Great British Nuclear: Modular Reactors

Earl Russell Excerpts

Monday 2nd December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I understand the point the noble Lord is raising. My department is exercised by the advantage that could be brought. We are in discussions with the Welsh Assembly Government and my colleagues in the Department of Health and Social Care. I cannot say at this stage whether we can bring this to a successful outcome, but I certainly see the merits in what he is arguing.

[Earl Russell (LD)]

My Lords, can the Minister update the House on the importance of the agreement reached on the sidelines of the COP summit with the United States, which seeks to speed up the deployment of cutting-edge nuclear technology, helping to decarbonise our industry? The agreement aims to support information sharing on advanced nuclear technologies to help make them available to industry by 2030. How important is this agreement, and how will it help us to make sure that this technology is actually deployed?

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is a very important agreement. We have a very good relationship with the US on all things civil nuclear, and this will enable us to enhance that. I should also say that at COP, six new countries joined existing countries in declaration of an aim to triple nuclear power globally by 2050. There are now 31 signatures, which is very important. It is an indication that globally we are seeing a renaissance in nuclear, in which this Government wish our own nuclear industry to be a part.

COP 29

Earl Russell Excerpts

Thursday 28th November 2024 Lords Chamber

[The Earl of Courtown (Con)]

My Lords, I must acknowledge that, for the past 14 years, the UK has been a global leader in this area. We are the only major economy to have halved carbon emissions since 1990. In that time, the US’s emissions have stayed the same and China’s have tripled. In fact, we account for just 1% of global emissions. Despite this, we have seen that other countries are not persuaded just because the United Kingdom is going further and faster than others; they are persuaded by living standards and prosperity.

At COP, the Secretary of State announced a new target to cut our greenhouse gas emissions by 81% by 2035, but he has not explained what this will cost the British public. Why is this? He also argues that he will deliver savings through energy policy, and that those plans will boost jobs, growth and national security, and will cut household energy bills. This is very debatable.

The Institute for Fiscal Studies has said that the Secretary of State’s climate agenda will not lead to growth. There were also concerns about the National Energy System Operator’s report, which shows that the Government’s rush for clean power by 2030 will add costs to our energy system. In addition, the head of offshore wind development at RWE has warned that the RHG’s rush to meet the 2030 target will lead to price spikes, with consumers losing out. Yet, despite the costs, His Majesty’s Government’s plans would still leave gas pricing the system around 50% of the time, or they would leave the equivalent of a million of homes in the dark, waiting for the wind to blow or the sun to shine.

Billions of pounds of British taxpayers’ money will go to China, the world’s largest polluter, powered 60% by coal, which dominates clean-tech supply chains. Will the Minister set out an assessment of the increased reliance on coal-powered Chinese imports for the Government’s clean power by 2030 goal? What does this mean for global emissions?

The Government’s plans will result in the opposite of what is being promised: low growth, high bills, jobs lost and even blackouts, for more carbon in the atmosphere. Yet, in Baku, the Secretary of State signed the UK up to a $300 billion annual climate finance target. Can the Minister tell the House what this new target means for the British taxpayer?

Although I do believe that Britian has a role to play in global leadership, we must focus on delivering cheap energy, innovation, exports and, ultimately, living standards. If the Secretary of State continues down the path he has set out, our country will possibly face hardship.

[Earl Russell (LD)]

My Lords, we welcome this Statement and the progress made at COP 29. The world—indeed the very future of humanity—stands at a cross-roads. One path leads to a near-term end of the viable future of humanity on planet earth, and the other leads to concerted, collective and constructive change and a willingness to fight for humanity’s future. Time is a luxury that is rapidly running out. We are on the cusp of breaching our collective goal of limiting climate change to 1.5 degrees. We must keep hope alive. We must fight for further rapid progress with the little time we have left.

The near future—one that our children will experience—is one where they will need to fight climate change and deal with the ever-growing consequences of the failure to do so earlier. The tragic loss of life and destruction from Storm Bert is the latest reminder of this fact. It is not acceptable that funding shortfalls mean that the number of properties to be protected from flooding by 2027 was cut by the previous Government by 40%. Will the Minister commit to including natural flood defences as a central part of the £5.2 billion flood-defence spending to protect our communities? Much more work is also needed on adaption and resilience programmes.

COP 29 concluded with a deal that, while welcome, still leaves much to be desired. The $300 billion a year is a start, but the developed world must do more to support the developing world to implement its own clean energy and adaption programmes. It is estimated that this funding can deliver reductions equivalent to more than 15 times the UK’s annual emissions. Simply put, we can either pay now or we can pay more later. The greatest cost of all is always that of doing nothing.

