piece of good news in this round, which is in relation to the development of marine renewables. The success of the auction for tidal stream development illustrates what would be possible for wave power if it were to be given the same opportunity in AR6. But for tidal stream, does the Minister agree that what is now needed is the 1 GW target for deployment? Will he work with me and other people in the House with an interest in this and the marine renewables sector itself to deliver that ahead of AR6?

[Graham Stuart]

May I pay tribute to the right hon. Gentleman? I met him in his constituency when I visited the European Marine Energy Centre and saw for myself some of the projects in the water. I am personally determined to ensure that tidal stream continues to grow. We maintain our global leadership, with a very high percentage UK supply chain as a further positive to it. He tempts me to get ahead of myself on policy, but I cannot do that. However, what we are doing and what our dedicated pot this year did is further strengthen that so that we can get in a position where that might be a realistic policy position to take.

Heating Rural Homes

Alistair Carmichael Excerpts

Tuesday 13th June 2023 Commons Chamber

[Sir Bill Wiggin]

All I can say is that those 15% of my hon. Friend’s constituents are lucky to have such a champion in their MP—what a hero for rural sensibility. We are truly blessed to have an intervention such as that. Later in my speech, I may touch on the subject of HVO. What he is saying is absolutely right. We need to be much broader in our outlook about what works for people, not through force, but through choice, so that the people who want to do the right thing can do so, rather than being curmudgeonly bullied—

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[Sir Bill Wiggin]

On that point, I will give way to my former Whip Friend.

[Mr Carmichael]

I am grateful to the hon. Gentleman for giving way. I should perhaps declare an interest, as someone who owns a house that is also heated by oil-fired central heating, however inadequately. The point he makes illustrates well what happens when Government intervene to set targets and to insist that things must be done by a certain deadline. We see that time and again. I can tell him and others now that one of the biggest problems will be the lack of available skilled, qualified labour in rural areas and in other places to install the equipment for these things. Would it not be better if on this occasion we were to use a little more of the carrot and a little less of the stick, as he and I did when we were Whips together?

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Graham Stuart]

It is quite simple. We are reducing demand for fossil fuels, but we are net importers of them. Producing them here and destruction of demand have to be our focus and that is what the Government are doing. We are getting rid of the power stations burning coal. In 2012, nearly 40% of our electricity came from coal, the most polluting of fossil fuels—that was the legacy of the right hon. Member for Doncaster North (Edward Miliband)—but by next year it will be zero. We have moved from 7% to well over 40% with renewables, as the Secretary of State has said. It is economic insanity for us not to produce the oil and gas that we will need for decades to come when we are a net importer.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

9. What recent assessment he has made of the potential role of North sea oil and gas infrastructure in developing carbon capture and underground storage capacity.

[The Secretary of State for Energy Security and Net Zero (Grant Shapps)]

North Sea oil and gas infrastructure can play a crucial role in lowering costs and speeding up deployment if it is repurposed for carbon capture and storage, therefore improving our energy security.

[Mr Carmichael]

The Greensand project in Denmark has proven the concept of carbon capture, usage and storage, but we know that the supply chain in this country is fragile. Indeed, if others go ahead and develop CCUS, that is where they will go. Companies such as EnQuest in Shetland, which operates the Sullom Voe oil terminal, are keen to do exactly what the Secretary of State is talking about. Would he or the Energy Minister agree to meet me and the operators of EnQuest to hear what it needs to get that exciting project across the line for a final investment decision?

[Grant Shapps]

The right hon. Gentleman is absolutely right about this, but the UK is playing a leading role with its recent £20 billion investment in carbon capture, usage and storage. We have sufficient space to store potentially 78 billion tonnes of carbon under the North sea—equivalent, I am told, to the space occupied by over 15.5 billion well-fed elephants. I would be more than happy to meet him to discuss the potential of the field he mentioned.

