Capenhurst Facility: High-assay Low-enriched Uranium

Earl Russell Excerpts

Wednesday 11th November 2026 Lords Chamber

[Baroness Curran (Lab)]

I have been assured that it will not create any delays. I will make sure that I answer the specifics of that and perhaps write to the noble Lord to make sure that I give him that assurance. As I stand here, my understanding is that I can categorically give that assurance.

[Earl Russell (LD)]

My Lords, we strongly support this programme, and recognise that it is an important part of increasing our resilience and making sure that we are not still dependent on the Russian nuclear fuel cycle. Can the Minister confirm when start-up is likely to happen? How are the Government working with our international partners on these matters, particularly given that America is also a major supplier of this type of fuel?

[Baroness Curran (Lab)]

We do believe that we are on track for a start-up in 2031, and of course we work with international partners. The UK is working closely with European partners to develop a secure and resilient supply, which will play an important role in also producing medical radioisotopes. We work closely with the G7 to remain close partners in discussions on how we build supply chains free of Russian influence. I am sure noble Lords will be aware that the UK has already implemented a direct ban on Russian uranium, in May 2026. This also restricts UK persons or entities from facilitating Russian uranium supply to third countries. We have a close working partnership with the United States on nuclear policy. I attended the G20 Ministers’ meeting, and in that dimension, there was good co-operation.

National Policy Statement for Fusion Energy Generation

Earl Russell Excerpts

Tuesday 10th November 2026 Grand Committee

[Earl Russell (LD)]

My Lords, it is a pleasure to speak in this debate, and I thank the Minister, the noble Baroness, Lady Curran, for securing it. I welcome the chance to speak on what is a really extraordinary scientific journey—one that, as others have said, is vital to our long-term net-zero future. The running joke has always been that fusion is the energy of the future and is always 30 years away.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Or 15 years.

[Earl Russell (LD)]

Whether 15 or 30 years away, however, we are making progress, and that joke does not really apply anymore. We are trying to do something really extraordinary: to build a star here on earth, to heat hydrogen to around 10 times the temperature of the core of the sun, and to hold plasma in a chamber with magnets cooled to near absolute zero.

Britain is not sitting on the sidelines on this but is actually leading the world. The Joint European Torus at Culham has set records for fusion energy output. The MAST upgrade is the world’s largest operational spherical tokamak. Public and private investors, from the UK Atomic Energy Authority to Tokamak Energy, are pushing ahead and pushing each other forward. We have rightly earned our place at the heart of this.

The prize, as others have said, is incredibly large. The International Atomic Energy Agency counts fusion among the most environmentally friendly sources of energy: no carbon dioxide; no harmful atmospheric emissions; and it produces fuel from hydrogen and lithium, which are both widely available. We know that electricity demand here is expected to double, or more than double, by 2050, as we seek to electrify our heating, transport and industry. The UK Atomic Energy Authority believes that fusion could provide steady baseload power that would complement our renewables. If it works at scale, we could move from an energy politics of scarcity and competition towards abundance, and the global market has been estimated to be worth £12 trillion.

But we need to be honest about the climate argument, which is a point that the Commons Energy Security and Net Zero Committee also made. The earliest we will see this energy in production and viable is the 2040s, so we need to continue on our renewables journey and we need to cut our emissions. This energy will come late in the day in terms of meeting our climate targets.

That being said, we on these Benches back fusion. We support it, and we support the £2.5 billion invested so far and the £1.3 billion to be put into STEP. The Government are backing a winner, and I believe that it is justified, but the risk is also large, and the horizon is long. Ministers and the Government have a duty to be open about the costs and processes involved and to make sure that we are getting value for public money.

That brings me to EN-8. As the Minister said—I did not know this until she said so—it is the world’s first policy for energy fusion. Obviously, planning policy is our primary consideration here today. There is a lot here that we welcome and support, and my sense is that that is also the case for others around the Room today. We welcome the designation of low-carbon fusion energy as a critical national priority; the priority for brownfield and former energy sites; and the recognition that fusion’s low radiological risk means no population density limits. We also welcome the encouragement of collocation with energy-intensive users, such as data centres, and the 19 fusion-specific considerations on top of EN-1.

We also welcome the broadening of what can count as a nationally significant project. The Government are bringing in fusion infrastructure with thermal, or combined thermal and electricity, capacity over 50 megawatts, which recognises that fusion plants may supply heat as well as power. We also welcome the application of good design principles, which are key, and how the new plants will meet the very important climate-resilient targets—as we know, our climate is changing in the future.

As the Minister said, industry has broadly welcomed the draft. I thank the Minister for noting that the Government will look at the responses and points that have been made on that draft.

I have a few areas that I would like to explore while I have the chance to do so. In 2022, the Government decided that fusion would continue to be principally regulated by the Health and Safety Executive and the relevant environmental agency. As the noble Lord, Lord Khan, has already mentioned, of course we recognise that fusion is not fission, but the Commons Energy Security and Net Zero Committee was entirely unconvinced that removing the Office for Nuclear Regulation would reduce bureaucracy and warned that “the relative inexperience”—or, really, the complete inexperience—

“of the Environment Agency may lead to the excessive caution”

in this field. My question for the Minister, therefore, is: how will regulators be adequately resourced? What specialised staff are the Government seeking to recruit and what are the timeframes for ensuring that all this is done in good time?

I understand that fusion sits outside the nuclear siting and licensing regime of 1965; that makes sense, but questions remain about how third-party liability, insurance and—as has already been mentioned—long-term waste costs can be handled. As the industry seeks to invest, it will need further clarity on these points.

Can the Minister also say a little more on where we are at with the STEP programme? I understand that the aim is to submit a development consent application in 2029 and to start building in 2030. Even conventional schemes can take well over a year, so are we still on track for this timetable? It feels like quite a tight timetable for a one-of-a-kind plant.

Fusion plants will be strategic national assets and the supply chains behind them will depend on global supply chains. What considerations have the Government given to securing those supply chains, particularly when we will face a world of competition, particularly with the USA and China, which are particularly investing in this technology? What are we doing to make sure that those supply chains work?

The Energy Security and Net Zero Committee also called for non-proliferation guidance to be issued now, not at the five-year review. Will the Government accept that recommendation?

For me, another important point is that these are really big infrastructure projects and we want to support community benefits. What more are the Government doing to make sure that local economies, the wider economy and the people who live next to these big industrial sites will benefit from them? Is it still expected that STEP will support around 10,000 jobs? What work is being done to support the skills and apprenticeships that will go with that?

Issues have also been raised around how we talk to local communities about these projects. Obviously, this is a new, evolving and unknown technology, so there is a real need for the Government to put effort and consideration into how they communicate these projects to make sure that the public are reassured of their inherent safety.

Cooling water is an issue. Tomorrow, we will debate the Environment and Climate Change Committee’s report on drought. Obviously, we know that this is subject to forward plans, but it looks like we could be short by 5 billion litres of water per year by 2030. These plants have big cooling needs, and they may be collocated with data centres and other high intensity water and energy requirements. Given that collocation is mentioned in this document, will the Government give more consideration to desalinisation or other methods so that we can look at water usage? Water usage is quite a critical element of these projects.

There is still some debate about the relationship between EN-1 and EN-8; I understand what the Minister says, and that EN-1 is the overarching document. I welcome the fact we have developed a separate policy with EN-8, but there are some issues about the relationship between those two documents, which could do with further clarification.

I also want to ask about the energy spatial plan, which the Government are in the process of developing and should be published later this year. But this plan needs to work with the energy spatial plan. These plants, particularly at start-up, will require to draw huge amounts of energy from the grid—although, when they are up and running, they will supply energy back to it—so grid planning and siting are key issues.

I like the fact that we are at the forefront of this technology, but the technology is evolving and changing, and other countries are investing heavily in it. Just yesterday I was reading about the helicon current drive at the DIII-D national energy facility, which is a new development of an old technology that hopes to maintain a steady state for longer so that we can get closer to getting long-term energy out of these plants. That highlights that the technology is moving really quickly, so I guess there is a question about how EN-8 will develop with new technologies.