We very much welcome the return of UK leadership on the world stage on climate issues, after the dying days of the Conservative Government did so much damage to our international standing and reputation with their retreat from reality. I congratulate our negotiators on their work. We welcome the commitments to new ambitious emissions targets, including the reduction by at least 81% by 2035. Delivery depends on bolder and more decisive action. We support this programme and I express our willingness to work with the Minister to help the UK to seize this opportunity.

We need concentrated and immediate action to insulate our homes, reduce energy costs and ensure that no one has to choose between heating and eating. The delay to Labour’s warm homes plan until spring 2025 is unacceptable when millions of people, including 1.2 million pensioners, face a cold and uncomfortable winter due to the cut in the winter fuel allowance. We need clearer plans to roll out heat pumps, to increase the update of electric vehicles, to fix the unacceptable delays to grid connections, and to achieve rapid progress in improving our energy security and enabling a swift reduction in energy bills.

We will work to progress the GB Energy Bill through this House, but we call on the Minister to give clear commitments to deliver clear community energy programmes. Labour must do more to decentralise the energy transition, bring much-needed jobs and growth from the green economy, and work to ensure that the benefits of our transition and increased energy security are properly communicated. Climate leadership must prioritise solutions that protect communities and restore nature. The nature and climate crises are interlinked and intertwined. We are one of the most nature-deprived countries in the world. Our 30 by 30 target still has unrealistic delivery pathways.

I note that the Statement says:

“The UK will decide what our own contribution will be in the context of our spending review and fiscal situation, and that will come from within the UK aid budget”.


On loss and damage, are these funds ring-fenced against the development cuts announced in the Budget? Lastly, I call on the Government to give the gift of time to the Climate and Nature Bill—a Private Member’s Bill being discussed in the other place. It is so important that we update our climate legislation.

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

My Lords, I thank both noble Earls for their comments and questions. I must say that it is good to welcome the noble Earl, Lord Courtown, to the Dispatch Box to talk on such an important issue; it is like old times. His comments were interesting because he started by talking about his own Government’s achievements in the area of climate change, net zero and the decarbonisation of our power supplies. But then he moved away from that, and it is worth reflecting that, of course, it was Prime Minister May who showed leadership on net zero, and it was the last Government who signed up to the £11.6 billion in international climate finance for the period 2021-26. They also signed up to the national adaption programme 2023-28.

It was the noble Lord, Lord Sharma, who so ably led the COP 26 Glasgow negotiations. I was just reminding myself of the ministerial meeting in Copenhagen only two years ago, co-chaired by the noble Lord, Lord Sharma, in which Ministers agreed the urgency of responding to climate change and of the need to accelerate practical action and support for a just transition to low greenhouse gas emissions. It seems to me that the Conservative leadership is essentially turning its back on climate change, and it seems to be obsessed with fossil fuels.

As we heard from the noble Earl, Lord Russell, both just now and in the Oral Question earlier, climate change is here. It is having damaging impacts in this country and globally. We simply cannot hold back: we have to charge on. I agree with the noble Earl, Lord Russell, on the importance of flood defences, charging on to net zero, heat pumps, and grid connections. His comments on the GBE Bill were helpful, and I noted his point on community energy. He mentioned the warm homes plan: we have that and continue to work on it, but we have already made some substantive announcements, which I hope he will be able to study.

There has been a lot of comment on the outcome of the negotiations, which were obviously very challenging. Developing countries were disappointed with some of the outcomes. The fact is that the focus was on finance, and the agreement calls on all actors to scale up financing to $1.3 trillion for developing countries by 2035 from all sources, public and private. Also agreed was a goal for public and publicly mobilised finances of at least $300 billion per year for developing countries by 2035. I should say that this new goal will take account of contributions from major economies such as China that are in a position to support developing countries.

Although we made strides in relation to finance and carbon markets, COP did not make progress elsewhere. We wanted much stronger outcomes on taking forward the global stocktake, agreed at COP 28, on the transition away from fossil fuels and on keeping 1.5 degrees Celsius alive. We will continue to push that as we move towards the run-up to COP 30 in Brazil.

I acknowledge that both noble Earls have welcomed UK leadership, which has been very important. The visit of the Prime Minister and the Secretary of State was influential, and it is right that Britain should be there at the negotiating table. I know that noble Lords say that we produce only 1% emissions, but there are many countries with 1% emissions, and collectively, we are very powerful. I acknowledge that we want to build on what the last Government achieved in this area. National consensus here is very important indeed.

On the 81% target for 2035, we think that that is in line with the advice from the Climate Change Committee. Clearly, we will now need to work through the implications of that. On our contribution to the £300 billion of public and publicly mobilised finance, clearly, I cannot be drawn on what that will be. As we have said, this will go into the multiyear spending review. However, overall, we can at least recognise that agreement was reached in very difficult negotiations.

I know that noble Lords are concerned about China, and I understand the issues they raise. The fact is that China disclosed that it has contributed £24 billion in climate finance to developing countries since 2016. We know that part of the COP agreement is to encourage more voluntary contributions on that basis. It is interesting that International Energy Agency figures show that China is accelerating its use of renewable energy.

