Financial Assistance to Industry
Anne-Marie Trevelyan Excerpts(3 years, 5 months ago)
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The Chair
Before we begin, I remind Members to observe social distancing and to sit only in places that are clearly marked. I also remind them that Mr Speaker has stated that masks should be worn in Committee. Hansard would be most grateful if Members sent their speaking notes by email to hansardnotes@parliament.uk.
We are debating for up to 90 minutes the content of the resolution that the House of Commons itself will be asked to pass without debate once the text of the resolution has been reported from this Committee.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, grants to businesses to support the development of an electric vehicle supply chain in the UK, up to a limit of £388 million over four years.
The Prime Minister’s 10-point plan sets out our ambition to accelerate the shift to zero-emission vehicles. That will play an important role in driving down carbon dioxide emissions for net zero and improving the air quality in our cities and towns.
The UK is home to a successful automotive sector, which has one of the highest productivity levels of the major European automotive-producing nations. Currently, 149,000 people are employed in automotive manufacturing, with an estimated 278,000 jobs supported by the sector in the wider economy. Those jobs are spread across the UK, mostly outside London and the south-east, with significant clusters of activity in the west midlands, the north-east and Wales.
Globally, the automotive sector is going through a once-in-a-lifetime transformation and significant investment will be required to support the shift to electric vehicles. The UK needs to establish supply chains to source critical components and to continue to develop the new technology to deliver the transition. Investing in such areas offers a huge opportunity for the creation of new highly skilled jobs as we build back better following the significant challenges that the pandemic has posed for the automotive industry. There is significant opportunity for the UK to capture a share of the investment needed to make that happen, building on existing strengths in automotive research, development and manufacturing, and on wider capabilities such as chemicals, materials processing and refining, and electronics.
Without the new investment, there is a real risk that the sector will fall into decline, causing irreversible loss of jobs and activity in our industrial heartland. To maintain and grow our automotive sector, our aim is to create an internationally competitive electric-vehicle supply chain right here in the UK. Government have developed the automotive transformation fund, which supports both R&D and capital investment to focus on the commercialisation of strategically important technologies to enable production at scale. Securing investment in battery manufacturing and gigafactories is a priority, but the fund also targets investment in the upstream battery supply chain, motors, drives, power electronics and fuel cells.
The specific technologies and processes being targeted are based on extensive research into the vehicle value change, coupled with an analysis of UK strengths, capabilities and market trends. Demand for those key components is increasing rapidly as the transition to electric vehicles accelerates. Increasing production capacity will therefore help UK-based vehicle manufacturers to secure the supplies that they need. The ability to source from suppliers in the UK is also central to enabling UK businesses to meet the rules-of-origin requirements and to continue to benefit from tariff-free exports under the UK’s free trade agreements with important export markets. That will safeguard existing jobs in the automotive supply chain and create new ones, helping our established incumbent businesses to transform and attracting new investors.
Securing such investment will take concerted effort in the face of global competition. That is why the Government and their delivery partner, the Advanced Propulsion Centre, engage proactively with potential investors through the automotive transformation fund. Engagement is backed by extensive research into the UK’s competitive strengths and an understanding of key considerations for investors. The team also provides support and information on, for example, site availability, planning and energy supply; facilitates contact with other relevant stakeholders; and makes introductions to other businesses. We speak to vehicle manufacturers to better understand their requirements and which aspects of their supply chain they would most like to onshore. We use that information to inform our targeting and discussions with investors.
The automotive transformation fund is critical to our efforts to support the transformation of the automotive sector to a zero-emissions future. We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive manufacturing. I commend the motion to the Committee.
Anne-Marie Trevelyan
May I thank the hon. Lady for her valuable contribution to the debate? On her last point, I completely agree on women-led businesses and how we make sure that we maximise all that latent potential. The green jobs taskforce, which has been running over the last few months, is about to publish its recommendations, and an area that I have discussed with its members at some length is the fact that they are not maximising the use of all the human capital available to them in terms of women. I hope very much that they will be able to put forward suggestions on how they will look to expand their staffing groups to make sure that they do, because I think there is room for much improvement in many sectors. I look forward to reading the report shortly.
To answer the point the hon. Lady made, the Prime Minister set out his 10-point plan last year with the £1 billion investment for the automotive transformation fund, of which £500 million is so far in the system—if that is the right way to describe it—and will set out in due course how the second half of that committed fund will roll out. We are committed to the continued success of the UK automotive sector. We are the fifth largest European car producer and we have one of the highest productivity levels among major European automotive-producing nations.
Investment in the automotive sector was £7.2 billion in 2019, which is nearly 22% of UK manufacturing investment, and I was thrilled to see Nissan’s commitment just last week to its move to electric vehicles and the work it is doing. It wants to stay because it knows—I speak as a north-east MP who is entirely biased—that its north-east workforce is fantastic, and the company would not in any way want to move away from that. On a personal level—I apologise—I was thrilled by that announcement, because many of my constituents work at Nissan, and this will expand not only that workforce and the vehicles they produce but the wider supply chain through the battery factory. It is very exciting news.
The automotive transformation fund will continue to be a really important programme to help us with the steadfast commitment that we have made to support the sector through its transition to electrification, and the intervention that we are discussing today will help to lay the foundations for that competitive and sustainable industry. We will continue to show our support as a Government to the automotive sector as it builds back better following the disruption caused by the covid pandemic last year, giving businesses the confidence to invest and innovate, creating skilled, well-paid gender-balanced—I hope—jobs across the country, and enabling our green industrial revolution to make progress at pace.
Question put and agreed to.
Nuclear Power Station Decommissioning
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government are today entering into a new set of arrangements to deliver safe, lower-cost and more efficient decommissioning of the UK’s operating nuclear power stations, once they stop generating power.
Those nuclear power stations are all owned and operated by EDF, and the new arrangements have been negotiated by the Government to provide significant cost savings for the taxpayer, with the potential to achieve upward of £1 billion of savings without compromising on safety and security. They will also provide the Government with enhanced oversight of the decommissioning costs.
The new commercial arrangements relate to the fleet of seven advanced gas-cooled reactor (AGR) stations—Hunterston B, Hinkley Point B, Dungeness B, Hartlepool, Heysham 1, Heysham 2 and Torness. EDF last year announced the end of generation of Hunterston B and Hinkley Point B in 2022 and recently, Dungeness B with immediate effect. The other four are all scheduled to close on a rolling basis by 2030.
