Draft Electricity Trading (Development of Technical Procedures) (Day-Ahead Market Timeframe) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Chair
I remind Members to observe social distancing and to sit only in places that are clearly marked. I also remind Members that Mr Speaker has stated that masks should be worn in Committee. Hansard would be most grateful if Members send 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 Electricity Trading (Development of Technical Procedures) (Day-Ahead Market Timeframe) Regulations 2021.
The draft regulations were laid before the House on 22 March this year. This statutory instrument was brought forward using powers under the European Union (Future Relationship) Act 2020.
The trade and co-operation agreement that we secured with the EU requires that new and efficient cross-border electricity trading arrangements be developed between the connected UK and EU markets. The new arrangements were a key objective of the UK during the negotiations for the agreement. Efficient cross-border trade can lower bills for UK consumers and support our decarbonisation and security-of-supply objectives.
The agreement sets out the principles for the design of the new trading arrangements, but the detailed technical procedures still need to be developed by the transmission system operators. Those, collectively, are the companies that own and operate electricity interconnectors that connect the UK to neighbouring markets, and the electricity system operator that runs our onshore electricity network. The development of the new arrangements will need to take place in co-operation with the relevant electricity market operators, which are organisations that operate marketplaces for the buying and selling of electricity.
The agreement details the timeframes for transmission system operators to develop technical procedures for the new arrangements, noting that new arrangements should be made operational by April 2022. It is therefore important that the development of the new arrangements takes place quickly and efficiently. To support that development, this draft statutory instrument imposes duties on electricity transmission system operators in Great Britain, with the co-operation of relevant electricity market operators, to develop the new cross-border electricity trading arrangements for the day-ahead market period.
The instrument will also grant the Office of Gas and Electricity Markets the ability to regulate transmission system operators and relevant electricity market operators in their development of the new trading arrangements, to ensure that they meet their obligations under the regulations. The instrument will further enable Ofgem to make decisions on the allocation and recovery of costs incurred in the development of the new arrangements.
The new arrangements will also be used for trade between Great Britain and the single electricity market on the island of Ireland. Energy is largely a devolved matter in Northern Ireland, but my Department has developed the draft instrument in close collaboration with officials in the Northern Ireland Department for the Economy and the Northern Ireland Authority for Utility Regulation. Input from our colleagues in Northern Ireland ensures that the instrument will support a UK-wide approach to the development of the new arrangements.
It is estimated that the new, efficient trading arrangements could bring significant benefit to consumers. Any delay will of course come at a cost to consumers. Therefore, it is important that the draft regulations are approved to ensure that the transmission system operators develop the new arrangements within the timeframe set by the agreement, so that the benefits can be realised as early as possible. The instrument is one part of a programme of works to deliver the new arrangements.
On 3 February 2021, the Secretary of State provided guidance to those organisations to encourage early action to support implementation of the agreement, while the draft regulations were still being prepared. This instrument follows that guidance to provide a regulatory underpinning for the initial development of the new cross-border electricity trading arrangements.
Since this statutory instrument was laid in both Houses, the numbering of the provisions in the trade and co-operation agreement has been updated following the final legal revision process. A correction slip has been laid in respect of the draft instrument to update the cross-references of the agreement.
If required, the Government will prepare further legislation for the operation of the new trading arrangements, once they are developed. I assure the Committee that such legislation will be laid before Parliament to ensure that it, too, may be scrutinised appropriately. Therefore, I commend the draft regulations to the Committee.
Anne-Marie Trevelyan
I thank the hon. Gentleman, as ever, for his valuable and insightful contribution. To confirm, Norway is not included in the regulations—separate discussions are ongoing with them at the moment, which, unsurprisingly, look very similar. I am happy to keep him updated in due course on how those are progressing.
On the question of the exemptions regime, the best answer that I can give is probably, “May I come back to the hon. Gentleman on that ongoing area?” I am happy to write to him with more details in the near future. He challenged me last time on a particularly tricky question, which I think we managed to fulfil, and although this is less tricky, I would not want to give him insufficient information today—I would rather write and provide him with the full picture so that he is reassured in due course.
The regulations will oblige our transmission systems operators to develop now and at pace new efficient cross-border electricity trading arrangements. As I said, those are really important to supporting our decarbonisation, our security-of-supply objectives and, crucially, to providing economic benefits to all our customers. The new regime should be operational by April 2020. That is quite a challenging deadline, but adherence to it will enable us to realise as early as possible those benefits to consumers of the arrangements. We are very minded that we have a clear set of deadlines to meet to help everyone to get to that point. On that basis, I recommend the draft regulations to the Committee.
Question put and agreed to.
Norfolk Boreas Offshore Wind Farm Development Consent Application: Statutory Decision Deadline
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
This statement concerns an application for development consent made under the Planning Act 2008 by Norfolk Boreas Limited for the installation, operation and maintenance of the proposed Norfolk Boreas Offshore Wind Farm, its related offshore infrastructure off the coast of Norfolk and its related onshore electrical connections within that county.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a Statement to Parliament to announce it. The deadline for the decision on the Norfolk Boreas Offshore Wind Farm application was 12 April 2021.
The Secretary of State has decided to set a new deadline of no later than 10 December 2021 for deciding this application to allow an opportunity for further information in respect of cumulative impacts of the onshore substation and of offshore environmental effects to be provided and considered.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS5]
East Anglia ONE North and East Anglia TWO Offshore Wind Farm Development Consent Applications
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
This statement concerns applications for development consent made under the Planning Act 2008 by East Anglia ONE North Limited and East Anglia TWO Limited for the installation, operation and maintenance of the proposed East Anglia ONE North Offshore Wind Farm and the proposed East Anglia TWO Offshore Wind Farm respectively, their related offshore infrastructure off the coast of Suffolk and their related onshore electrical connections within this county.
