UK Renewables: Critical Minerals
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I congratulate my hon. Friend the Member for Rother Valley (Alexander Stafford) on securing this truly important debate. I thank him and my hon. Friend the Member for St Austell and Newquay (Steve Double) for their written questions on the subject, and I thank my hon. Friend the Member for Broadland (Jerome Mayhew) for his contributions.
The Government are proud of their commitment to net zero, and my hon. Friend the Member for Rother Valley is right to link it to the question of sourcing raw materials. Indeed, critical raw materials have supported our success so far. The UK’s world-leading offshore wind industry, which uses light rare earth metals, niobium and borates, as well as the more common cobalt, in turbine manufacture, provides a critical source of our renewable energy for our growing economy. The latest figures indicate that our onshore wind assets now generate enough power for more than 10 million UK homes. In solar, which relies on silicon, indium, germanium and gallium for its panels and turbines, we also see a UK success story. More than 99% of UK solar capacity has been deployed since May 2010.
Clearly, such materials underpin the renewable technologies we need to achieve our net zero goals. That is why we are looking at how we can leverage the UK’s extensive R&D ecosystem to lead efforts to deliver the green industrial revolution and maximise sustainable and efficient use of critical materials. Our investment in two new interdisciplinary circular economy centres—UK Research and Innovation’s interdisciplinary circular economy centres for technology metals and for circular metals—is helping to explore how reusing waste materials can deliver environmental benefits and boost the UK economy.
We have also committed £500 million of funding for the automotive transformation fund to build an internationally competitive electric vehicle supply chain, and £318 million for the Faraday battery challenge to support the pioneering work needed to ensure that we can deliver our net zero commitments. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will be consulting later this year on new measures to help to build a circular economy at home, while driving international collaboration abroad to encourage harmonisation in the circular economy regulations. These efforts will put us at the forefront of future green growth.
The coronavirus pandemic has demonstrated the importance of resilient supply chains, and that is why the Government are monitoring and assessing the supply of critical materials. The Department for International Trade global supply chain directorate now forms a key part of this work. It will help to ensure access to a resilient critical material supply that adheres to free, fair and open international trade. This will help to advance the plan for growth and our levelling up objectives as we seek to attract investment and boost important aspects of our future economy across all UK nations and regions.
As my hon. Friend mentioned, we are absolutely committed to exploring and developing lithium mining in the UK. We have backed Cornish Lithium and Geothermal Engineering, which are collaborating to build a zero-carbon lithium extraction pipe plant at an existing site in Cornwall. Such commitments provide a powerful stimulus to mobilise private investment, which plays such an important role in the UK economy.
Our foreign direct investment strategy is similarly focused on securing investment in the extraction and, crucially, processing of these commodities. We are working with overseas mining companies and host Governments to support and enable UK investment in the extraction, processing and refining of the raw materials required to deliver our ambitions. We are working to improve international mining conditions. We have implemented a number of programmes to tackle modern slavery in the Democratic Republic of Congo, including a programme in the DRC with the Carter Centre to improve transparency and governance in the mining sector, working with civil society.
I thank my hon. Friend for allowing me to respond to these points. I know we shall continue to discuss this critical supply chain in the months and years ahead, as we drive our net zero ambitions into action and delivery and we consider how to play this great game.
Question put and agreed to.
Draft Renewables Obligation (Amendment) Order 2021
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Chair
Before we begin, I remind Members about the social distancing regulations. Spaces available to Members are already clearly marked, and unmarked spaces must not be occupied. I see Members have taken their appropriate seats, but the usual convention of a Government side and an Opposition side is waived on this occasion, so Members may sit anywhere. Hansard colleagues would be very grateful if Members sent any 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 Renewables Obligation (Amendment) Order 2021.
The draft order, which was laid before the House on 3 February 2021, relates to the renewables obligation and the renewable electricity support scheme. The renewables obligation was introduced in 2002 to provide subsidy for electricity generation from renewable sources. It covers onshore and offshore wind, solar, hydro, biomass and so on. The scheme is closed to new applications, though support for existing stations continues. The scheme will finally close in 2037.
The scheme was part of a programme of measures aimed at stimulating the renewables industry to enable ambitious climate change targets to be met. Without subsidy, the nascent renewables sector would have struggled to make headway in a market dominated by the established heavyweights of coal, gas and nuclear. The renewables obligation had an initial target of 10% renewable electricity by 2010, but today about 30% of electricity supplied in the UK is supported under the scheme. Of course, the scheme needs to be paid for, and that falls on electricity suppliers, who currently provide almost £6.5 billion of subsidy a year to renewable generators. Those costs are passed on to customers via their bills, adding about £70 a year to the average domestic electricity bill. Costs will fall from 2027 as generators start reaching the end of their period of support and exit the scheme.