In the European Union, policy on fusion energy is still country based, and we are ahead of the EU now. But these are big, large-scale projects, and as part of our reset with Europe we should be looking for greater co-operation with our European partners. I think we are actually ahead of the game here, and on this document we could be leaning into Europe to develop better policies based on this. I would encourage the UK Government to include fusion as a key element of our European reset.

We are supportive of this national policy statement. We think this is a real opportunity for the UK to press home its technological advantages in this area. The development of and investment in this technology is really important towards providing our future long-term energy security and helping deal with the problems of energy use and climate change.

--- Later in debate ---

[Baroness Curran (Lab)]

I thank noble Lords for a very substantial debate, and I very much appreciate the comments they have made. If I may begin with the very last comment made by the noble Lord, I can assure him that my view as a Minister, which I would be certain about, is that comments made in Parliament have very significant status. Particularly given the detailed consideration that has been given here today, I can guarantee that that will be fed into the concentration process; it will be given special status, because it is from Parliament, and it will feed into forming the view that the Government take to respond to that. I also thank the noble Lord for recognising that some comments here today are very detailed indeed, and I may not respond to all of them, but I guarantee that I will come back in detail to them and feed them in.

I also appreciate the noble Lord’s ingenuity because, in every engagement I have with him on the broadest range of energy topics, he squeezes in Jackdaw and the court case that is going on today. I recognise that, but he does that in great spirit because of his commitment to the issue, rather than for any other reason.

I will just make two broad points before I go onto the detail in front of me. The first is on the broad issue of planning. I recognise the substance of what the noble Lord said about planning issues and their relevance to the whole energy field. I think I have said in Parliament before that, in a previous life when I was a Member of the Scottish Parliament and when it was of a different persuasion, I was a Planning Minister. I took the importance of planning very seriously, as a mechanism to protect and support, but also as an opportunity. We need good, balanced planning systems. When regimes do not have that, often business does not thrive either, so planning needs that balance. It is there to facilitate and encourage, not for red tape. For this Government, it is not there to smother business in any way whatever. We want a lively planning system that is the servant of economic growth and development to make sure that we have coherence in the system and a level playing field, and that people have stability. That is part of what today is about: it is to give that coherence and stability, so that investors can have confidence that they know what the framework is, rather than haphazard, piecemeal support. I will engage with the noble Lord’s substantial points and look at them again, and make them a theme of how we look at the consultation.

The noble Earl, Lord Russell, as he always does, made very substantial points about the link to clean energy, and the need to support the renewables industries and recognise the myriad challenges that we face at the moment. I assure him that we will continue on that journey and have many discussions about this. This is one part of that journey, but it does not take us off that path, because we know that this is a longer-term issue, not an immediate solution, and we will not argue that it is or put it forward as such.

I will now try to address some of the other points that were made that I have not addressed yet. Some of your Lordships made similar points, so forgive me if I reference one noble Lord and not another. I will make sure that I respond in writing to anything that I have not picked up.

My noble friend Lord Khan made a very useful, interesting and important contribution to this debate, and raised some very significant and substantial points. The regulatory framework around waste is vital, and I will address the point about public opinion and how we engage the public on this. The UK already has a robust regulatory framework in place, governing the treatment, storage and disposal of intermediate and low-level reactive and other harmful waste. We are recognised as having that as well. EN-8 requires developers to demonstrate how waste from their fusion facilities will be managed safely and in accordance with all existing legal and regulatory requirements, the right construction, operation and decommissioning.

The Government will continue to consider how waste from fusion facilities will be managed as the sector develops, which links to the very important point that the noble Earl, Lord Russell, raised about engagement with local communities and the public more broadly. The broader public are, understandably, perhaps not terribly well versed in the details of fusion energy, so we have a responsibility as the Government to be clear about what fusion is and that it is different from fission, and that, even with both energies, we have robust safe regulatory regimes in place. It is important that Parliament questions that thoroughly—that is why this process is so important—but we need to find mechanisms to ensure that local communities get the benefit of that but understand that planning gives them that protection and confidence. I take that point seriously.

I also welcome the support from the noble Earl, Lord Russell, for enabling thermo-generating fusion plants to be considered as nationally significant infrastructure projects. I think that was also said by my noble friend Lord Khan.

The theme of regulator capacity came out quite significantly. Of course, we have looked at the committee report and will respond properly and in full. The Environment Agency and the Health and Safety Executive are heavily experienced in this sector. They have successfully regulated fusion facilities for decades, having, for example, regulated the JET facility at the UK Atomic Energy Authority in Oxfordshire. The Government will continue to fund these regulators to further build their fusion capability and provide access to subject experts at the UK Atomic Energy Authority. We will continue to support early engagement with developers and knowledge building across the planning and regulatory system and engage with investors to ensure they can have confidence that the skills and understanding capacity are there.

On fusion timelines and energy production, the noble Earl, Lord Russell, also mentioned that the timing of fusion energy will not impact short-term climate goals, which I recognise. It is unlikely to make material impact until the 2040s. However, the benefit of fusion energy development remains, with jobs, inward investment and the development of technologies, such as high temperature superconducting magnets, all adding to the UK’s economy well before the fusion energy does—notwithstanding the general points the noble Earl made about clean energy. In the longer term, as energy demand increases, as the noble Earl recognised, fusion will become a more invaluable source of baseload energy.

As my noble friend Lord Khan highlighted, non-proliferation and liabilities are vital issues that we are required to address. Although they are important, these are not strictly planning matters, which is why EN-8 does not directly address them. Outside of planning, the Government have committed in the fusion strategy to clarify third-party liabilities for fusion and believe that the conventional insurance market, rather than the nuclear market, is the most proportionate approach. The Government are engaging with the insurance market to understand the risks of fusion and develop bespoke insurance products. As part of this, the Government have also committed to identifying, by autumn 2027, a proportionate mechanism to ensure that decommissioning facilities can be met by fusion operators, rather than falling to the public.

The noble Earl, Lord Russell, raised questions about STEP. I am happy to confirm that STEP is progressing well, and we still expect government investment in fusion to support over 10,000 jobs by 2030. Alongside that, we have invested £50 million into skills development through the FOSTER programme. STEP, as well as demonstrating that fusion is commercially viable, acts as a demand signal to the wider fusion supply chain. Earlier this year, a number of contracts were placed with the STEP programme, including the construction partners and magnet engineering partners. We know that there is much to do. It is a very large project, but we are ambitious. As we have recognised, we have got a lot of status in this, and we have to remain ambitious.

I also take this opportunity to note, as the noble Earl, Lord Russell, set out, that the new strategic spatial energy plan is at the heart of the Government’s vision for our power system and will set out the blueprint for our future energy system. The UK’s fusion strategy commits to including fusion within that when fusion technology is sufficiently mature.

Moving on to water, I can confirm, and assure noble Lords, that water use is obviously an important planning consideration. Fusion energy infrastructure may use water for cooling, but this water is returned—just at a slightly higher temperature—and this is tightly controlled by environmental regulation. EN-8 will require applicants to set out their proposed cooling systems and apply the mitigation hierarchy to any significant environmental impacts. As I have said, obviously they are required to look at local impact considerations, including the social and economic impacts on local areas. As was said, it is vital that local communities understand that it is not just a government imposition and that they see the benefit.

I can also assure noble Lords that we have always been open to collaboration with the EU and other international partners, and that remains the case. We will continue to work on that.

I will address the points made by the noble Lord, Lord Moynihan, as best I can. I think we all recognise that fusion is a fundamentally different technology to nuclear fission, with a different hazard profile. A dedicated national policy statement is therefore the most appropriate way forward, because this is so significantly different and has to be understood by the public to be so. We need an appropriate regime to provide a clear and proportionate planning framework for fusion that supports commercialisation while maintaining robust protections for workers, the environment and communities—and gets that balance right. EN-8 offers a better balance for investors and communities.

The fusion sector itself called for this national policy statement, and the responses to the public consultation are supportive. Of course, we will look at those along with the comments raised today. We will address that point. The Planning Act was updated last year to streamline the consenting process, in July new guidance covering all key stages of the process was published, and the Planning Inspectorate is redesigning its services to support the implementation of these reforms. This will include providing bespoke and technical advice to applicants, including fusion developers, at the early stages of the consenting process. I hope that addresses some of the issues that were flagged.

