Long-duration Energy Storage (Science and Technology Committee Report)

Baroness Lane-Fox of Soho Excerpts

Thursday 9th January 2025 Lords Chamber

[Baroness Lane-Fox of Soho (CB)]

My Lords, I declare my interests as noted in the register, most particularly as president of the British Chambers of Commerce and as a director of Peers for the Planet.

Last year, the British Chambers of Commerce published its green innovation challenge report, and there is much overlap with this excellent report, so expertly introduced by the noble Baroness, Lady Brown. We share concerns about the UK’s energy transition. We also emphasise the need for robust, long-term strategies and institutional frameworks to address gaps in policy and delivery. Some of the specific policies we called for include a new public body to oversee climate policies, strengthened resources for the Climate Change Committee, and faster grid upgrades to support net-zero goals. Both reports advocate for better cross-sector collaboration and government/business partnerships to overcome the challenges in infrastructure, financing and policy consistency.

There are a couple of themes I would like to build on. The first is speed: “get on with it” is the perfect mantra. Both reports emphasise the need for immediate action. The Lords’ report warns that delays in LDES deployment could derail 2035 decarbonisation targets. Our BCC work similarly calls for swift implementation of policies to address grid bottlenecks and accelerate renewable deployment. As a live example, Sizewell C currently has 1,000 people on the ground working, and significant plans for local supply chain investment and skills development, yet it is still waiting for a decision, which has taken years, so that it can become a functioning and sustainable energy source. A process has been promised in the CSR, but this is too slow and is indicative of a national issue. I could not agree more with the speech of the noble Lord, Lord Drayson, on the importance of more infrastructure investment and planning, and I defer to his great expertise on this issue.

As I have travelled about, talking to businesses of all sizes, a common theme has been the incredible urgency of local infrastructure decisions. The BCC is calling for grid upgrades to support renewable integration and storage deployment. For example, we are asking for the speeding up of investment into the electrification of the London-Sheffield line, which is estimated to create over 4,000 jobs and £61 million in local economic value. An example from a different area is the decision to build the Rampion 2 offshore wind farm. This project is projected to add 60 gigawatts to our supply, as well as thousands of jobs, but the decision is delayed in DESNZ. There are too many examples of unacceptably long timeframes.

Secondly, supporting innovation is non-negotiable. Both reports highlight the importance of partnerships between government and industry to overcome barriers to innovation. I hope the Government build on some of their early announcements and unlock more opportunities for growth in climate-based innovation and entrepreneurship, of which there are so many. There is much that is positive, such as the introduction of 10-year R&D budgets, which can help address short-term funding cycles that hinder innovation. This stability is expected to foster meaningful collaborations between research institutions and industries, particularly in clean energy and climate technologies.

However, I was dispirited to read in some recent research that, while the UK benchmarks pretty well with other European countries on venture capital investment into climate tech, the total amount in 2023 and 2024 fell from its high in 2022 and is set to fall further this year. If you look at the total itself, I believe it is shockingly low, at just £4.5 billion. It needs to be 10 times this if we want to enable the innovation we need as a society and the growth we want as an economy.

The announcement of regulatory modernisation is welcome, and the planned regulatory innovation office is a step forward in enabling regulators to adapt to emerging technologies, including those in the area of clean tech and the AI overlap. This could accelerate approvals for climate innovations, but the details are still scarce, and more clarity needs to come quickly.

However, I have never been more confident and excited than now: one of the UK’s leading entrepreneurs is on the Government’s Front-Bench team. I welcome my friend, the noble Baroness, Lady Gustafsson, to the Front Bench. Known for her commitment to the UK and its innovation, as well as her experience of scaling a global company, there is no doubt that her knowledge will be invaluable. I could not be more thrilled to call her a colleague and wish her good luck through the inevitable butterflies of her maiden speech.

As has been noted, we debate today against the backdrop of the horrifying fires in LA, and we are witnessing the climate catastrophe in real time, so I add my voice to the calls for the Government to adopt the committee’s friendly mantra of “get on with it”. The direction of travel is welcome, but the pace of decision-making and execution is not.