The draft statutory instrument deals with a technical matter that relates to supplier payment default. More specifically, it aims to prevent electricity suppliers from being unduly exposed to the unpaid bills of competitors who fail to meet their obligations. The renewables obligation comprises three separate but interlinked schemes: the renewables obligation, covering England and Wales; the renewables obligation Scotland; and the Northern Ireland renewables obligation. The Scottish and Northern Irish Governments are responsible for their own schemes; the UK Government cover the England and Wales scheme. The matter under debate relates to the England and Wales scheme only.
The renewables obligation is a traded scheme that places an obligation on electricity suppliers to obtain a number of green renewables obligation certificates in proportion to the amount of electricity they supply to their customers. Certificates are issued to renewable generators for free by Ofgem in relation to the amount of renewable electricity they generate. Suppliers typically buy those certificates, providing generators with an income stream over and above electricity sales revenues. Certificates are usually in short supply, so suppliers may make a cash payment, called a buy-out payment, in lieu of each certificate. The buy-out price is about £50 per certificate for the current renewables obligation year, and about 10% of the scheme is met in that way. At the end of the scheme year, the cash fund is recycled back to those suppliers who met their obligations with certificates, which gives certificates additional value over and above the buy-out price.
In recent years, an increasing number of suppliers have defaulted on their obligation under the scheme. Payment default leaves a shortfall in the cash fund, meaning recycle payments are lower than they would otherwise have been. That lowers the value of certificates, which ultimately impacts generators’ returns. The scheme therefore features a mutualisation mechanism that offers protection against payment default. Under the mechanism, shortfalls in the cash fund are recovered from all other suppliers and recycled back to those suppliers who met their obligation with certificates. The mechanism is triggered when the shortfall exceeds a £15.4 million threshold.
Mutualisation has been triggered in each of the past three years. In total, £173 million has been mutualised across suppliers in England and Wales. Electricity suppliers and their customers are understandably unhappy about the situation, so in December 2020 the Government consulted on a proposal to amend the mutualisation threshold so that it would be less easily triggered. It was proposed that the £15.4 million threshold should be replaced with a new threshold calculated annually as 1% of the cost of the scheme, which is broadly equivalent to the arrangements that were in place when mutualisation was first introduced into the scheme in 2005. Since then, the threshold has been gradually eroded in relative terms and is now equivalent to just 0.25% of scheme costs. Mutualisation can therefore now be more easily triggered. In other words, the risk associated with supplier payment default has become increasingly tilted away from generators and towards other suppliers.
Our proposal and the draft statutory instrument seek to redress the balance of risk. In the first year, the threshold will rise to about £62 million. That will ensure that suppliers and their customers are not unduly exposed to the unmet renewables obligation bills of other suppliers. Generators will face an increased risk that unmet obligations will remain uncovered. That will have a small impact on the value of certificates, but the new level of risk is broadly equivalent to what it was in 2005. In that respect the SI can be considered to be restorative.
The draft instrument makes minor technical changes to the Renewables Obligation Order 2015 so that a fixed £15.4 million threshold is replaced with a threshold that is calculated on an annual basis. The new threshold is determined as 1% of the forecast scheme cost for the year ahead. It also places a new requirement on the scheme’s administrator, Ofgem, to calculate and publish the threshold ahead of each obligation year.
The emergence of payment default and cost mutualisation under the renewables obligation has become of increasing concern to electricity suppliers. Through no fault of their own, those suppliers have become increasingly exposed to the unmet obligations of their competitors, whereas renewable generators have seen their returns increasingly protected.
The draft instrument will restore the original balance of risk between generators and suppliers. It will make it harder for mutualisation to be triggered, so suppliers will be less likely to be exposed to the unmet obligations of other suppliers. That is good news for consumers; they should benefit because the likelihood of mutualisation costs being passed on to them will be lower.
The legislative changes need to be effective on 1 April to enable them to take effect in respect of the next renewables obligation year, which runs from April 2021 to March 2022. Consequently, and subject to the will of Parliament, the draft instrument will enter into force on 31 March 2021. I commend the order to the Committee.