The national policy statements will now be reviewed and either updated or withdrawn at least every five years to ensure that they remain appropriate and reflect the Government’s priorities and ambitions. As I said, the Government will reflect on the committee’s report on the wider planning framework and respond. I very much appreciate the range of comments that were made today and the recognition of the opportunities that this energy can provide. We hope to address your Lordships’ very significant points.

Fusion has the potential to contribute to our long-term energy security, support both near-term and long-term economic growth, create highly skilled jobs and—as has been said—strengthen the United Kingdom’s position in a technology of the future. We are already a world leader in this. Through our fusion strategy, we are taking the steps needed to translate that scientific and regulatory leadership into long-term economic, commercial and strategic advantage. We see EN-8 as an important part of that approach, building on our global leadership by ensuring that the planning framework in England and Wales is ready to support the safe and sustainable deployment of fusion energy in a way that supports innovation and investment. As part of that process, we also listen to communities, business and industry.

I thank noble Lords for their comments. If I have missed any specific issues, I will reply later. I am sure that we will continue to discuss some of those broader themes.

[Earl Russell (LD)]

I apologise for intervening. I really appreciate those responses, but my point about water and collocation was not just about the fusion plants themselves. Since the Government have collocation at the heart of their documents and plans, and that includes AI data centres and other industries with very water-intensive use, it would be good to have further consideration of other processes of desalinisation, if circumstances allow. This is not something that the Minister needs to respond to me on now, but I recognise that for fusion it would be abstraction of water and there are regulations around returning that, but with this abundant energy there comes possibilities for doing things that we have not done before. I leave that there.

[Baroness Curran (Lab)]

I thank the noble Earl for that point. I will not respond specifically on desalinisation now to make sure that I get a proper briefing on it first. It may cover a broader issue. I take the general point, however: we live in technologically changing times; there is a lot of excitement about that and huge opportunities, but it raises significant questions. We raised this on the Floor of the House and have seen some very significant debate around it internationally. It is a legitimate question, and one we must keep on the agenda. I will respond to the specific question that he raised.

Rosebank Oil Field

Earl Russell Excerpts

Thursday 29th October 2026 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the Minister for the earlier answer she provided to give clarity on the OBR forecasts. However, separate from that decision, does she agree that 90% of Rosebank’s oil reserves would be destined for international markets and would be sold at global market prices, providing little or no benefit to UK consumers?

[Noble Lords]

Oh!

[Earl Russell (LD)]

Does the Minister also agree that the 254 million tonnes of scope 3 CO₂ emissions will be equivalent to 70% of the UK’s annual emissions in 2024 and seem very incompatible with our carbon budgets?

[Baroness Bennett of Manor Castle (GP)]

Hear, hear.

Gwyndod Project

Earl Russell Excerpts

Thursday 29th October 2026 Lords Chamber

[Baroness Curran (Lab)]

That was interesting and challenging, as ever, from the noble Lord. I do not know how well people know this, but I am not really on record as being frightened to upset the Scottish Government—I do not think they would have that view, either.

The noble Lord raises a very serious point. There have been discussions about nuclear power in Scotland. The Green Party had a debate at their conference, and it has resisted it, unfortunately, and the SNP has stood against it. They have missed huge opportunities to contribute to the development of clean energy in Scotland and across the UK. They are also turning their back on huge opportunities for investment and infrastructure development, and the development of skills. Of course, we have high standards of safety and security, overseen by independent regulators, and we have made enormous progress on this. The SNP has been very backward in its attitude, so I will use every opportunity I can to pursue this issue with the SNP Government—and I am not frightened to do so.

[Earl Russell (LD)]

My Lords, on these Benches, we very much welcome the progress that has been made on this important project at Gwyndod. I ask the Minister to give some further information on the skills pipeline needed. We recognise that there is the opportunity of 300 apprenticeships and 3,000 jobs, but what action are the Government taking to ensure that local Welsh residents, including Welsh speakers, are able and empowered to apply for these jobs and that they turn into long-lasting opportunities?

[Baroness Curran (Lab)]

It is really important to make the point, too, that Wales must be part of this. Often, we have seen projects in the past that have not emphasised that connection to the local community, and we must take those opportunities to do that—so I agree with noble Earl’s emphasis on that. Also, as the Chancellor, John Healey, said yesterday, we must make investment work twice, and we need to make sure we do that in the energy department too, so we get a skills bonus as well as a delivery bonus. We agree that it must represent the most significant industrial investment in the region in Wales for a generation. As I have said, it will support 3,000 jobs. There is a nuclear skills plan, focused not simply on growing the nuclear workforce but on creating a strong, sustainable pipeline of skills, and it is something we will keep under close attention.

Jackdaw Gas Field

Earl Russell Excerpts

Tuesday 27th October 2026 Lords Chamber

[Lord Moynihan (Con)]

My Lords, I declare my interests as chair of Amey, Acteon and Buckthorn. I start by warmly congratulating the Government on approving production from the Jackdaw field, which will strengthen our energy independence and security, and add substantial tax revenues to the Treasury. Will the Minister now confirm that the Government are looking to approve the tie-backs from the Tornado field to the Greater Laggan infrastructure, the Abbey and Baker field tie-back in the southern basin, the Kyla development tie-back to the Bittern infrastructure, and the Montrose infill, a subsea tie-back?

Does the Minister agree with Offshore Energies UK, which says that the industry has identified 111 projects within existing licences that could unlock £50 billion-worth of private investment, create thousands of jobs, generate substantial tax income to the Government and, importantly, reduce the higher carbon emissions from either imported gas from Norway or, indeed, LNG from the US? With OEUK estimating that there could be more than double the Government’s projections, does she recognise that the Government may have underestimated the recoverable gas reserves within the UKCS? Given that the Government are in the spirit of supporting the production of domestic oil and gas expansion, perhaps she could commit to reviewing those current projections as well?

We warmly welcome Ed Miliband’s damascene conversion to supporting oil production, and on a major scale, as evidenced by his approval this month of the production licence for the giant Sea Lion oilfield, with gross full-field 2C resources estimated at up to 917 million barrels of oil located 220 kilometres north of East Falkland, with the production sold into international oil markets via offtake tankers. We are glad that the Foreign Secretary believes in the policy of exporting our oil, not least given the fact that the Government have recently overseen the closure of two of our six refineries. Will the Minister confirm for the record that the Foreign Secretary had every right to turn down the production licence under the Offshore Minerals Ordinance 1994 but chose not to? For the record, I should inform the House that I know that ordinance well, having been party to the previous 1992 ordinance when I was Minister for Energy.

Rosebank is half the size of Sea Lion. So, given this recent history of government decisions, can the Minister provide the House with any intellectually sound arguments that the Government can muster to reject Rosebank while approving oil from the Sea Lion field to be sold on international markets and, indeed, gas from Jackdaw? Can the Minister tell the House whether she agrees with the Prime Minister and the Chancellor that the economic case for approving Rosebank is inarguable, or with the Energy Secretary, who has recently been deserted from her post by the Foreign Secretary on this subject, that the field should remain undrilled?

Unlike Jackdaw, which is already near complete construction, Rosebank could add nearly 500 full-time equivalent jobs on average over its lifetime, including decommissioning. In addition, this project would generate billions in tax revenue. Does the Minister see the approval of Rosebank as an opportunity to regenerate the northern Scottish economy and one that the Government must take?

In 2024, at the end of the Conservative Government’s time in office, UK fossil fuel dependency was 75.1%—a record low. It is, of course, the final burning of hydrocarbons, not their extraction and production from the North Sea, that creates the CO emissions. Yet under this Government, fossil fuel dependency this winter is predicted to rise to 76.6%, which covers all our energy needs, including transport, heating and electricity generation. For as long as this lasts, does the Minister agree that we should maximise UKCS production to minimise our exposure to imported LNG and oil and gas products, including imported aviation fuel refined from Russian crude in India, which is part of the aviation fuel used on every flight taking off today and every day from Heathrow and Gatwick?

