Gas-fired Power Stations
Baroness Blake of Leeds Excerpts(3 months, 2 weeks ago)
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Baroness Blake of Leeds (Lab)
My Lords, it is fair to say that there has been some scratching of heads as to why exactly this announcement was deemed necessary. There is general agreement that gas-fired power stations will be needed during the transition to net zero. However, there is disquiet at the emphasis on this aspect of policy rather than on alternative approaches such as ramping up investment in renewables.
If new-build plants are needed, it is essential that they are capable of converting to hydrogen or are connected to functioning carbon capture and storage. May I seek assurance from the Minister that this is indeed the Government’s view? Can he also inform us what estimate has been made of how many of these new gas plants will be needed, when they will come on stream and how long reliance on them is expected to last?
Earl Russell (LD)
My Lords, this announcement comes out of the blue and fuels doubts that this Government are on track to meet their own target of fully decarbonising power generation by 2035. So far, instead of progress we have seen repeated failures to prepare; the offshore wind auction collapse; an effective ban on onshore wind; nuclear power projects delayed; slow or no progress on battery storage, hydro-generation and tidal projects; and a lack of investment in overall grid capacity. I ask the Minister to confirm that the Government are still committed to fully decarbonising power generation by 2035 and that these will be the last ever carbon-based power generation plants to be built in the UK.
Heat Pumps
Baroness Blake of Leeds Excerpts(3 months, 3 weeks ago)
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Baroness Blake of Leeds (Lab)
My Lords, the number of heat pumps per 100,000 people in the UK is about eight times lower than the average across the EU. What steps are the Government taking to investigate how other countries have found success in raising their adoption rates, and will they apply any lessons learned to increase our own adoption rate, which is far lower than it needs to be?
Lord Callanan (Con)
The noble Baroness is right; it is lower than it needs to be, which is why we have plans to expand the installation rates up to the levels that I mentioned. We have a number of schemes to support that: the clean heat market mechanism, which I mentioned; the boiler upgrade scheme; and we increased the grants to £7,500. We support it under the social housing decarbonisation fund, and under the eco scheme as well. We have ambitious plans to expand the installation rate.
Overhead Electrical Transmission Lines
Baroness Blake of Leeds Excerpts(4 months ago)
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Baroness Blake of Leeds (Lab)
I thank the noble Lord, Lord Swire, for bringing this debate before us. I also thank the noble Earl, Lord Effingham, and the noble Lord, Lord Bruce, for their contributions so far.
The view coming through is clearly that none of us can underestimate the challenges ahead in being able to deliver the UK’s target to achieve net-zero carbon emissions. It is intense, and it is fair to say that we are already witnessing unprecedented change in the way our electricity is being generated. We recognise the demands this is putting on the industry to deliver, but also on the capacity of the electricity grid to catch up and then keep pace with the dramatic investment and build required.
I think we all know the pressure there is on government. In fact, in talking to businesses about the timescales that they are being quoted for connection to the grid, some of the waiting times we hear of are, frankly, eye-watering. The years quoted—we are talking in years here—start at seven years and go up to 12; even longer waits are not uncommon. From our conversations, I think that these are some of the most problematic areas that industry generally and investors are having to grapple with at the moment. Fortunately, other places around the world have a more attractive set of circumstances; they can go more speedily.
Briefings from industry representatives suggest that it can take around 10 years to build a new transmission line, seven of which can be spent on the consenting and planning side, with just three years on construction. Clearly, our debate today with regard to a preference for underground transmission lines or overhead lines with pylons is critical to understanding some of the reasons for this lengthy process. As we have heard, the context is that the Secretary of State should grant development consent for underground or subsea sections over overhead alternatives only if they are satisfied that the benefits clearly outweigh any extra, economic, social or environmental impacts. The mitigation hierarchy must be followed and technical obstacles must be overcome.
The latest government guidance presumes that the lines will be built overhead, with notable exceptions, as we have heard, including areas of outstanding natural beauty and national parks. The responses on this have been split, not always in predictable ways. To cut to the point: will the Minister tell us whether the Government feel that expediency or landscape considerations should take precedence? Further, how can he ensure that the correct balance is achieved and delivered consistently across the country, when these planning applications are determined? With regard to the areas of natural beauty and other sensitive areas, can he confirm whether it will just be within the boundaries of those areas, or will consideration be given to the aspect—the areas outside those boundaries that are overlooked by people who go into our national parks to enjoy the natural amenities there?