Anne-Marie Trevelyan
I thank the hon. Member for Southampton, Test for his valued contribution and for his depth of knowledge—this is an opportunity to put that on the record. It is always a pleasure to discuss such issues, albeit across the Floor, because he has an extraordinary depth of understanding and a commitment to the consumer and to those who are generating our electricity.
I welcome the support of Members, who recognise that the draft SI will ensure that electricity suppliers and, by association, their customers will no longer be unduly exposed to the onerous obligations of other suppliers. I hope that my responses have provided the necessary assurances for the Committee to approve this statutory instrument.
In reply to the hon. Gentleman, I am confident that the new Ofgem tests will rebalance and therefore reduce the risk of supplier failure. The SI, alongside those changes, will therefore strike the right balance between the needs of renewable generators on the one hand and of electricity suppliers and their customers on the other. I commend the draft order to the Committee.
Question put and agreed to.
Disused Mineworks in Skewen: Flooding
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I thank the hon. Member for Aberavon (Stephen Kinnock) for his campaigning on this issue, which I recognise is a very serious one indeed for the residents of Skewen. I would also like to add my respectful gratitude to all those he mentioned who have helped residents through this incredibly difficult and stressful time. Some years ago now when Morpeth, just outside my constituency, was flooded, it was extraordinary to see the commitment—the continued commitment—of those among the affected who just quietly continued to support people and make sure that families got back on their feet, so I absolutely understand that. I just wanted to put on the record my thanks to them too, because I know just how difficult that can be.
I would like to provide the House with a little background on the important work that the Coal Authority undertakes, which I feel is relevant to the hon. Member’s very important constituency situation. The coalfield areas of Wales, England and Scotland cover some 26,000 sq km, or 11% of our country’s surface area. Since the start of the industrial revolution, human settlement has followed natural resource availability, industry and employment. The coalfields are consequently some of the most densely populated parts of the UK. Some 7 million properties lie within the coalfields, with 1.5 million properties lying above workings where coal has been mined at a depth of less than 30 metres, and more than 170,000 mine entries are known of. Alongside these, there are hundreds of miles of underground roadways, adits and drainage systems, which are often only partially mapped, especially in very historic coalmining areas.
In south Wales, 52% of the population live on the coalfield, and the vast majority will fortunately never experience any issues. Although there is little active coalmining today, centuries of underground and surface extraction have created a legacy of environmental issues and public safety hazards. As the hon. Member mentioned, the Coal Authority was created under the Coal Industry Act 1994, when the previously state-owned coal industry was privatised, to regulate the industry and manage these legacy issues. The authority helps to manage the UK’s energy legacy safely and responsibly.
A substantial legacy of mining hazards remain in many major conurbations, with one third of the documented coalmine entries being in urban areas. Surface collapses above abandoned workings and shafts present the most common risks to the public. The authority therefore has a 24/7 hazard line, enabling the public to report mining hazards around the clock, in order to ensure immediate responses. Approximately 1,000 surface and subsidence incidents are reported each year, about half of which are found to be coalmining related. The scale of the issues means that costly proactive remediation of the surface effects of mine workings and mining entries is carried out only when there is a higher risk to persons or property. In 2008, the authority began a risk-based mine entry inspection programme to identify such areas for proactive remediation. To date, some 149,000 shafts have been inspected, less than 1% of which have required remedial treatment.
The coalmine works in Skewen date back beyond 1830. There are 287 recorded mine entries in the immediate area of Skewen, which are part of the proactive inspection programme. The mineshaft involved in this awful flood and the area around it was inspected in 2011, as the hon. Member mentioned, and no concerns were identified at the time. It was mapped approximately 20 metres away from where the Coal Authority now know it to be. A mine drainage level in the vicinity has operated effectively for a very long time, but had become blocked, causing water and pressure to build up, eventually connecting with the nearby mineshaft, which allowed it to rise to the surface. The additional heavy rain from Storm Christoph caused the water to force its way out, leading to the flooding on 21 January. This is considered an extremely rare event and was unforeseeable.
Since then, the Coal Authority has worked fast with local partners and continues to provide a blended package of support to the community, which has included developing a solution to reduce the risk of this ever happening again, cleaning up in the aftermath of the flood and practical help for residents affected, including, to date, increasing the maximum payment for each household for outside restoration to £500. However, this is without doubt a deeply sad and very upsetting incident, and I heard absolutely what the hon. Member for Aberavon said about liability and, indeed, moral responsibility.