There is clearly much to discuss and to tease out of the agreement, and a lot of work has to be done on the pathway to Brazil. But at least an agreement has been reached which gives us some hope that we can move forward, and for this country, the message is to charge on.

Domestic Solar Panels

Earl Russell Excerpts

Monday 25th November 2024 Lords Chamber

Asked by

[Earl Russell]

To ask His Majesty’s Government how they plan to increase the number of homes fitted with solar panels.

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

My Lords, rooftop solar on homes and buildings will play an important role in the drive for clean power. Details about how the Government will increase deployments of domestic solar panels will be set out in the forthcoming solar road map.

[Earl Russell (LD)]

My Lords, Labour promised a rooftop solar revolution, which I welcome, tripling solar power by 2030. It now appears that this commitment has not survived contact with the housebuilding industry. Are this Government still requiring that, as part of the future homes standards, all new homes will have to have solar panels installed, as promised? If not, why? Further, France is maintaining solar panel installations on all parking lots greater than 80 spaces, generating power for 8 million homes. What consideration has been given to doing the same here?

[Lord Hunt of Kings Heath (Lab)]

My Lords, we are not moving away at all from the idea of a solar revolution. The noble Earl will know that, in its scenarios for 2030, the National Energy System Operator—NESO—reckons that we will need 47 gigawatts by that time. We are committed to publishing a clean power action plan, which will embrace solar plans, very soon. The Solar Taskforce is there to provide clear advice and actions on how we will take that forward. What the noble Earl said about French car parks was interesting. There has been an easing up of development rights in this country in relation to that. On the 1.5 million homes that we pledged to build in the lifetime of this Parliament, we are in close discussion with our colleagues across government about mandation, and we very much take his point on that.

Great British Energy Bill

Earl Russell Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, it is a pleasure to wind up in this debate. I welcome to the House the noble Baroness, Lady Beckett, with her 45 years of experience and her wisdom. I know that she will make an important contribution here. I also welcome the noble Lord, Lord Mackinlay. Not only did he beat Al Murray and Nigel Farage on the same night but I am so delighted that he beat sepsis as well. I wish him well in his campaigning in this House—it was emotional for me when he entered, so I wish him well.

We on these Benches welcome this important and timely Bill. But, like many of your Lordships, we have concerns with it and how it is set out. These relate to the clarity of the strategic objectives, the purpose, the definition and the scope, as well as the lack of reporting, accountability and oversight within the Bill. The noble Baronesses, Lady Bloomfield, Lady Hayman and Lady McIntosh, and the noble Lord, Lord Ravensdale, all raised this.

Other areas of the Bill are not defined well enough, which leaves us in a difficult position as legislators. The noble Baroness, Lady Noakes, said that it is a “seriously flawed” Bill. I do not agree with that—it is an important Bill—but some points need clarification. I hope to work with Members across the House to help clarify some of these matters, because the Bill is important to our energy security and our future. I thank the Minister and his Bill team for meeting us all, cross-party, before the debate. This is important, and I welcome his commitment, his openness and his approach to the Bill.

The Bill is very short—in some respects, it is perhaps too short for its own good. It establishes Great British Energy, a publicly owned company owned solely by the Secretary of State. Some Members questioned whether other options might be appropriate, looking at whether that could be expanded slightly or changed. The Bill fulfils a Labour Party manifesto commitment to achieve net zero and to make energy generation clean from carbon by 2030.

Great British Energy’s founding statement says:

“Great British Energy stems from a simple idea: that the British people should have a right to own and benefit from our natural resources. That these resources belong to all of us and should be harnessed for the common good”.


What is not to agree with there? We definitely agree with that. Backed with an initial capitalisation of some £8.3 billion over this Parliament, the plan is that GB Energy will work closely with industry, local authorities, communities and other organisations to make progress on our energy independence. It should be noted that this funding does, however, drop to £125 million in 2025-26.

GB Energy will invest in and partly own new projects, crowding in and not crowding out private finance. This is key to the energy transition, but this will be a difficult tightrope for that organisation to walk—that is a very small space. It aims to take on elements of risk, invest in emerging technologies and lay the groundwork for investment, helping to build the UK supply chains and deliver much-needed jobs and growth.

We have the third-best wind resources in the world, and they are still largely underdeveloped. We also have some of the highest domestic energy bills in Europe. But our continued dependence on the importation of gas must end. If we continue to lack energy independence, we will continue to be vulnerable to the vast fluctuations in the international markets. It is always our domestic bill payers who suffer. Today, we are at the start of a cold spell in winter. Continued international tensions mean that the gas and energy markets are rising as we speak.

