Carbon Capture, Usage and Storage

Barry Gardiner Excerpts

Monday 7th October 2024 Commons Chamber

[Ed Miliband]

May I begin by welcoming the hon. Lady to her place, and thanking her for the tone and substance of her remarks? She is right to underline the fact that we are marking a new era but also marking the passing of an era, and it is right to pay tribute to all the people who worked in our coal-fired power stations and, indeed, who worked underground to dig coal for our country. It is a big moment of change and the passing of an era.

On the hon. Lady’s broad points about CCS, my philosophy is that we want zero-carbon power where possible, but we also need carbon capture, particularly for hard-to-abate sectors and so that we can have not unabated gas, but gas with CCS or hydrogen power. She raises the question of cost. Imagine if we had had this conversation 15 years ago, when I was Secretary of State and much younger—15 years younger, to be precise. [Interruption.] Yes, I am good at maths. Some people were saying at the time, “Why are you subsidising offshore wind? It can never be competitive with fossil fuels.” Now, it is among the cheapest technologies to build and operate. That is what deployment does for us, and that is what the combination of public and private sectors working together does for us. Yes, there is an investment here, but a far-sighted, forward-looking Government have to make such investments, and I welcome the hon. Lady’s support.

[Barry Gardiner (Brent West) (Lab)]

I had rather hoped that my right hon. Friend was going to start his statement by saying, “As I was saying before I was so rudely interrupted—”. I have waited so long to hear a Secretary of State make such announcements from the Dispatch Box, and I am delighted. However, my right hon. Friend knows that carbon capture technologies reduce the energy intensity of fossil fuels by up to 25%, which makes such electricity much more expensive than that produced from renewables. Can the Secretary of State confirm that CCUS will be used not simply to allow the continued extraction of fossil fuel for our power sector, but only for the hardest-to-abate heavy industries and for the production of green hydrogen, thereby keeping domestic fuel bills low and delivering on this Government’s commitment to decarbonise our power sector by 2030 through much cheaper renewables and nuclear, not more expensive gas with CCUS? Finally, may I caution him against swallowing too much of the hype around blue hydrogen?

[Ed Miliband]

I thank my hon. Friend for his question; he speaks with great knowledge and expertise on these issues. He is absolutely right about the hard-to-abate sectors. I say to him what I said to the Chair of the Energy Security and Net Zero Committee, my hon. Friend the Member for Sefton Central (Bill Esterson): there is a role for both blue hydrogen and gas with CCUS, but that is within the context of a primarily renewables-based system that uses nuclear as well. It goes back to the point about needing all the technologies at our disposal if we are to surmount the challenges we face.

Making Britain a Clean Energy Superpower

Barry Gardiner Excerpts

Friday 26th July 2024 Commons Chamber

[Michael Shanks]

Again, I thank my hon. Friend not just for his intervention, but for all the work he has done before and since his election. He has been a dedicated campaigner on this issue and has raised it a number of times with me and my right hon. Friend the Secretary of State.

My hon. Friend’s point about collaboration is incredibly important. We have reset our relations with the devolved Administrations across the country. In particular, on Grangemouth, we have been working hard with the Scottish Government to find a solution. That has been a far more helpful set of interventions than we had from the previous Government. For example, on Project Willow, we have committed to joint funding with the Scottish Government to drive forward to find a solution. We are leaving no stone unturned to secure an industrial future for the Grangemouth site, and I know that my hon. Friend will continue to campaign on the issue.

The future of the North sea more generally depends on having a plan for the industries of the future, whether that is carbon capture and storage, hydrogen or, indeed, renewables. The just transition is critical and it is something I take incredibly seriously, so we will work with North sea communities to develop a credible long-term plan. That work will be supported by a British jobs bonus to incentivise developers to build their supply chains here in the UK and to create good jobs in our industrial heartlands and coastal communities. We will make sure that our offshore workers are the people who decarbonise our country and deliver our energy independence, and that there is a strong, resilient workforce in the North sea for decades to come.