The Coal Authority’s work handling subsidence and safety issues associated with former coalmines is a statutory duty under the Coal Industry Act 1994 and the Coal Mining Subsidence Act 1991. The 1991 Act sets limits to the liability in terms of defining coal-mining subsidence damage. Flooding such as that at Skewen does not form part of these duties, because flooding, whether the water comes from a river, a stream, the sea, groundwater or a mine, is dealt with in the main through insurance. The Coal Authority is doing everything it can to support the community within the bounds of the legislation and the guidance it has to work within, but I am very pleased to note that, following a meeting last week, the Coal Authority is reviewing its package of support. I shall watch closely to see how that progresses.
The scale and complexity of our historic mining legacy mean that the authority will never be able to inspect all that is underground. I deeply sympathise with the hon. Member’s constituents and I realise that this is an incredibly frustrating and distressing time for them. However, it is neither affordable nor practical to underwrite flooding damage risk associated with former mining works for some 7 million properties, any more than it is for flooding from other sources. None the less, I will continue to monitor progress and hope to get to Skewen for myself as soon as lockdown restrictions allow, so that I can hear at first hand both from residents and those of the coal authority charged with the management of our coal mining legacy. I will watch very closely to see how this revised package under consideration rolls out. Once again, I hope very much that, when the lockdown restrictions hopefully lift in the weeks ahead, I can get on a train and head to south Wales as soon as I can.
Question put and agreed to.
Electricity
Anne-Marie Trevelyan Excerpts(3 years, 9 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I beg to move,
That the draft Electricity Supplier Payments (Amendment) Regulations 2021, which were laid before this House on 21 January, be approved.
The statutory instrument amends regulations concerning the levies that fund the operational costs budget for the Low Carbon Contracts Company and the Electricity Settlements Company. The Low Carbon Contracts Company administers the contracts for difference scheme on behalf of the Government and the Electricity Settlements Company administers the capacity market scheme. Those schemes are designed to incentivise the significant investment required in our electricity infrastructure; to keep costs affordable for consumers; and to help to meet our net zero target while keeping our energy supply secure.
Contracts for difference provide long-term price stabilisation to low-carbon generators, allowing investment to come forward at a lower cost of capital, and therefore at a lower cost to consumers. The capacity market ensures security of electricity supply by providing all forms of capacity with the right incentives to be on the system and delivers capacity when needed by increasing generation or by turning down electricity demand in return for guaranteed payments.
In both schemes, participants bid for support via a competitive auction that ensures that costs to consumers are minimised. The next contracts for difference auction, the fourth to date, is planned to open in late 2021, and will be available to both established technologies such as solar PV and onshore wind as well as less-established technologies such as floating offshore wind. As the Prime Minister announced in October, we are seeking to secure up to 12 GW of renewable electricity capacity in this round—double that secured in the last round, which was held in 2019. That will allow a broad range of renewable technologies to come forward while delivering the best deal for bill payers.
The capacity market is tried and tested, and is the most cost-effective way of ensuring that we have the electricity capacity that we need now and in future. It facilitates investment in the existing capacity to remain in the market, and drives innovation in financing new capacity to be built. The capacity auctions held to date have secured the capacity that we need to meet the forecast peak demand at 2023-24. The next auctions, which will open tomorrow with the T-1 auction, and on 9 March with the T- 4 auction, will secure most of the capacity that we need in 2024-25.
The Low Carbon Contracts Company and the Electricity Settlements Company play a critical role in delivering the contracts for difference and capacity market schemes. They enter into and manage contracts for difference with low-carbon generators, and collect the supplier obligation levy from suppliers, which they use to make payments to generators under contracts for difference.
The statutory instrument sets a revised operational cost levy for the Low Carbon Contracts Company, and a revised settlements cost levy for the Electricity Settlements Company, which they collect from suppliers to fund their day-to-day operations. It is important that the LCCC and the ESC are sufficiently funded to perform their roles effectively, given their critical role in administering those schemes. However, the Government have made it clear that both companies must deliver value for money, and with that in mind we have scrutinised closely their operational cost budgets to ensure that they reflect their operational requirements and objectives. Savings have been identified in a number of areas. Both the LCCC and the ESC are mindful of the need to deliver value for money, as their guiding principle is to maintain investor confidence in the contracts for difference and capacity market schemes while minimising costs to consumers. They have taken a number of actions to date to reduce costs, and it is because of their actions that costs are falling both per contract and by overall generation capacity despite the growing size of the contracts for difference portfolio.
