Energy Bill [HL]

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Committee stage
Monday 5th September 2022 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

Before we continue, I remind noble Lords that the Companion asks noble Lords to make their speeches directly relevant to the amendments they are proposing and—please—to keep those comments as short as they possibly can. Thank you.

[Lord Ravensdale (CB)]

My Lords, I shall speak to Amendments 7 and 242. I declare my interests as a project director working for Atkins, which is in the energy industry, and as a director of Peers for the Planet. I thank the noble Baroness, Lady Worthington, who I have worked with to develop these amendments.

Amendment 7 has similar objectives to Amendment 1 in the name of the noble Baroness, Lady Blake, and spoken to by the noble Lord, Lord Lennie. I concur with his comments on the necessity of clearly setting out the purpose of the Bill and legislating for a strategy and policy statement on its implementation. Amendment 7 brings out two specific aspects that are further detailed in Amendment 242. These are the importance of a plan for delivering against the 2035 target to decarbonise our electricity system and for the electrification of energy use in the UK.

The reason that electrification is so important stems from the second law of thermodynamics. As my favourite physicist, Richard Feynman, said in his superb analysis of the “Challenger” disaster in 1986, “Nature cannot be fooled”. Whatever options we come up with for decarbonising our energy system, and whatever laws and policies we make, we run up against fundamental constraints from the laws of thermodynamics. For example, using hydrogen to fuel road transport will always be much less efficient and use far more energy than electrification, no matter what technical advances are made in hydrogen production. Similarly, using electricity to heat homes via a heat pump will always be more efficient than producing hydrogen for the same purpose. This is not to say that hydrogen production should not be pursued as a matter of urgency, as it will be vital in some areas, but its use should be focused on areas that are absolutely necessary. The efficiency gains and the reductions in primary energy use from electrification mean that this is a vital metric to consider as our energy system evolves.

The enabler of all of this is a decarbonised electricity system. We have a world-leading target to decarbonise our electricity system by 2035, but I worry about delivery. Atkins has undertaken a calculation of the rate of new capacity required to hit the 2035 target. This is not anything complex: it simply divides the capacity in the BEIS scenarios by 12 and a half years, allowing for an estimate of the capacity that will be decommissioned over that timeframe.

As I stated at Second Reading, this calculation results in a minimum of an average of 12 gigawatts of annual installed capacity being needed every year between now and 2035 to hit that target, so the next question is, with a baseline of 12 gigawatts, what have we managed in recent years? In 2019 we managed 2.8 gigawatts of new installed capacity. In 2020 we managed 1.1 gigawatts and in 2021 we managed 1.6. If we go on like this, it is very hard to see how we will meet the 2035 target. The upshot is that to replace ageing power plants and ensure that enough generation is built to meet peak demand requirements, the UK needs to build a minimum of 159 gigawatts of new generating capacity by 2035—the equivalent of building the UK’s entire electricity generation system one and a half times over in slightly more than 12 years. It is not only generating capacity but all the grid infrastructure to support it, as well as energy storage and data management.

This says to me that there is a significant risk that the Government will not be able to meet their 2035 target. I work on the coalface, as it were—I am not sure that is the best analogy. The industry has a long way to go to gear up for this pace of delivery, so alongside the 2035 target we urgently need a strategy for delivery. This reflects one of the priority recommendations from the CCC’s 2022 progress report: we need a delivery plan to provide visibility and confidence for private sector investors, to reduce costs and to build up supply chains. There is a key gap here in comparison to other sectors. We have the Heat and Buildings Strategy and the transport decarbonisation plan, but we do not have a plan for electricity decarbonisation, despite it being so important as an enabler for those other plans. I would be grateful if the Minister could, in summing up, state that the Government will bring forward such a delivery plan for electricity system decarbonisation.

Amendment 242 details our approach to legislating for this strategy. The noble Baroness, Lady Worthington, pointed out to me that we already have a toolkit to approach this via the Energy Act 2013—the mechanism of a decarbonisation target range and decarbonisation orders. If we take these existing powers and modify them, we can set a range for carbon intensity of electricity production in the UK each year and targets for electrification of the energy system. The report must also include the expected volumes of installed capacity and energy produced by electricity energy source for each calendar year to 2035. This rigorous approach will deliver the required strategy and plan to give industry and investors a clear road map to 2035, which, lest we forget, is only slightly more than 12 years away.

