Drax Power Limited: Ofgem Investigation

Lord Birt Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is clearly very important that companies in receipt of the ROC payments—and, indeed, where their biomass electricity generation is classified as low-carbon—are acting according to sustainability criteria. The last Government issued a call for evidence in 2021 and then took two years to publish a strategy, in 2023. On the revision of sustainability criteria, they rather ducked it, saying that they would produce a cross-sector consultation this year, which never happened. We are now working on that. It is clear that sustainability criteria need to be kept up to date. We will ensure that that happens.

[Lord Birt (CB)]

My Lords, I have seen the deeply troubling allegations presented by a staff whistleblower to at least one member of the Drax board. It is troubling reading. They allege outright dishonesty, cover-up, offers of under-the-table bribes and naked threats by some senior Drax executives. Has the Minister seen this evidence, or, as already mentioned, KPMG’s internal investigations following the BBC “Panorama” report on Drax? If not, given the substantial public funding that Drax receives, will he ask to see them?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord. I have seen the media reports, but I have to say to the House that it is the responsibility of Ofgem to make judgments as to whether a company is applying the sustainability criteria. The issue before us today is data information. Clearly, Ofgem found that Drax was not complying with the requirements—hence the redress payment. However, it did not find that Drax was not complying with sustainability criteria.

EV Strategy: (ECC Committee Report)

Lord Birt Excerpts

Wednesday 16th October 2024 Lords Chamber

[Lord Birt (CB)]

My Lords, I congratulate the noble Baroness, Lady Parminter, on her commanding introduction, and I congratulate the committee on producing a truly comprehensive report of real ambition. My only criticism is that it is far too polite. The committee strictly identifies the gulf between aspiration and delivery thus far on our journey to net zero, and it offers no hope that, on current trends, we are even remotely on course to meet our long-term targets for decarbonising road transport. Decarbonising and expanding the production of electricity, decarbonising the heating of our homes and buildings, and decarbonising road transport must be our prime goals if we are to play our part in reducing the impact of climate change.

Today, only one in 30 of the vehicles on our roads is an EV, with annual sales of new EVs apparently flattening at around 16% of the total. I am an EV owner, and it is easy to see why take-up has been so slow—the committee’s report evidences this well. First, although the lifetime cost of owning an EV is economic, EVs are more expensive to buy up front than petrol and diesel vehicles. Will the new Government seek more ways to incentivise EV purchase and increasingly to disincentivise the purchase of vehicles powered by petrol and diesel?

The second factor inhibiting take-up is that, on the move over longer distances, the charging experience is infinitely less convenient than buying petrol. I am a member of the APPG on EVs, and we were told by a leading motorway service provider that one major motorway service station has no charge points at all. One station has installed charge points, but they are not in service because an adequate grid connection cannot be obtained for some years still to come. He told us that, in busy periods, he has to deploy stewards to avert fights breaking out on charge point queues. Only 63% of motorway service stations have over six charge points, and only around 40% have six or more rapid chargers. In the whole of the UK, there are fewer than 4,000 ultra-rapid charge points. Will this Government ensure that motorway service stations up their game and that grid connections to charge points used by long-distance drivers will be prioritised?

The third reason for the low take-up of EVs is that there is huge variation across the country in the availability of public charge points. The EV APPG was told that 80% of UK public charge points are in London and the south-east. I see from the committee’s report that there are over 100 times more charge points per head of population in Hammersmith and Fulham than in the Wirral, west of the Mersey. Not everyone can install a charge point in their garden at home—if you live in an apartment block or on a terraced street, for example. Will this Government devise and implement a plan for an appropriate rollout of public charge points right across the UK and located conveniently to where people live and park their cars?

The fourth reason why EV take-up is low is because the cost of charging is highly variable. It is economic at home, of course, cheaper than petrol, but high-speed charging is expensive. Will this Government ensure that the daily cost of running an EV is cheaper than a carbon-fuelled vehicle?

Finally, take-up is low because the quality of the user interface at charge points can be completely unfit for purpose, with under-illuminated screens in direct sunlight impossible to read, touch pay not always available, and onerous and complex user instructions. Touring the Inner Hebrides with my wife in the summer, I came across a particularly lurid example: a charge point with a blizzard—over 100 words—of user instructions; the requirement before using it to scan a QR code and to download an app; and a complex process of feeding back a reference number for the individual charge point before it could be used. It was a complete nightmare. I have a picture of that charge point on my smartphone, if any noble Lords present would like to see it. It is a gruesome sight. Will this Government galvanise the industry to ensure that the process of paying to charge your EV is as simple and convenient as buying petrol, and that all payments can be contactless, even below 8 kilowatts?

Briefly, I want to respond to what the noble Lord, Lord Lilley, has said. The noble Lord graces any committee because he is always challenging. I passionately believe that we have to achieve net zero, but I agree that we have to find the most economic route to it. There is far too little debate about that—but at the end of the day there may be a price for achieving net zero. We need to make it the minimum price, but we have to recognise that there is a price, and it is absolutely imperative that we reach our net-zero goals as quickly as possible.