The energy transition will bring short-term costs, but it will bring long-term benefits and security, and it will reduce bills permanently. However, energy bill payers must be supported and must benefit from that transition process. Equally, huge costs come from simply doing nothing. It is estimated that, in 2022-23, the energy bill support scheme cost the Government £6 billion, with absolutely no long-term benefits. So when the Conservatives go on about costs, they should remember that the biggest cost of all is that of doing nothing. The promise is that GB Energy will save some £300 a year. I hope that it does and that that happens soon.

I turn to our areas of concern with the Bill. The first is the general lack of funding available. There is a big, long shopping list of stuff that needs to be done, and my concern is that, because Labour cut its green budget virtually in half before the general election, there is not enough money to do everything on that list. Therefore, priorities will have to be set, which means that the money needs to be spent very wisely.

Can I ask the Minister to provide the House with further clarity on what, if any, borrowing powers GB Energy will have and how they will be used and monitored? Further, will the national wealth fund be supporting GB Energy and, if so, how? Many Members have asked that. It is also unclear whether GB Energy will be able to use debt financing powers and how that would sit on Treasury balance sheets. When does he believe GB Energy will be able to make its own investments?

A great concern for us is the lack of any written strategic priorities for GB Energy. A plan needs to be made and there needs to be scope in the Bill for parliamentary oversight of it. I welcome the comment by the noble and learned Lord, Lord Falconer, that this needs to be in the Bill. It is clear from discussions with the Minister that the plan is not yet written and is unlikely to be ready before we finish scrutinising the Bill. That puts us, as a House, in a difficult position. The legislative cart has been put before the strategic priorities horse.

We need to find a way forward through that. The noble Baroness, Lady Hayman, said it was a skeleton without any flesh. There are ways in which we can find solutions—we could delay Report; we could ask for a draft publication to be made available; we could even ask for heads of terms to be agreed with the Minister, or verbal assurances to be given by the Minister from the Dispatch Box. We should have an opportunity for parliamentary oversight. That is really important. Moreover, there should be opportunities for a further strategic review of those priorities if they change.

There is no overall reporting or accountability for GB Energy in the Bill. Other than what it must provide—like every other UK company—to Companies House, there is literally no reporting. That is not good enough, and it needs to change. Many Members have raised that in the House. We added a reporting duty to the Crown Estate Bill. My suggestion is that a similar thing is done here for GB Energy—it could have agreed headings and things that need to be reported on. Reporting needs to happen, and there needs to be parliamentary scrutiny.

What is the area for GB Energy? The Bill has such an inclusive and broad range that it is impossible to know what is included and what is not. It could virtually spend 98% of its money on nuclear energy or it could spend 98% on carbon capture and storage, despite the fact that that has already been given £22 billion. There are no definitions at all and, looking around the House, I think that worries noble Lords considerably. They do not know where the money will be spent and what the priorities are. The House as a whole is asking for clarification on those issues.

We understand that the Government do not want to be restricted, that a lot of this money will be seed money and enabling money, and that the Government want freedom to do that work. However, that needs to be balanced against the need for some clarity of what we are signing up to and approving.

There is also a need for a general environmental duty. We put one in the Crown Estate Bill. That should be copied over. I welcome the support of the noble Baronesses, Lady Hayman and Lady Young, for a nature recovery duty as well. We will support that; it is an important duty. I ask the Minister to consider that.

Clause 6 was raised by the noble Lords, Lord Lilley and Lord Bourne. It gives the Secretary of State sleeping powers. I note that he has to consult with GB Energy beforehand and to report to the House afterwards. Are those powers really necessary? Are they appropriate? Should the Minister maybe come to the House before using those powers and seek some kind of approval? I do not know—they seem a little over the top for what is necessary. They are copied from the nuclear industry. We are talking about windmills and stuff here. Do we need that power?

Other elements are missing from the Bill altogether. Community energy is something that we on these Benches will be concentrating on a lot. Community energy must appear in the Bill and in the strategic objectives for GB Energy. I thank the noble Baronesses, Lady Hayman and Lady Young, for supporting this. The founding statement makes welcome claims, and the Minister gives his assurances. However, the reality is that there is nothing in the Bill or in the strategic priorities.

We all want community-led energy to succeed and to experience accelerated growth from its very small base of 0.5% of our energy, but this will happen only if those who invest to make that growth happen have the confidence that this Government truly support this as a way forward. Vague promises are not investment options. Real-worth investment in this sector requires firm commitments from the Government, so I will seek to work with the Minister to make sure that we write this into the Bill and the strategic objectives, because, without that, it will not happen. It is an important part of the energy transition, an important part of taking communities with us and an important part of strengthening and decentralising our grid. In fact, I would like to see a plug and play system designed for community energy, linking together planning, investment and everything else that needs to happen across the piece, so that this stuff can really get off the ground. When will this investment in community energy come?