Under section 98(1) of the Planning Act 2008, the examining authority must complete its examination of an application by the end of the period of six months beginning with the day after the start day of the examination unless the Secretary of State sets a new deadline under section 98(4) of that Act. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
A request has been made by the Planning Inspectorate to extend the examination periods for the proposed developments. The reasons given for this request were that some interested parties, local authorities and statutory bodies have had their resources and capability reduced due to covid-19 restrictions, and that extensions would enable all interested parties sufficient time to engage properly and effectively in the examination processes.
Taking these reasons into account and after careful consideration, the Secretary of State has decided to reset the statutory timescale for the examinations. The examination periods for both applications are now extended by three months—from 6 April 2021—so that the examinations must be completed by no later than 6 July 2021.
However, mindful of the need to avoid unnecessary delays to the development consent processes, the Secretary of State requests the examining authorities make best efforts to complete the examination processes as soon as is reasonably practicable within the extended periods.
The decision to set the new deadlines for the examinations of these applications is without prejudice to the decisions on whether to grant or refuse development consents.
[HCWS4]
District Heat Networks
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
It is a pleasure to serve under your chairmanship, Ms Ghani. Let me begin by congratulating my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) on securing this really important debate. I also thank the hon. Members for Greenwich and Woolwich (Matthew Pennycook), for Lewisham East (Janet Daby) and for Kilmarnock and Loudoun (Alan Brown) for raising issues of concern in their own constituencies. As ever, I thank my friend the hon. Member for Southampton, Test (Dr Whitehead), who turns out to be an expert and an advocate on the subject of domestic heat networks—who knew? He was able to take us from Denmark to Southampton in demonstrating why they can and should be an important part of the mix. I thank to all colleagues for their contributions to the debate.
I was very sorry to hear of the troubles experienced by the constituents of my hon. Friend the Member for Carshalton and Wallington in the New Mill Quarter of his constituency. They have had really awful challenges with their district heat network. I sympathise with the difficulties that has clearly caused them all and it is profoundly disappointing to hear that their Lib Dem-run council has failed them all so very badly. I absolutely agree with the need for protections for heat network consumers. The experience of my hon. Friend’s constituents highlights the importance of the Government’s commitment to regulate the heat networks market within this Parliament.
Heat networks play and will continue to play an important part in assisting us to meet our net zero challenge. They will unlock larger-scale renewable and recovered heat sources, both energy from waste heat and heat from rivers and mines. It was interesting to hear about the geothermal heat source being used in Southampton. When deployed effectively, they can bring greater heat efficiency than individual gas boilers, lower costs for consumers and support local regeneration. However, we recognise that we need to regulate the market to ensure that those outcomes are real, for which protections for heat network consumers are needed.
As colleagues have highlighted, in 2017 the Government commissioned a survey to quantify consumer experiences with heat networks in England and Wales. The results showed that consumers connected to a heat network have generally received good service and were as satisfied as non-heat network customers, which makes the terrible experiences of those in New Mill Quarter all the more upsetting. The results of the survey also showed that, on average, a heat network consumer was likely to pay £100 less per year for heating and hot water compared with consumers on other utilities. Again, this makes it all the more shocking that my hon. Friend’s constituents have got such a raw deal from their Lib Dem council’s activities.
The Government also noted, however, a report by the Competition and Markets Authority in 2018, which showed that a significant minority of heat network consumers experienced high prices, frequent outages and a lack of transparency. Therefore, we committed to the Competition and Markets Authority’s recommendation of regulating the market and, last year, consulted on establishing a heat networks market framework.
The framework will include introducing consumer protection rules to combat cases of detriment, such as the outages being experienced by the residents of New Mill Quarter. We want heat network consumers to have comparable levels of service and protection to those using electricity and gas on individual contracts for their homes. As part of the market framework, we will introduce quality of service standards requiring notification periods for planned outages and compensation for all outages.
Consumers will have access to an independent redress scheme and a consumer advocacy body, which will provide a consumer helpline and priority services for consumers in vulnerable circumstances. The regulator will have powers to enforce price transparency, introduce guidance on fair pricing, set requirements on cost allocation and conduct investigations into heat networks where prices are disproportionately high. Finally, consumers will be provided with a minimum level of easily accessible information and guidance on heat networks at the pre-contractual stages of property transactions and during residency. There will be requirements on the provision of heat supply agreements and billing information.
We are preparing to introduce legislation to regulate the market, but, as colleagues have mentioned, there are some measures already in place to improve standards for heat network consumers. The Heat Trust provides an independent market-led voluntary standards scheme and consumers on heat networks registered to the Heat Trust benefit from terms of service similar to those in the gas and electricity markets. They can also access the energy ombudsman if they have a complaint against their heat supplier. In 2019, BEIS wrote an open letter to all heat network operators encouraging them to register their schemes with the Heat Trust and we continue to encourage schemes to sign up to raise standards now and to prepare for regulation.
Alan Brown
The work on the regulation framework the Minister is talking about seems well advanced, so can she give us a timescale for when legislation will come forward?
Anne-Marie Trevelyan
If only I could do it tomorrow, but I think Prorogation would stop me. We have also supported the Heat Networks Industry Council in its work to establish the consumer protection agreement and the heat network emergency responders group in response to the covid-19 pandemic. We encourage heat suppliers to sign up to that agreement and we have written to signatories urging them to do more to tackle outages and improve compensation standards for those outages. Although these schemes have benefited many consumers, we recognise that regulation is needed to drive up consumer standards across the heat networks market. I therefore reiterate our commitment to that regulation today, but I am afraid that I cannot give a precise date.
