Great British Energy Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the Minister, the noble Lord, Lord Hunt of Kings Heath, for so ably introducing this debate on a Bill which relates to one of the most critical issues this country must address: energy security. I very much look forward to the maiden speech of my noble friend Lord Mackinlay of Richborough and that of the noble Baroness, Lady Beckett—a very warm welcome to them both.

This Bill gives the Secretary of State total power to establish the publicly owned Great British Energy, which will receive £8.3 billion of British taxpayers’ money. The purpose of Great British Energy will be to assist the Government in ramping up renewables, which will always be naturally unreliable, to achieve their unachievable target of 100% clean energy by 2030. I am fully in favour of ambitious targets, but this is a target driven by political ideology which industry experts have described as aggressive, unrealistic and expensive—requiring far more than the allocated £8.3 billion of funding. Yet the Bill contains little detail on how this will be achieved. We have not seen a business plan or a framework agreement, nor do we understand how the Secretary of State and Great British Energy will be held accountable.

Over the past month, as was the case both this time last year and in March, we have seen another dunkelflaute, indeed in March the capacity factor—the measure of how often turbines generate their maximum power— failed to reach 20%, and for the past two weeks it has been virtually zero. The UN’s Intergovernmental Panel on Climate Change predicts that average wind speeds in the UK will decline and that wind droughts will become more frequent. Relying on new interconnectors to Belgium and Holland will not offer energy security if either their wind farms suffer the same weather conditions as ours or their countries’ needs are greater than ours. Indeed, it is possibly only Xlinks’ proposed HVDC cable bringing solar and wind-generated energy from Morocco to the UK that comes close to offering baseload power as well as exclusive supply.

Throughout the election campaign, the Government repeatedly promised that Great British Energy would cut household energy bills by an average of £300. A similar claim was made by at least 50 MPs as well as by both the Science and Work and Pensions Secretaries of State. The Chancellor said:

“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300”.


In an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. However, the quotes in the weekend press from the wind farm industry are damning. They say that the rush to deliver by 2030

“would create very short-term resource constraints, spikes in prices and the consumer risks losing out”—


a fear also expressed in the recent NESO report that supply chain pressures might add a whopping £15 per megawatt hour to the price of our electricity.

I therefore express my deepest concern that in the other place the Government voted against a Conservative amendment to make cutting energy bills by £300 a strategic priority for Great British Energy. By doing this, they voted against an amendment that would hold them to their word and to their election promise. the Minister confirm by how much they anticipate energy bills to fall by 2030? The pledge to cut household energy bills by up to £300 was not the only promise the Government made. They also promised that Great British Energy would create 650,000 jobs. Yet this too was defeated from becoming a strategic objective of Great British Energy and is absent from the Government’s Explanatory Notes to the Bill and the Great British Energy founding statement. Why?

These are not trivial matters; they are promises that are important to people, and the Government have already put 200,000 jobs at risk through their plans to shut down North Sea oil and gas. The Secretary of State has made huge promises which greatly impact people’s energy bills, their businesses and their jobs. It is therefore crucial that the Government are held accountable. Will the Minister tell the House how the creation of Great British Energy will impact employment in the UK?

The Government have said that Great British Energy is part of their plans to ramp up renewables, which they say will result in cheaper energy and greater energy security. This is simply not true. Instead, the Government’s renewables plans will cost the British people. First, analysis by Cornwall Insight found that the contracts for difference round that the Secretary of State bumped up will increase people’s energy bills. Secondly, if we build renewables faster than we can develop and connect them to the grid, the constraint payments needed by 2030 could increase bills by hundreds of pounds. Why was the need for long-term energy storage not realised before the approval of all these huge solar farms being built on prime agricultural land?

Thirdly, the cost of the transition to renewable energy will be paid for by consumers, through environmental levies on bills. The Office for Budget Responsibility has forecast that this tax will increase by 23% by 2030, highlighting the upfront cost of the Government’s ambition to decarbonise the grid by the end of the decade. In fact, households in the UK are expected to pay the equivalent of £120 per year, via green levies, to fund the Government’s race for clean energy. This is far from the Government’s promise that Great British Energy and the race to renewables would cut bills.

It is clear that the cost of investment in renewable energy projects will be incorporated into prices. Not only will consumers be burdened by environmental levies but experts have warned that the funding required to build new electricity pylons and overhead wires, enabling the connection between wind and solar farms to the grid, is and will be added to bills in the form of network charges. The Government have not modelled the cost of constraint payments, network costs or green levies. What is more worrying is that they have deprioritised new technologies such as small and advanced modular reactors.