Jacob Young (Redcar) (Con)
My hon. Friend rightly points out that contracts for difference have meant a massive leap forward in our investment in wind technology and a decrease in costs for consumers. Does she agree that this is a perfect way to increase production of hydrogen as well, and will she consider meeting me to discuss how we can use contracts for difference in hydrogen production?
Anne-Marie Trevelyan
My hon. Friend is, as ever, a champion for Teesside, where, the work under way to help grow the future hydrogen capacity for our country is absolutely cutting edge. I will be absolutely thrilled to meet him to discuss this matter more fully. For now, the CfDs will be for the existing and established technologies, but he is not wrong that the future is bright for hydrogen. I look forward to meeting him to discuss it more fully.
We expect to increase to 55.16 GW of capacity and 546 capacity providers in 2021-22. Despite the increase in those numbers, the operational costs are expected to be marginally lower this year than last. The operational cost budgets for both companies were subject to consultation, which gave stakeholders the opportunity to scrutinise and test the key assumptions in the budgets and, importantly, to ensure that they represent value for money. The budgets remain unchanged save for one amendment, which I will briefly summarise. The consultation was published before the outcome of the 2020 spending review was known. The review had announced a pause in public sector pay rises for the majority of the workforce. Taking into account the outcome of this review and the wider economic landscape, the LCCC’ remuneration committee decided to agree a pay pause for its staff in 2021-22. Consequently, an allowance contained within LCCC’s operational cost budget for pay rises that was included in the consultation has now been removed.
To conclude, taking into account the removal of this allowance, the proposed operational cost budget for the LCCC in 2021-22 is £20,736,000 and £7,472,000 for the ESC. The amendments revise the levies currently in place to enable the companies to collect enough revenue to fund these budgets. Any levy collected that is not spent will be returned to suppliers at the end of the financial year in accordance with regulations. Therefore, subject to the will of Parliament, the settlement cost levy for the Electricity Settlements Company is due to come into force on the day after these regulations are made, and the operational costs levy for the LCCC by 1 April 2021. I commend these draft regulations to the House.
Anne-Marie Trevelyan
I thank hon. Members for their valuable contributions to the debate. I will do my best to answer their questions and commit to replying by letter or having meetings with any of them if they wish to follow up on any of the issues that I do not cover.
In answer to the hon. Member for Southampton, Test (Dr Whitehead), periodicity for future years of pricing is not yet determined. However, as he rightly set out, the challenges of the past year have meant that we felt it was more appropriate to look at it on a single-year basis this year, hoping, clearly, that things will settle and we will get back to some sort of normality in the year ahead.
The budgetary increase for the LCCC is in fact 19%. There are three main reasons for that. It is partly due to the impact of covid on energy and insurance markets. The LCCC will now be managing an increased number of CfDs in the year ahead. It is also having to move to a new building this year because the one it has been in is being demolished, so that is a technical reason for having to invest in a new site. The hon. Member for Kilmarnock and Loudoun (Alan Brown) raised the question of savings. In fact, with the new building, the LCCC has taken the opportunity to look at staff working patterns and the flexibility that some staff will want to use, and that has brought a saving of £184,000 on the overall costs, which is a good thing.
Interestingly, in relation to the hon. Gentleman’s point about pumped hydro, he is the second person today who has raised that with me and asked that we can look at it, so I look forward to speaking to him and others on the subject. There are three pots for the contracts for difference. Pot 1 will cover onshore wind and solar, pot 2 is for the less developed technologies like tidal, wave and geothermal—that is perhaps where pumped hydro might sit if we look to do that—and pot 3 is for offshore wind, which is obviously a fast-growing sector. I hope that answers hon. Members’ questions, but if there is anything I have missed, I am happy to write to them.
The hon. Member for Strangford (Jim Shannon) raised the important question of the challenges with fuel bills for many of our constituents following a really difficult year. I was in fact discussing exactly that with Ofgem this morning, and we will be doing a piece of work to make sure that we are as apprised as we can be of the challenges.
Dr Whitehead
The question that I asked at the end of my contribution was whether, in the light of those increases and of greater increases in the future, as I think we both agree will be the case in terms of counterparty costs, the Minister is actively thinking about other ways of funding that, or is she happy to continue with the levy arrangements we have discussed this afternoon?
Anne-Marie Trevelyan
It is very much a live issue, and, across the multiplicity of the energy resources that we are looking at, we are thinking very much about how we will do that. I am very happy to meet the hon. Gentleman, if he would like, to discuss that in more detail in the weeks ahead.