A recurring concern with overhead lines is connected to their ecological impacts. I do not think we have heard much about that. Some of the evidence coming through in responses to consultations might seem slightly perverse, but this is not straightforward. The RSPB has stated that both overground and underground lines can have detrimental impacts on birds and other wildlife, depending on the terrain—for example, wetland habitats or through the impact of hedgerow removal. Can the Minister comment on this and give us his assessment as to whether a more discretionary, rather than prescriptive, starting presumption might be a better way to manage the ecological impact of implementing new electrical lines? It clearly is not possible to have a one-size-fits-all approach in this area.
We know that, before adding new parts to the electricity network, the transmission owners will always consider first whether they can achieve more capacity by upgrading or enhancing the existing networks. This is quite right and as we would assume. When this is not possible, a robust and transparent options appraisal will follow. Further to assessments flowing from this, planning authorities will work on the proposals in line with the national policy statements, ready to take proposals for decision.
Consultation with local communities and stakeholders then becomes a key component in making progress. A transparent process must be established to gain the confidence of all parties in an attempt to avoid confrontation. Achieving a balanced view on all the available considerations is then the responsibility of local planning authorities and, ultimately, the Government if still contentious.
We can all recall when we had a Question on this in the Chamber. It coincided with the Government’s announcement of their national plan, back in November last year. The Secretary of State announced an ambitious programme to deliver a transformation of the electricity network to support energy security and the transition to net zero. This will include plans to halve the time taken to build new transmission infrastructure and will therefore reduce the time taken for viable projects to connect to the grid.
As we know, local objections have delayed many of these considerations. The Secretary of State also announced plans to introduce “a community benefits package” and
“a national communications campaign to improve public understanding of electricity infrastructure and its benefits”—[Official Report, Commons, 22/11/23; col. 22WS.]
to enable local communities to make the choice before them. Do we have any more idea what these community packages will look like or what the communications campaign will contain? Could the Minster update us on the proposals and inform us when they will be implemented?
Lord Callanan (Con)
Yes, I absolutely concede the noble Lord’s points but, given the modern policy environment and all the legal impacts, much energy infrastructure that was built many years ago would be very difficult to build today. In past generations, consumers were perhaps much more understanding of installations of nationally significant infrastructure than they are now. I absolutely accept the noble Lord’s point. In all these considerations, it is also about balance—balancing out competing factors, of which cost is one and convenience is another, but security of supply is an equal factor that also needs to be considered. I suspect that the noble Lord is probably considering the low-voltage distribution network rather than the high-voltage transmission aspect of the supply.
My noble friend Lord Swire talked about the different creative technologies available for laying underground cables and asked whether the Government had considered those factors. Ultimately, it is not for the Government to opine on those matters. Those innovative solutions are quite rightly being driven forward by industry and they are a brilliant example of how we can use such innovations to support the delivery of our energy infrastructure ambitions and our net-zero infrastructure. The transmission owners and others are the experts in this field and, of course, we will continue to liaise with and support them in their endeavours.
I hope I have—but I suspect I have not—succeeded in persuading noble Lords that undergrounding is far from being the silver bullet in our endeavour to expand our network transmission infrastructure and meet our net-zero targets. In fact, using underground rather than overhead lines may in some respects have the opposite effect and lead to more delays rather than fewer, given that the installation takes much longer. In some cases, the upfront costs are perhaps not worth it in the longer term, as my noble friend Lord Effingham suggested. In our bid to greatly expand our domestic energy production and meet the needs of households up and down the country, I am afraid that we need to act and build networks faster than we have ever done in the past.
It is for those reasons, which I have talked the Committee through, that the Government have decided to maintain our policy position of a starting presumption of overhead lines for electricity network developments in general. That is not to say that the Government stand idly by while communities living in the path of new transmission infrastructure are affected; it is quite the opposite. That is why, at last year’s Autumn Statement, the Chancellor announced proposals for a community benefits scheme for communities living near transmission network infrastructure, which the noble Baroness, Lady Blake, asked about. The communications campaign is due this year and I invite the noble Baroness to get in touch directly so that we can provide more details on it.