The new arrangements do not relate to the Sizewell B station, which is of a different technology—pressurised water reactor—and is due to continue operating until at least 2035. The new arrangements also do not cover the Hinkley Point C station, which is currently under construction.
Once a nuclear station closes the nuclear fuel from that station must first be removed (defueling) before it can be prepared for deconstruction. Then, following deconstruction, the site can be remediated.
The new arrangements we have negotiated will incentivise EDF to achieve the defueling of the AGR stations in a cost-effective and timely manner and include real risk share. EDF Energy have agreed to up to a total of £100 million in charges for underperformance in return for the potential to earn up to a total £100 million for good performance across the AGR fleet.
Shortly after EDF has completed the defueling activity, and subject to regulatory approval, the ownership of the AGR stations will transfer to the Nuclear Decommissioning Authority (NDA), on a station-by-station basis, to prepare for and manage the long-term decommissioning. The NDA will deliver this mission alongside their ongoing mission to decommission the first-generation Magnox nuclear power stations. This will allow the NDA to employ their unique expertise and experience of nuclear decommissioning and seek synergies with their wider mission to achieve savings for the taxpayer.
These new arrangements will harness the best of both organisations: EDF’s in defueling as an extension of its operational activity; NDA’s in decommissioning as the nation’s civil nuclear decommissioning authority—in order to deliver best value for the taxpayer, while maintaining strong regulatory oversight on safety, security, environmental and health matters.
The NDA and EDF will co-operate to help ensure a seamless transfer of the AGR sites and to enable efficiencies and identify and realise cost savings across the AGR decommissioning programme.
Under previous arrangements, EDF was responsible for the full defueling and deconstruction of the AGR stations, using funding provided by the Nuclear Liabilities Fund (NLF), a segregated fund managed by trustees and underwritten by Government. EDF’s AGR defueling and decommissioning work will continue to be funded by the NLF.
To facilitate these revised arrangements, designation directions have been laid in Westminster and jointly with Scottish Ministers in Holyrood—for Scottish stations —which provide the appropriate vires for the NDA to undertake their pre-transfer work and obligations on these stations.
I will deposit the designation directions in the Libraries of the House and further details are available at the www.gov.uk website.
[HCWS114]
Green Energy in the North-west
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I begin by congratulating the hon. Member for Birkenhead (Mick Whitley) on securing this important debate. I assure the House that this Government are ensuring that we have an energy system that delivers a cleaner and greener future. We are determined that every place, every community and every industry in the UK, including of course the north-west, has the support it needs to successfully transitioned to green energy.
We only need to look at what happened with coal and wind in the last few decades and the political consensus that has formed around reducing our emissions to see that the nation is embracing a move to green energy. Members have shared their passion and commitment to a just transition to net zero in this debate. The energy White Paper, which we published in December last year, set out plans for the historic transformation of the UK’s energy system for a cleaner future, including fully decarbonising our electricity generation by 2050. We have shown that rapid progress on decarbonisation is possible, alongside a thriving economy.
We recognise, of course, the need to ensure that industries move to clean energy in a sustainable way, which is why we have announced in recent years the industry strategy challenge fund, the industrial energy transformation fund and the clean steel fund. Those funds support the meeting of green energy goals in key industrial regional clusters and sectors. In addition to those funds, the Prime Minister’s 10-point plan for a green industrial revolution set out how we will work with industry to help deliver our net zero targets in a way that creates employment opportunities in green energies as they emerge. My hon. Friend the Member for Warrington South (Andy Carter) raised some important north-west leadership points in relation to nuclear, which were very interesting to hear, as it is a key low carbon part of our future energy mix.
In the 10-point plan, there is a commitment to deploy carbon capture usage and storage in at least two industrial clusters by the mid-2020s and a further two clusters by 2030, with an ambition to capture 10 megatonnes of CO2 per year by 2030. In May this year, we launched the first phase of the CCUS cluster sequencing process. On the concerns about other technologies of the hon. Member for Birkenhead and the hon. Member for Liverpool, Wavertree (Paula Barker), they will be pleased to know that allocation round 4 of the contracts for difference later this year will include less established technologies, including floating offshore wind, advanced conversion technologies and tidal stream. The delivery of at least two CCUS clusters is not the extent of the ambition, with a commitment to support four by 2030 at the latest. The Government are also clear that, in order to reach net zero, all industrial clusters will need to decarbonise and CCUS is going to play a key role in enabling that.
The industrial decarbonisation strategy and the forthcoming heat in buildings and net zero strategies will set out how targeted investment, underpinned by support for technology innovation, will help enable a more sustainable long-term path, while protecting jobs and supporting levelling up across the UK. I hope that will give my hon. Friend the Member for Vale of Clwyd (Dr Davies) and the hon. Member for Wirral West (Margaret Greenwood) reassurance on many of the transportation issues that were raised.
This debate gives us an opportunity to recognise the significant contribution the north-west has already made and plans to make to investing in green energy. I will take a moment to recognise a couple of those excellent contributions. Winnington in Cheshire will be home to the UK’s first industrial carbon capture and utilisation plant. The £15.7 million project will be funded by Tata Chemicals Europe, with the support of a £4.2 million grant from the Department for Business, Energy and Industrial Strategy through our carbon capture and utilisation demonstration programme. The plant is near completion and due to commence carbon dioxide capture operations this year.
The hydrogen energy and carbon capture and utilisation storage project, HyNet North West, which many colleagues mentioned, is an innovative low carbon and hydrogen energy project that will unlock a low carbon economy for the whole of the north-west and north Wales, and put the region at the forefront of the UK’s drive to net zero. The project will receive almost £33 million of funding from the industrial decarbonisation challenge, and will be important for our efforts to decarbonise industry in support of the Government’s wider net zero ambition. I am really looking forward to my visit to HyNet North West later in the summer. I would be happy to meet the hon. Member for Denton and Reddish (Andrew Gwynne) to learn more about the geo-engine technology, when my diary allows.
Finally, since 2015, Electricity North West has spent £33 million on innovation projects which have already delivered £46 million of benefit to consumers across the north-west. I am sure hon. Members agree that these kinds of bold and innovative investments, such as those happening in the north-west, will be vital to positioning the UK as global leader in the future energy industry. This Government are absolutely committed to working closely with communities and industry to enable that transition to green energy.