I hope that I have been able to provide the necessary assurances for hon. Members to approve the statutory instrument, and I am grateful to them for indicating their support. As I said at the start of the debate, the regulations that the Government are seeking to amend through this instrument will revise the operational cost levies for the LCCC and ESC. These companies play a crucial role in delivering the contracts for difference scheme and the capacity market. They must be sufficiently funded to perform that role effectively, but those costs must be kept to a minimum. It is my view that the operational budget for 2021-22 strikes an appropriate balance between ensuring that companies are adequately funded and that consumer bills are minimised. I therefore commend the regulations to the House.
Question put and agreed to.
Mr Deputy Speaker (Mr Nigel Evans)
I will suspend the House for a short period to allow the sanitisation of the Dispatch Boxes.
Oral Answers to Questions
Anne-Marie Trevelyan Excerpts(3 years, 10 months ago)
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Henry Smith (Crawley) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
We are matching the UK’s world-leading net zero ambition with world-leading action. The Prime Minister’s 10-point plan for a green industrial revolution will accelerate our path to net zero with £12 billion of Government investment, including a commitment to power every home in the UK with offshore wind by 2030. In December, we published the energy White Paper and we will publish our net zero strategy ahead of COP26.
Andy Carter [V]
I thank the Minister for her statement. Could she expand on some of the points she makes, particularly the support that small businesses in towns such as Warrington might expect to receive to reduce their carbon emissions and contribute to net zero targets at a time when many are concerned about the costs of day-to-day business in the light of covid?
Anne-Marie Trevelyan
We recognise the challenges that SMEs are facing and we want to work with businesses to build that green recovery, so we are offering up to £6 million with a boost in SMEs’ access to energy efficiency competitions to develop green solutions. Through the SME net zero working group, we are hearing from businesses how we can go even further to support them. Financial savings are available to businesses taking steps to achieve net zero, and I would encourage SMEs to sign up to the Race to Zero campaign.
Henry Smith [V]
A year ago, the UK airline industry committed to net zero carbon by 2050. What support and assistance has the Department been providing to this important sector, which is suffering loss at the moment, so that it can contribute in the future?
Anne-Marie Trevelyan
The Government are backing the airline sector to achieve net zero, committing £3.9 billion, with industry, to fund aerospace research and development from 2013 to 2026. This includes the FlyZero project, to study in depth the potential for zero emission aircraft. We are also investing £125 million in the future flight challenge, to enable the use of new forms of green and autonomous aircraft.
Stephen Kinnock (Aberavon) (Lab)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
First, I wish to offer my sympathies to all the families affected in the Skewen floods. My officials have been updated by the Coal Authority on the flooding in Skewen on a regular basis and on the work that it and local partners are doing to support the community, remediate the site and allow people to return safely to their homes. I will be meeting people from the Coal Authority shortly to discuss its work and the investments it is making to reduce the risk of this ever happening again.
Stephen Kinnock [V]
My constituents in Skewen have been devastated and traumatised by the flooding that ripped through their homes on 21 January. The disused mine workings that caused this incident are the responsibility of the Coal Authority and, ultimately, of the UK Government. Will the right hon. Lady therefore ensure that the Government fill the gaps not covered by insurance and provide financial support to those who are not insured? Does she agree that not a single Skewen resident should be left out of pocket by this terrible flooding?
Anne-Marie Trevelyan
The hon. Gentleman is a wonderful advocate for his constituents, and I hope very much to be able to visit Skewen with him and talk personally to those affected. The Coal Authority does not have liability for flooding; flooding, whether from a river, stream or groundwater, is mainly dealt with through insurance, and I know that the Welsh Government emergency grant equivalent of the Bellwin scheme for those affected by flooding in England provides a higher sum. So I look forward to working with him and to hearing directly from his constituents as soon as we can arrange this.
Chris Grayling (Epsom and Ewell) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The UK has expertise and assets to support both green and blue hydrogen. Our twin-track approach to enable both routes, in line with our 2030 5 GW ambition, will drive cost-effective supply volumes in the 2020s, while scaling up green hydrogen.
Chris Grayling [V]
My right hon. Friend is right to talk about both forms of hydrogen. Ideally, of course, we would all be using entirely green hydrogen—as she knows, there are problems with the renewable transport fuel obligation, which I hope she will be able to sort out—but blue hydrogen is going to be part of what we need in the coming decades. What steps is she taking to ensure that we provide the right support for the carbon capture that must, by definition, go alongside the production of blue hydrogen so that it is genuinely a net zero fuel?