[Earl Russell (LD)]

My Lords, we recognise the logic of this decision, but approving a new gas field in a climate crisis is proof that Britain has not moved nearly fast enough to cut demand for gas in our homes and transport. Jackdaw was licensed decades ago. The decision is late because the Conservative Government failed to do the necessary preparations, and North Sea workers in the industry have paid the cost ever since. We accept that gas will be needed for decades during the transition, but burning fossil fuels causes climate change, and this summer’s wildfires and heat waves show us the true cost.

Although we could have properly invested in our transition towards cleaner, cheaper and more efficient energy, successive Governments—some more than others —have instead left the UK in a state of energy insecurity. By scrapping insulation schemes, the Conservatives built around 1.6 million homes to lower efficiency standards, costing families in those homes an extra £5 billion in bills between 2017 and 2025. The Conservatives also blocked onshore wind and cancelled zero-carbon homes, leaving us far more exposed to ever-rising global gas prices.

The Conservatives and Reform still talk about the North Sea as though it were a magic lamp. The fact is that it is a basin in terminal decline. The Conservatives’ latest so-called evidence is the Onward report, which Carbon Brief’s fact check found assumes that gas prices will fall back to pre-war levels and stay there for 20 years. One Imperial College professor said that the modelling

“has more holes than a Swiss cheese”.

Even on its own terms, it would mean an extra 524 billion tonnes of carbon dioxide and slower electrification. The Climate Change Committee estimates that a single fossil fuel gas spike on the scale of 2022 could cost as much as the net additional cost of reaching net zero across every year to 2050.

Jackdaw will not bring energy bills down. It can only add to the margins of our energy security. Jackdaw can play a short-term role only if it displaces the most polluting LNG and if it leads to more technological green investment. What guarantees are there that this will happen? Will the Government publish the evidence and report on it each year?

Rosebank, on the other hand, is different. The vast majority of it is oil and is sold on the international market, so it will not lower our bills, and the evidence shows that it fails the climate test. We await that decision and we will hold the Government to account.

The Government have also said that tax revenues will go into the new energy wealth fund to invest in green technology, which we welcome. However, the OBR forecasts North Sea tax receipts falling from £4.1 billion in 2025-26 to just £100 million by 2030-31—a 98% drop that Jackdaw cannot reverse. How will Parliament know how this money is spent?

The real answer to energy security is having homegrown renewable power the price of which we control and electrifying everything at speed. This Government are slipping ever further behind. Labour cannot argue that we need more gas because we failed to transition at speed while slowing their own electrification ambitions. The vehicle mandate requires 80% of new cars to be electric by 2030. Reports suggest that Ministers are leaning towards cutting that target to 60%. Does the Minister accept that this would be a disaster, sending the wrong signal to manufacturers, charge point investors and drivers? I ask the Minister to rule out any weakening of the 2030 target and to say when the review will report.

The target for heat pumps has been cut from 600,000 a year by 2028 to 450,000 by 2030. We are among the slowest in Europe because electricity costs are so much higher than gas. On insulation, the warm homes local grant has upgraded just 5,470 homes as of July—0.1% of the 5 million target by 2030. The Government must commit to a national electrification strategy and to a 10-year emergency home upgrade programme, starting with free insulation for the lowest-income households.

I welcome the commitment in the Statement to take levies off electricity bills, but Ministers have committed to remove only two-thirds of the renewable obligation and for just three years. We must remove it fully and decouple the price of electricity from that of gas.

I am concerned that new North Sea production, airport expansion and new data centres are adding emissions, while developing the grid, electric vehicles and heat pumps are falling behind. When will the Government receive the Climate Change Committee’s advice and will they commission a fundamental new assessment of our carbon budgets? The just transition is not delivering for North Sea workers and their communities. Labour should establish the just transition commission that we have called for.

Jackdaw must be the very last. This may be a pragmatic decision, but it must not become a precedent. The only lasting route to security and human survival is to enable the end of our addiction to oil and gas.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Baroness Curran) (Lab)]

I thank noble Lords for those substantial contributions, and I will do my best to address them as much as I can. I am sure we will have countless opportunities to address them again.

The noble Lord, Lord Moynihan, began by mentioning a number of other North Sea oil and gas projects. As noble Lords will know, I cannot comment on other projects as they are undergoing relevant quasi-judicial processes. However, I lodge the general point that he made, and I am sure it is one that we will continue to discuss.

On Sea Lion, as the Government have said in this Chamber before, the Government maintain a consistent position on the right of the Falkland Islands to develop its natural resources. This is integral to its right of self-determination, which is grounded in international law. UK oil and gas licensing policy does not apply in the Falkland Islands.

I turn to some of the noble Lord’s general points, and I want to be absolutely clear. He began on quite a positive note. I did get some congratulations, so I register my appreciation of that, even if it did not last very long. The North Sea remains a vital asset. It supports jobs, communities and our energy security. Even on the path to net zero, the UK will still require oil and gas for decades to come as we make the clean energy transition.

I think the fundamental disagreement between our positions today is that—I return to the challenge that the noble Lord has given me—he failed to mention the challenge of climate change. After the summer that we have had and all the signs that surround us, I think that is a dereliction of duty. We cannot look at just the production of gas and how we consume gas. We have to look at our carbon emissions, and we have to have a plan to deal with that. That is why this plan, this decision, is vital.

Jackdaw will start supplying gas to British homes and businesses in the coming weeks. At its peak, it is expected to increase UK domestic gas production by around 6%. It is a meaningful production, but it is still in line with our climate change commitments. Those climate change commitments are central to the policy of this Government, which is why our approach to the North Sea goes hand in hand with our ambitions for a managed, orderly and prosperous energy transition. As confirmed by the Prime Minister, who I agree with—and noble Lords should wait until the Prime Minister or any Minister makes formal decisions—this Government will hold to the target of reaching net zero by 2050 to meet the climate challenge and transition from fossil fuels to renewables and nuclear.

Let us be clear that the Jackdaw project will not prevent the UK being able to meet its legally binding limits on carbon emissions or achieving net zero by 2050, but, as the noble Earl, Lord Russell, indicated, Britain is a price taker, not a price maker. The price we pay for gas is determined ultimately by international markets, so while domestic production supports our energy security, producing more gas cannot, by itself, protect British consumers from volatile international prices. That is the charge I return to the noble Lord. He talked about the challenge of relying on renewables, but he does not take responsibility for the impact that volatile gas prices and their knock-on effects have had on British consumers.

We talk about developing the North Sea and continuing to do so. I remind the noble Lord that under the previous Tory Government 70,000 jobs in the North Sea were lost, which indicates that there are challenges there. Just increasing production there cannot be seen as a solution.

I turn to some of the points raised by the noble Earl, Lord Russell. I appreciated his introduction to his questions, which was quite interesting. We have heard very little from the Conservatives about the Onward report, and very little about their cheap energy plan. These have been questioned quite significantly in relation to the thinking and the figures behind them, but I am happy to return to that discussion if the noble Earl wishes to do so. He indicated some very useful stats in relation to that.

The noble Earl mentioned the energy wealth fund, which was announced alongside the Jackdaw decision. Its purpose is to use Britain’s energy wealth today to invest in the clean energy industries of the future. It will invest in renewable and low-carbon energy infrastructure across the UK, helping to unlock growth and supporting the low-carbon economy.

The noble Earl, Lord Russell, also talked about the zero-emissions vehicles mandate. On 14 August, the Government launched the mandate review consultation, which sought views from the public and stakeholders to consider the ZEV mandate and ensure that it is fit for purpose. The consultation forms an important part of the long-committed mandate review and has just closed. As your Lordships know, the Government have a long-standing commitment to publish that review to ensure that we are taking a pragmatic and balanced approach to the transition for transport. The Government launched the consultation so that views from stakeholders and the public could properly inform the review. No policy decisions have yet been made, but I assure noble Lords that the Government remain committed to the zero-emissions vehicle mandate.