I am afraid that I am running out of time, so I will move to my conclusion. I will write to noble Lords if I have not answered any of their points.
I do not need to tell the Committee that, as with so many issues, no policy is etched in stone indefinitely. In fact, the Government would not be doing our job properly if we did not keep policies under review. However, that falls far short of committing to look again at the Government’s current policy on undergrounding less than two months after it came into force. Now is not the time. The Government can determine whether this should be reassessed if and when more evidence is provided by industry. For now, the best place for the majority of transmission infrastructure is—I am sorry to say—up in the air, for technical, operational, environmental and cost reasons and, most importantly, to protect consumer bills.
Baroness Blake of Leeds (Lab)
May I ask for a written response with reference to the community benefit packages and the consultation package, just to give us an update? Several months have gone by and we should be moving on this.
Lord Callanan (Con)
I would be happy to write to the noble Baroness on that matter.
Global Heating
Baroness Blake of Leeds Excerpts(5 months, 1 week ago)
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Baroness Blake of Leeds (Lab)
My Lords, I add my thanks to the noble Baroness, Lady Sheehan, for securing this debate and for her introduction. I am mindful of the contributions of the noble Lord, Lord Lilley, and my noble friend Lord Young. It is good to have these debates, not least to recognise some of the challenges that we face and the need to hone all the evidence and bring the arguments together to make sure that we can move forward together on this important issue.
As we have heard throughout the debate, analysis published by NASA indicates that the earth’s average surface temperature in 2023 was the warmest on record, with global temperatures around 1.2 degrees Celsius above their baseline period of 1951 to 1980. This links with what billions of people around the world have experienced—extreme flooding, rising sea levels and exceptional heat, accompanied by widespread unprecedented media coverage, bringing evidence of these impacts into households across the world.
The inclusion of the 1.5 degrees Celsius target was regarded as a great breakthrough in the Paris climate agreement of 2015. Although this was a drop of only half a degree, the IPCC has since spelled out the growing risk of calamities if 1.5 degrees is breached, and the consequent need to halve carbon emissions by 2030 to have any chance of avoiding them. I thank the noble Baroness, Lady Hayman, and my noble friend Lady Kingsmill for outlining those calamities, and the risks, so well.
As we know, the EU’s Copernicus earth observation programme has stated that 2023 was the warmest year on record “by a large margin” and has estimated that it is likely that a 12-month period ending in January or February this year will exceed 1.5 degrees Celsius above the pre-industrial level. The Met Office has also projected that global temperatures could temporarily exceed the 1.5 degrees threshold in 2024. Although this would not of itself mean a breach of the Paris agreement, I think we can almost all agree that the first year above 1.5 degrees will indeed be a difficult milestone to reach in climate history, even taking into account the impact of El Niño in boosting temperatures.
Against this backdrop, serious alarm has been raised about the current UK Government’s changes in policy, despite the rhetoric and their welcome commitments and targets. As we have heard, these policy changes include: pushing back the planned date for phasing out the sale of new petrol and diesel cars and vans from 2030 to 2050; reversing the plans to introduce a new requirement for landlords to upgrade the energy efficiency of their properties; and the even more damaging decisions to approve a new coal mine in Cumbria and to allow the approval of new oil and gas licences in the North Sea—which, we also know, will not contribute to reducing energy costs or increasing energy security.
This all speaks of a Government who simply do not understand the impact of trashing our reputation as a world leader on tackling climate change, the damage they are doing to the confidence of investors and businesses and the subsequent damage to our economic prospects, as well as our ability to deliver net zero. Indeed, although the Climate Change Committee’s 2023 progress report commends the overall aims of the Government’s 2030 strategic framework, it cautions that
“more must be done to support the ambitions expressed in the document with detailed future actions”.
Further, it criticises the Government for the reputational damage the UK has suffered over the past year as a result of their policy changes, stating that these changes represented a “retreat” from the strong leadership position established during the UK COP presidency in 2021. The report talks about the
“decline in profile for international climate issues”,
highlighting that domestic policy decisions
“clash with the UK’s international messaging”.