Will this Government produce and publish a comprehensive and granular joined-up plan for delivering net zero, as we do not have one at the moment, including how to decarbonise transport? Will he explain how all the many departments right across government that need to combine to deliver an integrated plan will be involved in that process, and how they will be tasked to deliver? Does the Minister believe that by 2030, in six years’ time, the goal that all new cars should be EVs is achievable?

Home Insulation

Lord Birt Excerpts

Tuesday 14th May 2024 Lords Chamber

[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.

[Lord Birt (CB)]

My Lords, insulation is plainly cost-saving, whatever form your heating takes, but it is particularly important in respect of heat pumps, powered as we know by expensive electricity. Does the Minister yet know when the Government will announce the long-promised rebalancing of the cost of electricity versus the cost of gas?

[Lord Callanan (Con)]

The noble Lord is absolutely right that, whatever form of heating you have, insulation is always a good thing, because you can use less of it. Rebalancing is obviously a particularly tricky political issue. We are currently looking at it and, although I cannot give the noble Lord a date yet, we hope to have a consultation on some proposals out shortly.

Biomass: Power Generation

Lord Birt Excerpts

Wednesday 13th March 2024 Lords Chamber

[Lord Callanan (Con)]

Of course I agree absolutely with the statement made by my noble friend. As I said, I have spoken to Ofgem, which is investigating. It is its job to enforce against these criteria. My officials are in touch with those in British Columbia for further discussions. However, there are many perfectly legitimate reasons why timber would be removed from old-growth forests—for instance, for firebreaks, diseased wood, et cetera. This is a complicated issue. Drax is an important part of the UK’s energy security. Let us make sure that it does this sustainably and abides by the rules before we rush to judgment.

[Lord Birt (CB)]

Has the Minister actually studied the detailed and evidenced findings of the last few weeks from “Panorama”, confirmed by the Government of British Columbia, that Drax is, in fact, burning wood from old-growth primary forests—rich, diverse habitats that are over 150 years old and will take 80 years or far longer to grow back—and that it is doing so in defiance of its 2017 commitment? Against wind, solar, hydro and nuclear, is not the case for biomass as a source of renewable power fatally weak and wholly unconvincing?

[Lord Callanan (Con)]

As the noble Lord knows—we have been in correspondence on this—I do not agree with him. As I said, we are in discussions with the British Columbia authority. This is not a third-world country; it is perfectly capable of sustainably managing its forests in its own way. There are internationally agreed strict sustainability criteria. It is important that Drax follows those rules. Ofgem is studying its application and will not hesitate to take action against it, as I have said.

Heat Pumps

Lord Birt Excerpts

Wednesday 6th March 2024 Lords Chamber

[Lord Callanan (Con)]

A huge amount of research has gone into it. We reckon that about 90% of homes in the UK are suitable for heat pumps. Obviously, there is a wide variety of different homes; the area that the noble Lord and I come from has a lot of terraced properties. You can use ground source heat pumps with common arrays in the road, and you can use heat networks that have one remote location powering the heat pumps. There are a number of different technologies where this is perfectly possible.

[Lord Birt (CB)]

My Lords, we languish not only very close to the bottom of the European league table of heat pump installation but at the bottom of another European league table: the ratio of the price of electricity to gas, with electricity being far higher. The Minister has discussed the matter before. When will we rebalance that imbalance in the UK?

[Lord Callanan (Con)]

If the noble Lord had been paying attention earlier, he would have noticed that I answered that question in response to my noble friend Lord Leigh. This is a difficult political issue—I will not shy away from that fact—but the Government are aware that we need to make progress on it, and we will issue a consultation this year.

Civil Nuclear Road Map

Lord Birt Excerpts

Monday 15th January 2024 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes a good point, but the attraction of using a similar design is that many of the teething problems that have been undergone at Hinkley will hopefully be solved by the time we get to a decision on Sizewell. As I said, my noble friend makes a valid point and, again, it is not a question of either/or. We will continue the development of SMRs and AMRs in conjunction with large-scale nuclear.

[Lord Birt (CB)]

My Lords, I welcome the Government’s Statement on their long-term nuclear policy. It is and it should be a critical component of our strategy for achieving net zero. However, I want constructively to raise some points. I worked at No. 10 in 2004 when the decision was made in principle to give the go-ahead to a new nuclear plant, which of course became Hinkley Point C. It has become a 25-year project. This is a genuine question: what lessons does the Minister think the UK can learn about how we manage these ambitious long-term infrastructure projects? Did we set out to fund it in the right way?

Biomass Strategy 2023: Cross Sectoral Sustainability Framework

Lord Birt Excerpts

Wednesday 15th November 2023 Lords Chamber

[Lord Callanan (Con)]

Indeed, my noble friend makes a very good point. We have currently awarded £32 million of funding to projects as part of the Government’s £1 billion net zero innovation portfolio, because there is an awful lot that we can do to improve the availability of biomass feedstocks and look at deploying it more effectively.