The noble Earl also mentioned the warm homes plan. The warm homes plan represents the biggest ever programme of home upgrades in history and is already helping households to cut their energy bills, through solar panels, batteries, heat pumps and insulation. On heat pumps, to which he referred specifically, under the boiler upgrade scheme, the Government have supported over 90,000 heat pump installations and issued over £600 million in grant funding to homes in England and Wales.

I take the general point the noble Earl made about the renewables obligation, the work that we have done on that and the de-linking that we need to undertake in this country. Britain has already moved from gas setting the price of electricity for about 90% of the time in the early 2020s to around 60% today. So we are on that journey, and it is a journey that we want to continue to be on. Through the Government’s clean energy mission, it is estimated that gas will set the wholesale price for around half the time in 2030.

I return to the general point about the decision itself. The Jackdaw decision is fundamental to the decisions that we are making as a Government. It does not affect prices, but it will help with production and give a small but meaningful contribution to energy security. I re-emphasise that Britain has a secure gas system that has consistently met demand, including during periods of global market disruption, and will continue to do so this winter. We have also emphasised the economic benefits to Britain. The developer estimates that Jackdaw will support nearly 300 jobs and contribute around £2.9 billion to the UK economy. I am very pleased that most noble Lords have welcomed the decision today, for which I thank them.

Jackdaw and Rosebank Oil and Gas Fields

Earl Russell Excerpts

Monday 7th September 2026 Lords Chamber

[Baroness in Waiting/Government Whip (Baroness Curran) (Lab)]

I thank the noble Lord for his warm welcome. We know each other, and I know that we both welcome robust discussion—which is just as well because I think we will have a few disagreements along the way. He made reference to the enormous contribution of my noble friend Lord Whitehead to this portfolio and the work that he has done. I have learned a lot, and will continue to learn a lot, from my noble friend.

On the substance of the issue the noble Lord raises, he will know that the Jackdaw and Rosebank fields are each subject to a live regulatory process. The public notice period is closing on 10 and 17 August respectively. We are part of that regulatory process. The Secretary of State will consider the representations received and make separate decisions on each project in due course. It would be inappropriate to comment further on either project because it is important to maintain the robustness of the process and not pre-empt or predetermine the decisions.

I note the detail of what the noble Lord asked me in relation to the Falklands. I refer him back to the comments of my noble friend Lady Winterton, and it would be inappropriate for me to comment further on that.

[Earl Russell (LD)]

My Lords, I too congratulate the noble Baroness on her appointment, and I look forward to working opposite her. I also pay tribute to the outgoing noble Lord, Lord Whitehead.

I know the Minister is unable to comment before the decision, so instead I ask if she agrees with me that the Onward report, through which the Conservative Party has argued that we should abandon our net zero targets and could save £320 billion, is not worth the paper it is written on, as it is based on an incorrect underlying assumption that future gas prices will be low and stable and would result in an extra 524 million tonnes of carbon dioxide emissions by 2050.

[Baroness Curran (Lab)]

I thank the noble Earl for that question and for his welcome, and I pay tribute to his work on this issue in the House. Again, I have learned a great deal and will continue to do so from listening to his speeches. I recognise and appreciate the point being made about the Rosebank and Jackdaw decisions. I recognise the interest in them, but I cannot be drawn on that.

On his wider point, the noble Earl is right about the Onward report, the general disappointment people feel at the breaking of the consensus we have seen from the Conservative Party over recent months, and how significant that is. He will know that climate scientists and energy industry bodies have overwhelmingly challenged the report’s methodology and logic as applied to grid and infrastructure costs, and how it has costed the high volatility of gas along with its political and economic costs.

Energy Prices Act 2022 (Extension of Time Limit) (No. 2) Regulations 2026

Earl Russell Excerpts

Wednesday 15th July 2026 Grand Committee

[Baroness McIntosh of Pickering (Con)]

As we are all about the same height at this end, we do not need it. We should not worry about that.

Can the noble Lord write to me—I have asked this on more than one occasion—to tell me whether he, the department and the Government are inclined to look into this? From the point of view of household energy bills, that would make a real difference. If we could move away from renewables so that the application for the BESS in Knaresborough and Scotton is not approved next week, that would make the world a safer place, because my niece has been told that she will have to evacuate in the event of a fire. Knowing how highly combustible and flammable these things are, the world would be a safer place. However, with those few remarks, obviously I approve the SI before us this afternoon.

[Earl Russell (LD)]

My Lords, I thank the Minister for the way in which he introduced these regulations. It is almost like double déjà vu because we have considered the Northern Ireland regulations and we considered these ones very recently. We had a good debate on them last time, so I will be incredibly brief on these. I sincerely hope that the Minister stays in post, because I enjoy working opposite him.

On the regulations, the Government need go on seeking these six-month extensions so that they can continue to deliver these savings, which are important at the moment. We have renewed hostility in the Middle East and increased pressures on the cost of energy, so we absolutely recognise the need for this to be done, and these regulations would extend those provisions from 25 October 2026 until 25 April 2027. I therefore recognise that, in the absence of other primary legislation, there is a need continuously to come back with the six-month extensions.

I welcome that the noble Lord said that his department was working on bringing forward a permanent legislative solution so that we do not need to continue doing this. Can we expect that in the energy independence Bill, or is the expectation that it would need to be a stand-alone piece of legislation?

I made all the broader points I need to make on this SI when we debated it previously, so I will not rehearse those again. The Minister knows where I stand on a need to reduce energy costs, and on some of the ideas that I believe in and which my party has put forward. I wanted to ask about the situation in Northern Ireland, on which the Minister kindly updated us. I welcome that his department has been working with the Northern Ireland Executive, and I hear what he says: that has been enabled and has entered into force. If there is anything else on the Northern Ireland situation that the Minister might choose to add, that would be welcome. Other than that, we support these regulations, we will not stand in their way, and I thank the noble Lord.

[Lord Moynihan (Con)]

My Lords, I declare my interest as chairman of both Amey and of Acteon subsea engineering company, which works on offshore wind and oil and gas around the world, and as chairman of Buckthorn Partners, all of which are involved with energy transition.

I am very grateful to the Minister for the introduction of what is, I hope, the last SI before the Recess. I echo the comments made by my colleagues about the way he always handles the Committee with respect and responds to as many questions as he can in the time available.

I hope that the Government will not continue to keep propping up the renewables obligation to the Exchequer with secondary legislation. The point has been made that it is also important that we have proper scrutiny of it through the introduction of primary legislation. I say to my good friend, the noble Earl, Lord Russell, who is the Liberal Democrat spokesman, that I have no doubt that there will be plenty of room to handle this matter in the so-called energy independence Bill. It is fast becoming a Christmas tree Bill. I would not want to be on that Bill Committee; it must be the worst job in DESNZ at the moment, because it is being written and rewritten. I hope that the clauses about banning licensing in the North Sea have now been removed, in advance of the new government leadership—we will see shortly—but this would be a good opportunity for this specific point to be remedied in primary legislation.

State of Climate and Nature

Earl Russell Excerpts

Tuesday 14th July 2026 Lords Chamber

[Lord Moynihan (Con)]

My Lords, I declare my interests as the chair of Amey, the chair of Acteon and the chair of Buckthorn Partners, which are all involved, in different ways, with energy transition both in the UK and around the world. I am grateful to the Minister for answering questions on the Statement made in another place yesterday. There the Defra Minister read the Statement, and the exchanges focused on her responsibility. Today it is the turn of the Minister for DESNZ in this House, so I will concentrate my questions on the aspects of the Statement that focus on the Starmer Government’s record on meeting the objectives set out in the Statement—or, more precisely, the consequences of the tenure of the Secretary of State, Ed Miliband, who is rumoured to be heading to the Treasury at the end of the week.

We all recognise the importance of protecting our climate and restoring nature. The key question is whether the Government have been capable of making progress on both. The Statement notes the introduction of carbon budget 7 and praises it, despite it being regretted in your Lordships’ House. The Government claim to be

“working in partnership with local communities, businesses, conservationists and farmers”.