The Government have introduced several schemes to support heat network deployment. Our heat networks investment project has made £320 million of capital funding available for investment in heat network projects through grants and loans in England and Wales. That will be succeeded by the green heat network fund in 2022, which will support and incentivise the use of low-carbon heat sources in heat networks. Both investment projects will ensure adequate consumer protection measures are in place by requiring projects to demonstrate Heat Trust or equivalent standards, which will ensure that taxpayers’ money supports only heat networks that deliver fair pricing and which are well designed, efficient systems.
Furthermore, we have been carrying out work on improving performance across a number of existing heat networks. That provides an evidence base for the development of the heat networks efficiency scheme, which will part-fund operational performance improvements and carbon emission reductions in existing systems. Further details will be announced later this year.
It is essential that heat network consumers are provided with clean and reliable heat at an affordable price. As such, we are developing the heat networks market framework that will place consumers at its heart, deliver sustained investment in the sector and maximise heat networks’ potential economic and environmental benefits. We committed in the energy White Paper to legislate for the market framework by the end of the Parliament.
We are working closely with the industry and consumer groups to ensure that regulation delivers positive outcomes for consumers, and we will shortly publish the Government’s response to last year’s consultation. I look forward to working with all colleagues on the proposals that we will bring forward. In the meantime, I wish my hon. Friend the Member for Carshalton and Wallington and his constituents well as they seek redress from their council, whose failure to meet the standards that residents could have reasonably expected is motivation indeed for the Government to get protections in place.
Electricity
Anne-Marie Trevelyan Excerpts(3 years, 7 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the draft Warm Home Discount (Miscellaneous Amendments) Regulations 2021, which were laid before this House on 3 March, be approved.
The House may be aware that in October 2020 the Government consulted on the proposed one-year extension of the warm home discount scheme. The changes proposed were broadly welcomed, and these regulations will implement them.
The Government are committed to alleviating fuel poverty. In the sustainable warmth strategy, published in February, the Government restated our commitment to our statutory target to upgrade as many fuel-poor homes as is reasonably practical to at least an energy efficiency rating of band C by the end of 2030. The best long-term solution is to improve the energy efficiency of a home, thereby bringing down the cost of heating it, but that takes time and some homes, especially those that are harder to treat, may be left behind.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I thank the Minister for giving way so early. Are there any interim targets for upgrading homes to energy performance certificate band C? What is meant by practical, cost-effective and reasonable costs? Can those terms be defined, or are they left for others to judge?
Anne-Marie Trevelyan
If the hon. Gentlemen waits, we may be able to provide him with some more information.
As well as reaching millions of people each year, energy bill rebates are simple to deliver and consumer friendly. The warm home discount is therefore a key policy in our policy mix to help alleviate fuel poverty. Since 2011, the warm home discount has helped more than 2 million low-income and vulnerable households each year by reducing their energy bills at the time of year when that is most needed. Under the current scheme, around 1 million low-income pensioners in receipt of pension credit guarantee credit receive the £140 warm home discount as an automatic rebate on their energy bills, and more than 1.2 million low-income and vulnerable households receive the rebate following an application to their participating energy supplier.
Building on the success of the scheme, the energy White Paper committed to extending the scheme to at least 2025-26, expanding the overall spending envelope to £475 million a year from 2022 and consulting on reforms to improve the fuel poverty targeting weight. We intend to consult on the future scheme later this year.
Reforming the scheme has long lead times, however, and this winter I want to prioritise the safe and timely delivery of rebates to ensure that those in need continue to receive this vital support, particularly given the continuing impacts of covid-19. It is therefore important that minimal changes are made to the scheme for next winter. This will mean that the scheme will be worth £354 million and that eligible pensioners on pension credit guarantee credit, as well as eligible vulnerable households supported through the broader group, can continue to receive £140 off their energy bills.
We will also not be amending the current energy supplier participation thresholds, as any change now, with such limited time for implementation, could cause significant and potentially damaging administrative and financial challenges for smaller energy suppliers. We intend to review that for the future reform.
We are, however, making some improvements to the industry initiatives part of the scheme. That includes lifting the restriction on providing financial assistance under industry initiatives to those eligible for a rebate, which will create greater flexibility and help more people during the covid-19 pandemic. We will keep the current overall cap of £6 million for the energy debt write-off mechanism, but we will also introduce a new individual cap of £2,000, enabling support to reach a greater number of households in need.
We will additionally be making changes so that proposed industry initiatives and specified activities will ensure, so far as reasonably practicable, that advice on the benefits of smart meters is provided to households benefiting from the industry initiative or specified activity. During the covid-19 pandemic, smart meters have been invaluable for energy consumers, allowing prepayment customers to top up remotely from home, while also enabling suppliers to offer timely support to vulnerable customers. We are also introducing greater consumer protections for boiler and central heating system installations and repairs carried out under the scheme.
Finally, we are proposing to make some further operational changes this year. That includes introducing a requirement for the Gas and Electricity Markets Authority to inform the Secretary of State if an electricity supplier that becomes a supplier of last resort notifies the authority of its intention to meet all or part of a failed supplier’s non-core spending obligation. This additionally includes making changes to clarify the full extent of the small suppliers scheme obligations when it passes the relevant threshold and becomes newly subject to the non-core spending obligation.
To conclude, the regulations extend the warm home discount until March 2022, which will help more than 2.2 million households this coming winter. The regulations will provide vital support for low-income and vulnerable customers to keep warm this winter in advance of consulting on wider scheme reform from 2022. I commend the regulations to the House.