The hon. Member for Westmorland and Lonsdale (Tim Farron) will be pleased to read the heat and buildings strategy when it is published soon, as it will answer some of his questions. I am sorry, Mr McCabe, but I am still quite excited that I brought carbon budget 6 into law yesterday and signed the legislation this afternoon, which means that we are genuinely world-leading in the challenge that we have set ourselves. When we publish the first net zero strategy of any country in the world in the autumn, we will be genuinely demonstrating our world-leading effort to get to net zero by 2050. That will be achieved through creating green jobs, targeting investment and supporting the innovative technologies that we are seeing across the north-west and across the UK, which will help us to achieve a cleaner and greener future for us all.
Draft Contracts for Difference (Miscellaneous Amendments) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Chair
I remind Members that in line with what we are doing in the main Chamber, we have narrowed the distance between Members in this Room to 1 metre. Please therefore sit in the spaces that have the rather nice blue tickets beside them.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Contracts for Difference (Miscellaneous Amendments) Regulations 2021.
The regulations were laid before the House on 12 May 2021.
The draft instrument makes a number of amendments to three separate contracts for difference regulations: the Contracts for Difference (Definition of Eligible Generator) Regulations; the Electricity Market Reform (General) Regulations and the Contracts for Difference (Allocation) Regulations. The amendments will help to support the ambition for the next contracts for difference auction, planned to open in December this year, and help to make progress towards the 2050 net zero target.
The amendments include adding and removing technologies from the list of technologies eligible to compete in a CfD round and measures aimed at strengthening the supply chain plan process and extending the delivery years that can be set for successful projects. They also include some small technical amendments to the non-delivery disincentive rules, capacity cap rules and technical changes to improve the operation and clarity of the allocation regulations.
We are proposing the legislative amendments following two public consultations, during which our proposals received broad support. The CfD scheme is designed to offer long-term price stabilisation to new low-carbon generators, allowing investment to come forward at a lower cost of capital, and therefore at a lower cost to consumers. The scheme has been successful in driving substantial development and deployment of renewables at scale in Great Britain, while rapidly reducing costs to electricity consumers.
The most recent allocation round in 2019 saw contracts awarded to 5.8 GW of new renewable energy projects, with the costs of offshore wind generation falling by around 30% from the previous allocation round in 2017. We are laying the amendments today to give certainty to businesses on what basis projects will be eligible to take part in the next CfD scheme in advance of the round opening in December.
CfD applicants with a capacity for 300 MW or more are currently required to present a supply chain statement to the Electricity Market Reform Delivery Body as part of their application. A statement is provided if a developer can demonstrate to the Secretary of State’s satisfaction that the project will make a material contribution to the development of relevant supply chains. The aim of the policy is to encourage the effective development of open and competitive supply chains and the promotion of innovation and skills in the low-carbon electricity generating sector.
The Government believe that the current policy approach needs to be strengthened to boost competitiveness and productivity in places that stand to benefit the most, harness innovation and invest in skills while driving progress towards the UK’s net zero target.
The regulations revise the criteria that the Secretary of State must consider when assessing an application for a supply chain statement. In addition, they create a new stage in the process, requiring a CfD generator to apply for a supply chain implementation statement in order to demonstrate the extent to which they have delivered on the commitments set out in their original supply chain statement. The regulations also set out the process for providing or refusing a supply chain implementation statement. That statement will enable a CfD generator to fulfil a condition of the CfD contract. Failure to fulfil that condition may lead to the termination of the contract. That new requirement will be inserted into all CfD contracts awarded from the fourth allocation round.
Biomass conversions have played a material role in helping to meet the UK’s 2020 renewables targets by replacing coal-fired power stations with renewable energy generation. However, as electricity generation has become less carbon intensive, we have reviewed the role of biomass conversions. The regulations remove biomass conversion projects from the list of technologies eligible to apply for a CfD in future allocation rounds.
The Government have confirmed a new ambition for 1 GW of the new 40 GW offshore wind target to come from floating offshore wind on account of widespread agreement that floating offshore wind will play an important role in helping the UK to meet its longer term decarbonisation targets. That technology is currently in an earlier phase of development making it more costly than offshore wind that is attached to the seabed. It is therefore appropriate for floating offshore wind projects to be recognised as a distinct technology within the CfD scheme, one subject to its own administrative maximum strike price. The regulations therefore establish floating offshore wind projects as a category of technology eligible to take part in the CfD scheme and to compete alongside other less established technologies. In doing so, that delivers on our manifesto commitments.
The UK’s new 2050 net zero emissions and carbon budget six targets, which we put into law yesterday, mean that we will continue to require substantial amounts of new, low-carbon power sources to be built before 2050. The changes in the regulations ensure that CfD allocation rounds can best support an increase in the pace of deployment of new renewable electricity generation needed to achieve our ambitions, while continuing to consider value for money for consumers. Subject to the will of Parliament, the arrangements will come into force on the day after the regulations are made.
I therefore commend the draft regulations to the Committee.
Anne-Marie Trevelyan
I thank the hon. Member for Southampton, Test for, as ever, his valuable contribution. If I may, I will answer some of his concerns.
On the question of the hard and soft boundaries, each rounds will have specific aims about the amount of new capacity to be supported, and will always look for the value for money balance. As we go through the next round, we will be able to assess the success of that approach.
On BECCS, I hope I can reassure the hon. Gentleman when I say that the biomass strategy will be published in 2022. It will consider how we move forward in terms of biomass with carbon capture and storage, because existing CfDs for the likes of Drax run out in 2027. We will then set out on the next phase.
The hon. Gentleman said that we have failed to provide a phasing framework for floating wind. The construction risks for floating wind are much lower because the constituent parts of the turbines and blades will all be joined in the port and not out at sea. At this stage, we are comfortable with that arrangement. At the moment, we are in the first stage of getting floating wind into action, and if the technology proves very successful, and we all hope that it will, but delivery develops not as we have predicted, we can always return to the House to make further amendments to regulations, as we are today. That is the beauty of wanting to keep CfDs up to date with the technological developments. I hope that reassures the hon. Gentleman.
We are trying to ensure that we build the capacity in renewable energies to help us to achieve net zero by 2050. No doubt more regulations will be introduced in due course to help us make sure that we can best support the increase in pace of renewable deployment, as well as always remembering that value for money for consumers is a critical part of delivery.
I hope that the proposed regulations give developers the certainty about who will be able to take part in the next CfD round in December, and I commend them to the Committee.
Question put and agreed to.