There is no point in creating renewable energy if we cannot plug it in when it is finished. Similarly, there are real issues around grid capacity and grid connections—lots of noble Lords raised that. My understanding from the Minister is that the grid is not in or crucial to the Bill, so where will the funding for grid connections come from? How that will be done is really important. Similarly, home heating accounts for 18% of CO₂ emissions in this country. I call on the Minister to look at using GB Energy as a vehicle for helping to get heat pumps into homes. We need 600,000 heat pumps to be brought into our homes annually by 2028. There is no mechanism and no promise of doing that at the moment. The noble Lord, Lord Deben, suggested allowing people to borrow against their mortgages to pay for the cost of heat pumps. I suggest that GB Energy could be a vehicle to help make that happen, making it affordable to homeowners so we can get this stuff done.

In the transition, jobs and skills are really important as well. The noble Lord, Lord Ashcombe, and others mentioned this. There was not much in the Budget. The Budget itself, despite all the investments, is not creating real long-term growth, so I really encourage the Minister and the Government to invest more in jobs and skills so that the green transition benefits people and brings benefits to them.

Spatial planning has also been mentioned. A number of new organisations are being created here; the landscape is changing. We have NESO, Ofgem, the Crown Estate, GBN and GBE. How will they all work together? These are questions that people asked.

Finally, to wrap up, I encourage the Government to look at future-proofing GBE to make sure that it outlasts this Government and the next.

King’s Speech

Earl Russell Excerpts

Thursday 18th July 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, I congratulate Labour on securing a historic win and the noble Lord, Lord Hunt of Kings Heath, on his appointment.

This Parliament has a powerful mandate for bold action to fight the climate emergency and ensure an unprecedented revolution in the deployment of renewable energy. We must ensure a return to the all-party consensus on climate change. This June marked the 12th consecutive month of global temperatures of 1.5 degrees above preindustrial levels. Global sea surface temperatures have also breached the 1.5-degree Celsius threshold for each of the last 15 months. We are running out of time. Our global climate goals are melting before we transition away from fossil fuels.

Although the Conservatives passed a ground-breaking Climate Change Act and cut our CO₂ emissions to their lowest levels since 1879, ultimately Sunak prioritised the perceived electoral benefits of climate polarisation over climate action. Dither and delay and climate culture wars have meant that UK energy bills were £22 billion higher over the past decade than they would have been had we taken action earlier to rid ourselves of our overdependence on fossil fuels. Precious time, inward investment and our international reputation were all sacrificed.

The Climate Change Committee is clear that we are off course to meet the fifth and sixth rounds of our carbon budgets, particularly for heating and transport. Were someone to ask, “How would you get to net zero by 2050?”, the answer would come back, “I would not start from here after nine years of Conservative government”. Labour have made their job more difficult as well by deciding to cut their own £28 billion annual budget for climate change. I call on Labour to revisit these budget decisions. We have a historic opportunity to turn to the next chapter in the fight against climate change and transform the United Kingdom into the world’s leading innovative and successful green economy.

The international frameworks, legislation and policy are all largely in place. The job of government is to implement change at an unprecedented pace and scale, and that means taking critical decisions and building lots of infrastructure. The initial signs are encouraging: in particular, the ending of the effective nine-year ban on new onshore wind farms, the launch of the National Wealth Fund, the approval of three big new solar farms and the masterful appointment of Chris Stark as the head of mission control. This is all good for our energy security, reducing energy bills and ensuring a future for humanity.

I am proud of my party’s manifesto, which was judged by Greenpeace and Friends of the Earth to be better than Labour’s for the environment and nature. We on these Benches are committed to achieving net zero by 2045. I encourage Labour to be bold. As Ed Davey said, please steal our ideas, especially on tackling the failing water companies and the sewage scandal. We welcome Labour’s plan to make the UK a clean energy superpower, doubling offshore wind, trebling solar and quadrupling offshore wind, along with the Government’s commitment to decarbonise our energy generation by 2030, including the creation of Great British Energy.

The Liberal Democrats have always been and will always be champions of renewable energy. The UK has the third-best wind resources in the world. Renewable energy is cheap and proven and has short delivery times. It provides energy security and lowers costs to consumers. It is entirely possible to decarbonise our power generation by 2030, but no nation has ever fully decarbonised their national power generation within such a short timeframe.

Success will require an intergovernmental approach across Whitehall, the devolved regions and local government. It will also involve rapid societal change not seen here since the dawn of the Industrial Revolution. It means building a massive amount of infrastructure, equivalent to some seven times more over the next 10 years than was built over the previous three. The “how, not if” reforms to planning will need to be carefully balanced and communicated to ensure that we do not get bogged down in nimby infrastructure wars. The Government need to balance building with spatial strategies that include brownfield first and enhanced, larger geographical areas of nature protection.