The inescapable truth is that intermittent, non-dispatchable renewable energy sources can never compete on level terms with nuclear power, which can harness the extremely high-energy density of nuclear with very little fuel and very little waste. For its entire lifecycle, it is the lowest-carbon electricity source and that is even before the potential uses of its excess heat, such as the creation of green hydrogen, are taken into account. Shockingly, solar requires 17 times more material and 46 times as much land for the same installed capacity as nuclear. Moreover, these new technologies will not only bring supply chain opportunities, jobs and inward investment but will attract data centres such as Microsoft to the UK if we can deliver the kind of co-located energy sources as offered by such companies as TerraPower, X-energy and others.

In the meantime, by increasing the windfall tax by 3% in the Budget, the headline rate of tax imposed on UK oil and gas firms is 78%. Energy firms have described this as “a devastating blow”. This hike will cut investment in UK natural resources and oil and gas production and will make the UK increasingly dependent on imported supply. Not only will this compromise the UK’s energy security but consumers will be exposed to price fluctuations. If investment in UK oil and gas decreases, the revenue generated from the energy profit levy, which the Government are relying on to help fund Great British Energy, will decrease. Twelve billion pounds in tax receipts have been lost from the North Sea by pressing ahead with ending oil and gas licences, a move no other major economy has taken. This, combined with £8 billion which will be spent on Great British Energy, is a staggering £20 billion.

I come back to the details of the Bill, or the lack thereof. I repeat that we have not seen a business plan or a framework agreement. This is deeply concerning. We have learnt that Great British Energy will be headquartered in Aberdeen—incidentally, in a country totally opposed to nuclear power—but that the chair will be based in Manchester. Another promise was that Great British Energy would turn a profit for the taxpayer, yet there is nothing in the Bill that elucidates an investment profile or even a targeted rate of return. Why not? The British taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of their money.

We have also not seen an explanation of how this Bill is different from the UK Infrastructure Bank, which was set up to do the exact same thing. Great British Energy is almost a duplicate of the UK Infrastructure Bank. This was established to provide loans, equity and guarantees for infrastructure to tackle climate change, funded by £22 billion. Great British Energy seeks to do something extremely similar but gives far greater powers to the Secretary of State. The UK Infrastructure Bank Bill had important accountability and report measures which are removed from this Bill. Why is this and why should taxpayers be burdened twice?

Furthermore, how is Great British Energy going to link in with the underresourced Great British Nuclear, which has yet to receive this Government’s encouragement to craft a vision that industry, government and the private sector can work collectively towards? Indeed, the word “nuclear” does not even appear in the Government’s new industrial White Paper, and the Minister reported at the all-Peers briefing last week that Great British Energy will not be investing in nuclear at all. What is going to happen to Wylfa?

In conclusion, this legislation is premature, lacking in detail and fuelled by an unrealistic target which will be unnecessarily costly to the people, jobs and economy of this country. This is particularly concerning given the wide-ranging powers the Bill gives to the Secretary of State and the absence of accountability measures and a business plan. We need clarity from the Government on the priorities and intention of Great British Energy. I hope that the Minister—indeed, the Minister for Nuclear—for whom I have the greatest respect, will engage constructively with these concerns.

Drax Power Limited: Ofgem Investigation

Baroness Bloomfield of Hinton Waldrist Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, on the issue of data, I have checked with Ofgem. At the moment, it has no reason to think that Drax is not compliant, but it will not hesitate to act if required. On the question of subsidy to Drax, the noble Baroness is referring to the ROC system of subsidies, which the last Government oversaw for many years. The ROC comes to an end in 2027. The last Government issued a consultation on whether there should be transitional subsidy arrangements. We are considering the results of that work at the moment.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Noble Lords will remember the “Panorama” exposé of the illegal sourcing of wood pellets from Canadian forests, a charge vigorously denied at the time by Drax. Our Conservative Government introduced the strict criteria that allowed Ofgem to conclude that there was not “sufficient evidence”. What plans do this Government have to ensure that Ofgem can continue to investigate any company receiving a subsidy?

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is clearly very important that companies in receipt of the ROC payments—and, indeed, where their biomass electricity generation is classified as low-carbon—are acting according to sustainability criteria. The last Government issued a call for evidence in 2021 and then took two years to publish a strategy, in 2023. On the revision of sustainability criteria, they rather ducked it, saying that they would produce a cross-sector consultation this year, which never happened. We are now working on that. It is clear that sustainability criteria need to be kept up to date. We will ensure that that happens.

King’s Speech

Baroness Bloomfield of Hinton Waldrist Excerpts

Thursday 18th July 2024 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I turn back to energy and of course nuclear power in particular. I draw attention to my entry in the register of interests as an adviser to Terrestrial Energy, a generation IV Canadian technology company.

I congratulate the noble Lord, Lord Fuller, on an excellent and meaty maiden speech—the first of many valuable contributions to your Lordships’ House, I am sure. I also congratulate the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Hayman of Ullock, on their appointments; they have both given wise counsel to the House. I was also reassured by his opening speech. I am glad that the new Government recognise the challenges of the energy trilemma and that they will continue the good work of the previous Government and speed up the delivery of a domestic clean economy. As was said in the King’s Speech, the Government are determined to lead

“the development of the technologies of the future”.