Anne-Marie Trevelyan
I thank hon. Members for their valuable and insightful contributions to this debate. I will do my best to answer their questions but, as ever, if I fail to do so, my team will make sure that we get back to everyone in due course.
The hon. Member for Southampton, Test (Dr Whitehead) highlighted some of the issues. To reassure him, the reforms will indeed target those most likely to be in fuel poverty as well as protecting the most vulnerable current recipients. He is right that consultation is required, but we felt that the pandemic pressures last year made that inappropriate and incredibly difficult, which is why we are rolling it forward for this year and will bring these consultations into action as quickly as possible. We absolutely recognise the value of industry initiatives, which is why we have expanded their potential use. The reform consultations later this year will include industry initiatives. I hope that reassures him on that front.
My hon. Friend the Member for Delyn (Rob Roberts) raised the really important and genuine challenge that we should try to find a UK-wide definition of fuel poverty. I take on board those things. I have regular meetings with the devolved Administrations on a number of issues, and I will put that on the agenda, because—he is not wrong—trying to think holistically is a really important challenge for this Government. I do not guarantee that I will find an answer immediately, but I absolutely take up the challenge of extending those discussions.
In response to the hon. Member for Kilmarnock and Loudoun (Alan Brown), we do have, as he asked, interim milestones in the fuel poverty strategy of fuel-poor households reaching an energy efficiency rating of band E by 2020 and band D by 2025. Achieving that is indeed a great challenge. However, investment in the local authority schemes element of the green homes grant scheme has increased by £300 million. We have already allocated £500 million across English regions, reaching 50,000 homes, and that will continue to roll out. This is absolutely targeted at reaching the most vulnerable households. Local authorities are making really good use of the fund and getting on with making these really important efficiency adaptations for those of our constituents who are most in need of it.
Turning to the contribution by my hon. Friend the Member for Southend West (Sir David Amess)—his early leadership on this should absolutely be celebrated. I have learned in my short time in this place that if you do not celebrate your achievements, no one else might do it, so I absolutely support his willingness to share. I did not know about that, so it is lovely to discover it. I very much hope that we will continue to reassure his constituents of our commitment, through both this SI and the forthcoming reforms, to really hone this and try to improve its reach even further. He will no doubt be waiting with bated breath for the heat and buildings strategy, which we will be publishing very soon—I would like to say imminently, but it is always hard to know just how clear one can be. Let us go with that. I hope that that will give him a clearer picture of the work we want to do to make sure we crack the efficiency challenge, which accounts for nearly 20% of our carbon emissions, so we have to find ways. It is complicated, with 50 million homes that are built in different ways. It is a huge challenge that we all have to undertake.
In the short term, we have heard from colleagues across the House about the importance of extending the warm home discount scheme that we are here to put through today for a further year. The financial situation that covid-19 has posed for households across the country in the past year has been challenging to say the least, but particularly so for low-income and vulnerable households.
Alan Brown
Will the Minister be able to clarify how the £475 million figure was derived? That is an increase of £121 million, which is an increase of almost a third. I am just curious about the workings that said £354 million this year is okay, but we need a massive increase the year after.
Anne-Marie Trevelyan
I thank the hon. Gentleman for that intervention, and I will make sure we give him the detail of the figures in due course.
I am really pleased that there is agreement across the House that low-income and vulnerable households should continue to receive the valuable support provided by the warm home discount at a time when they most need it. Over the 10 years of the discount scheme so far, more than £3 billion in direct assistance has been provided to low-income and vulnerable households.
Dr Whitehead
I thank the Minister very much for giving way. I detect that she may be coming towards the end of her comments. I wonder if she might pause to reflect briefly on the whole question of thresholds and obligations, and how they might work out over the next year, particularly with the new scheme as it comes forward after her proposed consultation period.
Anne-Marie Trevelyan
I fear the hon. Gentleman may have to wait for our consultation to consider that, but I absolutely hear his point and reassure him that we will be looking at that in the round. I think we will have capacity. It is so important that we get to grips now, at the start of this really big challenge on buildings efficiency, and think in the round to help those most vulnerable households, and ensure we are as effective as we can be with taxpayers’ money and as impactful as we can be for each and every one of those homes regardless of their situation. I hope he will be reassured, as the consultation gets going, that we will look at that across the board.
The regulations will enable the continuation of support for a further winter. One million of our poorest pensioners and a further 1.2 million households in or at risk of fuel poverty will continue to receive £140 off their bills. I encourage all Members to continue to use the messaging—I am happy to share the detail with them—to reach out to their constituents who might be eligible for pension credit but have not applied for it. We want to ensure that people apply for it. The numbers are lower than we think they should be, so I encourage all colleagues to ensure that all their constituents who are eligible receive it.
As we outlined in the energy White Paper, beyond this extension we are committed to extending the scheme from 2022 until at least 2025-26, and to expanding the spending envelope to £475 million to enable us to reach a further 750,000 households, while consulting on reform of the scheme to better target fuel poverty spending. We intend to consult on the scheme beyond 2022 later this year. I commend the draft regulations to the House.
Question put and agreed to.
Mr Deputy Speaker (Mr Nigel Evans)
We will now suspend for three minutes in order to clean the Dispatch Boxes. Please leave carefully.
Draft Greenhouse Gas Emissions (Kyoto Protocol Registry) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 8 months ago)
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The Chair
Before we begin, I remind Members to observe social distancing and to sit only in the spaces that are clearly marked. I also remind Members that Mr Speaker has stated that masks should be worn in Committee unless, of course, you are speaking. Hansard colleagues will always be most grateful if Members send their speaking notes to them on the email address.