The Government must make a number of key policy decisions urgently and set out a comprehensive policy programme. The solutions are well known: onshore and offshore wind power; rooftop solar; a huge home insulation programme; the delivery of affordable home heat pumps, the take-up of electric vehicles; a massive update to the grid and interconnectors, generating more power in the south, where it is consumed; and decisions on carbon capture and storage, medium and long-term power storage and how we get cheap energy to heavy industry and nuclear power.

We await the Bills and will scrutinise them carefully when they arrive to ensure that they work. We will hold Labour to account and push them to be ambitious. Great British Energy is welcome, but I encourage Labour to invest in community energy schemes, and I caution against on an overreliance of nuclear projects that are often over budget and delivered late.

Adaptation and resilience is the bit that no one wants to talk about, but we can no longer afford to ignore it. From our health systems to urban planning, water infrastructure, transport, flood defences, the resilience of critical infrastructure, food security and the control of wildfires, there is little joined-up comprehensive thinking going on across government. The recommendations of the Adaptation Committee of the Climate Change Committee need to be fed into Whitehall and delivered across government.

The key to success in all these projects lies in the Government’s ability to bring the public along for the transition. That requires providing real cost of living benefits to people early on. To make the green revolution work, it must provide jobs, wages and economic growth. The Government must work to provide the educated skills workforce required.

I believe passionately in the need for a just climate transition. It is essential that our citizens see tangible benefits. Another spike in the international energy markets could cost the UK an extra £50 billion. We welcome Labour’s foreign policy plans to establish co-ordinated global action on climate change. I want Labour to form ever-closer relations with Europe, and to see a return to having shared environmental standards with the EU. Global finance mitigation and adaption will be key issues at COP 29. This is an ideal opportunity for the Labour Government to show leadership. We encourage His Majesty’s Government to act with speed, but to bring society with them.

Electricity: Cost-competitiveness

Earl Russell Excerpts

Thursday 16th May 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is right and wrong at the same time. Of course, it makes absolute sense to build more nuclear power, and we are doing that. However, his reference to the last Labour Government gives me the opportunity to state that, when they came to power in 1997, they cancelled all our new nuclear generation.

[Earl Russell (LD)]

My Lords, the UK green economy grew by 9% last year, delivering much needed green growth and green jobs for UK workers. Does the Minister agree that investment in our world-leading offshore wind capacity not only provides the UK with the long-term energy security we require but is also good for UK energy bill payers and our environmental futures? Will the Government consider increasing the funding for AR6 to secure the future energy capacity and security we require?

[Lord Callanan (Con)]

We have allocated over £1 billion for AR6, and it is important to procure newer capacity. It is also worth saying that we cannot rely on offshore wind alone: we need to consider the whole system. That is why we need nuclear, storage and technologies such as tidal, which my noble friend is always asking me about. We need a range of technologies, including interconnectors with other parts of the world, because that is the best way to secure a levelised grid that is secure and provides our energy independence in the future.

Home Insulation

Earl Russell Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

There were a number of questions there. In response to the noble Baroness’s last question, the majority of the schemes are currently delivered through local authorities. I absolutely concede that delivery through GBIS has been disappointing. I held a round table with the obligated energy suppliers in March to discuss possible changes and improvements to the system. We will have more to say on that shortly. But this is only one of a number of different energy-efficiency schemes. In the last year alone, we spent about £2.5 billion on improving insulation and upgrading the homes of the poorest members of society.

[Earl Russell (LD)]

What actions have the Government taken to improve the energy efficiency of homes in the private rented sector to date, and what outcomes have been achieved? Does the Minister agree that it is imperative that we improve the take-up of home insulation schemes among the poorest households, which are often the hardest to reach?

[Lord Callanan (Con)]

I certainly do agree that we need to target the poorest households, which is precisely what we do under schemes such as the social housing decarbonisation fund and the energy company obligation. The noble Lord is also right to point out that the private rented sector is one of the most difficult sectors. But home insulation grants, ECO, et cetera, are often rolled out in PRS homes.

Contracts for Difference (Sustainable Industry Rewards) Regulations 2024

Earl Russell Excerpts

Monday 13th May 2024 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, I have some technical questions, although I begin by broadly welcoming the Government’s direction of travel on this. It really is urgent that we proceed with offshore and floating offshore wind schemes.

I have two questions, one of which refers to the Procurement Act, which I spent more hours than I care to remember debating in this very Chamber when it was a Bill. How does this provision fit with the social value provisions in the Procurement Act? These measures would seem to be carved-out and very narrow provisions within that, so I am wondering how those two legal elements interact. My other question is, this provision provides a mechanism for offshore and floating offshore wind; how will this impact potentially on bids for solar, hydro and other schemes? Will it create a disadvantage for smaller-scale schemes, particularly community schemes?