Draft Carbon Tax Budget
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Chair
Before we begin, I remind Members to observe social distancing and that Mr Speaker has stated that masks should be worn in Committee when not speaking. Hansard colleagues would be most grateful if Members sent their speaking notes to hansardnotes@ parliament.uk.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Carbon Budget Order 2021.
The draft order was laid before the House on 21 April 2021. It may be only one line long, but it is a world-leading line of legislation. It sets a sixth carbon budget of 965 million tonnes of carbon dioxide equivalent, which will reduce greenhouse gas emissions by 78% by the 2033-37 budgetary period, compared with 1990 levels. That level is recommended by our statutory expert advisory body, the Climate Change Committee, and endorsed by all four Governments of the UK nations. The UK was the first country to introduce a legally binding long-term emissions reduction target, through the Climate Change Act 2008. That was updated in 2019 to set our new target of net zero emissions by 2050. Carbon budgets are set on the way to 2050 to step down our emissions every five years. So far, five budgets have been set in law, setting our decarbonisation path through the last decade and the next.
The proposed sixth carbon budget is highly ambitious, seeking to achieve well over half the emissions reductions required from now to 2050 in the next 15 years. It builds on the momentum of our new nationally determined contribution under the Paris agreement to reduce emissions by 2030 by at least 68% compared with 1990 levels—the highest reduction target set by a major economy to date.
The sixth carbon budget will, for the first time, incorporate the UK’s share of international aviation and shipping emissions—an important part of the Government’s decarbonisation efforts that will allow for those emissions to be accounted for consistently. We aim to introduce the necessary legislation formally to include those emissions as soon as possible, and within the year.
The arguments for decisive action on global climate change are overwhelming, and the consequences of inaction are stark. Unchecked, it will lead to rising temperatures and rising sea levels, extreme weather, damage to ecosystems, and reduced crop productivity. Co-ordinated global action is critical if we are to mitigate the potentially catastrophic effects on the environment and economies across the world. The UK is leading the way in responding to the climate threat. This world-leading sixth carbon budget will reinforce that strong leadership, ensuring that the UK acts consistent with the Paris agreement temperature goal to limit global warming to well below 2°C and to pursue efforts towards 1.5°C. Importantly, it will allow us credibly to call on others to increase their own efforts, including at this year’s COP26 summit.
We know that we have a significant challenge ahead of us, with additional effort needed across every sector of the economy, but look at what we have already achieved: cutting emissions by more than 40% since 1990 while growing our economy by more than three quarters. Today, low-carbon electricity gives us more than half our generation, while we boast the world’s largest offshore wind capacity. Consider the benefits that net zero will bring: protecting the planet for future generations; economic growth and jobs in new green sectors; reducing air pollution; and enhancing biodiversity.
The net zero transition has huge potential to support jobs in low-carbon industries, building on the Prime Minister’s 10-point plan, which will mobilise £12 billion of Government investment and potentially three times as much from the private sector to create and support up to 250,000 more green jobs by 2030. We recognise that we can harness such benefits only if we back our targets with ambitious plans across all sectors of the economy. Over the coming months, we will bring forward further bold proposals, including a comprehensive net zero strategy showing how we intend to meet this ambitious new carbon budget and earlier targets. That will set out the Government’s vision for transitioning to a net zero economy, cutting emissions and creating new jobs and industries across the country, going further and faster towards building a stronger, more resilient future and protecting our planet for this generation and those to come.
I conclude by emphasising the utmost importance of the sixth carbon budget in our efforts to cut emissions and strengthen our climate leadership ahead of COP26. I hope very much that hon. Members will support this statutory instrument, and I commend the order to the Committee.
Anne-Marie Trevelyan
I thank the hon. Gentleman for his thoughtful words and for the depth of his commitment to the subject. We all appreciate that this is, in every sense, whole-of-Parliament legislation. None of us underestimates the challenges of decarbonising the economy, but this legislation will ensure that we give ourselves a marker to move towards.
I will answer a number of the hon. Gentleman’s questions. The shipping and aviation timeline will be within a year. It will be as soon as we can find some parliamentary time and pull together the relevant details, but it is very much at the front end of the queue, because it is important that industry in both sectors can get on and do the work that we want it to do.
Can we be more ambitious? Well, we are incredibly busy. I have published the industrial decarbonisation strategy already, and I will be imminently publishing the hydrogen strategy. The heat and building strategy, which is clearly within the remit of the Department for Business, Energy and Industrial Strategy, is doing the final stages of its tour around Whitehall before it can be published.
I cannot directly speak to the challenges that the hon. Gentleman raises about the Department for Transport’s strategies, but I would like to give him confidence that there really is whole-of-Government thinking on net zero in a way that has never really been visible before. The Climate Action Implementation Committee, on which I sit, meets regularly and is really driving incredibly hard and fast. It is drawing together, at both official level and ministerial level, that criticality of thinking through both the key policies and the most effective policies that can have the biggest impact as quickly as possible.
I cannot give the hon. Gentleman a precise time on the Treasury’s net zero review, but I know that it, too, is coming close to completion. Its focus will be on the exposure of household sectors and regions to these changes. The Treasury is providing important oversight by understanding the risks and making sure we make the journey safely and inclusively. This must be a just transition. If it is not, we will be leaving parts of our communities behind, which is not something any of us wants to do; quite the opposite. This affords us the opportunity to think in a forward-leaning, world-leading way to set technologies in place and drive forward private and public sector investment. That gives us the opportunity to give the world leadership and technology to help it decarbonise.
I hope I have provided the necessary assurances to allow the statutory instrument to be approved. It will keep the UK on a credible path to meet our 2050 net zero target and try to keep the temperature rise to 1.5°. It will build on the current momentum, and we will continue to drive new policies that enable us to capitalise on the opportunities that net zero brings and credibly urge other countries to do the same for the benefit of our planet.
I hope I have answered all the questions, and I commend the order to the Committee.
Question put and agreed to.
Draft Ecodesign for Energy-Related Products and Energy Information Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Chair
Before we begin, I remind Members of the social distancing regulations. Spaces available to Members are clearly marked et cetera. I am sure you know all about this.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Ecodesign for Energy-Related Products and Energy Information Regulations 2021.