[Barry Gardiner (Brent West) (Lab)]

My hon. Friend, very importantly, mentioned the role that carbon capture, usage and storage has to play in the decarbonisation of our economy. I am sure he will have seen the latest National Audit Office report on CCUS and will therefore be aware that the Department has increased its reliance on CCUS substantially since this was first mooted. The NAO is clear in its report that uncertainty remains about the funding available for future stages of the CCUS project proposals; that the previous Government were behind in agreeing support for track 1; and that future progress on the programme is dependent on reaching financial investment decisions for at least some of the track 1 projects very swiftly. Will he give us an update—if not now, at some point later—on how this essential part of the programme will be handled?

[Michael Shanks]

My hon. Friend raises a very important point. The Department is reviewing the NAO report at the moment. This area will need investment, but we also need a concerted effort to understand what some of the barriers are. It is very clear that carbon capture and storage will be a critical part of the North sea infrastructure in the future, so we are taking those issues very seriously.

--- Later in debate ---

[Claire Coutinho]

I have enormous respect for the hon. Lady, but I disagree, particularly on nuclear, because every single operational nuclear power plant in this country was started by Conservatives.

I will offer some suggestions for questions that Labour Members might like to ask. They like to say that renewables are cheap, and they are cheap to operate. After all, wind and sunshine are free. However, if we want to know what a type of power will do to our bills, we have to look at the full system costs. If we race ahead with renewables at the same time as making our gas power stations uninvestable, what will be our back-up when the sun does not shine and the wind does not blow, and how much does that cost the system? New technologies such as small modular nuclear reactors, carbon capture, and batteries of long duration storage are all welcome, but they will not be ready by 2030. What will be used, and how much will it cost?

Will the largest nuclear expansion in 70 years, which I set out, be sacrificed to pay for GB Energy? I know that Ministers barely refer to it any more, but nuclear will be critical to our energy supply in the years ahead. Have they made an assessment of how much their plans will increase our reliance on the current dominant provider of pylons, cables, batteries and solar panels, which is China? If not, when will they do so? How much private investment into the energy transition will they lose through their plans to tax the North sea into oblivion and ban new oil and gas licences? It is not a coincidence that many integrated energy companies in this country pursue both oil and gas and renewable projects at the same time; it is because they use the same skills, supply chain and workers. Industry says that more than £400 billion is at risk from these plans. GB Energy, at £8 billion, will not touch the sides of replacing that. How much will be lost, and where will the extra money come from? Will it be from central Government through people’s taxes, or will it be through the bills and standing charges of all our constituents?

The Government keep claiming—I think the Minister did so today—that GB Energy will turn a profit. I believe he said that “every single project” will make a return, but the slice of the pie that they want to invest in is the slice that even businesses do not think they can make money from. That is what de-risking means. Members should ask on what basis the Secretary of State thinks that he can turn a profit for the British taxpayer when highly experienced energy companies believe that they cannot.

If I were to give one piece of advice to the Minister it would be to do what I did when I first started the job. He should not listen to just one side of the climate lobby who pretend that there are no costs involved in this transition, but go to speak to industry, and to oil and gas workers, and listen to how much those families value secure, well-paid jobs on their doorstep. He should not follow the Secretary of State’s path of quoting only from the Climate Change Committee, and never from business or industry. The Minister’s job, first and foremost, is to keep bills down and the lights on. He should not forget those last two priorities, or he will find that those on the Benches behind him will turn very quickly.

[Barry Gardiner]

The right hon. Lady said that Members should not quote only from sources that they feel are friendly to them, so I will not quote from the International Energy Association, but perhaps she might accept a quote from the World Economic Forum, which stated:

“Renewables are now significantly undercutting fossil fuels as the world’s cheapest source of energy”,

according to its report.

[Claire Coutinho]

I thank the hon. Gentleman, but as I said, we have to look at the full system cost. He is very experienced in the energy sector, and he knows as well as I do that the flexible capacity that is used to back up an intermittent system is where the true costs lie. It is fair for Opposition Members to ask for an assessment of what those costs will be, and what they will mean for British bill payers.