Net zero cannot be achieved without nuclear power, which absolutely encompasses the technologies of the future. The last Government went some way towards this—albeit too slowly—by putting in place the legislative environment, a dedicated Minister and a public body in the shape of Great British Nuclear, which together aimed to deliver the renaissance that the nuclear industry desperately needs. We once led the world in nuclear technologies. In some we still do, but we could become a world leader in all of fusion, fission and fuels if we could just get a move on. By all means build at gigawatt scale but not at the expense of the small, advanced and micro technologies. This Government just need to quicken the pace.

Why? It is because nuclear energy is a vital low-carbon source of energy for the UK. While renewables such as wind and solar are important in achieving net-zero ambitions, nuclear provides the essential baseload required to meet the increasing demand for reliable energy while keeping emissions low. As the noble Baroness, Lady Moyo, so eloquently warned in her exceptional speech, AI and data centres will result in an explosion of demand for power. Nuclear is the most sustainable energy source; it has the lowest life-cycle carbon footprint and is the only low-carbon energy available 24/7, making it essential to meeting these needs. The nuclear industry is also crucial to economic growth and job creation. Over 77,000 people currently work in that industry, with the majority of these jobs outside London and the south-east. However, the UK must train tens of thousands of additional workers if the Government are to meet the target to deliver 24 gigawatts of nuclear by 2050.

I hope that this Government will continue to support the work of the nuclear skills taskforce, as well as the many outstanding apprenticeship schemes throughout the industry, notably those with the UKAEA, Rolls-Royce, and EDF at Hinkley Point. Some of those at Hinkley Point relocated from Anglesey when the Horizon project failed. I sincerely hope that this Government will continue their plans to redevelop Wylfa. If not at gigawatt scale then please release it quickly as a site for SMRs, as either would enable this young skilled workforce to return home. Incidentally, while it is not one of the industrial heartlands of the noble Lord, Lord Hunt, it is one that is very close to my heart and desperately needs good-quality, well-paid employment—as does Cumbria, another area which cannot be described as an industrial heartland, an observation that will not be missed by his noble friend Lady Hayman of Ullock.

It was also welcome to see the announcement of a sustainable aviation fuel revenue support mechanism Bill, to support the transition to sustainable flying. Of the multiple SAF production routes, those using nuclear energy inputs offer the greatest emissions reduction, and production on a scale sufficient to meet future commercial demand. The Bill can enable designers such as Rolls-Royce SMR, Westinghouse SMR, newcleo and SAF developers, such as the British company Equilibrion, to position the UK as a world leader in commercial nuclear SAF production. Supported by this Bill, these companies offer the UK access to a huge international market in a rare economic and social opportunity to deliver UK growth and thousands of well-paid jobs, while slashing emissions from aviation.

As a stark reminder of the challenge, I point out that the UK will generate the same amount of nuclear power in 2024 as it did in 1976, and less than half that which it did in 2000, with most of our existing capacity to be retired by the end of this decade. While we welcome the progress made at Hinkley and Sizewell, the new Government must build on the Conservative Government’s strong support for nuclear and capitalise on the significant and historic opportunities brought about by new technologies. Just one SMR has the ability to generate up to the equivalent of 150 onshore wind turbines, and benefits from being manufactured at a plant and transported to a site for installation.

While a focus on SMRs would be welcome, it should not be the full focus of the Government. Advanced modular reactors have the potential significantly to support the UK’s net-zero transition. Not only do AMRs offer the ability to recycle reprocessed spent fuel and thereby close the fuel cycle; they could be sited alongside data centres in positions not previously designated as nuclear sites. Many developers of such reactors are keen to progress their projects here in the UK as soon as possible, in some cases using only private finance. For example, Europe’s fastest-growing energy company, newcleo, is willing to advance a project to final investment decision at pace—indeed, multiple projects on multiple sites—without drawing on taxpayer money.

What they need is a level playing field. This means that potential sites for development need to be released by the Government/GBN to developers in a timely manner, and not just land-banked for the winners of the SMR or subsequent competitions. The top-down, winner-takes-all and government-subsidised approach needs to be replaced by an enabling and empowering platform on which developers can raise finance and progress their projects as soon as possible.

Key to this will be quickly progressing agreements regarding the revenue support mechanism of choice—namely, if certain conditions are met and it falls below a certain price, the power generated by developers will be purchased. A simple contract for difference would achieve this and open the floodgates to foreign investment into UK nuclear. The contrast with the situation in, for example, France, is stark. There, the Government are actively helping projects find the right sites and providing much earlier assurance on revenue support, thereby removing the five to six years of project risk borne solely by the developers before a financial investment decision is made.