There is a great opportunity in this Bill for the Government to legislate for a strategy to give industry and investors the confidence they need to reduce costs and build up supply chains for 2035, significantly reducing delivery risk, with efficiency and minimising primary energy consumption at the forefront. I strongly support the Government in their ambitions for 2035 and the target that they have set, but there is much to do in a short time, and I hope the Government will take this opportunity to ensure that there will be a clear plan for delivery to ensure the success of their ambitions.

Nuclear Energy: Hydrogen Production Targets

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Monday 19th April 2021 Lords Chamber

[Lord Ravensdale (CB)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as in the register.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, the energy White Paper acknowledges the important role that both nuclear energy and hydrogen can have in meeting our climate targets. I am aware of industry proposals showing how current nuclear technologies could play a role in hydrogen production during the 2020s, while small and advanced modular reactors could unlock further efficiencies in future hydrogen production. We will say more on the role of hydrogen production technologies, including nuclear, in our forthcoming UK hydrogen strategy.

[Lord Ravensdale (CB)]

I thank the Minister for that Answer. Nuclear is a low-carbon, always-on source of power that has the power to economically produce green hydrogen at scale, complementing offshore wind. Will the Minister agree to liaise with the Department for Transport to ensure that nuclear energy is added to the renewable transport fuel obligation following the consultation? This is a great opportunity to create demand and get green hydrogen production moving. Can she also assure the House that nuclear will play a role in her department’s forthcoming hydrogen strategy?

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, the noble Lord, Lord Ravensdale, makes a very good point. The RTFO was created specifically to address the transport element of the EU renewable energy directive, but to be eligible hydrogen had to be produced from renewable energy. This year we are consulting on preferred long-term sustainable business models and the revenue mechanism to stimulate private investment into new low-carbon hydrogen projects. The UK will take a science-based approach to this whole area of taxonomy. I am sure the noble Lord will have seen the recent leaked report from the EU, which concluded that nuclear is actually no more harmful than any other technology, so we will watch this space.

Ynys Môn: Economy

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Tuesday 2nd March 2021 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

The noble Lord, Lord Davies, raises an important point. The freeport bids for England are already in and an announcement is expected shortly. I know that the MP for Ynys Môn, Virginia Crosbie, has worked tirelessly with a group of qualified and interested local stakeholders to put together a bid for a freeport for Ynys Môn. This will be ready to go when we launch the competition for Wales, on which we will work together with the Welsh Government.

[Lord Ravensdale (CB) [V]]

My Lords, I declare my interests as in the register. The national thermal hydraulics facility is a key part of the nuclear sector deal and will bring jobs and investment to Anglesey, making the most of the strong nuclear skills that exist in the area. Can the Minister say what progress has been made with this facility and, importantly, how it will align with the testing requirements of the UK SMR programme?

[Baroness Bloomfield of Hinton Waldrist (Con)]

The national thermal hydraulics facility is a key part of the nuclear sector deal and would indeed bring jobs and investment to Anglesey. The issue is very live at present. Collective and separate discussions are taking place between BEIS, the Welsh Government, the UKAEA, Rolls-Royce, whose SMR design is pivotal in this decision-making process, and the Menai Science Park, which would host the hydraulics centre. The technical needs of the Rolls-Royce SMR are being worked into a redesign of the proposed facility, but issues still remain over the height-planning restrictions, extra funding and future financing requirements of the facility. Perhaps all the parties can dig deep.

Electricity Supply

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Wednesday 3rd February 2021 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My noble friend will be aware that EDF is estimating a 20% reduction in cost for using the same technology that it has been using at Hinkley Point C, which is why we are proceeding with Sizewell C. We need a mix of all these technologies. He is right to point out the potential of advanced nuclear technologies: that is why we are investing in them. The Rolls-Royce SMR is likely to be operational by 2032. Investment in AMR technology, which has the potential to help us in our hydrogen ambitions, will follow shortly thereafter.