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the Committee has considered the draft Greenhouse Gas Emissions (Kyoto Protocol Registry) Regulations 2021.
The draft regulations were laid before the House on 25 February this year. This statutory instrument was laid under the power in section 8(1) of, and paragraph 21 of schedule 7 to, the European Union (Withdrawal) Act 2018 to address deficiencies of retained EU law that arose from the withdrawal of the United Kingdom from the European Union. The purpose of the statutory instrument is to amend retained EU law relating to the UK’s Kyoto protocol registry to ensure that it will be operable in the UK.
This draft statutory instrument does not introduce any new policy. It will simply ensure the continuity of the UK’s Kyoto protocol registry independently of the EU’s registry system.
As a party to the Kyoto protocol, an international climate change treaty, the UK has a legal obligation to maintain a Kyoto protocol registry. That registry enables the UK and UK-based account holders to hold and trade Kyoto units. Kyoto units are each equal to 1 tonne of carbon dioxide and may be traded on the international carbon market.
Kyoto units held by the UK Government are used to demonstrate compliance with our emission reduction targets under the Kyoto protocol. Emission reduction commitments under the Kyoto protocol cover the period from 2008 to December 2020 but, due to the time lag in collecting emissions inventory data, final accounting cannot be completed until several years after December 2020, hence the continued need for a registry. Future registry requirements under the Paris agreement as the successor to the Kyoto protocol are due to be decided at COP26 this November.
While the UK was an EU member state, the UK’s Kyoto protocol registry was housed in the EU’s consolidated system for EU registries. The UK has now established its own domestic platform to house the UK’s Kyoto protocol registry independently of the EU system. That platform is due to be operational in May of this year.
The UK Kyoto protocol registry enables the holding and trading of Kyoto units, just as a bank account does with money. As an industrialised country with emission reduction targets under the Kyoto protocol, the UK is allocated a number of units known as assigned amount units. Those units are held in the UK Kyoto protocol registry.
When finalising accounting for the Kyoto protocol commitment period, countries have the option to trade or cancel any surplus units, if they have met their emission reduction targets through domestic action. The registry enables that activity.
Private entities may also open accounts in the registry to hold and trade Kyoto units generated through the clean development mechanism under the Kyoto protocol. The mechanism allows a country with an emission reduction commitment under the protocol to implement an emission reduction project in developing countries. Such projects can earn certified emission reduction credits, each equivalent to 1 tonne of carbon dioxide, which may be counted towards meeting Kyoto targets. The mechanism can enable more cost-effective emission reductions, and the emissions credit generated may be traded, thereby creating a carbon market.
This draft statutory instrument is about continuity and compliance, rather than substantive changes to policy. By amending the retained EU legislation relating to the Kyoto protocol, the statutory instrument will provide a clear legal basis to operate and administer the UK registry domestically. It will not have any significant impact on businesses, charities, voluntary bodies or the public sector.
The Environment Agency will continue its role as the administrator of the UK Kyoto protocol registry, as before our departure from the EU. There are 112 businesses with accounts in the UK Kyoto protocol registry. The units and transaction history relating to the accounts are being transferred from the EU system to the new UK system hosting the UK Kyoto protocol registry.
As I said, the new UK system is due to be operational in May 2021, which is when account holders will be able to register on the UK system to access their migrated accounts. Trading Kyoto units via the UK Kyoto protocol registry should be possible from June 2021.
Businesses with accounts in the UK Kyoto protocol registry were given advance notice about changes to the registry while the transfer from the EU to the UK system takes place. The Environment Agency, in its capacity as administrator of the registry, continues to provide updates to account holders. We are not aware of any concerns from any of those account holders.
All four Governments of the UK nations have agreed with the purpose and content of this statutory instrument. The measures in the draft regulations are important as they will ensure the UK’s ability to uphold its international commitments under the Kyoto protocol following our departure from the EU, and I hope that hon. Members will support them.
Anne-Marie Trevelyan
I thank the hon. Member for his, as ever, forensic challenges. He raises some important questions. First, I will clarify one point. The UK Kyoto protocol registry is an international body, while our UK ETS is our domestic trading platform, so they are not incompatible—they are sitting in two different parts of the system. They are housed within the same IT platform in a technical sense, and, as the hon. Member highlights, that has had to be developed in a compressed timeframe. The UK ETS registry has been prioritised, given the large number of businesses using it and the significantly higher value of ETS allowances compared with Kyoto protocol units. I hope that clarifies that point.
The SI is limited in scope. It is being made under the powers of section 8 of the EU (Withdrawal) Act, and it can only prevent, remedy or mitigate failures of retained EU law to operate effectively or any other deficiency in retained EU law. It is not within the powers to make wider changes to terminology and so on in the registry. This is very much one small element of the new world we are in, working within our domestic market.
There was an important question about whether the platform will be ready for June. The Department for Business, Energy and Industrial Strategy is working very closely with the Environment Agency, which has the oversight, and the IT software developer. We are keeping in regular contact with the account holders, who are waiting for it to open up again, so that everything is very much joined up and everything will go smoothly when it opens.
The registry has to be connected to the United Nations framework convention on climate change’s international transaction log. Before it is reconnected, it has to pass a number of tests to meet the international standards, which are ongoing at the moment—dare I say, fingers crossed, that we are on track to pass them all? Like every exam, you never quite know, but it is progressing as we would hope. Once the tests have been passed, it will be ready to go live.
The hon. Member raised some questions about UK ETS and how it might join up with other schemes in the future. We have made the UK ETS more ambitious than the EU system that it is replacing. From day one, the cap on emissions allowed within the scheme has been reduced by 5%. We will consult in due course on aligning it with net zero. That gives industry the certainty it needs to be able to invest in low carbon technologies, because that is absolutely what we will continue to do.