The regulations were laid before the House on 20 April. Ecodesign policies regulate products that consume energy when in use, such as household white goods, by setting minimum energy performance standards to increase their energy efficiency. Ecodesign can also require resource-efficiency measures that seek to make products more repairable and recyclable. Energy-labelling policies are intended to provide clear and consistent information about a product’s energy usage to consumers at the point of purchase, encouraging the uptake of more energy-efficient products. That results in lower energy usage and savings for consumers and businesses on their energy bills. As a whole, we estimate that ecodesign and energy-labelling policies in Great Britain will save £75 on consumers’ energy bills and 8 megatonnes of carbon dioxide in 2021, equivalent to the average yearly carbon emissions from the electricity use of 12 million homes.
The statutory instrument introduces new ecodesign requirements for welding equipment, electric motors, household washing machines, washer-driers and dishwashers, domestic and commercial refrigeration and electronic displays placed on the market in Great Britain. These requirements will raise the minimum energy efficiency of products sold in Britain, reducing energy usage and saving consumers and businesses money on their energy bills. They introduce new obligations on manufacturers to make the products easier to recycle and repair. Consumers will be entitled to access spare parts to repair their appliances, with a wider range available to professional repairers, enabling them to support consumers to keep appliances in use for longer and therefore reducing electrical waste.
The statutory instrument will also introduce an energy label for commercial refrigeration, which will provide information to businesses when purchasing an appliance, helping them to understand and compare the energy consumption of different products. That will encourage businesses to opt for more energy-efficient fridges, helping to cut down on the energy used and associated carbon emissions of commercial refrigeration, for example in supermarkets. By setting ambitious boundaries for the A to G classes on the energy label, innovation will be spurred on as manufacturers compete to achieve the highest energy-efficiency ratings. Through introducing the ecodesign and energy-labelling requirements, we will ensure that we maintain high product standards in Great Britain.
The requirements introduced by the statutory instrument will contribute to savings of approximately 1.7 megatonnes of carbon dioxide by 2050. They will help to reduce the quantity of electrical waste reaching landfill each year and will ensure a common set of product standards with Northern Ireland, facilitating trade across the Irish sea. A public consultation was conducted between September and November last year, with feedback showing strong support for implementing these requirements among manufacturing bases and, of course, environmental campaign groups.
In conclusion, the measures introduced by the SI are aligned with the Government’s carbon budget and net-zero targets, and they will provide greener choices for consumers and businesses to save money on energy bills, as well as encouraging long-term product innovation. I commend the statutory instrument to the Committee.
Anne-Marie Trevelyan
To cover the specific point about the review date, I am afraid that I do not have that information to hand so I will make sure that we share that with the hon. Gentleman so that he has clarity on how that matches up with whatever the EU timetable is. As he says, the regulations are obviously Great Britain regulations and we will continue to work together closely, and as there are changes they will always be made in a way that upholds the Northern Ireland protocol. We are very clear on that.
Perhaps importantly for the hon. Gentleman’s wider point, later in the year we will publish an energy-related products policy framework that will set out our ambitions as part of that narrative. We have set out the energy White Paper to demonstrate those product methodologies for maximising carbon and energy reduction across all energy-related products. As that rolls out, it will give us the opportunity to build on the forward look for all those products and quite possibly others as we think holistically through every part of our economy and where we want to help consumers and businesses. This is a particularly important piece in helping businesses to think much more proactively about how they can help their businesses get closer to net zero within their own commitments. I hope that this will help to drive that forward.
In March, we reinstated the simple A to G scale to help provide more accurate information. Those new labels are an improvement on the old system, and as the hon. Gentleman says the challenge is to train everybody to think about looking at that before they make a purchase so that they are not disappointed when they do not get the right one. I had that challenge just the other day, Dame Angela, trying to buy a new fridge. It was surprisingly difficult to compare and contrast and find the best one for the relevant price. All this framework is about making things as easy and directly accessible for the consumer as possible so that we really can help people to do their part in helping us to get to net zero.
I hope that barring the question on dates, on which I will return to the hon. Gentleman, I have shown these regulations will help achieve setting those higher product standards and increasing resource efficiency. That is better for the environment and, of course, much better for consumers who are helping us with all of this to meet that net-zero challenge. We will be pushing for household appliances to be more energy and resource-efficient. Consumers will pay less on their energy bills and, importantly, can expect to have access to spare parts for their appliances if something goes wrong. That is a really important shift to ensure that when something goes wrong it is not thrown on the scrap heap but can easily be fixed and much more life can be got out of the whole product.
I underline the fact that this statutory instrument brings tangible benefits for consumers and businesses and helps us to secure those important carbon savings to help us towards our carbon-budget net-zero targets. I commend it to the Committee.
Question put and agreed to.
Downstream Oil Resilience Bill: Draft Publication
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I will this morning lay before Parliament a draft Downstream Oil Resilience Bill which introduces measures that will enable Government to support industry in ensuring the resilience of the fuel supply sector, prevent supply disruptions and maintain the security of fuel supply to consumers.
The sector is currently efficient, flexible and effective in ensuring the continuity of fuel supply and we do not currently expect any disruption to this. We need to ensure that we protect the continuity of fuel supply and that we are prepared and resilient to disruptions when they do occur. The measures set out in the draft Bill will help ensure that critical services and consumers will continue to receive the fuel on which they rely and will reduce the risk of disruption to economic activities from the loss of fuel supplies.
This draft Bill follows a public consultation in 2017, where Government explored options to address sector resilience and concluded that due to high levels of global competition, the sector has gone through a process of restructuring to remain internationally competitive which has reduced its spare capacity. This means that there is an increased risk of market disruption in the downstream oil sector, given the lower capacity to react to sudden supply and demand shocks.
The fuel supply system faces a number of inherent risks, including accidents, severe weather, malicious threats, industrial action, and financial failure. The Government work with fuel suppliers to mitigate such risks and, while individual companies have a good record of managing their own risks, they do not see a commercial return in managing low probability, higher impact risks.
The publication also marks the first step towards the commitment made in the Energy White Paper ‘Powering our Net Zero Future’ to take powers to ensure we maintain a secure and resilient supply of fossil fuels during the transition to net zero emissions. As set out in the Energy White paper and in line with the recommendation from the independent Climate Change Committee, we will decarbonise our energy system, boosting the production of clean energy. The sixth carbon budget will ensure Britain remains on track to end its contribution to climate change. Ensuring a reliable and secure fuel supply to essential services in coming years will be critical and therefore primary legislation is required to build adequate resilience across the whole supply system.