[Earl Russell (LD)]

My Lords, I note that this SI has not been the subject of any report by the Secondary Legislation Scrutiny Committee. On these Benches, we broadly welcome the SI and its intention to grow the green economy. The UK is one of the best-placed countries in the world for developing and deploying offshore wind to help to provide energy security and meet our net-zero commitments. In 2023, a record 49 terawatt hours, 17% of the UK’s total electricity generation, was produced by offshore wind energy. The UK is aiming to triple its offshore wind capacity in the next six years and desperately needs a successful wind auction this year after the failure to attract any bids from offshore wind developers for the last round of contractual auctions.

The green economy in the UK grew by 6% last year and is crucial to delivering economic growth, the just transition and our climate goals. There are worries about the level of support for future investment in the UK offshore wind sector, and this SI is broadly welcomed on these Benches for recognising this and aiming to improve the situation.

This SI applies contracts for difference sustainable industry rewards—SIRs—which, it is said

“will help to address recent supply chain challenges that could otherwise hinder the deployment of offshore wind (OFW) and floating offshore wind (FOW). They will do so by providing additional revenue support to OFW and FOW developers, through a series of lump-sum payments in addition to their regular CfD payments, should they invest in the economic, social, and environmental sustainability of their supply chains”.

Carbon Dioxide Transport and Storage Revenue Support (Directions and Counterparty) Regulations 2024

Earl Russell Excerpts

Monday 13th May 2024 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, the noble Lord, Lord Jones, spoke about a war on carbon. Of course, that is a war we should not be having to fight. The arrival of these regulations is an expression of failure over decades. We have continued to dig up and burn coal, oil and gas, and now, having done all that damage to the natural carbon capture and storage—the best possible form of it, which nature has done for us over hundreds of millions of years—we are trying to find a mechanism to undo some of that damage. Yet what we are doing here is establishing an expensive, top-down framework for a technology that does not yet exist at any scale and which, if successful, will create natural monopolies.

This novel industry has zero customers and no guarantee that there will be any in the future. It will be heavily dependent on the Government to adopt an energy and industrial strategy down a route that makes the carbon capture and storage industry possible. It is heavily centralised, risky and expensive, which must be contrasted with the decentralised, readily available and readily deployable technologies that exist as an alternative to CCS. What the Government are proposing with these regulations are huge subsidies for decades, in the hope that at some point there will be economic developments that will start to reduce the cost to the taxpayer. This means that our situation is a bit like the problem we have with incinerators, whereby we build incinerators with contracts to supply them with waste for decades and then have to generate the waste. The Government are really combining science fiction with dinosaur thinking here.

I feel some sympathy for the Minister, because these regulations have landed in your Lordships’ Committee in a rather unfortunate week. To quote the Energy Mix website, referring to the carbon capture and storage industry,

“Industry Navigates Very Bad Week”.

This article reflects two developments in Canada, where Capital Power has cancelled a 2.4 billion Canadian dollar carbon capture and storage project at its Genesee generating station, saying that it is “technically viable” but “not economically feasible”. It also reflects, as the Canadian national organisation Environmental Defence said,

“the latest failure in carbon capture’s terrible track record”.

This project had already received 5 million Canadian dollars from the Government of Alberta and was being set up for further tax breaks and support from both the federal and provincial Governments. It is just not working.

The other bad week to which the website referred concerned figures that have come out of Boundary Dam Unit 3, a project worth 1 billion Canadian dollars. It promised to capture 90% of the CO₂ that was being generated but, in fact, its capture rate has been only 57%. This gives me a question to ask of the Minister—and perhaps of the Labour Front Bench—about the regulations before us and the Government’s plans: if there are contracts promising a certain rate of capture but that rate of capture is not met and they fail to deliver what is promised, with the potential to cause considerable damage in this new industry, what will be done? I note that the Toronto Globe and Mail is saying that there are

“continuing tensions between industry and the federal government about the extent to which public dollars will be used to provide”

for this industry.

With that in mind, I note the Minister’s comments in his introduction. I also note paragraph 5.10 of the Explanatory Memorandum to the directions, eligibility and counterparty regulations and paragraph 5.9 of the Explanatory Memorandum to the directions and counterparty regulations, both of which refer to the importance of information being deployed publicly, as well as the Minister’s comments about commercial confidentiality. In so many areas of public provision, we have seen real problems with people hiding behind a total lack of transparency arising from that coverall of commercial confidentiality. Can the Minister assure me that that will not happen in this case?

[Earl Russell (LD)]

My Lords, I rise to speak to both of these SIs. I note that neither of them has been subject to any report by the Secondary Legislation Scrutiny Committee.

Both SIs relate to carbon capture, usage and storage—CCUS—and are broadly welcomed on these Benches. I will not partake in any debate on CCUS today. It is a suite of technologies that enable the mitigation of carbon dioxide emissions from large point sources, such as power plants and refineries, and the removal of existing CO₂ from the atmosphere. In short, CCUS is one vital tool in the toolbox to help us reach net zero.