[Lord Birt (CB)]

My Lords, the “Panorama” on Drax offered vivid and compelling evidence that fatally undermined Drax as a renewable proposition. The Minister has previously asserted that that was an accurate presentation, but as yet has offered no evidence to support his claim. Drax wrote to me almost four months ago, also claiming that the programme was a misrepresentation, and offered to present me with evidence. Despite prods from me and further promises from Drax, I have yet to receive that evidence. Is it possible that the “Panorama” was an accurate representation?

[Lord Callanan (Con)]

To slightly correct the noble Lord, I think I said it was an inaccurate portrayal, rather than an accurate one, as he said. We have debated this matter before, and the noble Lord has tabled a number of Parliamentary Questions to me on it. I cannot go any further than to repeat what I have already said: government officials have engaged extensively with forestry experts and Canadian officials following the “Panorama” programme, and we have found no evidence that wood pellet production in the region is unsustainable. We continue to believe that the narrative would have benefited from a much fuller picture of how harvesting decisions are made in practice.

2030 Emissions Reduction Target: Heating

Lord Birt Excerpts

Tuesday 5th September 2023 Lords Chamber

[Lord Callanan (Con)]

As the noble Lord knows, that is a matter for building regulations. The future homes standard will come in from 2025; it will not specify the type of heating but it will put in place standards that will, in effect, end gas boiler installations in new homes.

[Lord Birt (CB)]

My Lords, the Minister will know that heat pumps are a very efficient means of turning electricity into heat, but does he think that, while electricity costs roughly three times as much as gas, there is any prospect whatever of them taking off in the UK?

[Lord Callanan (Con)]

The noble Lord is right about the efficiency of heat pumps and about the cost of electricity. Later this year we will issue a consultation on so-called price rebalancing, which will attempt to bring the electricity price down relative to gas.

Drax Biomass Power Station

Lord Birt Excerpts

Monday 3rd July 2023 Lords Chamber

[Lord Birt (CB)]

Speaking of proof, has the Minister had a chance to view the devastating “Panorama” on Drax? Drax’s claims have been fatally undermined. Ancient forests have been cut down and indiscriminately turned into pellets, transported 12,000 miles by ship and incinerated in Yorkshire, emitting more CO₂ than coal did before and at gigantic cost to the taxpayer. This is not the route to net zero.

[Lord Callanan (Con)]

The noble Lord should be careful of jumping to conclusions. I have not seen the programme, but my officials have. They have engaged extensively with forestry experts and Canadian officials following the programme, and the officials’ conclusion is that the “Panorama” programme provided an inaccurate representation of practices by the forestry and biomass sector on the ground.

Climate: Behaviour Change (Environment and Climate Change Committee Report)

Lord Birt Excerpts

Wednesday 7th June 2023 Grand Committee

[Lord Birt (CB)]

My Lords, our behaviour can adapt at the required pace only if government itself provides the right policy framework and puts the appropriate incentives in place—and that, I regret to say, is not happening.

The majority of carbon emissions in the UK, as we all know, stem from road transport and from heating 30 million homes and buildings. The number of EVs is rising fast and outpacing a charging network which is haphazard and unreliable—viz the recent queues over the holiday at motorway service stations. Range anxiety will not dissipate until a charge point is as quickly and easily accessed as a petrol pump. We need a comprehensive national plan to ensure that, wherever you travel and wherever you live, whether in a tower block, a terraced street, or a country village, a charge point is readily and reliably to hand. When will we have such a plan?

We have the oldest housing stock in Europe—poorly insulated and heated overwhelmingly by gas. For most households, the cost of migrating away from hydrocarbons to effective insulation, which is vital, and a heat pump is prohibitive. How will government transform the incentives —making electricity far cheaper than gas, for instance? When will the Government deliver on the challenge that they set themselves in the 2021 strategy to

“make the green choice the easiest”

and

“make the green choice affordable”?

Precisely how much electricity do the Government forecast we would need if by 2040 we were successfully to decarbonise transport and heating? Where is the analysis underpinning the “doubling” current need assumption in the Powering Up Britain plan published earlier this year—if it exists? Will it be published? Where is the plan for, and what is the cost of, the massive upgrade of our electricity distribution network that such extra demand would require?

Powering Up Britain would not pass muster in any decent boardroom in Britain, for it is full of headlines but largely devoid of analysis and assessment—for instance, of the economics of hydrogen or carbon capture, or clarity about what part both technologies might play. For hydrogen, yes, it would most likely be maritime and heavy rail freight on non-electrified lines —but what else? Mankind, as most here will agree, faces no greater nor more important challenge than net zero, but achieving that goal requires co-ordination right across Whitehall. I worked at the centre of government for six years, and I know just how hard it is to herd the cats and achieve integrated and holistic cross-departmental objectives.

If the UK is to play its part, we need appropriate machinery of government in place. It is plainly right to have an energy department, but I think it is wrong to assign it the lead responsibility for net zero. That can be achieved only by a muscular entity at the centre working hand in glove with all departments and with powerful analytical support evaluating competing technologies, assessing the economics, integrating planning, identifying the costs, and monitoring progress against detailed plans. Until we have such machinery in place—and I greatly regret to say this—we can have no confidence whatever that we are on a certain and optimal path to net zero, and all those many well intentioned individuals who want to play their part and change their behaviour will lack the opportunity to do so.