The Integrated Review 2021 sets out our goals to build a more robust position on national security and resilience in order to reduce the impact of shocks and long-term challenges on the life and livelihoods of UK citizens. The Bill is aligned with the Integrated Review’s objectives and outlines solutions to address the current and future risks to the downstream oil sector because we need to ensure that there is a supply of secure, affordable and clean energy which is essential to the UK’s national interests.
The Bill will help the Government identify risks of disruption to the UK fuel supply market in advance and ensure that Government and industry together can implement effective and proportionate contingency plans as early as possible. This includes mandating the provision of information to Government to allow better risk assessment and the design of appropriate mitigating measures, and direction powers that will allow the Government to intervene where supply resilience is compromised, or there is a significant risk that it will be, and the industry has not taken any action. The Bill also introduces new powers that allow the Government to ensure that anyone taking control of critical infrastructure in this sector has appropriate financial and operational measures in place, and a new spending power to allow Government to provide financial assistance to support sector resilience and ensure continuity of supply, where such support is deemed necessary and value for money.
The Bill will apply to all operators and infrastructure in the downstream oil sector with a supply handling capacity above the thresholds which are outlined in the Bill. My Department will continue to work with industry to refine the proposed measures, so that the disruption to market functioning is minimal.
The Bill will also ensure that there is a reliable energy supply and increased resilience which means that the downstream oil sector is able to protect against, react to and recover from any disruption.
The draft Bill will be published with accompanying explanatory notes and an assessment of the potential impacts. The draft Bill will undergo pre-legislative scrutiny by the Business, Energy and Industrial Strategy Committee to ensure that it is robust and workable.
[HCWS64]
Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2021.
The regulations, which I will respectfully refer to as the fees regulations, were laid in draft before the House on 21 April.
As the environmental regulator of the offshore oil and gas industry, which I shall refer to as the offshore industry, the Department for Business, Energy and Industrial Strategy’s Offshore Petroleum Regulator for Environment and Decommissioning—OPRED—recoups the cost of its regulatory functions from the industry rather than the taxpayer footing the bill. OPRED’s role is to minimise the impact of the offshore industry on the environment by, for example, controlling air emissions plus discharges to sea and minimising disturbance over the lifecycle of operations from seismic surveys through to post-decommissioning monitoring.
The regulatory activities for which OPRED can recover costs are covered in two ways—within a suite of regulations, which are covered by the fees regulations and by four fees schemes, which are not covered by the regulations because they do not require legislative change and will be amended administratively.
OPRED’s annual fees income is, on average, £6.2 million, which is recovered from around 130 companies that are billed quarterly. It recovers its costs via fees based on hourly rates. The fees regulations will increase the hourly rates used to calculate fees payable by the offshore industry. The fees relate to the provision of regulatory functions in relation to the environmental management of offshore operations. Currently, the fees that OPRED charges for providing its regulatory services are based on hourly rates of £190 for environmental specialists and £101 for non-specialists.
Environmental specialists are qualified technical staff who carry out the legislative functions of the Secretary of State and the non-specialists are administrative staff who support them. The current hourly rates have been in place since April 2020. OPRED has reviewed the cost base and concluded that the existing hourly rates need to be increased to recover fully OPRED’s costs for providing specific regulatory services.
The fees regulations will therefore amend the charging provisions by increasing the hourly rates for environmental specialists and non-specialists to £197 and £108 respectively. As the increases relate to cost recovery, they do not represent monetary changes linked to inflation. OPRED’s fees are determined by adding together the recorded number of hours worked by environmental specialists and non-specialists on cost-recoverable activities multiplied by the hourly rates. The new hourly rates were approved by Her Majesty’s Treasury in November last year.
Guidance on OPRED’s fee-charging regime is published and clearly explains the scope of the cost-recoverable functions undertaken by OPRED and how the costs are to be calculated and recovered. The revised fees to be paid will increase by a small amount, sufficient only to allow OPRED to recover its eligible costs. In that regard, the additional total cost resulting from the increase in hourly rates will be around £300,000 per year. OPRED’s guidance on its fees-charging regime will be revised to reflect the new hourly rates.
The fees increase will enable OPRED to recover the costs of providing regulatory services from those who benefit from them instead of those costs being passed on to the taxpayer. I hope that hon. Members will support the measure, which I commend to the Committee.
The Chair
Does the Minister wish to reply, or does she want to stand by her opening statement?
Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(3 years, 6 months ago)
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Andrew Griffith (Arundel and South Downs) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
In December, the Government aim to deliver their biggest auction for renewables yet through the contracts for difference scheme. Our £240 million net zero hydrogen fund and forthcoming hydrogen business model will enable us to deliver our 5 GW low-carbon hydrogen production ambition to use across the economy. We have also announced the clean heat grant and the green heat network fund, and will launch the green gas support scheme later this year.
Sir Desmond Swayne
How good are we actually going to be at the production of green hydrogen?
Anne-Marie Trevelyan
There is a short answer, or I could give my right hon. Friend a longer one. Brilliant. [Laughter.]
Andrew Griffith
Does my hon. Friend agree that one of the many natural advantages we are blessed with is the tide around the shores of the United Kingdom, and will she bring forward at the earliest opportunity the Government’s proposals to unleash tidal power?
Anne-Marie Trevelyan
Let me first pay tribute to my hon. Friend’s work as a net zero business champion for COP26; he is doing an extraordinary amount of work, and has been tireless in his efforts to support the country’s business community to showcase its extraordinary leadership in tackling climate change and heading to net zero.
Tidal generation does indeed have a potentially important role in the long-term decarbonisation of the UK. Projects will need to demonstrate value for money to compete with other renewables over the long term. The Secretary of State and I are very keen to hear from those who want to progress such projects.
Dr Alan Whitehead (Southampton, Test) (Lab)
In terms of increasing the production of renewable energy, does the Minister feel rather embarrassed about the deep neglect that there has been of the development of deep geothermal energy in the UK over recent years? Is she aware of a report published on 19 May suggesting a new future for deep geothermal energy, and particularly a mechanism for supporting deep geothermal through a successor to the renewable heat incentive? Does she intend to respond positively to that report and its proposals, and will she acknowledge that deep geothermal is indeed one of the cleanest and most efficient renewable energy sources that we can have in the UK?
Anne-Marie Trevelyan
I have not had a chance to look at the report, but I absolutely commit to doing so. The Department for Business, Energy and Industrial Strategy has been doing a lot of work with local communities where there are geothermal projects, and we will continue to look at them and see how we can help to support them. It will be, as ever, one of those ongoing areas of policy; in the long term, we want to use all the renewable resources available to us as a country to ensure that we maximise their use, while, as I said earlier, ensuring that they also provide value for money for the taxpayer.