The Climate Change Committee suggested a 35% reduction in meat and dairy consumption by 2050, a 50% reduction in the number of cattle and sheep, a doubling of tree planting rates by 2030 and a doubling of peatland restoration by 2040. Does the Minister agree with those representing the farmers that they will be forced to uproot their entire business models within a single generation?

Similarly, the Statement informs us that the Government will

“protect and conserve 30% of our land and seas for nature by 2030”.

Yet last week, the Government approved One Earth solar farm, a week after approving Peartree Hill and Dean Moor solar farms. One Earth will cover 3,900 acres and will have a capacity of 740 megawatts. Half the farm will be on best and most versatile—BMV—land. Can the Minister explain how that enhances our natural environment? Does he agree with the Secretary of State, who recently overruled his own planning inspectors to approve this, Britain’s second-largest solar farm, despite their recommendations to refuse the application over concerns about environmental damage and the loss of productive farmland, which this Statement is meant to protect? It is estimated that the site’s 660 hectares could produce around 5,300 tonnes of wheat a year. Does the Minister not agree that the Government are getting the balance wrong? Britain needs affordable, reliable, clean power, but covering productive farmland with vast solar developments while ignoring practical alternatives is not the answer. Ministers should be pursuing an energy strategy that strengthens our energy security without undermining our farmers.

However, I understand that there is some good news coming from the Statement. Will the Minister confirm that Andy Burnham is going to accept the long-running campaign from this side of the House to approve the Jackdaw gas field and will be going to Aberdeen during the recess with this welcome news? Let us hope that this is the beginning of the damascene conversion of Ed Miliband, especially if he is to move to the Treasury, although somehow I doubt it. Given the decision to approve Jackdaw this summer, does the Minister now agree that North Sea gas is four times cleaner in production than imported LNG and that UK energy security is strengthened by reducing reliance on imported gas? Does he agree that this would be a first step to protecting and indeed increasing oil and gas jobs, would grow tax revenues, would secure energy transition and, vitally in the context of this Statement, would reduce the carbon emissions our reliance on gas generates?

When the Secretary of State states that the North Sea is a mature oil and gas province, we agree with him. The primary source rocks were deposited about 150 million years ago, and with the right tax allowance, regulatory and decommissioning regimes, as in Norway, we could be producing a similar 4 million barrels of oil by the time the first new-build nuclear comes into generation in the late 2030s—and that is optimistic, given the Government’s unacceptable delay in enacting the Fingleton recommendations. Will the Minister confirm that the Burnham Government will understand that what we are talking about is global warming and that the UK is not detached from the globe? As such, does he agree that we should count all emissions in all the supply chains that deliver solar panels and offshore wind to the UK if we are to be honest with the public and not just virtue signalling to a world that is not listening but looking with incredulity at the Government’s deindustrialisation, with the cost of electricity to our industrial base being the highest in the OECD and four times higher than in the States?

The Under-Secretary of State for Defra noted during the Q&A exchanges following the Statement that a school in her constituency, Richard Lee Primary School, is installing new solar panels. Is the Minister aware that this school sources its solar panels from JA Solar? The company has a “very high” exposure—the highest rating—to the Xinjiang province in China, and the accusations of Uyghur slave labour in that province are well known to your Lordships’ House. Does he agree that our solar panels are neither homegrown nor clean? The component parts come from China and rely heavily on vast coal-fired factories daily belching out CO₂ into the atmosphere. Does he agree that the total carbon footprint of a finished Chinese panel averages around 490 kilograms of CO₂ equivalent per module, involving extreme furnace temperatures, adding to global warming at an alarming rate, and putting high levels of CO₂ into the atmosphere for polysilicon, ingot and wafer production? Then we have imported Chinese offshore wind farms, where Chinese white asbestos ends up in wind turbines, and imported brake pads and hoist components are sourced from third-party suppliers in China, where the material is not prohibited, and are now installed in service lifts that transport our technicians up turbine towers in the North Sea.

Does the Minister agree with me that all these essential steps in the supply chain must be taken into account when considering CO₂ emissions globally? Offshore wind turbines rely on powerful permanent magnets with neodymium, praseodymium and dysprosium—the supply of the latter being almost exclusively controlled by China. Add the copper and cobalt from the Democratic Republic of the Congo, where child labour and high CO₂ emissions mining take place, and pupils, children and teachers at the Richard Lee Primary School might not be so impressed.

Does the Minister not agree that if we were to transport all these vital elements of this massively misnamed “clean” homegrown supply chain, we could have an acreage close to size of the Isle of Wight with CO₂-belching factories and illegal working practices? How would parents, teachers and children at the Richard Lee Primary School regard that? The state of the climate and nature is under threat but, sadly, the Government’s energy response in this Statement is lamentable.

[Earl Russell (LD)]

My Lords, we welcome this Statement. The science is absolutely certain that human-induced climate change is beyond doubt. What has changed is how fast the impacts are arriving on our very own doorsteps. This summer’s heatwaves in May and June caused as many as 2,700 excess deaths; transport systems were strained; over a thousand schools closed; and the London Ambulance Service endured its busiest ever day.

We are on our third heatwave of 2026, and 2026 is the first year the UK has reached 35 degrees in May, June and July consecutively. Excessive heat is putting a strain on every individual citizen, on our economy, on our schools and on our health systems. Europe is now confirmed as the fastest-warming continent on Earth, warming at more than twice the global average.

This Government have been genuinely good on the energy transition, approving renewable projects to power the equivalent of more than 19 million homes. But nature has been the poor relation. Not a single new site of special scientific interest has been designated in England since 2023, and our tree-planting rate remains less than half the annual target. Labour’s messaging on nature has been muddled, its green mission too often undermined from within. Climate and nature are not separate; they are codependent. A Government strong on one and weak on the other will ultimately fail at both.

Our climate is changing more quickly than our policies. The Climate Change Committee’s fourth independent assessment of UK climate risk was stark: on adaption, not a single delivery pathway was rated good. Inaction cannot continue. Three of our five worst harvests on record have occurred since 2020; our food security is threatened. The Green Alliance has today written to Ministers to warn:

“The UK was built for a climate that no longer exists”,


and emergency action is needed. We must do far more, more quickly, on adaption. It is the vulnerable, the elderly, the sick, the poor and the workers who will suffer the most.

These matters are hard when we co-operate, and they become almost impossible when we do not. So, I say with real regret that the Conservative Party’s ever-continuing retreat from reality, rejecting the 2050 net-zero target and now reportedly barring prospective candidates who continue to support it, is a betrayal of its own history and the consensus that this country requires.

To those who say the UK emits only 1% of global emissions so why bother: every major economy could say the same. To those who say net zero is impossible, I ask: what is possible instead? British leadership works only if Britain leads.

The wildfire risks this summer are at extreme levels, endangering lives and devastating habitats, yet the Government’s wildfire strategy is still not ready and we remain completely reliant on commercial aircraft to fight fires. We have had one mega wildfire already last year, and we are not prepared for the next. That must change before next year’s El Niño impacts are felt.

On tipping points, will the Minister say what more the Government will do to strengthen monitoring of the AMOC system? The Government’s nature security assessment warns that every critical ecosystem is on a pathway to collapse. If that is true, as I believe it is, the public and this House deserve to see the full assessment, not merely a summary. I ask the Minister to commit to its publication in full. The 30by30 on Land: Delivery Plan, published yesterday, is welcome but insufficient. It leans too heavily on farmers and land managers volunteering, with no statutory backstop and no guarantee that voluntary schemes will deliver at the scale required.

Labour must stop doing things to people and start doing things with them. Give communities real opportunities to protect nature, launch a national campaign and provide an emergency briefing, because misinformation is filling the gap left by government silence. Fear alone will not sustain the public throughout this crisis. We must offer hope and invest in the young people who will live the longest with the consequences of what we decide.

Finally, our climate and nature laws are out of date. Can the Minister say whether the Government will finally match strong words on climate with equally strong action for nature?