--- Later in debate ---

[Graham Stuart]

I thank my hon. Friend for separately sharing his detailed thoughts on REMA and its reform. This is a complex area with multiple interrelated mechanisms; it requires careful consideration to unlock the £280 billion or perhaps £400 billion of investment in generation and flexible assets that could be needed by 2035. While I share his impatience and desire to move fast, it is more important still that we get it right. I aim to publish a second REMA consultation in the autumn, which will narrow the options for reform and detail the direction of travel.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

T4. Directors at Ofgem are on the record as saying they are already doing everything that needs to be done to meet the country’s net zero targets. I do not know anyone outside Ofgem who sees that as anything other than dangerously complacent. Is it not now time for the Minister to give a direct mandate to Ofgem to include meeting net zero as part of its remit?

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The Government have published a draft strategy and policy statement for energy policy that makes clear Ofgem’s role in promoting the UK’s net zero targets. However, we are considering the effect of an amendment made in the House of Lords to the Energy Bill currently going through this place on Ofgem’s statutory duties in relation to net zero.

Energy Bill [Lords]

Alistair Carmichael Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

I will make a little progress before I give way again.

Turning to the contents of the Bill, I think it is helpful to consider them in three themes. The first is about liberating private investment in clean technologies, helping reduce our exposure to the very volatile gas prices in the long term. For example, the Bill will help us to exploit our absolutely extraordinary potential for carbon capture, usage and storage, as well as low-carbon hydrogen, potentially for industrial use. This country has a vast storage reservoir beneath the North sea, much of it once filled with oil and gas. There could be enough capacity to store up to 78 billion tonnes of carbon. I appreciate that people have difficulty imagining what that would look like—I know I did. The answer is that it is the equivalent weight of 15 billion elephants, if people are better able to imagine that, or to put it another way, an atmospheric pressure roughly the space of 200 million St Paul’s cathedrals. In short, our geology provides us with a lot of space under the North sea, and if we are able to fill the UK’s theoretical potential carbon dioxide storage capacity with CO₂, the avoided costs at today’s emission trading prices could be in the region of £5 trillion. We have the potential for a geological gold mine under the sea, and the Bill helps us to access it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

CCUS is very important to me and to my constituency. EnQuest, the operator at the Sullom Voe terminal, sees the next generation of the use of that terminal involving CCUS, but does that not reinforce the point made by the right hon. Member for Reading West (Sir Alok Sharma), in relation to Ofgem’s remit? Does it not sit very nicely with the recommendations that the Secretary of State has received from Tim Pick, his offshore wind champion, who has also made the point that Ofgem’s mandate must be reshaped to bring it into the appropriate framework for net zero challenges? That remit has not been touched since 2010.

[Grant Shapps]

The reality is that the Government have committed to those targets, as has the whole House, because the law has already been passed. We have the carbon budgets, one to six; I think we exceeded one, two, three and four, but we are on track for five, and a few weeks ago, I set out in “Powering Up Britain” how we plan to meet carbon budget six as well. The conversation about whether the regulator has an individual duty is an interesting one, but the reality is that in truth, we are all headed towards that cleaner energy system.

Powering Up Britain

Alistair Carmichael Excerpts

Thursday 30th March 2023 Commons Chamber

[Graham Stuart]

My right hon. Friend is, of course, absolutely right. The hon. Member for Leeds East (Richard Burgon) talked about growing our oil and gas. We are net importers of oil and gas, and production in the mature basin of the North sea is falling. Only new investment can unlock the greening and electrification of production, with even lower emissions in sight from the North sea than from tankered gas coming in from abroad. My right hon. Friend is absolutely right. If we did as the leader of the Labour party, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), said at Davos and had no new oil and gas licences, we would not stop using gas; we would just import more of it from abroad with higher emissions attached, with no jobs, no tax and no long-term benefit to the United Kingdom. That is not a tenable policy. I hope that, apart from their far-left colleagues on the far Labour Back Benches, everyone else in the Labour party recognises that is a crazy position and it needs to change.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I take the Minister’s recent comments to be a notification that I will be having a constituency visit from him. I look forward to that.