Alexander Stafford (Rother Valley) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Renewable electricity will be key for the decarbonisation required for carbon budget 6. Therefore, we have set an ambitious target to deliver 40 GW of offshore wind by 2030 and announced our aim to up to double the capacity of this year’s contracts for difference auction, as well as extending eligibility to a wider range of technologies.
Alexander Stafford
The Minister will be aware of my long-standing interest in environmental, social and governance, as I chair the all-party parliamentary group on the matter. How will her Department ensure that the Government’s sixth carbon budget is delivered with ESG at its heart, and what are the plans for engagement with Government Departments and corporations to ensure that all targets set out in the carbon budget are viewed through an ESG lens?
Anne-Marie Trevelyan
My hon. Friend’s passion for, and commitment to, this subject since he arrived in the House have been unstinting. I have been more than impressed by his determination to ensure that we do not, at any turn, miss the opportunity to raise it; he has been particularly determined to ensure that we look at the role of critical materials in renewables. They will continue to be an important part of how we are able to develop our renewables capacity. I hope that he is reassured that we continue to work across Departments to maximise those outcomes.
Nick Smith (Blaenau Gwent) (Lab)
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government are striving to decarbonise transport by phasing out the sale of new petrol and diesel cars and vans by 2030, and from 2035 all new cars and vans must be zero emissions at the tailpipe. The plug-in van grant will support businesses to reach net zero by reducing the purchase price of new zero emission vans up to £3,000 for small vans and up to £6,000 for large vans. The plug-in truck grant also provides up to £25,000 of funding for the largest HGVs.
Mr Sheerman [V]
I thank the Minister, and I have a lot of time for her, but she must realise that these heavy goods vehicles—these trucks—are poisoning our atmosphere and poisoning children, pregnant women and elderly people. All of us are being poisoned by these emissions. Can we not move much more quickly to encourage things? There are some really good British manufacturers such as Electra Commercial Vehicles in the north of England, which is doing wonderful work, guided by Sid Sadique, one of our new entrepreneurs. There is a capacity to switch to electric vehicles to deliver all the stuff that we get in this country, and we could do it much faster. Can I beg her to move faster for the environment, for children, for the air that we breathe, and for our commercial industries?
Anne-Marie Trevelyan
I thank the hon. Gentleman for his kind words. We are working to ensure that the transport decarbonisation plan is as ambitious as possible, and we plan to publish in the very near future. It will set out how we incentivise operators and industry to transition to zero emission HGVs and manage emissions from the existing fleet. We are also investing £20 million this year in planning for zero emission road freight trials, which will support UK industry to develop cost-effective, zero emission HGVs and their refuelling infrastructure in the UK.
Aaron Bell (Newcastle-under-Lyme) (Con)
Dehenna Davison (Bishop Auckland) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government have laid legislation for the UK’s sixth carbon budget, proposing a target that would reduce greenhouse gas emissions by 78% by 2035 compared with 1990 levels, marking another ambitious and decisive step towards net zero by 2050. Our 10-point plan will bring together £12 billion of Government investment, unlocking three times as much private sector investment by 2030 and supporting up to 250,000 green jobs.
Aaron Bell [V]
I thank the Energy Minister for her answer. I know she will have been as disappointed as I was that we were not able to visit the Ibstock Brick factory in Chesterton yesterday, and I look forward to welcoming her up to Newcastle-under-Lyme soon. In the meantime, will she say what the Government are doing to support our vital manufacturers, such as Ibstock Brick, to decarbonise and at the same time support jobs?
Anne-Marie Trevelyan
Yes, I was very sad not to get there. Sadly a cow on the line caused a level of disruption to LNER services yesterday, which delayed my always relatively long journey from the north further south. However, I hope to be able to visit before too long. In March, the Government published the UK’s first ever net zero strategy for industry. It is the first strategy published by a major economy that sets out how industry can decarbonise while remaining competitive and without pushing emissions abroad. Our £350 million industrial energy transformation fund will support businesses with high energy use to cut their bills and reduce carbon emissions.
Laura Trott [V]
Consumer awareness of the environmental impact of the actions they take, the things they buy and the food they eat will be key to helping us achieve net zero. Can the Minister set out what steps the Department is taking to help consumers make more informed environmental choices?
Anne-Marie Trevelyan
Last November, we unveiled the brand Together for Our Planet to raise awareness of climate issues and support the public in making those important green choices. In parallel, we have funded several digital tools that can help people reduce their carbon footprint, including the Simple Energy Advice service on how to reduce energy use in the home and the Go Ultra Low website, which provides information on electric cars and vans. Our upcoming net zero strategy will set out our approach to supporting the general public to make green choices, which will be a critically important part of our journey.
Dehenna Davison
A key part of achieving net zero will be exploring alternative energy sources. One of those that was mentioned by the hon. Member for Southampton, Test (Dr Whitehead) was deep geothermal. I am working with stakeholders across Bishop Auckland to explore making Bishop Auckland a centre of excellence for geothermal energy. Will my right hon. Friend visit me in Bishop Auckland to discuss that in much more detail?
Anne-Marie Trevelyan
I hope to be able to reach Bishop Auckland with speed, as it is just round the corner, and I am always happy to meet my hon. Friend to discuss new energy projects. Compared with many countries, high geothermal temperatures are found at a much deeper depth in the UK, but we recognise, as I said earlier, that geothermal could indeed form part of our solution to decarbonise our heating. I welcome the opportunity to discuss energy opportunities in this area and look forward to meeting her and her constituents.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
This Government are committed to supporting the transition to net zero for all the United Kingdom. Our landmark North sea transition deal will support Scotland’s offshore oil and gas workers, businesses and the supply chain to exploit technologies such as low-carbon hydrogen production and carbon capture usage and storage. In March, we announced £9 million to help Scotland’s world-famous whisky distilleries get into the spirit of going green, cutting emissions and supporting green jobs.
Gavin Newlands
I am sure that if we could capture energy and store it, Scotland’s entire energy needs would have been met on Saturday by clean blue energy from St Johnstone fans celebrating their historic cup double. Now that I have shoehorned that in, here is my question. Despite meeting after meeting in which Minister after Minister, including the current Secretary of State, have said that HELMS—Home Energy and Lifestyle Management Systems—customers under the green deal have been, at best, mis-sold products and that it would be fixed, hundreds of my constituents and others right across Scotland and the UK remain swindled by Robert Skillen and his company. I am happy to have another meeting, but I would be even happier with swift and appropriate action.