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

I thank noble Lords for their valuable contributions in responding to this Statement made yesterday in the other place. As noble Lords know, the Statement was about climate and nature, and particularly the extent to which—as the noble Baroness, Lady Jones of Moulsecoomb, repeatedly reminds us—you cannot disentangle one from the other. Climate change drives nature loss and nature loss drives climate change. If you tackle one but not the other, you will not succeed in tackling the first thing. Making sure that our environment is liveable—that it is a thriving environment for the purposes of both nature extension and recovery—is completely wound up with the actions we take against climate change in general. The Statement set out what actions the Government are taking on that clear link.

Indeed, in the most recent spending round, the Government put aside unprecedented sums for nature development, recovery and restitution. For example, altogether they put forward over £7 billion at the spending review, including £5.9 billion for environmental farming schemes. ELMS began to take place under the previous Government and have been very successful in developing sustainable and low-carbon farming practices and in making sure that farming is about not just production but enhancing and sustaining that production for the future through changes in farming practices. In addition, £816 million has been put aside for tree-planting, with the planting of three large national forests under way, and £85 million pounds for peatland restoration. Those are practical things that tackle some of the key issues around nature degradation in this country. I suggest that the Government are matching their words with a substantial amount of investment in making sure that nature can live and survive in the right way in the future.

I anticipated that the noble Lord, Lord Moynihan, might concentrate rather more on particular energy and climate change issues. Those areas are very much tied to the balance between nature and climate change. What you absolutely need for a thriving background for nature is clean air, clean energy and clean environmental circumstances under which that energy is produced, as well as an environment that allows nature to thrive. I suggest that solar power, for example, absolutely offers those things, so I do not recognise the noble Lord’s characterisation of the apparently inherent dirtiness of solar panels. The carbon payback of a solar panel is estimated to be just 1.05 years. I agree with the noble Lord that, where a solar panel is made under circumstances in which the production arrangements are a little, shall we say, browner than they are in Europe, the payback will be marginally greater, but it is still only 1.18 years. So I do not recognise the characterisation of solar put forward by the noble Lord. It is an integral part of bringing energy and nature together in how we produce clean energy and clean air at the same time.

The noble Lord, Lord Moynihan, asked whether, in advance of the new Government being in place, I will predict a number of things they are about to do—which of course I will not do. However, I remind the noble Lord that the Jackdaw field is not a field that has not been explored but a field on which Ministers are presently deciding whether to proceed. I should not pre-empt that decision process, but he can be assured that the decision process is under way.

My final point on the noble Lord’s points about this area is that the production of clean energy and low carbon is not about deindustrialisation. As he will know, the Government have recently invested something like £61 billion and crowded in more than £100 billion of clean, green, low-carbon investment in the process. It is actually value added as much as it is investment. It is reindustrialising the country, albeit on a different level of carbon output, in a way that we can see before us in the British-based requirements for a lot of offshore wind, nuclear and various other such things. That means that a lot of this activity is taking place as industrial processes in the UK and is creating green, low-carbon jobs to replace those brown, high-carbon jobs as a result.

The noble Earl, Lord Russell, rightly talks about what is quite evident around us outside this Chamber. This Chamber, mercifully, is reasonably cooled, but outside we are experiencing the hottest year in history, as we will undoubtedly break last year’s records if we go on as we are. We are in an absolute emergency as far as adaptation is concerned. We cannot just think about mitigation for the future. I agree that there is a long way to go in getting that adaptation right for the future, but the Government are on the case. We need to look, for example, at the record sums that have been put in place for flood protection and flood relief and the work that the Government are doing to ensure that building regulations and various other such things are climate change-proof rather than lagging behind—as much of our society is at the moment. I agree that there is a long way to go and I am sure that we will debate how that process is going in the near future. I thank him for his general support for the measures that the Government are taking on climate change and nature and look forward to his continued support in future.

Electricity Capacity (Amendment and Transitional Provision) Regulations 2026

Earl Russell Excerpts

Tuesday 7th July 2026 Grand Committee

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, these draft regulations were laid before the House on 14 May. This instrument seeks to make technical improvements and changes to the capacity market, the Government’s main tool for ensuring security of electricity supply in Great Britain. Before I turn to the provisions in detail, I will outline some of the background to the capacity market.

Great Britain’s capacity market was introduced in 2014 and is designed to maintain security of electricity supply by ensuring that sufficient electrical capacity is available to meet future demand predictions. Through auctions held annually one year and four years ahead of delivery, the capacity needed to meet future peak demand under a range of scenarios is secured based on advice from the National Energy System Operator, NESO. Participants secure agreements through these auctions, requiring them to make capacity available at times of system stress. It is a technology-neutral scheme that pays providers for making capacity available when needed, covering generation, storage, consumer-led flexibility and interconnection.

Since its introduction, the capacity market has contributed to investment in around 20 gigawatts of new capacity needed to replace older, less efficient plants as we transition to meet our clean power 2030 target. To ensure that the capacity market continues to function effectively, we regularly amend the implementing legislation based on what is required to best ensure continued security of electricity supply.

This instrument will amend 11 regulations and introduce one new regulation in the Electricity Capacity Regulations 2014, amend two regulations in the Electricity Capacity (Supplier Payment etc.) Regulations 2014 and revoke one chapter of the Electricity Capacity (No. 1) Regulations 2019. The draft instrument will ensure that assets awarded a contract for difference, or CfD, following a direction from the Secretary of State will be allowed to participate in the capacity market until the start of the asset’s CfD support. This will better align the capacity market with our clean power 2030 ambition and ensure a smooth transition from payments under the capacity market to a CfD.

This draft instrument will strengthen delivery assurance by increasing termination fees and credit cover to restore their value broadly in line with 2016 levels in real terms. It will also make several amendments and a revocation to ensure that the legislation delivers on the policy intent. As a result, the Secretary of State and NESO will have the power to extend the pre-qualification deadline for an auction following a major IT outage. It will align the capacity market timetable with the ongoing market-wide half-hourly settlement reforms. Finally, it will also remove obsolete provisions.

Two public consultations were conducted in relation to the measures in this instrument towards the end of 2025. Respondents were broadly supportive of the measures included in the instrument that clarified regulations or enabled participants awarded a direct award CfD to manage their transition off capacity market payments. Responses to the delivery assurance reforms were more mixed, with some respondents raising concerns about the impact of higher termination fees and credit cover. The Government have proceeded on the basis that these increases are necessary to realign delivery incentives and strengthen delivery assurance. The changes are proportionate, aligning fees with their real-terms equivalent values in 2016, and will apply only to participants entering the scheme after the instrument comes into force.

We have also made several technical amendments to the capacity market rules, which support the changes made by these regulations, in the form of the Capacity Market (Amendment) (No.2) Rules 2026 laid before the House on 14 May. A final set of amendments to the capacity market rules will be laid on 13 July.

To conclude, this instrument will enable the continued efficient operation of the capacity market, so that it can deliver on its objectives, improve delivery assurance and ensure that the legislation is as clear as possible for all participants. I beg to move.

[Earl Russell (LD)]

My Lords, I thank the Minister for the clarity with which the instrument was introduced. The capacity market has served us well, and we welcome this examination and updating of its functionality so that it can continue to do so long into the future.

From these Benches, the Liberal Democrats have long championed a decentralised, resilient and, above all, clean energy system. We recognise the necessity of the capacity market as a mechanism that keeps the light on during periods of high demand and low generation, and we support the broad thrust of these technical reforms. They should improve confidence that providers can deliver on their obligations, increase value for money and help to further integrate low-carbon technologies into the market. These regulations may be highly technical, but it is important that they are looked at closely, so I hope the Minister will forgive me in advance for asking a couple of technical questions from these Benches.

I welcome the Government’s intent to strengthen the delivery assurance. The 30% increase in termination fees, and in initial credit cover from £10,000 to £13,000 per megawatt, rising to £19,500 for new-build units that miss their 11th-month financial commitment milestone, is a reasonable restoration of real-terms value, given that these figures have not moved since 2016. I find it surprising that these instruments, which govern so finely balanced a market, have not been updated for over a decade. As I understand it, even with these new regulations, there is no standing process to ensure that future regular updates are in place. Were such processes contemplated and examined in the work that was done in preparing this? What guarantees do we have that we will continue to see future upgrades to this important marketplace?