The other area where the Government must be honest with the public is about what they are going to build. The Secretary of State’s first week in the job saw him approve 4,000 football pitches’ worth of solar farms on farmland in Rutland, Suffolk, Cambridgeshire and Lincolnshire. Those projects were not sat on my desk, as the Secretary of State has claimed. I had made a decision to reject Sunnica on the basis of a scathing examining authority report, and I changed policy to protect our best agricultural land. These are not projects that were likely to be approved; these are bad decisions. Work was being drawn up to be announced, but the decision had been taken in the case of Sunnica. The Secretary of State will know that from civil servants, who are duty bound to brief him honestly in the Department.

In the case of Mallard Pass, the site has been signed off, 40% of which will be built on our best and most versatile agricultural land, taking no notice of legal planning guidance that says that best agricultural land must be avoided. The Secretary of State and his Ministers will have to justify that, and many more decisions, to his new colleagues, many of whom now represent rural communities and whose constituents will be rightly concerned that they are next.

I wish the new Minister well for his time in the Department. The energy sector is one of the most interesting and important policy briefs affecting this country, and it is in all our interests that he does his job well. However, what the Government have done so far —make claims during the election that they cannot stack up now they are in government—will just not do. They have set out a hard target to decarbonise the grid by 2030, and the Secretary of State stakes his entire political reputation on it, without being honest about the costs. These issues are far too important for Government not to take seriously, and they are far too important for Labour Members to follow the Government blindly without asking questions. They did that during the election with promises to save households £300, and they can no longer stack up those promises just three weeks into Government. I humbly suggest that this is their first lesson of the Parliament: they should not give the Secretary of State a blank cheque again.

--- Later in debate ---

[Wera Hobhouse]

I am only mentioning how important community energy is to Liberal Democrats. The Labour manifesto did not seem to have as much emphasis on it, but if we agree on it, hurrah! We all win.

[Barry Gardiner]

The hon. Lady is being generous in giving way. On the issue of undergrounding power lines, although that may in some cases be necessary for communities, does she not accept, given that it is 10 times the cost, that it is possible to screen the power lines and, in doing so, create biodiversity corridors that can connect biodiversity from one part of the country to another, so that biodiversity can cope with climate change?

[Wera Hobhouse]

Indeed, there are not easy answers to all these questions. We need to look at the fine balance of cost versus getting community buy-in. There is going to be a transformation of our landscape, and we need to be aware of that. We must also make a good case for why it is urgent that we get to net zero, and in my view that balance in the argument was not struck properly by the previous Government. It is important that communities buy into our big landscape transformation, but it is also important that we do this at an affordable cost for the whole of the UK.

We Liberal Democrats are calling for all new homes to be net zero immediately. It is crazy that we are building homes today that will need upgrading in a few years’ time. We are proposing a 10-year emergency upgrade programme for homes, starting with free insulation and heat pumps for those on low incomes. That will not happen without incentivising private landlords and having tougher energy efficiency targets. The private rental sector has the most energy-inefficient homes. Nearly half of households living in these properties are in fuel poverty, but local authorities have taken limited action to enforce minimum energy efficiency standards.

Whether it is tighter regulation on private landlords or further sanctions to ensure that they comply, the Government must put their mind to the private rental sector. We will ensure that energy efficiency for rentals is not brushed under the carpet. That includes incentives for the private rental sector. From discussions in the previous Parliament, I know that the Labour party is relatively reluctant to give money to private landlords, but without incentivising the private rental sector, I do not think that a home insulation programme will happen, particularly for low-income families. I urge the Government to think about that.

As well as landlords, businesses must be incentivised to invest in the green transition. The U-turning of the Conservative Government sparked immense distrust from industry, with the UK chair of Ford warning that her business needs three things from the Government: ambition, commitment and consistency. That is exactly what they must deliver. Years of stop-start investment have left the energy sector reeling. Businesses and trade organisations have long been calling for a detailed plan of action that offers the clarity and certainty that will make the UK an attractive country to invest in. I hope that this Government can finally deliver the certainty that the country so badly needs.

Climate change is happening, but every cloud has a silver lining. Seizing the economic opportunities of net zero will help us spread wealth and opportunity to every corner of the UK. From insulating homes to providing thousands of new jobs in the energy sector, it is clear that everyone can benefit from a thriving green economy. I look forward to working constructively with the new Government to combat climate change, reduce energy bills and be a leader in the journey to net zero.