Anne-Marie Trevelyan
I am happy to meet the hon. Gentleman and his constituents and to work with officials to make progress.
Tonia Antoniazzi (Gower) (Lab)
Peter Aldous (Waveney) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
My hon. Friend makes an excellent point about seizing the broader benefits of the green economy, which are integral to our industrial decarbonisation strategy. We will continue to work closely with all those helping us to meet our net zero commitments, from 40 gigawatts of offshore wind power by 2030, to the Government’s commitments to deliver at least one more gigawatt nuclear power station, and substantial commitments to the next generation of nuclear. For all that, infrastructure investment and growing the skills base will be vital across the country, including in Lowestoft. We have set up the green jobs taskforce, which will report to the Government this summer and inform the next stages of our green skills plans going forward.
Stephen Flynn (Aberdeen South) (SNP)
Stats released by the Office for National Statistics this morning show that trade with the European Union has fallen by 23% in the first quarter. In the meantime, Scottish farmers are facing up to the reality of a trade deal with the Australians that threatens their very future. The Scottish Parliament—it has no say; the Scottish Government—ignored. What exactly will the UK Business Secretary do about that, and how much damage are his Government willing to cause?
Mr Laurence Robertson (Tewkesbury) (Con)
Anne-Marie Trevelyan
Just yesterday, the energy regulator, Ofgem, announced that it has approved a £300 million investment to help triple the number of ultrarapid electric car charging points across the country. That will give a green light for energy network companies to invest in more than 200 low-carbon projects across the country over the next two years, including the installation of 1,800 new ultrarapid car charge points for motorway service stations, and a further 1,750 charge points in towns and cities.
Layla Moran (Oxford West and Abingdon) (LD)
Graham Stringer (Blackley and Broughton) (Lab)
Anne-Marie Trevelyan
We are continuing to work with the regulators and to look at how smart meters are rolling out. We continue to encourage people to do so, if they have not done so yet, but as the technology changes, we will obviously make sure that regulations afford those adaptations.
Mark Eastwood (Dewsbury) (Con) [V]
Draft Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Chair
Before we begin, I remind Members to observe social distancing and to sit only in the marked seats. I think everyone has adhered to that. I also remind Members that Mr Speaker has deemed that masks should be worn in Committee—apart from by me; I might have to speak at any second, so I am exempt. Our Hansard colleagues would appreciate it if Members could pass on their speeches to hansardnotes@parliament.uk.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021.
The draft regulations were laid before the House on 18 March 2021. The combined heat and power quality assurance scheme has been in place since 2001 to certify highly energy-efficient combined heat and power plants across the UK. Combined heat and power plants can be fuelled by natural gas or renewable fuels and are up to 30% more efficient than conventional methods of generation as they make use of both the heat and electricity that they produce.
To incentivise the deployment of combined heat and power plants, certification through the quality assurance scheme enables access to a variety of financial benefits. More than 1,400 sites across the UK certify their combined heat and power plants through this voluntary assurance scheme, giving them access to more than £500 million in benefits each year. Combined heat and power plants are a vital technology for some of our most valued but energy-intensive industries. They will play a key role in our move towards net zero emissions due to the variety of benefits that they bring to an increasingly renewables-based electricity network.
As the covid pandemic hit, restrictions on businesses meant that they were unable to operate their combined heat and power plants effectively and risked not being able to recertify as normal through the combined heat and power quality assurance scheme as a result. Two key issues affected their operation. First, for some industrial processes, demand for power remained but heat customers had shut down, meaning useful heat was being wasted. Secondly, there were reports of significantly reduced quality of biomass supply, which negatively impacted the volume required to meet demand. These issues impacted the operational data that is used in the certification process, presenting a risk for operators that they may not be able to certify for their usual level of benefits in 2021.
The draft regulations therefore amend issue 8 of the scheme’s standard to allow for a temporary revision to the certification process to allow operators to use their unimpacted 2019 operational data for their 2021 certification, instead of impacted 2020 operational data. This will allow affected operators to access appropriate levels of financial benefits in 2021 based on their energy use, avoiding further covid-19-related financial impacts to key businesses and industries in the UK. The regulatory amendments will be in place for 12 months following the draft instrument’s coming into force.
The Government do not intend to extend the amendment to the quality assurance scheme’s processes for further years as it is expected that businesses have now had the opportunity to adapt their processes. We hope that there will be no additional extended periods of restrictions related to covid-19 for the rest of 2021 and beyond. The change to the combined heat and power quality assurance certification process will avoid increased operational costs being passed on to consumers and will support vulnerable businesses and industries in the UK to avoid further financial impacts and potential job losses caused by the covid-19 pandemic.
This is a necessary change due to the important role that combined heat and power technology will have on our route to decarbonising our energy use. Stakeholders affected by covid-19 restrictions should be supported. This is a proportionate, transparent and widely supported administrative amendment that will avoid further financial impacts to crucial, vulnerable businesses and industries in the UK. I therefore commend the draft regulation to the Committee.
Anne-Marie Trevelyan
I thank the hon. Member for being here. We were hoping he would be, because, as ever, he brings his insightful contribution to the subject—I take “nudge”, but would also say “challenging”.
The hon. Gentleman would like me to be more precise on when the next energy Bill will appear. Sadly, I cannot be precise at this point, but I can reassure him that there is much work and activity ongoing on exactly that, because, as he rightly points out, there are many areas of change going on as we move towards a net zero energy system, which will require a great deal of work.
I am happy to take away the question of whether we want to look at secondary legislation for CHP. I commit to doing that with the Department, so he may, after all, get a response, and we may also generate more communication and correspondence as a result. I will take that away to investigate what it might look like.
The statutory instrument will support the impacted combined heat and power operators following the 2020 covid restrictions. Support in this way is crucial, as combined heat and power technology holds significant opportunity to help decarbonise energy use. The regulations will help maintain valuable jobs in green industries. Those jobs would be lost without support and efficient technologies would be abandoned in favour of carbon-intensive alternatives, which is absolutely the opposite of what we want to do. I commend the draft regulations to the House.
The Chair
Time for the last nail-biting moment in the Committee this afternoon.
Question put and agreed to.