However, can I take him back to the question of energy security and just remind him that there is more to energy security than what we produce and where? It is also about the protection of infrastructure and the assets around it. All this week, we have had a Russian tug, the Nikolay Chiker, steaming up and down to the east of Shetland in the vicinity of the pipeline servicing Brent and Ninian. This morning, the tug has gone around to the north-west of Shetland and is now doing the same thing in the vicinity of the pipeline servicing the Laggan field to the west of Shetland. It is a merchant vessel, but we know that the Russian military often purpose merchant vessels in this way. Will the Minister speak to his colleagues in the Ministry of Defence to see, first, if they know what is going on? Secondly, if they do not, will they find out? Thirdly, what will we be doing in the long term to protect these vital national assets?

[Graham Stuart]

I thank the right hon. Gentleman for his question. Perhaps we can follow up offline on that. As appropriate, I would certainly be happy to engage with my colleagues in the MOD. As a Minister for energy security, I keep all that under advisement. We will formally notify him of my intention to come to his constituency and, whether next week or another time, we can discuss this matter further and make sure I can reassure him on what are very well expressed concerns.

Energy Support for Farms

Alistair Carmichael Excerpts

Tuesday 21st March 2023 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is indeed a pleasure to serve under your chairmanship, Mr Robertson, and an even greater pleasure to support my hon. Friend the Member for Upper Bann (Carla Lockhart). She has outlined very clearly the problems that her constituents in Upper Bann are having, and I want to reflect on those problems as well.

It is also a pleasure to see the Minister in his place. He reminded me at 11 o’clock that this debate was on— I was already going to come, by the way. It is a real pleasure to be here. I think that he has already told me that whatever I ask for, he will respond in a positive fashion. I am not quite sure how that will work out, but perhaps my hon. Friend the Member for Upper Bann could give me a list of things to ask for. I say that in jest, by the way, but I know that the Minister will reply in a very positive fashion and I appreciate that.

My hon. Friend the Member for Upper Bann is truly an advocate, in every sense of the word, for her constituents. She is also—I say this respectfully—a credit to her constituency and to us as her colleagues. We are very pleased to have her here alongside us today and we are equally pleased to support her.

I declare an interest as a landowner and a farmer, and a member of the Ulster Farmers’ Union. As my hon. Friend and I both hail from rural constituencies, we are often of one mind and one voice. Everyone else present is also of that one voice because the issue raised by my hon. Friend affects many constituencies across this whole United Kingdom of Great Britain and Northern Ireland.

It is hard to know what more can be added to the comprehensive case that my hon. Friend has made today, but I will certainly do my best to contribute to this debate in a positive fashion. Farmers and farm businesses are heading towards crisis, which will not be a matter of a few “Closed” signs and a closed door; instead, it is a matter of food security, which is of the utmost importance to this House.

I chair the all-party parliamentary group on eggs, pigs and poultry. There is no better APPG to chair, by the way; I love telling people about it. Everybody says, “Well, you’ll have a good breakfast every morning”, and I probably do. I always have two eggs every morning; I do not always have bacon or sausages, but I always have my eggs.

In my constituency of Strangford, the eggs, pigs and poultry sectors have intensive businesses with high energy usage. They have been encouraged to produce more food over the years, and to invest to do so. They have done that. The old saying, “You need to speculate to accumulate”, only really works if someone can speculate in a way whereby they know they will get a return. The problem is that with energy costs being so high, that speculation is now looking rather doubtful for many farmers, which is why we worry.

In my constituency of Strangford, we have the world-famous Comber spud. There is no spud like it; there are no potatoes like it in the whole world. By the way, Europe recognised that and I have to say that I had a small role to play in getting the Comber spud recognised by Europe. My colleague at that time was Simon Hamilton. He and I pursued that objective and the Comber potato is now highly recognised and valued, not only right across the whole of the United Kingdom of Great Britain and Northern Ireland, but as far away as Europe.

