Energy Security Strategy

Baroness Blake of Leeds Excerpts

Wednesday 27th April 2022 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for coming here to answer our questions. However, I am disappointed that we only have this opportunity 20 days after the publication of the strategy, due to the Government’s decision to publish it while the other place was not sitting and thereby avoid immediate scrutiny.

On the Statement itself, I will begin with the aspects that we welcome. The last Labour Government gave the go-ahead for new nuclear sites in 2009, which have seen little-to-no progress. It now time for the pace to pick up on Sizewell C and the development of small modular reactors. The establishment of Great British Nuclear, if it achieves its goals, should be welcome, but, frankly, what is needed is action rather than additional bureaucracy and figures plucked out of the air without regard to cost, speed or deliverability. Can the Minister set out a timetable for the establishment of this body and, more importantly, the delivery of the eight reactors the Statement suggests could be set up at a rate of one per year?

We also welcome the Government’s target for offshore wind of up to 50 gigawatts by 2030. We need to ensure that developments of this kind lead to creating British jobs, which is not always the case under schemes from this Government. Can the Minister offer assurances that this will be addressed as the strategy is implemented and that other necessary steps to achieve it, such as grid investment in the North Sea network, will be taken?

However, the main issue with the strategy is what is missing. In short, these steps, while welcome, will not provide for households struggling with the cost of living crisis. They do not constitute the green-energy sprint that is needed to cut household bills, reduce reliance on Russian imports and cut emissions this decade. Measures that could have made an immediate difference to households and businesses have been ignored. On the cheapest, quickest, cleanest renewables such as onshore wind and solar, the Government have caved to Back-Bench pressure.

Onshore wind is four times cheaper than gas and overwhelmingly popular, but hundreds of projects that communities want, and are ready and waiting for, have been blocked. Earlier versions of the strategy showed that the Government were well aware of this, yet this strategy contains little beyond vague platitudes, and nothing to reverse the results of their ban on onshore wind projects in 2015, which destroyed the market, with only 20 new turbines granted planning permission between 2016 and 2021. Doubling onshore wind capacity to 30 gigawatts by 2030 could power an extra 10 million homes, add £45 billion to the UK economy and create 27,000 high-quality jobs. Does the Minister accept that bills will be significantly higher as a result of this failure?

The story with solar is not much different. Slashing solar subsidies in 2015 crashed the market, and many projects that could have been enabled are waiting in abeyance. Why have the Government watered down their ambition, rather than properly committing to tripling solar power by 2030?

The main hole in the Statement, for all those millions of people paying at least an extra £170 per year on energy bills, concerns energy efficiency. Energy efficiency is the best, quickest, most effective way to reduce energy bills, but there is no new money for it. Vulnerable people in this country need a national emergency plan to insulate homes, which could cut bills for the millions of pensioners and low-income households who need it most. At the same time, it would create new, skilled jobs. Instead, vulnerable people are being condemned to live in cold, draughty homes and paying more than they need to. The Minister previously admitted that the Government were keen to go further. So, who stopped them, the Secretary of State or the Chancellor?

The Government have missed another opportunity to close the door to fracking and continue to float the idea of a new coal mine in Cumbria. They have also failed to adopt Labour’s proposal of a windfall tax on oil and gas firms that are making record profits while bills skyrocket. Overall, it is fair to say that the energy strategy is disappointing and underwhelming. We can only ask how the Minister expects to reassure your Lordships’ House of the Government’s commitment to net zero if they continue to act to the contrary.

[Lord Oates (LD)]

My Lords, there are things to welcome in this Statement but unfortunately, there are also many missed opportunities. Energy security is obviously critical at this time, but we must understand that it is about not just security of supply to the United Kingdom but the fact that millions of households right now feel a complete lack of security regarding their ability to pay their energy bills going forward, and particularly as we go into the next cold period.

The Government had an opportunity to take up my right honourable friend Edward Davey’s proposal: a windfall tax on the super-profits of the oil and gas industry, which the Labour Party has also argued for. That could have unlocked finances to give further support to people who will be desperately vulnerable this winter.

As the Liberal Democrats and many others in this House have repeatedly stated, curtailing the wasted energy that leaks out of our buildings should be the No. 1 priority in the hierarchy of measures we take to improve our energy security, reduce carbon emissions and cut costs for households. But there was nothing new in the Statement on this front. I asked the Minister at Questions yesterday why the number of insulation measures installed annually in the UK had fallen from a high of 2.3 million during the coalition to an average of less than 10% of that peak since then. He did not really give me an answer, to be honest, but I do not blame him for that. If he was unconstrained by collective responsibility, he would be able to be clear that it was down to the myopic foolishness of the Treasury, which has kyboshed many of the schemes that have been brought forward in the past. Not least of these is the green homes grant, which was destroyed by its lack of understanding that this has to be a long-term project, not a short-term stimulus measure. I hope the Minister will not be deterred, however, by that myopia, and will continue to urge his government colleagues to take a more creative approach to this issue, including fiscal measures such stamp duty discounts and council tax rebates for homes that improve their energy performance certificate ratings.

Can the Minister also tell us when the new ECO4 regime, which he mentioned yesterday, comes into effect? Am I correct in thinking that there is gap between ECO3 and ECO4 coming into effect? If so, why is that being allowed to happen?

Like the noble Baroness speaking for the Labour Benches, I welcome the extra commitments on offshore wind, but I also share her view that this is a massive missed opportunity for onshore wind. Onshore wind, as has been said, is one of the cheapest ways of powering green energy, and it is absolutely reckless that we are putting it aside.

On oil and gas, I hope the Government are really thinking about the danger of stranded assets on any new exploration. That is a dangerous thing.

I should declare my interest as a member of the UK Hydrogen Policy Commission in saying that I very much welcome the Government’s commitment to doubling their ambition to 10 gigawatts by 2030, and that for the first time, at least half of that will be green or electrolytic hydrogen.

Our ambitions are now similar to those of many of our international competitors, which is welcome, but the funding allocation behind them is completely different. We are not putting in anything like the money that our competitors are. Could the Minister look at that issue in particular?

Finally, will the Minister also look at the support that will be needed by local authority planning departments and councillors, which will have to deal with an increasing number of hydrogen-related planning applications? Currently, most do not have the necessary skills or resources to deal with them or to address the inevitable concerns. Will he also look at the regulatory environment that will be required? The hydrogen strategy suggests that regulations will be made on a piecemeal basis as hydrogen is scaled up, but this misses the point that regulatory certainty is absolutely required if the scale-up is to happen at all. I hope he can address a few of those questions.