I conclude by asking the Minister for the Government’s views of the risks posed by the temperature rise predictions highlighted in today’s debate. Further, do the Government have plans to respond constructively to the criticisms levelled at them from the international community? Does the Minister acknowledge that our reputation has been severely damaged and, if so, will he tell us what actions the Government will take to restore our reputation as a global climate leader?
Hydrogen Production Revenue Support (Directions, Eligibility and Counterparty) Regulations 2023
Baroness Blake of Leeds Excerpts(6 months, 2 weeks ago)
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Baroness Blake of Leeds (Lab)
My goodness. I was not expecting that announcement and have not been party to that information. I am sorry: I was not clear from the noble Lord’s comments whether he meant the end of this year. Perhaps he has secret information about when this Parliament might come to an end.
Baroness Blake of Leeds (Lab)
Can I just put on record my appreciation for the incredible contribution that the noble Lord, Lord Teverson, has made in this area? I certainly benefited enormously from our working closely on the Energy Bill, and going forward from that.
I also echo the Minister’s comments on the progress that has been made; during the passage of the Bill, there were times when we wondered how we were going to get through it. I assure the Minister that the announcement of the first funding round, with its 11 successful green hydrogen projects, has been noted and is welcome. I certainly look forward to hearing about their progress.
I want to make a few comments on the regulations before us. As we have heard, this statutory instrument is one of the first to follow from the 2023 Act and we know that there are more to come. The regulations cover, in particular, the process whereby the hydrogen low-carbon business plan will be implemented during the initial allocation period of contracts for hydrogen producers; all of this goes towards the target of 10 gigawatts of hydrogen production.
As I understand it, schemes will be identified and quality-assured by the Minister, who will then direct the hydrogen counterparty—it is identical in structure to the low-carbon contracts company—to provide contracts for companies that have been deemed eligible. All of that is absolutely fine and the right thing to do, especially when we consider the initial allocation process.
The Explanatory Memorandum states that the initial allocation will give way to a competitive tender process later on. Some more detail on that would be useful as we go forward; perhaps it will be forthcoming. However, at this moment in time, we are considering the initial allocation process, which is to be informed by the centrepiece of the SI: the low-carbon hydrogen standard, which has been outlined for us today. This refers to a detailed document setting out the greenhouse gas emissions and sustainability criteria that programmes applying for an allocation contract should follow.
I note the stringent qualifying criteria for a project’s eligibility. Of course, they require a project not to exceed a certain level of carbon emissions and to measure fugitive hydrogen—that is, the process whereby hydrogen is produced and all the implications around hydrogen—for its duration. It is a system-wide standard for the low-carbon nature of that hydrogen. For a project to get a direction from the Minister, it must comply with the standard when it receives agreement to proceed.
I just want to pick out that point. As we understand it, the standard will evolve. Indeed, the standard to which the SI refers is version 2 of the UK low-carbon hydrogen standard; that evolved from the initial standard, which was produced immediately after the Act was passed. Version 2 has emerged from consultation with the correction of various elements of the initial standard that could have caused difficulties. It has tightened up several matters that were uncertain, difficult or in need of clarification. It is absolutely clear in the documentation and the Explanatory Memorandum that it is intended that the standard will evolve; this means that the department envisages that it will produce further iterations of the standard in future. The low-carbon hydrogen standard as it currently stands is therefore likely to change. Does the Minister think that this will present some difficulties for those companies that have had their contracts approved? Clearly, although they will be signing up under version 2, they may not necessarily comply if we move on to versions 3 or 4—or more. It would be good to get some assurances around what the implications will be for companies in the earlier rounds.
There needs to be a bit of thought about whether those companies could be disadvantaged as we go forward. Will the Minister have some discretion in considering this? Of course, it could go either way, although it is very unlikely that there would be a relaxation of the carbon emission standards, but there is something to pick up there. Is it possible that, with these changes, companies might be put in a place where there are more costs, expense and planning? It would be useful to have more understanding of the methodology that will be used to determine whether companies are continuing to adhere to the standard once it is set in the contract. From the initial comments, I understand that the Minister is satisfied that this will work well. Could he expand on some of the changes that might come along?