The plan to suspend capacity payments the moment an insolvency termination notice is issued is good stewardship of public money, and we do not oppose it. I am, however, concerned that in seeking real-terms parity, these changes may inadvertently raise the drawbridge behind the incumbents already inside the market. A near doubling of credit cover for those who miss a milestone is a serious sum for smaller storage developers or for demand-side responses, even if it is entirely reasonable for a more established or bigger generator. What assessment has been made of the impact of these credit cover changes on the smaller and newer entrants and on the diversity of technologies bidding in future auctions?

On the new provisions in relation to severe IT issues, which would allow the delivery body to extend the pre-qualification window by up to five working days, we generally welcome this flexibility and understand why this has been updated. But what objective threshold defines “severe”? Bidders deserve certainty that such extensions will be applied consistently and transparently and that they will not be left to the delivery body’s unreviewable discretion. I am not asking the Minister to be too specific, but are these changes partly motivated by any broader concerns about the future functioning of or threats to these systems?

On the treatment of contracts for difference, the instrument will allow a generator that receives a CfD via direct Secretary of State award to pre-qualify for the capacity market, provided that there is no overlap in the delivery period, yet auction-allocated CfD holders are not afforded the same route. I ask the Minister to explain the policy rationale for that distinction and confirm that it will not in any way create a two-tier system for low-carbon generators, depending on how they come by their contracts.

On the shift to accelerated reconciliation, cutting the final settlement from 14 months to four to align with the market-wide half-hourly settlement, we support modernisation, but faster reconciliation means less time to correct errors that might have crept in. What support is being offered, particularly to smaller suppliers, which may lack the systems to absorb the increased administrative velocity?

Finally, the instrument confirms that traditional gas-fired generation continues to sit comfortably within the capacity market alongside wind, solar, storage and demand-side response. Indeed, the market remains technologically neutral. It is worth saying clearly that our systems are among the most resilient in the world and these sensible upgrades will help to keep them that way.

I remind the Minister that this instrument, as sensible as it is, is no substitute for the deeper electricity market reforms that this country still needs. We continue to urge the Government to extend contracts for difference from 15 to 25 years. I have previously talked to the Minister about Greenpeace’s Power Shift proposals and the Minister has spoken about the openness of the Government to perhaps looking at a strategic gas reserve outside of the market. Obviously, those are conversations for another day. We are beginning to see signs of the decoupling of the gas and electricity prices, but more must be done. These changes would unlock future investment in renewables, strengthen our energy security and pass on cheaper home-grown power to consumers. I would welcome the Minister’s thoughts on how the Government plan to keep the capacity market under review and reform it further in the future and I look forward to his response.

[Lord Moynihan (Con)]

My Lords, I declare my interests as chair of Amey, an infrastructure and support service company in the UK, Acteon, a global subsea engineering company with interests in offshore wind and oil and gas production facilities, and Buckthorn Partners, which invests in energy transition companies.

I am grateful to the Minister for introducing these regulations and for broadening our debate to a wider consideration of the capacity market, which allows me to make a few additional comments. As he said, these regulations make technical amendments to the capacity market, so let me address that first. They provide reliable power generators with CMU auctions at either one year, T-1, or four years, T-4, ahead of when they must deliver future electricity capacity. Does he agree that this instrument allows the capacity market delivery body to extend the window for generators to apply to pre-qualify for the capacity market in the event of a severe IT issue? I believe that he does, but I would like him to confirm that.

I ask the Minister to confirm that the changes in these regulations will not be retroactive. Again, I understand that they will not, but it would be good to have that on the record. As I read it, the instrument accelerates the timetable for reconciliation runs in which the CM settlement body must make reconciliation payments to generators, subject to Ofgem approving them to do so. I would be grateful if the Minister could tell the Committee when the new timetable is expected to be called into force.

The most recent T-1 auction for 2025-26 secured 7.9 gigawatts of capacity compared with 7.6 gigawatts in 2024. The most recent T-4 auction secured 43.1 gigawatts of capacity compared with 42.8 gigawatts in 2024. Let us be clear and blunt about this: the public are being forced to pay an extra £600 million this year to ensure that there is back-up capacity for the already more expensive renewables that they are subsidising. Conventional forms of power generation from existing generating capacity, including nuclear and gas, were the most common source of capacity in the most recent auction, with 3.6 gigawatts of capacity coming from nuclear and 2.4 gigawatts coming from gas. Electricity supply from gas and overseas interconnectors were the most common source of capacity in the most recent T-4 auction, with 27.3 gigawatts of capacity coming from gas and 6.8 gigawatts coming from interconnectors.

It is self-evident that, despite the Secretary of State’s zealous opposition to gas, this instrument demonstrates that it is still needed and demand for it is actually rising as intermittent renewables increase. It is a function of the need for firm and predictable power when the sun does not shine and the wind does not blow. When preparing last week for this important debate, I looked at our high level of reliance and dependence on gas. In our generation mix, when I looked at my watch early in the morning, we were just 19% zero carbon as the country woke to turn on the kettles and the lights and to start the day: no solar, 6% wind, 8% biomass, 12% nuclear, 15% imports and 58% gas. That is how dependent we are on gas to provide baseload power, and we will remain dependent on it for many decades to come.

Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026

Earl Russell Excerpts

Monday 29th June 2026 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the Minister for introducing these regulations and all those who have spoken.

Extreme heat records and regret amendments appear to be competing with one another for frequency at the present time. Last week, the UK broke the record for the hottest June day three days in a row, reaching 37.3 degrees Celsius on Friday. Six NHS trusts declared critical incidents, and the London Ambulance Service recorded its busiest day in its entire history, with demand higher than even at the peak of the Covid pandemic. Europe is the fastest-warming continent on earth, and forecasters are warning that future heat events are likely very soon. I find it genuinely difficult to hear arguments that we are doing too much, too fast on climate change.

I will say something about the politics before turning to a couple of comments for the Minister. I want to return to the cross-party consensus on these issues, but I will first challenge the unravelling of our climate policy. When I hear calls from some to repeal the Act, abolish carbon taxes and cut renewable subsidies, with no credible alternative offered in their place, it becomes very hard to sustain the view that opposition to every government climate measure is made in good faith. If the Conservatives challenge settled climate policy, they should expect a response.

The challenge put today, and in our last debate, by both the noble Lords, Lord Hunt and Lord Deben, was: if not this then what? The policy assumption underlying these regulations was not made by this Government. It was made, as others have said, in April 2021, by the then Conservative Government, announced personally by Prime Minister Boris Johnson, who declared that the UK would set what he called the most ambitious targets to cut emissions in the world. That Government confirmed explicitly that the sixth carbon budget would incorporate the UK’s share of international aviation and shipping emissions as an important part of their decarbonisation efforts. These regulations do no more than formalise that commitment in statute. The Conservative Party supported this policy in government; the question before this House is simply whether to honour it.

I want to be clear about what this instrument does and does not do. It introduces no sector-specific limits, no levies, no charges and no cuts to aviation or shipping. It is an accounting measure. It formulates a framework already assumed in policy since 2021, and we are pleased to see it. If we exclude aviation and shipping from our accounting, we do not make those emissions disappear; we simply allow them to consume a disproportionate share of the UK’s available carbon removals and offsets, at the direct expense of agriculture and heavy industry.

I have two comments for the Minister. First, on methodology, I really appreciate the way the Minister set that out. I recognise the need for international negotiations and that those are also complicated at the moment. I simply seek a reassurance that we will continue to work internationally on these issues, and that the Government will continue to engage with the aviation and shipping industries to give them a formal role in that process. On economic impact, I similarly call on the Government to continue to monitor the impact of this and to continue to work with industry to make sure that this system and these processes are as streamlined as possible.

The honest answer to the noble Lord’s concern, introduced by the noble Baroness, is this: a clear framework actually helps these industries by giving investors the certainty and legal clarity needed, as the Minister said, to back sustainable aviation fuels and green maritime technologies. Uncertainty is the enemy of investment; these regulations reduce it. They fulfil a commitment made by a Conservative Prime Minister, have passed the Commons already and align with our Climate Change Committee’s advice. I support them and I urge the House not to support this regret amendment.