Energy White Paper

Lord Callanan Excerpts

Monday 28th September 2020 Lords Chamber

[Lord Howell of Guildford (Con) [V]]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interests as in the register.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The energy White Paper is a priority and will be published this autumn. This means that it will play a vital role in building back better and driving greener, clean economic recovery, delivering both jobs and skills.

[Lord Howell of Guildford (Con) [V]]

My Lords, I thank my noble friend for that Answer. Does he agree that when it comes to the future reliability of energy supplies, the public badly need some reassurance? Our main new nuclear project is well over budget and over time. The rest of our nuclear programme is full of uncertainties. The national grid warns of future power cuts unless it can invest fully in new systems, and household energy bills are still sky high. Can the Minister assure us that the long-overdue White Paper will restore some coherence to our medium and long-term needs for low-carbon, affordable and reliable electric power from all sources?

[Lord Callanan (Con)]

I agree with my noble friend; I know that he speaks with great authority on this subject as a former Energy Minister. The White Paper will consider the overall energy system, including how demand for low-carbon electricity will increase in buildings and transport, and the role of technologies such as hydrogen and nuclear in supporting that transition.

[Viscount Hanworth (Lab)]

One requirement in decarbonising the economy will be the replacement of current aviation fuels with hydrogen-based synthetic fuels, which will be produced by an energy-intensive process. Aero engines will also need to be adapted to consume such fuels. Small modular nuclear reactors, which Rolls-Royce is developing, would be a means of supplying the necessary energy. The company is also at the forefront of the aero engine industry. Do the Government recognise the unique opportunity that exists in sponsoring Rolls-Royce to pursue developments on both these fronts?

[Lord Callanan (Con)]

We are always willing to work with innovative British companies. I agree with the noble Viscount’s points about hydrogen and advanced nuclear technologies, which we are providing considerable support for.

[Lord Fox (LD)]

As the Minister knows, the current target for offshore wind generation is 30 gigawatts by 2030. During the election campaign, Boris Johnson said that if the Tories won, that target would go up to 40 gigawatts. Which number will be included in the energy White Paper? Whichever one is used, do the Government recognise that not just Ofgem but the Government must make sure that this electricity can be distributed around the country?

[Lord Callanan (Con)]

The noble Lord makes an important point about the distribution and alterations of the grid that will be required, but I am afraid that I must ask him to curb his impatience and wait for the White Paper with regard to numbers.

[Baroness Redfern (Con) [V]]

My Lords, the Humber energy estuary is the UK’s most carbon-intensive industrial region and hosts some of the largest offshore wind farms to capture and store power. What are the Government’s next steps for those carbon sequestration sites under the North Sea, which ultimately would have the potential to lead in securing a net-zero industrial cluster for the Humber?

[Lord Callanan (Con)]

The noble Baroness makes a very good point. As I am sure she is aware, we have created a carbon capture and storage infrastructure fund of at least £800 million to establish at least two UK sites—one by the mid-2020s and the other by 2030—and £500 million to help energy-intensive industries to move to low-carbon techniques and decarbonise carbon-intensive regions such as Humberside.

[Lord Ravensdale (CB)]

My Lords, I declare my interests as in the register. Given that we are unlikely to achieve net zero without nuclear power, which is critical to the security of thousands of jobs across the regions, I am concerned that the White Paper will contain only a broad outline of the strategy for new nuclear. Will it set out in detail clear guidance on financing, for example a commitment to a RAB model, to give the sector the clarity it needs to progress?

[Lord Callanan (Con)]

The White Paper will look at the whole system of energy within the UK as part of our commitment to net-zero carbon emissions by 2050. I reaffirm the key role that nuclear will play as part of that future energy mix. I can tell the noble Lord that we will respond to the RAB consultation in due course.

[Lord Grantchester (Lab) [V]]

With this long-overdue White Paper, the Government have said that they will

“publish decarbonisation plans for key sectors such as agriculture and industry as part of its green agenda in the run up to COP26.”