I urge the Minister to meet the advanced nuclear developers as soon as possible and to work together to find a way to progress multiple projects simultaneously and at pace. There is no net zero without nuclear, and there will be no 24 gigawatts of nuclear by 2050 without new advanced nuclear. This is an urgent matter of necessity and not just ambition. I wish the new Government well in their endeavours.

Advanced Modular Reactors: Criticality Tests

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

It is great to see that Labour now supports new nuclear projects, because that was not always the case for previous Governments. As I said to my noble friend Lord Howell, we want to see them in production by the early 2030s.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I congratulate the Government on the acquisition of Wylfa, which is hugely significant for both the generation of nuclear power and the people of north-west Wales. But why are they supporting only high-temperature gas reactor technologies in the AMR RD&D programme?

[Lord Callanan (Con)]

I thank my noble friend for her question and her positive advocacy of Wales and the Welsh nuclear programmes. I suspect that the noble Lord, Lord Wigley, was going to ask me something similar —he may well still do so. The Government selected HTGRs for research and development purposes in the AMR R&D programme following analysis by the Nuclear Innovation and Research Office of the responses to a call for evidence. This analysis suggested that HTGRs are the most promising AMR technology for decarbonisation due to their ability to generate high-temperature heat and their high technology readiness levels.

Civil Nuclear Road Map

Baroness Bloomfield of Hinton Waldrist Excerpts

Monday 15th January 2024 Lords Chamber

[Lord Callanan (Con)]

I welcome the noble Lord’s comments. We recognise the substantial contributions that many communities in Wales have made over the years towards our nuclear policy in the UK and all the energy that we have received. Part of the consultation is a check on the siting of new nuclear plants, and community support, the existence of existing grid connections and so on will play important roles in future siting policies. The plants that he mentions score very well in that regard.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I draw attention to my nuclear interests as outlined in the register. I wholeheartedly welcome this report—and its earlier cousin, Towards Fusion Energy—particularly its emphasis on the cross-Whitehall endeavour to build the skilled workforce that the industry needs, which we all know will be a challenge. But back to Wales. Following on from what the noble Lord, Lord Jones said, can my noble friend the Minister reassure me that, in deciding sites for a further large-scale and small modular reactor, sufficient weight will be given to the levelling-up needs of north-west Wales, where the creation of a nuclear cluster, including gigawatt generation at Wylfa and both SMR and medical radioisotope production at Trawsfynydd, would indeed be transformative?

[Lord Callanan (Con)]

My Lords, I know from many conversations that I have had with my noble friend her absolute commitment to pursuing the cause of Wales and the contribution that it can make to our nuclear renaissance. I give her the absolute reassurance, building on the reply that I gave to the noble Lord, Lord Jones, that the communities she has mentioned are very well placed to benefit from the new nuclear policies that we have announced. On her other point, my noble friend is correct to say that we need to build a skilled nuclear workforce to ensure that we have the people we need to power this future nuclear renaissance.

Climate Change Policies

Baroness Bloomfield of Hinton Waldrist Excerpts

Wednesday 20th September 2023 Lords Chamber

[Lord Callanan (Con)]

The answer to the noble Baroness’s first question is no. With regard to the OBR, I am not quite sure why the OBR has a role in this. We obviously have our Climate Change Committee which gives the Government advice, but, to be frank, lots of other external organisations send me more advice on this subject every day, so we are not short of helpful academic advice on all the topics under consideration. As I said, we are looking towards the future. The Government are still committed to our legally binding climate change targets. That means sticking to the legally binding carbon budgets that we have overdelivered on, and we are on track to deliver on the next one.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, it was Nuclear Week in Parliament last week, which showcased a myriad of gigawatt and small, advanced and microgenerating nuclear power. Can my noble friend the Minister reassure me not only that the Government are still committed to investing in nuclear but that they understand the urgency of doing so if the UK is to benefit from both the supply chain and the employment possibilities in areas of the country that desperately need levelling up, such as north Wales?

[Lord Callanan (Con)]

The noble Baroness has been resolute in her support for nuclear and does a fantastic job in advocating for it. I am very happy to give her the reassurance that she is looking for. Of course, again, the nuclear industry was left to decay under the last Labour Government. We have resumed it through building Hinkley Point, and we are about to take a final investment decision on Sizewell. I know the noble Baroness is particularly keen on the announcement of Great British Nuclear. These are all contributing towards our climate change goals. Nuclear will provide us with cost-effective, CO-free power for many years into the future.

