Oral Answers to Questions

Debate between Bernard Jenkin and Michael Shanks

Tuesday 12th November 2024 Commons Chamber

[Michael Shanks]

I would encourage the right hon. Gentleman to read the NESO report, because it sets out in great detail not only that clean power is achievable by 2030, but that it will lead to lower bills. What he says about investment misses the point: in the last few weeks, we have announced billions of pounds of private sector investment in these projects; indeed, Scottish Power has announced today that it will provide £1 billion. Companies are choosing to invest in this country, whereas they did not under the Conservative party. The reality is that once upon a time, the Conservatives recognised that the drive to net zero was important. They have abandoned that commitment now.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I thank the Minister for agreeing to meet the OffSET—offshore electricity grid taskforce—group of MPs later today; we are very much looking forward to the meeting. Does he recognise that achieving the 2030 deadline set out in the NESO report requires an acceleration of the process, which, in turn, is dependent on much higher levels of public consent?

[Michael Shanks]

I recognise the hon. Gentleman’s point, and I am looking forward to meeting him and his colleagues this afternoon to discuss the particular issues in his area. We need to build more network infrastructure across the UK to make this endeavour a reality, but he is right: we want to bring communities with us on this journey. That is why we have said that we are looking again at what community benefits will look like, building on some of the work that the previous Government did in consulting on this issue. Crucially, however, if want to bring down bills and deliver energy security, we will have to build the infrastructure, and that is what this Government are committed to doing.

Oral Answers to Questions

Debate between Bernard Jenkin and Michael Shanks

Tuesday 8th October 2024 Commons Chamber

[Michael Shanks]

I thank my hon. Friend for that incredibly important question. Community energy has so many benefits in our energy mix, including giving communities a stake in our energy future. We also know that there are many social and economic benefits that come from that. We are committed to our local power plan, which will deliver investment in community-owned projects. Great British Energy will have a key role to play in supporting communities, capacity building and in that initial funding to help them deliver these projects.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

Could I invite the Minister to meet a cross-party group of MPs from the east of England to discuss how the review conducted by the electricity system operator can contribute to energy security and in particular to look at how undergrounding high voltage direct current cables could be cheaper in the long term than pylons and more efficient for achieving net zero? Will he agree at least to have a meeting with us on that basis?

[Michael Shanks]

I am always happy to have meetings with any right hon. and hon. Members across the House on a range of issues, so I will take that away. The evidence suggests that undergrounding is five to 10 times more expensive and that actually it can have more of a damaging impact on nature and natural habitats than pylons. The important thing with all of this is that this is nationally important structure, which is necessary for us to get to the targets that we want to get to. I know that the hon. Gentleman takes that seriously, and I will meet him and others, but we have been clear as a Government that we will build this infrastructure if it is necessary.

Great British Energy Bill

Debate between Bernard Jenkin and Michael Shanks

2nd reading
Thursday 5th September 2024 Commons Chamber

[Sir Bernard Jenkin]

I do not agree with that, simply because we have seen massive investment in renewables over the past 14 years, as the former Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), and the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), set out. We have been making fantastic progress with bringing renewables on stream, but there are considerable questions to ask. I wish it were as simple as setting up a shell company and saying, “We are going to get the state to do everything”, but I am afraid it is not. As the shadow Secretary of State pointed out, Ørsted and EDF make massive losses, and either the taxpayer has to pay for those losses or those costs go on to electricity bills.

The Secretary of State announced on Tuesday that we have got all this renewable capacity coming on stream—enough to power 11 million homes. That is if we match the maximum capacity of the renewables with the average annual demand of those homes, but of course renewables are intermittent. It seems such an obvious thing to say, but we have to say it: sometimes the sun is shining, sometimes the wind is blowing, and sometimes we have enough water for hydroelectric power, but sometimes not. In the winter months, solar makes very little contribution—it makes no contribution in the dark, at night. [Interruption.] It may seem obvious, and the hon. Member for Stroud (Dr Opher) may laugh, but we need to point these things out, because when the Secretary of State says that renewables are cheaper than fossil fuels, he is comparing the strike price with the cost of buying marginal supply capacity when we need that extra marginal supply.

The strike price will not be reflected in our electricity bills, because we have to add in other things, such as system balancing costs. We have to add in grid infrastructure costs, because renewables require massive investment in grid infrastructure. We have to add in the costs of importing through interconnectors when we do not have enough domestic supply. We have not begun to factor in storage costs—the storage capacity of our electricity system is still miniscule. Members should read the Royal Society paper on creating electricity storage in this country: it is going to be astronomically expensive, and will probably still not be enough. Then there are constraint payments—oh, yes, the constraint payments. This year, we are paying £500 million to renewable producers under the contracts for difference scheme not to produce electricity when they can produce it, because that is how the system works. That is how we have attracted so much investment, but those payments are going to be about £1.5 billion next year.

I would like the Government to produce some forecasts. How much will the balancing costs be in each year over the next 10 or 15 years? How much grid infrastructure investment will need to be funded? That appears on our electricity bills—it is the standing charge, and boy, that charge is going to go up with all the infrastructure investment that we will require. How much will we have to spend on importing electricity? The two interconnectors coming into East Anglia as part of the Norwich to Tilbury programme will be importing electricity. They are not for exporting, because the only security of supply we will have if we have shut down all our combined cycle gas power stations by 2030 is from other places.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

indicated dissent.

[Sir Bernard Jenkin]

The Minister shakes his head, but if we have shut down all that capacity—if we cannot generate the electricity ourselves—we will have to get it from other places. There are phenomena called wind droughts, which can go on for very long periods. What are we going to do when the wind turbines are not turning and the sun is not shining during a very cold spell in the middle of winter? We had one or two close scares this winter. The generating margin that we used to enjoy has gone. The great risk of accelerating the decarbonisation of the electricity system is that there will be more appeals for voluntary or compulsory restraint from industry, because industry is the hidden customer that is shut off when we are short of electricity, or we risk more brownouts or even blackouts. That not impossible, so where is the data that the Minister is placing so much confidence in that shows these forecasts to be wrong? I am not making them off my own bat—there are plenty of people out there making them.

That brings me to the final brief point I want to make. I understand the logic that the Minister explained in his letter to me.