Anne-Marie Trevelyan
We are committed to making the UK a global leader in developing carbon capture and hydrogen production, so we are supporting both through new commercial frameworks and financial support, via our £1 billion for a carbon capture and storage infrastructure fund and £240 million for our net zero hydrogen fund.
Dr Alan Whitehead (Southampton, Test) (Lab)
I welcome the Prime Minister’s 10-point plan announcement of the proposal to develop 5 GW of low-carbon hydrogen production capacity by 2030 and, as the Minister has mentioned, the £240 million net zero hydrogen fund to support that. Is it her intention to deploy that fund to support the production of green hydrogen and not to use any part of it to support production capacity consisting of grey or blue hydrogen?
Anne-Marie Trevelyan
I thank the hon. Gentleman for his support for the 10-point plan, which I think the whole House believes is the right way forward. The £240 million net zero hydrogen fund is, of course, only one element of this, and we are supporting innovation, heat trials, standards, business models and a revenue mechanism to stimulate that private sector investment which is so important. This is going to put the UK firmly at the front of the pack. We will be setting out much more detailed work later in the year when I publish the hydrogen strategy.
Mick Whitley (Birkenhead) (Lab)
Sam Tarry (Ilford South) (Lab)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
We have introduced safer working guidance so that workers, including gas and electricity meter readers, can continue to work safely during national restrictions. This guidance is kept under constant review and updated in line with the latest scientific evidence.
Sam Tarry
Meter readers can visit between 50 and 200 properties a day, sometimes more in large cities. A large majority of these meter readers and their unions, such as the GMB, do not believe that it is right to enter those properties and put themselves and others at risk for the sake of someone getting an accurate gas or electric meter bill. Will the Minister listen to meter readers up and down the country and call for an end to internal meter readings during lockdown, to protect both meter readers and householders?
Anne-Marie Trevelyan
There was an extensive series of engagements to support the drafting process for the safer working guidance, with more than 1,000 users responding. The safer working guidance has had 3.3 million views, and the evidence shows that it is working well and supporting those who are doing the incredibly important work of keeping utility services going. My door is always open, and I would be very happy to discuss any concerns with the hon. Gentleman and his constituents.
Alex Cunningham (Stockton North) (Lab)
Simon Baynes (Clwyd South) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The UK is a major global market for renewables, and we have world-leading ambitions for deployment. We aim to deliver up to double the renewable capacity at the next contracts for difference round at the end of this year, compared with the last round. We are spending £160 million to support new port and manufacturing infrastructure needed to achieve our 40 GW offshore wind ambition, which will secure local jobs and benefits.
Alex Cunningham [V]
We all know how essential it is to provide our industries with renewable energy at an affordable cost, but it is also essential for the transportation of energy through the national grid so that firms in my area such as CF Fertilisers do not face even greater costs. What will the Minister do to ensure that there is a first-class regulatory environment for all energy transportation, including a fair system for shorthaul gas still being considered by Ofgem?
Anne-Marie Trevelyan
We have ambitious targets for future decarbonisation and the systems that will go with it. We will be publishing an industrial decarbonisation strategy in the very near future, which will help to support businesses as we look at all the issues that the hon. Gentleman raises.
Mark Logan [V]
I declare an interest. I have been listening to too many Elon Musk conversations on what is now all the rage, which is the Clubhouse app. What support can be provided to help Bolton to explore green technology opportunities, especially electric vehicles, boosting our local job market and future growth?
Anne-Marie Trevelyan
I am delighted to see my hon. Friend championing the north-west and the opportunities that our green industrial revolution will bring to his area. The north-west is incredibly well placed to benefit from our £1 billion commitment to become a world-leading sector in technology to capture and store harmful emissions away from the atmosphere. We have also launched the green jobs taskforce, which will help us to develop plans for green jobs, including in the new green automotive sector across all regions, and we advise on what support will be needed for people who are in those transitioning industries.
Simon Baynes [V]
Can the Minister comment on the opportunities for companies in Clwyd South and elsewhere in Wales offered by the latest £11 million round of the UK Government’s energy entrepreneurs fund, which is dedicated to driving forward new clean technologies?
Anne-Marie Trevelyan
Wales’s promising clean tech entrepreneurs are urged to bid for the latest £11 million of Government funding, which is going to support between 15 and 20 projects, with successful bidders receiving up to £1 million each. The funding available through the energy entrepreneurs fund is open to all eligible companies across England, Wales, Scotland and Northern Ireland, and I look forward to seeing their submissions.