Retained EU Law (Revocation and Reform) Bill

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Wednesday 17th May 2023 Lords Chamber

Moved by

[Baroness Bloomfield of Hinton Waldrist]

62: Clause 24, page 24, line 27, at beginning insert “Subject to subsection (1A),”
Member’s explanatory statement
This amendment and the Minister’s other amendment to Clause 24 ensure that any amendment, repeal or revocation made by the Bill has the same extent within the United Kingdom as the provision to which it relates.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, government Amendments 62 and 63 to Clause 24 provide a clarification, setting out that any amendments, repeals or revocations in the Bill have the same territorial extent as the provisions they are acting on. The Bill is intended to apply UK-wide. The purpose of Clause 24 is to set out the territorial extent of the Bill, which covers England and Wales, Scotland and Northern Ireland.

The purpose of government Amendments 62 and 63 is to set out in unambiguous terms that, while the Bill extends to the whole of the UK, any amendments, revocations and repeals by the Bill extend so far as the provision they are acting on. The amendments are minor and technical in nature and will not alter the policy of the Bill. I beg to move.

Amendment 62 agreed.

Moved by

[Baroness Bloomfield of Hinton Waldrist]

63: Clause 24, page 24, line 27, at end insert—
“(1A) Any amendment, repeal or revocation made by this Act has the same extent within the United Kingdom as the provision to which it relates.”Member’s explanatory statement
See the statement about the Minister’s other amendment to Clause 24.

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

“Shut up”?—well done. I am just saying: let us get on with the Bill seriously rather than keeping on blaming each other. That was my point in the first place. Drop the smug tone.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Perhaps I can remind the House that we have been incredibly patient but noble Lords should stick to debating the amendments rather than general points. Perhaps we can get on and make some progress.

Energy Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

[Lord Lennie (Lab)]

My Lords, this group of amendments from the noble Lord, Lord Teverson, my noble friend Lord Whitty and the noble Baroness, Lady Bennett, consider the circumstances of some of the vulnerable customers in the energy market, and the actions the Government might take to protect them from the vagaries of the market. Such actions range from a social tariff through to inhibiting the exploitation of current prepayment meter customers and a prohibition on the installation of prepayment meters unless specifically requested by a customer. These amendments would collectively offer protection for these customers, who are often regarded as problems by billing companies.

As was said by the noble Lord, Lord Teverson, Ofgem recently announced a stop to companies forcing their way into premises to fit prepayment meters. This practice was commonplace and saw such customers paying more in energy costs as companies passed on the costs associated with the fitting and maintenance of prepayment meters. The ban was originally due to last until the end of March and has now been made indefinite.

The call for a social tariff has been advocated by Citizens Advice and is supported by the Social Market Foundation. It comes in a report that follows a long period of consultation with industry leaders, civil society and the general public. Last year, National Energy Action also argued for a social tariff for low-income households, highlighting the double bind of energy costs and rising bills coupled with paying more due to the poverty premium. A targeted social tariff would limit the impact of these circumstances, as well as help accelerate a fair transition towards net zero. I repeat the question asked by my noble friend Lord Whitty: are the Government able to give an indication that they might review the current tariff structure with a view to making it fairer, in favour of vulnerable customers, including prepayment meter customers?

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, this group covers amendments tabled regarding support and protections for the most vulnerable energy consumers. First, I thank the noble Lords, Lord Whitty and Lord Teverson, and the noble Baroness, Lady Bennett of Manor Castle, for their amendment to introduce a social tariff for vulnerable energy customers.

I am all too aware of the context for the noble Lords’ amendments, as energy bills have dramatically increased for all households over the past 18 months. This, coupled with the wider cost of living, has put the budgets of vulnerable households under considerable pressure. Noble Lords will be aware that the Chancellor set out in the Autumn Statement that the Government would work with consumer groups and industry to explore the best approach for consumer protection from April 2024. He also said that the Government would assess options, including a social tariff. These discussions are already well under way and are ongoing.

As set out in Powering Up Britain: Energy Security Plan, the Government have committed to consult this summer on options to provide better targeted support for those who need it most. In addition, the Chancellor announced in the Spring Budget that the energy price guarantee will be extended at £2,500 for an additional three months to the end of June 2023. This is in addition to the expanded warm home discount scheme, which has been extended until 2026 and which provides £475 million in support per year in 2020 prices.

The amendments tabled by the noble Lord, Lord Teverson, and the noble Baroness, Lady Bennett of Manor Castle, relate to the smart prepayment meter rollout and the restriction of the use of prepayment meters. The Government want to see the highest possible levels of smart meter coverage across the country, including for prepayment. Energy suppliers are each being set annual minimum installation targets and large suppliers are required to publish their performance against those targets, broken down by credit and prepayment.

This amendment would go further, effectively mandating the replacement of legacy prepayment meters by the end of 2025. This would present significant logistical challenges, including the need for energy suppliers to obtain warrants to enter consumers’ homes. I think we can all agree that that would not be a satisfactory outcome. Prioritising the replacement of legacy prepayment meters may have the unintended consequence of creating disincentives for suppliers to install smart meters for vulnerable credit customers. Data from Ofgem indicates that around 70% of those with disabilities pay by direct debit and may therefore benefit from the automated readings which smart meters deliver.