The UK ETS will promote cost-effective decarbonisation. It will allow businesses to cut carbon where it is cheapest to do so and, in doing that, it promotes innovation and growth for UK businesses. It will allow us to expand our carbon pricing across the economy in order to encourage innovation and emerging decarbonisation technologies, which will be critical in helping us to meet our net zero challenge.
We have committed to exploring expanding the UK ETS to two thirds of presently uncovered emissions, and will be setting out our aspirations to continue to lead the world on carbon pricing in the run-up to COP26 later this year. This will also include how UK ETS could incentivise the deployment of greenhouse gas removal technologies. I hope that the hon. Member, and others, will be patient with us, but there is much to come.
We recognise the importance of international co-operation on carbon pricing and the role that international carbon markets can and will play as we all try to move internationally to a net zero position. The UK is open to linking the UK ETS internationally in principle. We are considering a range of options but have not reached a decision on where that will land, but I promise to keep the House posted as we progress.
I hope I have provided the necessary assurance for the Committee to approve the statutory instrument before us today. It provides a clear legal basis to operate the new domestic platform to house the UK’s Kyoto protocol registry, which is due to become operational in May. I commend these draft regulations to the Committee.
Question put and agreed to.
Draft NuclEar Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) (Amendment) Regulations 2021
Anne-Marie Trevelyan Excerpts(3 years, 8 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 Members that Mr Speaker has stated that masks should be worn in Committee, though obviously not when people are speaking. Our colleagues from Hansard 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 Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) (Amendment) Regulations 2021.
The draft regulations were laid before the House on 25 February 2021. This is an uncontroversial statutory instrument that is required to implement a protocol signed by the Governments of the United Kingdom and Japan on 16 December 2020 to amend the 1998 nuclear co-operation agreement between the UK and Japan. The draft statutory instrument will amend regulations to ensure that the United Kingdom may comply with the provisions of that protocol.
To understand the importance of the draft statutory instrument, one needs first to understand the purpose of the protocol. Nuclear co-operation agreements are commonly used international agreements that give legal underpinnings to civil nuclear co-operation. They provide key non-proliferation assurances, including respective nuclear safeguards and a framework for nuclear trade. Japan is an important partner of the United Kingdom in nuclear co-operation and non-proliferation. Both countries collaborate in the areas of nuclear regulation, research and development, decommissioning and advanced nuclear technology development.
The primary aim of the protocol is to maintain that mutually beneficial relationship between the UK and Japan on civil nuclear trade and co-operation. It achieves that by ensuring that the United Kingdom-Japan nuclear co-operation agreement, which it amends, is fully operable now that the United Kingdom operates its own domestic safeguards regimes and is no longer part of Euratom.
The protocol goes further, by including provisions that strengthen the mutually beneficial relationship between the UK and Japan. The additional provisions cover issues such as co-operation on R&D, intellectual property, safety and the expansion of the scope of the nuclear co-operation agreement to include technology.
I will now seek to explain what changes the draft statutory instrument will effect. First, it will amend the Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2019, so that the protocol is included under the definition of “relevant international agreement” for the purposes of the Energy Act 2013.
That primarily concerns the role and responsibility of the UK’s nuclear regulator, the Office for Nuclear Regulation. One of the office’s statutory purposes is to ensure that the UK complies with relevant international agreements. The draft regulations will ensure that the protocol is captured as such an agreement. Failure to pass the statutory instrument would therefore mean that the Office for Nuclear Regulation’s role would not include any reference to what has been agreed in the protocol, leaving the UK at risk of breaching the agreement. That, clearly, would not be an acceptable outcome.
The second change effected by this draft secondary legislation is the inclusion of the protocol under the definition of “specified international agreement” for the purposes of the Nuclear Safeguards (EU Exit) Regulations 2019. The change will extend the requirement in those regulations for operators to provide information to the Secretary of State relating to qualifying nuclear material or other relevant items in respect of the protocol. I commend the draft regulations to the Committee.
Anne-Marie Trevelyan
I thank the hon. Gentleman for his support, his forensic analysis and his challenge to the Government on process. Once I and officials have looked at his points in detail, I will absolutely write to him.
As the hon. Gentleman has highlighted, the UK and Japan have previously had relevant nuclear co-operation agreements in force—the 1998 UK-Japan bilateral nuclear co-operation agreement and the 2007 Euratom-Japan nuclear co-operation agreement—which was not the case with the US, Canada and Australia. Of course, the 2007 agreement ceased to apply when we stepped away from the EU, but the 1998 nuclear co-operation agreement remains in force.
Given that the policy changes made to the 1998 UK-Japan nuclear co-operation agreement were minor, it was not deemed necessary to agree a whole new nuclear co-operation agreement. Instead, a protocol to the agreement was deemed to be the most appropriate measure. There was an exchange of notes, which was considered a temporary solution that would come into force in any scenario where Euratom arrangements ceased to apply, which indeed they did, and the protocol had not then come into force. This protocol obviously represents a robust solution for our UK-Japan civil nuclear trade and co-operation, following our departure from Euratom, and it ensures continuity with an important partner.
Dr Whitehead
I thank the Minister for that partial elucidation. However, does she appreciate that, in terms of our leaving Euratom, at the very least this did not appear to have been made in time for the arrangements set out under the 2018 Act? I think she has partly confirmed that in her consideration of the status of the original protocol and what needed to be added to it in order to get us to a proper position—which is, indeed, the position we are now in today.