[Lord Ravensdale (CB) [V]]

My Lords, I declare my interests, as shown in the register. We are losing a large amount of low-carbon firm power capacity by the end of this decade. Much of the debate on future generation has been based on comparison of levelised costs of electricity metrics between technologies. Does the Minister agree that this does not recognise the system costs of intermittent generators, and that an alternative model should be developed which accounts for this and positively incentivises renewable generators, such as equivalent firm power auctions?

[Baroness Bloomfield of Hinton Waldrist (Con)]

The noble Lord makes an interesting point. He is right that we should take all costs of the energy system into account when making choices about our generation mix. The latest departmental modelling does this. It is not as simple as calculating firm power equivalence. A system’s cost depends on what is available across the sector, rather than focusing on each type of generation separately.

National Grid: Capacity

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Monday 11th January 2021 Lords Chamber

[Lord Ravensdale (CB) [V]]

My Lords, I declare my interests as in the register. The energy White Paper commits to opening the generic design assessment to SMR technologies this year. Can the Minister say how many GDA slots will be available—by that I mean how many SMR designs will be able to be supported through GDA—and at what point in the year will SMR GDA open?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I cannot give a specific answer on how many designs will be expected to be announced, but we are currently finalising arrangements to open the generic design assessment. We will provide more information in due course. Our aim is to invite applications to BEIS in quarter 2 of this year. In the meantime, the Government have announced £40 million for developing regulatory frameworks and supporting the supply chains for SMRs in the United Kingdom.

Hydrogen Sector

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Monday 30th November 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My noble friend speaks with great authority on this point. He is right that various modes of transport are already able to use hydrogen fuel cells to provide zero emissions at the tail-pipe. He will be aware of hydrogen pumps sited alongside petrol pumps at some service stations already. However, while hydrogen can also be combusted in internal combustion engines without greenhouse gas emissions, it does produce nitric oxide, so would not count as zero emission. My noble friend can be reassured that the Government’s intention is to phase out new petrol and diesel cars by 2030 and for all new cars and vans to be zero emission at the tail-pipe by 2035. Every effort is being made to support innovation and scale-up of low-carbon hydrogen across the value chain.

[Lord Ravensdale (CB)]

I draw the attention of noble Lords to my entry in the register. There remain significant technical risks with the use of hydrogen. For example, capture rates of carbon capture and storage technology used in the production of hydrogen could result in high residual carbon emissions. Therefore, does the Minister agree that mature, low-carbon heating technologies, for example heat networks and heat pumps, should be deployed at a rate commensurate with the 2050 target, in case hydrogen does not prove viable at scale?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I do agree with the noble Lord. He is right that proving the safety case through rigorous testing and trials is critical to the success of any new technology or fuel source. That is why the 10-point plan sets out plans for a series of incremental trials, potentially leading up to a hydrogen village by the end of this decade. Alongside this, it also sets out plans to implement the future home standard in the shortest possible time, so that new buildings can have high levels of energy efficiency and low-carbon heating, including the aim for 600,000 heat pump installations per year by 2028. The truth is that we need all these technologies to be developed at scale.

Nuclear Power Stations

Debate between Baroness Bloomfield of Hinton Waldrist and Lord Ravensdale

Monday 24th February 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist]

I acknowledge my noble friend’s concerns in this sector. The energy White Paper will still be published at the end of this quarter and will address some of those concerns. We have also been investing in new technologies for small and advanced modular reactors, which have significant potential to support a secure, affordable and decarbonised energy system. Although Horizon has suspended plans for Wylfa in Ynys Mon, the consent order is still live until the end of March and we are working hard to develop models that could work for Sizewell C and Bradwell, which would be a different form of reactor altogether.

[Lord Ravensdale (CB)]

My Lords, what assessment has been made of the possibility of further extending the life of the advanced gas-cooled reactor fleet beyond 2030? There is the potential to further extend the life of the three newest stations, which would help provide much needed low-carbon electricity until new nuclear capacity can be brought online.

[Baroness Bloomfield of Hinton Waldrist]

I assume by the question that the noble Lord means extension of those that currently have problems? They are obviously under investigation by the Office for Nuclear Regulation. Certainly, the ones at Hunterston in the north of Scotland are expected to be back online by the end of April.