I understand the sentiment that lies behind the noble Lord’s calls for measures aimed at ending self-disconnections, such as a social tariff. However, his amendment is not the way to achieve this. The best way is through the work under way to explore the best approach for consumer protection, which I outlined earlier.

Regarding the noble Lord’s second amendment, the Government agree that the recent findings in the Times in relation to customers of British Gas having prepayment meters forcibly installed were both shocking and unacceptable. It is critical that our most vulnerable energy users are protected, and that is why the Government acted quickly to tackle this issue of inappropriate prepayment meter use. The Secretary of State wrote to energy suppliers insisting they revise their practices and improve their action to support vulnerable households.

Following that, all domestic energy suppliers have agreed to cease the forced installation of prepayment meters, and the remote switching of smart meters to prepayment mode, while Ofgem and industry agree and implement a code of practice to improve consumer safeguards. Ofgem will then start a formal statutory consultation process to modify suppliers’ licence conditions in line with the code, which will allow Ofgem to use its full enforcement powers to enforce compliance with the code.

I am pleased that the Chancellor has acted through the Budget to remove the premium paid by prepayment meter customers. That will happen from July initially, through the energy price guarantee, with Ofgem bringing forward options for longer-term solutions to be implemented by April 2024.

Prepayment meters can continue to play an important role in the market. They are a useful tool for some customers to prevent debt building up, and a complete ban on prepayment meters would likely see a move to using debt enforcement via the courts and bailiffs, which is not a desirable outcome. However, it is important that the rules around their use are sufficient and properly enforced. That is why Ofgem is undertaking a review to consider how prepayment meters are handled across the market. The Government will continue to review progress to ensure that these processes lead to positive changes for vulnerable consumers.

Amendment 74 tabled by the noble Lord, Lord Whitty, relates to protecting heat network consumers. Robust consumer protection rules are of paramount importance, which is the primary reason that the Government are regulating the heat network sector. Schedule 16 provides for regulations to make the regulator’s principal objective to protect the interests of existing and future heat network consumers. That mirrors Ofgem’s principal objectives regarding existing and future gas and electricity consumers.

I would like to provide more detail on what that principal objective will mean in practice. It will ensure that the regulator prioritises enforcing rules that ensure that heat network consumers receive fair prices and reliable supplies of heat. The regulator will have powers to investigate and intervene where prices appear unfair or are significantly higher than comparable heating systems. The regulator will also introduce heat supply standards of performance, including adequate compensation for consumers who experience outages. That will ensure that heat network consumers receive comparable standards to gas and electricity consumers.

We are introducing these measures through secondary legislation and authorisation conditions, as with gas and electricity consumer protections, to ensure that rules can be updated more easily as the market matures and decarbonises. The Government will consult on the specific consumer standards that need to be met, and I encourage the noble Lord to consider that consultation once it is published later this year.

I hope that noble Lords are reassured by this explanation and feel able not to press their amendments.

[Lord Whitty (Lab)]

My Lords, I thank the noble Baroness for that considered reply and the recognition in her remarks that there is still a serious problem. She referred to Ofgem coming up with something in relation to the way in which prepayment meters operate. In this new era, with a new structure following the Bill, it would be useful if Ofgem and the Government looked at the totality of structures for all forms of supply of energy, and particularly at the impact on more vulnerable consumers—Ofgem would need to take the lead, I guess. I hope the issues that I raised on the structure of tariffs in relation to the priority service register and the impact on vulnerable consumers would be included. I am watching this space. The noble Baroness has moved some way towards recognising that there is an issue.

I refrained from commenting in detail on heat networks because my voice was going. There is a problem. I very much welcome the fact that this is one bit of consumer protection in the Bill; it has been extended to the users of district heating. District heating has been convenient and is usually quite cheap but is now faced with real problems. I hope that the consultation will cover it.

--- Later in debate ---

[Lord Lennie (Lab)]

My Lords, I will briefly thank my noble friend Lord Berkeley for this amendment, which is asking the Government to introduce renewable liquid heating fuel obligations that mirror the renewable transport fuel obligations as a choice available for decarbonising heating. I do not know—perhaps the Government know—whether there is any reason why they cannot accept this proposal, given that these fuels can be produced and distributed using industrial facilities that seem to already exist, and in turn using local raw materials, making it possible to diversify the energy base of the country in order to keep moving forward and achieve energy independence. Would it work? If so, why not give it the go-ahead?

