Heat Networks (Market Framework) (Great Britain) Regulations 2025
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath(3 weeks, 1 day ago)
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Lord Whitty (Lab)
My Lords, could I ask the Minister one question? I apologise to him: I realised this was being done today only about 20 minutes ago.
A significant number of existing heat networks are run by local authorities or hived-off organisations owned by local authorities. The aim of this legislation, as far as consumers are concerned, I have strongly supported for a long time, including during the proceedings of the Energy Act. I am very much in favour of consumer protection and consumer redress as spelled out in part of these regulations, but I have been told elsewhere that those protections and certainly those forms of redress are different if they are for consumers of heat networks run by local authorities, compared with a private sector or mixed ownership of the heat network. I would like to know whether that is true in principle. If it is at all true, perhaps the Minister could write to me and explain what the situation is.
Lord Hunt of Kings Heath (Lab)
My Lords, I am most grateful to noble Lords who have taken part in this short but none the less interesting and, I think, important debate. As the noble Earl, Lord Russell, the noble Baroness, Lady Bloomfield, and my noble friend Lord Whitty have suggested, the development of heat networks is a very important one, and we want to see considerable progress over the next few years.
I also think it is important that the sector itself has broadly supported the regulatory proposals. I believe, and I think it was explicit in what the noble Baroness said, that that confidence will allow them to invest in the future and develop the market, which is what we earnestly hope for and wish to see.
In response to the noble Baroness, Lady Bloomfield, I accept that this is another responsibility that is being placed on Ofgem. I have had quite considerable experience in dealing with regulators in my time in government. I think Ofgem discharges its responsibilities very seriously, and I have confidence in its ability to discharge this new responsibility. In a sense, it is simply extending the principles of the current regulation of gas and electricity to network heating, so it is something I am confident it will be able to do.
In response to the noble Earl, Lord Russell, I make it clear that from April this year, heat network consumers will also be able to seek redress from the Energy Ombudsman scheme and, through Citizens Advice and Consumer Scotland, will have access to advice and advocacy services afforded to the gas and electricity markets. In answer to the noble Baroness, we think this will be particularly helpful to the vulnerable customers she mentioned.
The noble Earl asked me about retrospection. The new arrangements will not be able to be applied retrospectively. The fact he raised this shows why it is so important that we get a move on in introducing these new regulations, and how customers were at risk under the previous arrangements.
As far as fair competition is concerned, again, I very much accept that point. Indeed, this work arose from the Competition and Markets Authority, and Ofgem is well used to intervening in areas where it feels that competition is not being fairly adopted. I am confident that it can deal with that. The data gathered by Ofgem—and, of course, it will have this ability to require data to be provided to it—will enable it to identify emerging issues and trends and adapt regulation as the heat sector develops and grows. As I see it, regulation will be proportionate and organic, marching in step with the way the market itself develops.
I inform the Committee that we will be introducing further regulations this year: first, to introduce protections against insolvency and debt management; and, secondly, to create an entity to implement mandatory technical standards. Putting those together will provide the foundation for this market to grow in future. Market growth seems to me to be a fundamental question, so we are working to expand the existing heat network market through capital funding via the green heat network fund, which will establish heat network zones in key locations. This will allow heat network developers to deploy large-scale district heat networks in dense urban locations, where, as I have said already, they are best suited to provide low-carbon heat.
On support for smaller heat networks, my understanding is that, first, Ofgem will take a proportionate and outcomes-based approach to regulation, providing guidance and supporting small operations.
To come back to the legacy issue and add a bit more information, on legacy issues with existing heat networks, we will take action to guide heat networks through legacy challenges that they face with existing heat networks, with remedial works implemented over time. One advantage of giving authorisation to current schemes is that, once they have been given an authorisation, they then come under these regulations. In one way, if there are pre-existing issues, at some point they will be authorised, and then they can be dealt with under these regulations. So, in fact, although strictly speaking it cannot be retrospectively applied, I hope that that can bring comfort to customers who are really concerned about the situation as it is.
I understand also, in relation to vulnerable customers, that a priority services register will enable vulnerable consumers to access additional support relating to their heat network, including receiving communications in an accessible format, assistance reading their meters and the ability to nominate another person to act on their behalf when dealing with their heat provider.
In relation to the point raised about regulation and customer prices, Ofgem will have direct powers to intervene on prices with a general authorisation condition, to set prices fairly, with data-driven interventions proceeding from January 2026.
On the point raised by my noble friend Lord Whitty, first, I acknowledge the work of local authorities of in some ways even pioneering district heating systems. My noble friend may know that in the heart of the city of Birmingham we had a district heating system that ran right through the city centre, and we can see the potential area. I have also been informed about the South Westminster Area Network, which is being established through close working between Westminster Council and Westminster business improvement districts. That is a new approach to procurement; it took four months to bring forward a partner, which is much quicker than for many of the schemes and developments.
The point that my noble friend raised is a new one to me, and I hope that he does not mind me just checking it out and coming back to him on it. On the face of it, it seems puzzling, but I think that I need to find out some more information about it. But I take his point that we want local authorities to continue to take a lead in developing some of these network heating schemes and, clearly, the public must have confidence in how that is done.
Finally, the noble Earl, Lord Russell, asked me about Great British Energy. He will know that we believe that, in the development of local plans and the role of GBE in doing that, there is clearly potential to give encouragement to community energy schemes and network schemes. I cannot really say any more about that, but I shall draw those remarks to the attention of the start-up chair of Great British Energy.