Anne-Marie Trevelyan
I hope that I have provided the necessary assurances for now and I absolutely commit to writing to him with the finer points of detail that I hope will give him the reassurance he needs that the UK-Japanese relationship is absolutely watertight and continues to be of great importance to both countries.
As I said at the start, these draft regulations will ensure that the United Kingdom can comply with the provisions of the protocol agreed between the Governments of the United Kingdom and Japan, and by extension will help to maintain mutually beneficial civil nuclear trade and co-operation between ourselves and Japan. Therefore, I commend these regulations to the Committee.
Question put and agreed to.
Climate-related Financial Disclosures Consultation
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Today, the Government published their consultation on proposals requiring mandatory climate-related financial disclosures by publicly quoted companies, large private companies and limited liability partnerships (LLPs).
In November 2020, the Chancellor of the Exchequer announced that in order to accelerate progress on climate risk disclosures, the UK will move towards mandatory Taskforce on Climate-Related Financial Disclosures (TCFD) across major segments of the UK economy by 2025, with a significant portion of requirements to be introduced by 2023. This will make the UK the first G20 country to make TCFD-aligned disclosures mandatory across the economy.
TCFD is an industry-led initiative which seeks to develop recommendations for climate-related financial disclosures. In 2017, the TCFD launched its recommendations, which set out how companies of any size, and in any sector or geography, could better manage and disclose their climate-related financial risks. Our proposed regulations will require companies to disclose information in line with the four pillars of TCFD: governance, strategy, risk management and metrics and targets.
High-quality disclosure of how organisations will manage the material financial risks and opportunities arising from climate change will improve transparency and encourage better informed pricing and capital allocation. As a result, and over time, TCFD-aligned disclosures will support investment decisions aligned with our transition to net zero. Our ambitious proposals will ensure the UK is leading the way ahead of COP26, where we will have an opportunity to encourage other countries to replicate our action.
I will place a copy of the consultation document in the Libraries of both Houses.
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Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Distribution network operators are incentivised to ensure adequate investment in electricity networks under the framework set by the independent regulator, Ofgem. My officials regularly meet distribution network operators to discuss impacts of the electric vehicle transition, including in rural areas.
Jonathan Edwards [V]
Diolch, Mr Speaker. Achieving Wales’s ambitious climate targets would require a rapid transition to electric vehicles, yet currently just 0.17% of vehicles used in Wales are electric. One of the biggest barriers to the transition is grid capacity, particularly in rural areas. Will the Minister outline how she will future-proof the grid in Wales, especially after the concerns expressed by the former deputy national security adviser, Paddy McGuinness, that the integrated review published last week failed to focus on the dangers that a future cyber-attack on the grid would pose as the EV transition accelerates?
Anne-Marie Trevelyan
The majority of the UK Government’s infrastructure grant schemes are available in Wales, and we are working with the Welsh Government to ensure that there are strong and co-ordinated plans in place to support the roll-out of charging infrastructure. We recognise the particular challenges that some rural areas may face across the UK, such as longer distances between substations, and Ofgem has set up a funding framework to ensure that our electricity network supports our net zero ambitions.
Kate Osborne (Jarrow) (Lab)
Stuart Anderson (Wolverhampton South West) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government are committed to getting as many homes as possible to EPC band C by 2035, where cost-effective, practical and affordable. We are doing this through setting long-term minimum standards, providing financial support where it is needed most, and getting the market conditions right to support action.
Neil Parish [V]
The green homes grant is a scheme that can improve home insulation, cut carbon, save on energy bills and create jobs across the country. It needs backing, not scrapping, so what plans does the Minister have to extend and improve the green homes grant, and how does she see the scheme helping to improve the efficiency of older, often rural, homes, especially those with solid walls, which use more energy and cost more to heat?
Anne-Marie Trevelyan
We absolutely recognise that older rural properties may be more challenging to improve. That is why we provide an incentive for off-gas homes under the current energy company obligation, and we will focus the future home upgrade grant on poorer-performing homes. We also have a range of exemptions under our minimum standard regulations for homes that are too expensive or difficult to improve. This is a really important aspect of our net zero challenges, and I look forward to working with my hon. Friend in the months ahead.
Stuart Anderson
The situation regarding covid-19 has had a big impact on the household incomes of residents in Wolverhampton. What long-term plans does my right hon. Friend have to help elderly and working-age residents to save money on utility bills and give them access to affordable energy efficiency schemes?
Anne-Marie Trevelyan
The Government have invested £500 million in the local authority delivery scheme to improve the energy efficiency of low-income households, helping to reduce fuel poverty for around 50,000 households by the end of this year. My hon. Friend is a champion for his constituents in Wolverhampton, and I look forward to working with him as we work with those communities and households to meet our net zero challenge through home efficiency improvements.
Dr Alan Whitehead (Southampton, Test) (Lab)
May I say that Opposition Members wish to be strongly associated with your words this morning, Mr Speaker, and that I am sure that goes for everybody else in the Chamber today?
The Government’s flagship programme to improve energy efficiency in homes, the green homes grant scheme, has produced figures for the latest month: vouchers applied for—18,526: vouchers issued—1,186; measures installed—99; and, I am not making this up, measures paid for—20. Does the Minister take responsibility for this catastrophic failure of a scheme? Will she say now whether she intends to extend the programme and roll the funding over so that it has a chance to succeed in the end? If she does, will she be sacking the US-based private consultancy firm she hired to run this awful mess?
Anne-Marie Trevelyan
May I, too, associate myself with your words earlier, Mr Speaker? I think we have all, sadly, been touched by the loss of someone, or more than one person, whom we have known to this dreadful disease in the past year. Thank you for your words, because it is so important that we are able to hold this moment together.