During the consultation, some respondents suggested that further information could be published in a contract register, including outturn volumes, CO2 capture rates and CO2 capture quantity. It is obvious that a balance needs to be struck between transparency and what useful information is kept confidential but, as making this information public seems like it would have a positive impact, is it that the impact is not deemed significant enough to lower confidentiality? Alternatively, is it that there are further drawbacks to publishing this information that have led the Government to proceed with the initial approach? A bit more clarification around that decision-making would be welcome. On the other hand, 10 of the 23 respondents disagreed with information that the Government are proceeding with publishing, primarily due to the financial aspects. Could the Minister please elaborate on the decision-making process there?
I welcome the progress that has been made and look forward with interest to see how we can move forward in the area of hydrogen, which seems to be fairly fraught—I note the comments of the noble Lord, Lord Naseby. I am also interested in the response on the review. It is very noticeable that that is missing, because of the process. But, in such a new departure, a review would be useful and welcome.
Lord Callanan (Con)
I thank all noble Lords for their contributions to the debate. Low-carbon hydrogen will be an essential part of our future energy mix, and the hydrogen production business model seeks to address one of the key barriers to its deployment: the higher cost of low-carbon hydrogen, compared to higher-carbon counterfactual fuels. The Government remain committed to delivering on our hydrogen ambitions—first, those to help support energy security, but also our decarbonisation goals.
The message from the 2023 progress report from the Climate Change Committee was the need to deliver policies to enable deployment at scale of new industries such as hydrogen. I think that sentiment is widely recognised across this House and by industry. Last week’s announcement represents a major step forward in helping producers to deliver a fuel of the future today, backing some of our fantastic businesses here in the UK to go greener. These regulations are vital to enable those contracts to be awarded, so that projects can take the investment decisions that will kick-start the deployment of low-carbon production in all parts of the United Kingdom. But we are not stopping there. A new second round of funding is already available for producers to apply for, so that they can develop the next round of projects and then subsequent ones that help to build on that success. I will deal with some of this in more detail as I go through the questions raised by noble Lords.
Limiting Global Temperature Increase
Baroness Blake of Leeds Excerpts(6 months, 2 weeks ago)
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Lord Callanan (Con)
We are into semantics and wording, but a transition away with clear deadlines is, in our view, a phase-out in all but name. It is not the language that we would have preferred, but in a multilateral negotiation there has to be compromise. We are very clear on the trajectory we are following. We have published numerous plans about our transition. We are accelerating the rollout of renewables and reducing our use of oil and gas, and that will continue.
Baroness Blake of Leeds (Lab)
My Lords, I too recognise today’s COP agreement as an important moment for the world. It is the first time there has been a global commitment to a transition away from fossil fuels. There will always be those vested interests pushing back, as there was at COP. The reality is that limiting global warming to 1.5 degrees still requires much to change. Despite the Minister’s attempts to reassure us, it was disappointing that, when their leadership was most needed at COP, our Government put their party infighting first. To keep 1.5 degrees alive, they will need to do better and lead by example. Therefore, as a result of the statement released this morning, what plans do the Government have to show strong international leadership and to make sure that we bring in the changes of direction needed? Are there any plans for changes at this moment in time or not?
Lord Callanan (Con)
I repeat the answer I gave earlier: these statements demean the noble Baroness. The UK provided fantastic leadership. We have an official, Alison Campbell, who co-chaired a number of the panels. She was the penholder on a number of these negotiations. We succeeded in all of our aims. There was robust political leadership; Graham Stuart was there. For a lot of the time, our own Minister, my noble friend Lord Benyon, was there. There were many other Ministers who were also there. There was no gap in UK representation or in the agreements that we achieved.
Climate Change: Phasing Out Fossil Fuels
Baroness Blake of Leeds Excerpts(6 months, 3 weeks ago)
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Lord Callanan (Con)
I am sorry to disappoint the noble Baroness, but I have not seen those particular remarks. I am sure they were excellent, and I will certainly take the trouble to have a look at them.