Baroness Bloomfield of Hinton Waldrist (Con)
I should just clarify my remarks about Ofgem. In no way was I intending to imply that its work was anything other than exemplary—I was just commenting on the increasing workload that we are putting on Ofgem.
Lord Hunt of Kings Heath (Lab)
I did not take it as a criticism at all. The noble Baroness is absolutely right that we are asking Ofgem to do a lot—but her experience and mine is that it is very capable of doing that.
Small Modular Nuclear Reactors
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath(1 month ago)
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Lord Hunt of Kings Heath (Lab)
My Lords, it is a little early to give a definitive view to my noble friend but clearly the role of the Civil Nuclear Constabulary is a very important one. I reassure him that in the 14-year gap since I was last responsible for that force, there have been huge improvements in the way in which the constabulary works. I keep this matter under very close oversight.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, it is welcome news that the Minister has indicated there will be a decision by Great British Nuclear on SMR technologies in the spring. However, we still await any guidance on advanced modular reactors, let alone details on how they can come to the market and generate much-needed clean energy here in the UK from the early 2030s. A number of privately funded developers—newcleo, X-energy, TerraPower and others—are ready to go and want GBN to have a parallel process alongside the SMR competition to help them realise their ambitions in the UK as soon as possible. Will the Minister please give a clear indication on when a plan for AMRs will be published? Will His Majesty’s Government support those that want to get on with things in the meantime, invest in the UK, boost economic growth, and create thousands of jobs through their supply chains?
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Baroness for her questions and we certainly take account of what she said. We all see the potential of AMRs. We have also seen that some of the major west coast companies in the US are interested in reaching agreements with project developers for AMRs to be sited near data centres in order to produce decarbonised energy. The noble Baroness’s Government produced an alternative routes to market consultation. We are currently considering the results of that and will make announcements in due course. I understand what she said about the role of GBN. These matters are all under earnest consideration at the moment.
Great British Nuclear: Modular Reactors
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath(2 months, 3 weeks ago)
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Baroness Bloomfield of Hinton Waldrist
To ask His Majesty’s Government what progress Great British Nuclear has made with its plans to deploy small modular reactors and advanced modular reactors, and what assessment they have made of the process for evaluating their design and manufacturing.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, Great British Nuclear is pushing forward the SMR competition for UK deployment and is now in negotiation with bidders, with final decisions to be taken in the spring. The Government are also actively exploring how we can enable alternative routes to market for advanced technologies, including AMRs, and we will set out our policy position in due course.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the Minister for that Answer. Will he explain exactly what has caused the damaging schedule slippage within GBN? Is it the shortage of staff, underfunding, underestimating the workload required or the many layers of approval—11 separate Whitehall approval committees at the last count—in order to allow GBN to announce the latest download of SMR technologies?
Lord Hunt of Kings Heath (Lab)
My Lords, I think the noble Baroness will know the answer, because 16 months of the lifetime of GBN occurred under her party’s Administration. The fact is that we are working very closely with GBN. It has to go through considered processes. It has done two rounds of assessment and, as I have said, four technologies have been shortlisted, all of which are viable options for development. Crucial talks are now taking place. Companies will be invited to make final bids, and decisions will be made in the spring. I am confident that GBN will ensure that we get to that final decision as soon as possible.
Domestic Solar Panels
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath(3 months ago)
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Lord Hunt of Kings Heath (Lab)
I am very grateful to my noble friend for that very helpful suggestion. I will make sure the taskforce gives it earnest consideration.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, as the Government’s Great British Energy Bill enters Committee in the coming weeks, can the Minister confirm whether this will include the deployment of solar panels as part of its strategy? Given that I have the Minister’s attention, and following on from the questions from the noble Baroness, Lady Winterton, and the noble Viscount, Lord Hailsham, I draw his attention to GB-Sol, a spin-out from Cardiff University, which manufactures Welsh slate-looking tiles, which are suitable for both listed and heritage buildings.
Lord Hunt of Kings Heath (Lab)
That is a very interesting point. It is worth making the point also that a number of British companies are assembling some of the solar panels imported from China. I agree that we need to look at all these areas.
In relation to the GB Energy Bill, the noble Baroness will know it is not our intent to place in the Bill the exact amount of energy generation we require from each source. That will be a matter for the GBE board in light of the Government’s overall priority-setting towards clean power and net zero.
Drax Power Limited: Ofgem Investigation
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath(3 months, 2 weeks ago)
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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.
Digital Competition
Debate between Baroness Bloomfield of Hinton Waldrist and Lord Hunt of Kings Heath
Baroness Bloomfield of Hinton Waldrist
I do not recognise those reports; I have not read them myself. However, the Government are committed to increasing transparency in digital campaigning to maintain a fair and proportionate democratic process. To this end, the Government announced, on 5 May this year, that they will implement an imprints regime for digital election material. The defending democracy programme, which we have already set up in the Cabinet Office, also works across government departments to strengthen the integrity of our electoral system.
Lord Hunt of Kings Heath (Lab)
My Lords, if the Government are so committed to transparency, why have they not released the report of the Intelligence and Security Committee looking at the potential influence of Russian interference in our electoral system?
Baroness Bloomfield of Hinton Waldrist
The noble Lord is straying slightly away from the original Question, but the Prime Minister is considering the report and will report in due course.