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I too thank the noble Lord, Lord Berkeley, for his amendment, and the noble Baroness, Lady Young, and the noble Lords, Lord Ravensdale and Lord Teverson, for their contributions to this debate. Decarbonising buildings off the gas grid—and I should perhaps declare an interest in that I, too, live in a house that is off the gas grid—using fossil-fuel heating is a key priority for the Government, as they use some of the most polluting fuels. Action on these buildings will help us to reduce our dependence on imported oil and protect consumers from high and volatile energy prices, while keeping us on track for net zero.

In 2021, we consulted on a policy of phasing out the installation of fossil-fuel heating systems in homes, businesses and public buildings in England off the gas grid during the 2020s. We will issue the government responses to these consultations in due course, setting out our plans regarding these policies. I am afraid that I cannot be more specific than that on the timing.

The noble Lord’s amendment seeks to impose new obligations on heating fuel suppliers, to encourage the supply and use of renewable liquid heating fuels. I appreciate his intent to increase the role of renewable liquid fuels in heating to help with the transition to clean heat off the gas grid. However, a number of questions must be answered before we can make decisions on what role renewable liquid heating fuels should play in the future heating mix and develop the policy framework which would support such a role. As he will be aware, sustainable biomass is a limited resource. We will need to prioritise its use in sectors that have the fewest options for decarbonisation and the most potential for emissions reductions. Indeed, the Climate Change Committee argues that the use of biofuels in heat should be minimised as far as possible to enable best use of biomass across the whole economy. Overcommitting in heating risks having effects in other sectors, such as transport, or driving up the prices paid for these fuels. The forthcoming biomass strategy will review the amount of sustainable biomass available to the UK and will then consider how this resource could be best used across the economy to achieve net zero. Policy decisions on the role of renewable liquid fuels will need to reflect this strategy.

Energy Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

Moved by

[Baroness Bloomfield of Hinton Waldrist]

22: Clause 67, page 59, line 29, at end insert—
“(4A) Provision made by virtue of subsection (3)(d) for the imposition of a financial penalty must include provision for a right of appeal against the imposition of the penalty.”Member's explanatory statement
This amendment requires regulations under Clause 67(3)(d) (functions of hydrogen levy administrator) that make provision for the imposition of financial penalties to include provision for a right of appeal.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I rise to speak to the amendments standing in the name of my noble friend, which address recommendations made by the Delegated Powers and Regulatory Reform Committee on the Energy Bill. We are grateful to the committee for its detailed scrutiny of the provisions in the Bill. The committee provided a range of comments and recommendations which the Government have carefully considered. The Minister was pleased to confirm in his response to the committee that the Government have accepted nine recommendations. He also provided further clarification, as requested, in response to the majority of the committee’s other comments. These amendments address the recommendations the Government have accepted, and I hope they will be welcomed by noble Lords.

Turning first to Amendments 22, 34, 48, 49, 50, 51, 52, 55, 64, 76, 77, 92, 93, 99 to 103, 105 and 106, the committee highlighted that certain clauses of the Bill confer powers to make provision for the imposition of civil penalties without mandating a requirement for the regulations to provide for a right of appeal. While it was absolutely the Government’s intention that regulations under such clauses would provide for a right to appeal, we have taken on board the committee’s comments.

These amendments clarify this point and ensure that regulations made under these clauses, which make provision for a civil or financial penalty, must also include provision for a right of appeal to a court or tribunal against the imposition of such a penalty. The committee’s recommendations referred to three specific instances in the Bill. To ensure consistency across the Bill, we have tabled similar amendments to a number of other clauses which make provision for a civil or financial penalty.

Amendments 73, 80 to 90, 96, 107 to 123 and 139 to 142 address the committee’s recommendations relating to changing the procedure to which regulations made under powers in the Bill are subject. The Government agree with the committee on the importance of parliamentary scrutiny. As such, we have tabled amendments to address the committee’s recommendations relating to changing the parliamentary procedure. These amendments will facilitate detailed scrutiny of the powers, when used.

Amendment 91 responds to the committee’s recommendation regarding subsections (3) and (4) of Clause 180, on heat network zoning. The committee had concerns that these provisions would confer powers allowing non-statutory documents to make requirements in relation to the methodology for identifying areas as potential heat network zones. We welcome the committee’s comments, and this amendment will ensure that any non-statutory documents do not have legislative effect. The amendment omits from Clause 180 subsection (3), which provides for the heat network zones authority to publish documents elaborating on one or more aspects of the zoning methodology. It also omits from the same clause subsection (4), which provides that regulations may require the authority and zone co-ordinators to comply with any requirements set out in these documents.

I reiterate my thanks to the Delegated Powers and Regulatory Reform Committee for its engagement and reports on the Bill, and I hope its members will be pleased with the amendments discussed today. I beg to move Amendment 22.

[Lord McLoughlin (Con)]

My Lords, on behalf of the committee, I thank the Government for responding favourably to the report. I hope this is something that other departments will follow through in their subsequent considerations.