Baroness Blake of Leeds (Lab)
My Lords, earlier this month it was revealed that the UK has fallen behind when it comes to attracting investment in renewables, slipping to seventh behind the US, Germany and others. This was a direct result of what EY described as the “diminishing of green policies”. Can the Minister tell us whether the Government have made any assessment of the impact of this on jobs and investment in the UK? How do the Government expect to encourage investment in green industries when they are pursuing climate delaying tactics at home?
Lord Callanan (Con)
We are not pursuing climate delaying tactics. Our legally binding net-zero commitment and carbon budget remain exactly the same. I do not know whether the noble Baroness was listening to the answer I gave to the noble Lord, Lord Teverson, but we are attracting record amounts of inward investment. At the Global Investment Summit, a whole range of inward investors promised considerable new funding in the order of £30 billion to all these exciting new industries, in which the UK is a world and European leader.
Electricity Network Connection Action Plan
Baroness Blake of Leeds Excerpts(7 months, 1 week ago)
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Lord Callanan (Con)
Of course, there are still some onshore wind connections being built in both Scotland and Wales, and a few in England as well. We are committed to looking at the barriers that exist and overcoming them.
Baroness Blake of Leeds (Lab)
Ofgem’s new mandate to prioritise the UK’s net-zero target comes into force on Boxing Day—welcome progress secured by an amendment to the recent Energy Bill. Given that the review on reform of the electricity connections system began before this change, what discussion have the Government already had with Ofgem to make sure that decisions are made in line with the new mandate, thereby ensuring that every opportunity it presents is taken to ensure progress?
Lord Callanan (Con)
I think the noble Baroness will find that Ofgem’s view is that it was already fulfilling that mandate—and, of course, the vast majority of the new connections are because of new renewable electricity, which is to fulfil our net-zero obligations. Ofgem is fully in line with that.
Biomass Strategy 2023: Cross Sectoral Sustainability Framework
Baroness Blake of Leeds Excerpts(7 months, 2 weeks ago)
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Lord Callanan (Con)
I did not quite hear the start of my noble friend’s question, but if she is asking whether we want to source more sustainable biofuels from UK sources, the answer is yes, absolutely.
Baroness Blake of Leeds (Lab)
The transition to clean power will require a massive expansion of alternative energy sources right across the board, whether biomass, onshore wind, solar or others, which will also deliver energy security and hundreds of thousands of good green jobs. This cannot be achieved without reviewing the sustainability and economic competitiveness of each energy source and accelerating carbon capture and storage. How are the Government working comprehensively towards these two vital functions?
Lord Callanan (Con)
I absolutely agree with the first part of the noble Baroness’s question. She is right that there needs to be a variety of sources of power: renewable sources, biomass linked to carbon capture and storage, and long-term hydrogen production. Of course, in the net zero strategy we look at all these things in the round, linked to a long-term analysis of how the power needs of the UK are best met going forward.
Carbon Capture and Storage Infrastructure Fund
Baroness Blake of Leeds Excerpts(8 months, 2 weeks ago)
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Lord Callanan (Con)
It is not one or the other; we need to do both. Of course we need to push ahead with renewables, and I have set out many times in this House how well we are doing. Almost 60% of electricity in the last quarter was delivered by renewables, but CCUS is also essential. We have committed £20 billion-worth of funding to CCUS over the next few years because everybody thinks it essential to meeting our goals. It also offers a massive export opportunity for this country, as we have expertise in many of these technologies. The estimate is that capturing 20 million to 30 million tonnes of CO2 by 2030 could deliver up to 50,000 jobs, many of them in our industrial heartlands.
Baroness Blake of Leeds (Lab)
My Lords, the Government have only recently entered negotiations with track 1 clusters, despite the climate investment fund being announced three years ago. They have earmarked £0.3 billion of the £1 billion fund for this financial year. This does not leave much time for negotiating. Are the Government concerned that this deadline, caused by their own delays, will impact on their negotiating position? Is the Government’s priority using this money well or simply using it?
Lord Callanan (Con)
My Lords, this makes me think that we cannot win on this. One part of the Opposition does not want to award these contracts at all and the Labour Party thinks we should have done it earlier. The reality is that we are proceeding with negotiations. It is our aim to have the contracts let for the first 10 projects by quarter 3 of next year. This is a really exciting technology, but we need to do the negotiations properly and get maximum value for money for the taxpayer from what is an emerging new industry.