The green homes grant voucher scheme has made significant strides since its launch in September 2020. We have received more than 90,000 applications and issued 33,000 vouchers, worth £142 million, and an additional £500 million has been given to local authorities to improve the energy efficiency of low-income households, helping to reduce fuel poverty for about 50,000 households by the end of this year. This is such an important part of the just transition that we want to ensure that we achieve with net zero. We recognise that the scheme has faced a number of delivery challenges, as many new mechanisms do, which has meant it has not delivered at the rate or the scale that we had originally hoped it would. However, we are working with the scheme administrator to process the backlog of voucher applications, streamlining the voucher issuance and redemption process as a top priority. Some delays in voucher processing are due to our robust fraud and gaming checks, which we have implemented by learning from previous schemes.
Philip Dunne (Ludlow) (Con) [V]
May I associate myself, and all those participating in proceedings remotely, with the moment of national reflection that you have just led, Mr Speaker? Thank you. Yesterday, my right hon. Friend will have seen the report published by the Environmental Audit Committee on the energy efficiency of existing homes, in which we highlighted the scale of the challenge in decarbonising the 19 million homes in this country that account for most of the 20% of UK emissions from domestic buildings. Will the Government commit in the heat and building strategy to a clear timetable to encourage owners of all tenures of homes to install affordable energy upgrades, in order to meet our net zero Britain targets?
Anne-Marie Trevelyan
My right hon. Friend is right that the challenge of making all our homes energy-efficient and moving to net zero is enormous. I thank him for his leadership, as Chair of the Environmental Audit Committee, in looking in depth at some of the vital issues, to help us not only to solve the technical and financial challenges but to encourage our constituents to make changes to reduce their power and heat usage through efficiency.
We have a strong track record in improving the energy performance of our homes over the past decade, with 40% above energy performance certificate band C —up from only 9% in 2008. We are also funding the first hydrogen-powered homes in Gateshead and allocating more than £500 million this year alone to improve the energy efficiency of 50,000 households in social and local authority housing throughout the UK.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Chancellor’s Budget recently announced significant investment for energy transition projects in Scotland. We hope to shortly announce the North sea transition deal, which will play a vital role in transitioning the oil and gas industry to low carbon alternatives.
Alan Brown [V]
COP26 will allow Scotland to showcase existing and emerging net-zero technologies, but, policy-wise, we need to see a minimum floor mechanism for pumped storage hydro. We need innovation power purchase agreements available for wave and tidal, a contract for difference for hydrogen and the go-ahead for the Acorn carbon capture and storage project. Will the Minister meet me to discuss these matters and take the necessary actions ahead of COP26?
Anne-Marie Trevelyan
It is always a pleasure to meet the hon. Member for Kilmarnock and Loudoun (Alan Brown) to discuss these matters. COP26 is such an important moment, not only with our carrying the responsibility of the presidency to help encourage other countries to do more to reach their net-zero targets, but in order to showcase the genuinely world-leading decisions that we have taken to drive our own net zero.
Stephen Flynn (Aberdeen South) (SNP)
My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) just mentioned a number of areas where the UK Government can and should invest in Scotland. But we do not just need cash; we need a level playing field. That is particularly true in relation to the electricity grid. I am sure that the Minister is aware that a new renewables project in Scotland will have to pay in excess of £4 per unit to access the grid, whereas the renewables project in the south-east of England gets paid £1 per unit to access the very same grid. That is no Union of equals. Scotland has the ability to lead Europe in the renewables field. Why are the Tories trying to hold us back?
Anne-Marie Trevelyan
Scotland has indeed played an important part, particularly in the wind development sector. The Chancellor’s Budget included £5 million for the global underwater hub in Aberdeen, £2 million for the North sea transition deal and £27 million for the Aberdeen energy transition zone. This is just one part of the whole net zero challenge that we are looking to take on. We look forward to continuing to work with our Scottish colleagues.
Jason McCartney (Colne Valley) (Con)
Chris Clarkson (Heywood and Middleton) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I thank my hon. Friend for his commitment to Greater Manchester and his constituency. We are committed to building back better and creating those green jobs, which will help to accelerate our world-leading path to net zero. The package of measures set out in the industrial decarbonisation strategy is part of this complex and critical path to success.
Justin Madders (Ellesmere Port and Neston) (Lab)
Elliot Colburn (Carshalton and Wallington) (Con) [V]
Anne-Marie Trevelyan
The proportion of residual waste sent to landfill, incineration and transfer stations that could otherwise have been recycled in England in 2020 is not available, I am afraid, but data on waste arisings are not structured around the material composition of waste streams. For both fossil and biogenic CO2 for energy-from-waste plants, national emissions estimates are based on an emission factor derived using the 2006 Intergovernmental Panel on Climate Change default factor for biodegradable and non-biodegradable waste.
Sarah Olney (Richmond Park) (LD) [V]
Notification to Parliament of a Contingent Liability: Indemnification to CGI IT UK Ltd
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
In line with our emergency response for nuclear incidents obligations, my Department has been developing a new software application to support the management of nuclear emergencies. The new system will replace two ageing legacy systems managed by BEIS and MOD.
My Department is procuring application management and support (AMS) services presently. We intend to indemnify the selected supplier in respect of liabilities that they may incur if employees of the former supplier of these services bring employment law claims against them in relation to the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
In relation to this, I have today laid before Parliament a departmental minute giving notice of the Department incurring this contingent liability in the form of indemnity protection provided to the selected supplier.
We believe it is appropriate to incur this contingent liability, to ensure that the new software system can go live without any delay. We consider the provision of this liability as the best value for money option to ensure the new service is available.
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