Dame Angela Eagle (Wallasey) (Lab)
Climate and Ecological Emergency: UK’s Response
Anne-Marie Trevelyan Excerpts(3 years, 10 months ago)
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The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this Adjournment debate on such an important subject. I am really pleased that I was able to share some of my time with colleagues, because this issue speaks far more widely than this Parliament—it is a global challenge. How we act on climate change is the most pressing issue of our time; I completely agree with her.
While we find ourselves in the midst of this very difficult pandemic, which of course is our short-term priority, we must not abandon and have not abandoned our planet’s need for urgent care, because we risk so many further crises for our children. Climate change is happening now, and this Government are determined that the UK will be a world leader in ensuring that the Paris agreement takes root across the globe. We will demonstrate through our commitment to bring down our country’s greenhouse gas emissions, and acting this year as the president of COP, that we will be a global leader.
The Prime Minister has made a critical commitment to doubling our international climate finance to £11.6 billion, with £3 billion of that going to nature-based solutions. We were the first major economy in the world to set a legally binding target to reach net zero carbon emissions across our economy by 2050, and we have shown that rapid progress on decarbonisation is possible alongside a thriving economy. Our emissions are down by almost 44% across the last 30 years, and our economy has grown by 78% in the same period. We have been absolute in our commitment to power past coal over the last 10 years, with a reduction in electricity generation from coal from 40% in 2012 to less than 5% today, replaced by renewables. We have made significant progress in meeting our climate targets, meeting our first two carbon budgets and projected to meet the third by 2022. We exceeded the required emissions reduction of the first by 1.2% and the second by nearly 14%, but now is the time to double down and decrease our emissions further and faster. To do this, the Prime Minister set out his 10-point plan last year to lead the world into a new green industrial revolution. We set out ambitious policies, backed by £12 billion of Government investment. The plan will support up to 250,000 highly skilled green jobs across the UK and accelerate our path to reaching net zero by 2050 while laying the foundations for building back greener.
The 10-point plan will develop the cutting-edge technologies needed to drive down those emissions in industries across the UK through significant investment in hydrogen, new nuclear and carbon capture technologies. The 10-point plan will go further. We are backing our world-leading automotive sector, including in the west midlands, the north-east and Wales, with a £2.8 billion package to accelerate the transition to electric vehicles and transform our national infrastructure better to support that electric vehicle revolution. Working with industry, we will drive the growth of low-carbon hydrogen. As part of the 10-point plan, we are aiming for 5 GW of low-carbon hydrogen by 2030. That will see the UK benefit from around 8,000 jobs across our industrial heartlands and beyond.
Importantly for me, we are determined that this transition must be a just and fair one. The Treasury is conducting a review into the cost of net zero. In its review due to be published this spring, it will outline how the transition to a net zero economy will be funded and ensure that contributions are fair between households, businesses and the taxpayer. We must ensure that the net zero transition works for everyone.
Throughout the UK, more than 2.5 million highly skilled people employed in manufacturing make a huge contribution to the wealth and character of their communities. We must not take those skills away from people, so as industry changes, our lifetime skills guarantee will ensure that people are equipped with the skills they need to adapt to the new products and services that we want them to provide. We have also launched the green jobs taskforce, bringing businesses and unions together with skills providers and Governments to develop plans for new, long-term, good-quality green jobs by 2030.
This year, we find ourselves in the privileged position of being the president of the G7 and of hosting and holding the presidency of COP26. We are determined to use these key international events to promote ambitious action to deliver the transformational change required by the Paris agreement. I have the extraordinary honour of being not only the Minister for Energy but the international champion for COP26 for adaptation and resilience. One of the critical challenges that we have as a global leader is not only to ensure that we walk the walk in demonstrating our decarbonisation in the UK, taking our country to a place where our greenhouse gas emissions are no longer impacting on the planet, but to help those developing countries that need to be able to grow and support their communities in a green way, building back better after the traumas that covid has caused to so many of the very poorest developing countries.
We will bring forward our own bold proposals, including our net zero strategy, in the run-up to COP26 to demonstrate that we will be cutting those emissions, creating new jobs and bolstering those new industries across our country to lead on that global stage. We will make sure that the UK’s voice is heard, that we deliver on our commitment to net zero and that protecting our planet for our children and for theirs in the future is something on which we can deliver.
Question put and agreed to.