The Government envisaged building a competitive, self-sustained CCUS market in the UK. I note that, as of today, no commercial-scale CCUS projects are up and running. CCUS could provide economic growth potential as part of the transition to net zero—£1 billion of government money has already been made available for investment in four potential clusters, which aim to be capable of storing 20 to 30 megatonnes of carbon dioxide by 2030—but CCUS has had a slow and slightly rough start in the UK.

The revenue, directions, eligibility and counterparty SI establishes the process by which the Secretary of State can direct a carbon capture counterparty to offer to contract with an eligible carbon capture entity. It also sets out the requirement that certain information must be published by the counterparty in respect of contracts entered into, as well as the requirement on the counterparty to notify the Secretary of State promptly if it is likely to be unable to perform its functions. This instrument concerns the implementation of industrial carbon capture business models, or ICCBMs—there must be a better acronym—which are intended to support the ambition set out in the net-zero strategy to deliver carbon capture, usage and storage, or CCUS, in four industrial clusters. The ICCBMs have been designed to incentivise the deployment of carbon capture technology by industrial and waste users who often have no viable alternative, as the Minister set out, and are similar to contract for difference schemes.

My questions on this SI relate to the future review and scrutiny of those contracts. As they are commercial contracts—I note that they are in the public domain, but some of this may not be made public—and are signed off by the Secretary of State, can the Minister explain what, if any, further parliamentary scrutiny there will be of these processes? These contracts are for new and in some cases yet unproven technologies, so how will value for money be ascertained and reported back to Parliament in future, especially given that the SI allows for the amendment of those contracts in future and no statutory review is envisaged? I welcome the response to the consultation and the changes, including the use of the term “energy recovery generating station” and around the exclusions and support.

Because of time, I will not go through all that the SI on carbon dioxide transport and storage does. It seeks to help establish first-of-the-kind infrastructure in the UK to transport and permanently store the carbon dioxide that has been captured. It provides Exchequer-funded revenue support to mitigate the financial risks of the initial investors. The investment in this infrastructure is welcome, and I recognise the need for it, but what level of financial support is envisaged at this stage? If none is required now but money is perhaps required at some later point, can I ask if and how Parliament might be consulted on that and what limits are in place on those future financial investments in this scheme? If more money goes in, how will that be reported and noted by Parliament?

My other questions relate to parliamentary oversight and scrutiny of the new types of technology and new contracts—what they are delivering and whether they are delivering value for money, how they are monitored and how Parliament gets future say in scrutiny of them.

Finally, in relation to both SIs, the process is delivered via commercial contracts, and both SIs allow for alterations and a requirement on the parties to inform the Secretary of State if the counterparty is unable, or likely to be unable, to fulfil its role as entered into. What, if any, dispute resolution mechanisms exist here between the department and the contractors? I am particularly interested in what legal dispute resolution mechanisms exist to give adequate oversight of this process to Parliament before any potential legal disputes end up in court.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for his in-depth introduction to the two SIs that are before us today and for the comments we have heard so far. There will be some repetition in some of our concerns and questions.

I start by setting a bit of the context. I admire the ambition that is expressed, as we discussed during the passage of the Energy Act, recognising that this whole area is just one part of the toolkit in addressing the need to remove carbon from our industry. The Minister outlined the sheer scale of the proposals here, which involves going from 6 megatonnes in 2030 to 9 megatonnes in 2035, but I do not think he expressed what that will mean in terms of the infrastructure required to support the operations. I have to be honest that this Government have so far not had a great track record in delivering infrastructure across the piece, particularly transport infrastructure.

I would like to have a bit more sense, given the backlog in transport investment, of whether investment in this area will jump the queue, if you like, in the planned progress. Is there a plan? That is a question we come back to again and again in terms of delivering on this agenda. Of course, the other major issue around all this is the way the planning system works, or does not work. Can the Minister assure us that we can move forward with confidence in delivering a fairly steep timetable approaching 2025—next year? The clock is well and truly ticking.

Energy: Welsh Government

Earl Russell Excerpts

Wednesday 24th April 2024 Lords Chamber

[Lord Callanan (Con)]

I am sorry that the noble Lord takes that attitude, because all projects across the UK are evaluated on the same basis. Of course, it is not possible to take forward every project, but the assertion that projects in Wales are somehow discriminated against is just not true. I could give him many alternative examples of projects in Wales—from nuclear, to hydrogen storage, to hydrogen allocation rounds, and CCUS projects—that are going forward.

[Earl Russell (LD)]

My Lords, does the Minister agree with the Institute of Welsh Affairs that Wales should retain, and local communities gain, greater income from the renewable energy developments that they host?

[Lord Callanan (Con)]

I am not familiar with those particular circumstances; I would be happy to chat to the noble Earl about it.