Energy Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Baroness Blake of Leeds (Lab)]

I thank the noble Lord for bringing this information to our attention. Some interesting reports documenting the risks are available, and I refer particularly to the report from the Institution of Fire Engineers on solar power fire risk and to batteryfiresafety.co.uk.

I have a couple of points to add to the comments already made as to whether it would be worth directing information about the storage of the batteries. It should be highlighted in particular that batteries are often stored in garages next to parked cars, which can have similar battery systems, and will not always be easily accessible.

The risks of lithium ion batteries from a fire safety perspective apparently have been well documented. However, the other element is that the risk with lithium ion batteries is not just fire. Once the battery fails—I think the term is “runs away”—the cells usually start to give off smoke. Thermal runaway is the chemical process within the battery which produces heat, as well as flammable toxic chemical gases, very quickly, often before any flames arise.

I think it is fair to say that, although the information is out there, it has not been properly documented. I wonder whether the health and safety considerations of the increasing use of these batteries and solar panels have been taken on board. Does the Minister think that there is a problem and, if the answer is yes, what does she propose to do about it?

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the noble Lord for his amendment on requesting a report into the fire risks of photovoltaic panels, lithium ion battery storage facilities and similar technologies. I was delighted to hear of his welcome in the Budget for the VAT exemptions.

First, I reassure the noble Lord that the health and safety regimes surrounding net-zero technologies are a priority for the Government. All electrical equipment requires safe installation and use. The Government recognise the importance of net-zero technologies such as electricity storage and solar PV in their ability to help us to use energy more flexibly and decarbonise our electricity system cost-effectively.

The data collected so far indicates that the risk from solar PV fires is low. However, it is right that we work with the industry to understand why any incidents happen and help to stop future occurrences. Over a three-year period and an overall cost of £135,000, the Government commissioned the Building Research Establishment to develop new guidelines for PV system installers, designers and the fire services, with the aim of making solar PV even safer. In February this year, the RISC Authority, the Microgeneration Certification Scheme and Solar Energy UK published an updated joint code of practice on recommendations for fire risk prevention in UK solar systems. Grid-scale lithium ion battery energy storage systems are covered by a robust regulatory framework, which requires manufacturers to ensure that products are safe before they are placed on the market and installed correctly, and that any safety issues found after products are on the market or after installations are dealt with.

In 2018, the Government set up an industry-led electricity storage health and safety governance group, which is responsible for ensuring that an appropriate, robust and future-proofed health and safety framework is sustained as the industry develops and electricity storage deployment increases. The Government are currently working with the group to support the development of a product and installation publicly available standard for domestic small-scale battery storage and guidance for grid-scale storage. They will both be published this year.

Most of the specific issues of e-scooters and bicycles fall within the remit of the Office for Zero Emission Vehicles, and I shall ask it to write to the noble Lord. I can also confirm that Defra will soon publish a consultation on battery recycling.

I do not believe that a specific report on fire risk of photovoltaic panels, lithium ion battery storage facilities and similar technologies mandated by the Secretary of State is necessary. While I welcome the noble Lord’s intention, we believe that working alongside industry and the fire services to manage specific risks is the appropriate way forward. It ensures that these vital technologies are installed, operated and decommissioned in a safe way, while still delivering the best outcomes for consumers. I hope that the noble Lord can recognise the Government’s sustained commitment to enabling the deployment of net-zero technologies in a safe and sustainable way.

In addition, on the concerns expressed by the noble Baroness, Lady Blake, about lithium ion batteries and their ability to combust, I visited last week a very clever packaging firm called Tri-Wall in Monmouth, which has developed packaging specifically for lithium ion batteries to be transported by air safely. The packaging itself will detect any change in heat in the batteries that it contains and change the structure of the packaging into water that will put the fire out before it even gets out of the packaging. Very clever technologies are being developed specifically around lithium ion battery transport and storage.

I hope that, with those few reassuring remarks, we can ask the noble Lord to withdraw his amendment.

[Lord Foster of Bath (LD)]

My Lords, the time is late; I shall be very quick indeed. I was well aware, of course, of the work that has been done looking at the package of arrangements around solar panels and their batteries. I really wanted to use it as a peg on which to hang the wider issue of all forms of lithium batteries, in particular. I am pleased to hear about the 2018 established group. It would be very helpful if we could see some of the output of that. I am grateful, too, to hear that there are going to be new standards, but the truth is very simple: you can have all the standards you like, and the products may be okay, but if they are not used appropriately and not decommissioned appropriately, then real problems exist, and that is what is happening. There are a huge number of fires in our landfill sites because people are not doing what they are meant to do in disposing of batteries. We have to find a way forward. That is why I wanted a report. I am disappointed that the Minister is not prepared to go further, but at this stage I beg leave to withdraw the amendment.