The very famous Comber potato is produced by farmers in my area. They are immensely proud of that product, as they rightly should be. In my constituency of Strangford, we are blessed with precisely the right climate to be able to produce three crops of potatoes per year instead of the standard two. As I say, that is due to the climate, but it is also down to the soil. I would say, without fear of being contradicted, that there is no better soil in Northern Ireland to do that. And what a joy it is to represent that constituency, which has, as I say, the best soil there is.

The difficulty for the businesses in my constituency is that the cost of production has risen but the cost to the agrifood industry of converting potatoes into mash pots—which is where nearly all potatoes seem to go now—or whatever form they take, means that they cannot provide as much food as they potentially could. That is due to the rising energy costs.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I am grateful to the hon. Gentleman for giving way and I remind the House of my entry in the Register of Members’ Financial Interests. He touches on the most important part of the debate. The issue is not just that farmers face increased energy costs, but that that is part of the overall package. They have labour shortages and are under the cosh in just about every way imaginable. Consequently, if they are not able to meet the demand, other food sources will come through trade deals, and once they fill that gap in the market, we will never get them out.

[Jim Shannon]

The right hon. Gentleman is absolutely right. I will refer to that shortly and give an example. There are many issues with workforce and the supply of products as well. We have had problems over the last year, before and after Christmas, and I wish to refer to them as well.

Over the years, Government have encouraged farms to diversify and modernise, providing grants for new equipment and technology. However, Government have not taken into account the fact that costs have quadrupled in the space of a year for many farmers, and grants and subsidies certainly do not meet those rising costs. When I speak to farmers in my constituency about the possibilities for renewable energy—there are quite a few who are trying to do it—I learn that, unfortunately, they have heard too many stories of fields being used for solar energy with only £100 being saved on the electricity bill. They would be better off renting out their field for a birthday party bouncy castle, which would bring in more revenue than £100. The numbers do not seem to add up for many and that is why we must now step in and sow solutions into the problem. Hopefully, the Minister will give us some ideas about what can be done to assist and help.

The lifeblood of this nation lies in self-sustainability. The right hon. Member for Orkney and Shetland (Mr Carmichael) referred to that. The UK does not produce enough fruit and vegetables for its population to get the recommended five portions a day. Even without taking waste into account, the United Kingdom would need to produce or import 9% more fruit and veg for everyone to be able to eat the recommended amount. That is not possible while farmers do not have the ability to produce and process in profit.

The recent debacle with the fruit and vegetable shortage highlighted a pertinent point: the UK depends on Morocco and Spain for vegetables during the winter. It does not have the workforce to sustain and gather all the fruit and veg in the summer. There are opportunities to do that better and to work ahead. Because of heavy rains and floods, suppliers have been hit by the problem of ferry cancellations, which has, in turn, affected lorry transport. At one stage, the Secretary of State for Environment, Food and Rural Affairs had to reply in the House as to why food was so scarce. To be fair, it was not the Secretary of State’s fault, but ultimately the need to find a solution fell at her feet.

Supermarkets have also had shortages of broccoli and citrus fruits and we were left with rationing. I am not an avocado man, but my wife mentioned that they were in short supply as well. We never eat them, by the way, so I do not know why she told me that. I could not figure it out because it did not really make that much difference. However, farmers know they could fill the breach with other seasonable vegetables if they had the capacity to do so in a profit-making venture. If it comes to speculating, to accumulate we need to encourage the farmers to do just that.

Generations of farmers are prepared to carry on with the family farm and the back-breaking, morale-destroying and socially isolating nature of their work. We may not give farmers enough credit for all they do. They work away. I have always lived in the countryside, so I am aware of that from friends I went to school with and others I know quite well. Also, I live on a farm and my neighbours are all intensive farmers. But they cannot do this without support and the recent payment does not even make a dent in what is needed.

I back my hon. Friend the Member for Upper Bann in her calls for meaningful support. This is not only a matter of saving a job; this is about saving the nation’s ability to survive alone, and that is worth any investment in my eyes and hopefully in those of the Minister.