Can the Minister confirm that a greater number of these plans will be published on the same day as the energy White Paper to demonstrate the Government’s joined-up approach, so needed to tackle the climate emergency?

[Lord Callanan (Con)]

The noble Lord is right to point out that intensive work is going on in all those areas. I cannot confirm that those documents will be published at exactly the same time.

[Baroness Bowles of Berkhamsted (LD) [V]]

With the continuing pull-out from nuclear new builds, do the Government consider it strategically important to invest in the pre-commercial development of the marine energy sector, which is also well aligned with areas where development is needed?

[Lord Callanan (Con)]

I agree with the noble Baroness. The Government have a long history of supporting the development and deployment of wave and tidal stream technologies in the UK. To date, we have provided sustained and targeted support enabling the wave and tidal stream sectors to move from initial concept to prototypes and now on to the first arrays in practice.

[Lord Wigley (PC) [V]]

My Lords, can we assume that the White Paper will give a definitive indication of the Government’s intention for the Wylfa site following Hitachi’s pulling out? Can the Minister tell the House whether both SMRs and fusion reactors are being actively considered for Wylfa and when the generic design assessments for these two technologies will be started?

[Lord Callanan (Con)]

I understand the concern in north Wales about this issue but Hitachi made it clear that withdrawing from the Wylfa project is a commercial decision that it has taken for its own domestic and business reasons. We understand that it is disappointing. We remain willing to discuss any new nuclear projects with any viable companies and investors wishing to develop sites in the UK, including that at Wylfa.

[Viscount Trenchard (Con) [V]]

My Lords, following on from the question asked by the noble Lord, Lord Wigley, repeated delays in the publication of the energy White Paper and the failure to publish a response to the consultation on a regulated asset base model for nuclear that closed nearly a year ago have contributed to the doubt and uncertainty surrounding the Government’s future commitment to new nuclear projects, such as that at Wylfa. Does the Minister agree that it is now crucial that the Government send an urgent message to the Japanese Government saying that they are committed to working with them to develop a framework under which the project that was supposed to provide 7% of our electricity by the mid-2020s can be revived as a UK-Japan joint project?

[Lord Callanan (Con)]

As I just said, the decision taken by Hitachi was a commercial one. We totally agree that nuclear power will play a key role in the UK’s future energy mix as we transition to a low-carbon economy, and we already support investments in small and advanced modular reactors.

[Lord Craig of Radley (CB) [V]]

My Lords, what progress have the Government made on resolving the issue of the safe and ecological disposal of nuclear waste with a long half-life? Will the future energy policy address this vital matter?

[Lord Callanan (Con)]

In December 2018, the Government launched a new siting progress to identify a suitable location in which to construct a geological disposal facility. This is of course a consent-based process that is looking to identify both a willing host community as well as a location with the suitable geology in which to construct such a geological disposal facility.

[Lord West of Spithead (Lab)]

My Lords, the Minister is well aware of my passion for ships and the need for the Royal Navy to have more, and also my huge support for a sensible nuclear power industry. But I am also delighted that it appears that hydrogen is being considered for future power. Will the Minister confirm that, in the energy White Paper, hydrogen is being addressed and that the supply and demand sides of the hydrogen economy will also be addressed—for example, a push towards hydrogen vehicles?

[Lord Callanan (Con)]

I was wondering how the noble Lord would get warships into this Question, but he has of course managed it. The White Paper will set out the proposals for the use of hydrogen and carbon capture and storage. They are key to our planning as we seek to decarbonise gas by 2050 for net zero, because of the potential they have to allow us to decarbonise both nationally and regionally while creating new, high-value jobs. Hydrogen will be a key part of the energy mix in the future. We are looking very closely at investing in it and we will be setting out a further strategy on that.

[The Deputy Speaker (Lord Lexden) (Con)]

My Lords, all supplementary questions have been asked and we now move to the next Question.