Great British Energy Bill

Lord Grantchester Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Grantchester (Lab)]

I have always been an admirer of sovereign wealth funds. They enable significant investment, targeting strategic national priorities for the benefit of their relevant populations. They can be consistent long-term enablers of plans for national leadership in their focus on identified industries. So I very much welcome this Bill wholeheartedly.

I also welcome—and commend the maiden speech of—my noble friend Lady Beckett. Her words were inspirational and I well recall when years ago she brought about the merger of the Department for the Environment and the Agriculture Ministry into the new department we have today. I also welcome the noble Lord, Lord Mackinlay. I have long been an admirer of his courageous path back into the House. I look forward to both his future remarks and those of my noble friend.

There can be no higher or more important task than transforming the national economy towards a more sustainable future, to stabilise the threat of ever more damaging climate change. The science is indisputable. The world is accelerating through the threshold of 1.5 degrees warming above pre-industrial levels, jeopardising the two degrees limit in the Paris Agreement. That public ownership does not occur more in the UK is curious: indeed, allowing—almost welcoming—foreign ownership of all parts of the economy has often been a long-term detriment to the interest of the nation. It enables foreign owners to set their own objectives and priorities to their own overseas interests and enables virtually unfettered reshaping of the relevant company invested in.

Other countries undertake national plans. For example, in France, the French have prioritised nuclear power, and the Danes have Ørsted to focus on offshore wind projects, including projects in the UK. I am sure the Government are correct to focus on all renewable energy in the pursuit of net zero and more competitive sources in the long term. The Government are to be congratulated on bringing this legislation forward so early in the new Parliament. It must start as soon as possible.

However, I have one major concern. How can this energy public ownership be protected in future from attacks by some rogue future Conservative Administration? Is the Minister confident that all necessary steps are contained in the legislation to keep Conservative privatisations and other asset stripping or sell-offs from undermining this public investment in projects? The debate between the relative merits of public ownership and state enterprise is ultimately sterile. There are good and bad examples to be found within both definitions. The emphasis must be to enable effective management to be accountable for their stewardship.

I am concerned that in Clause 1(4), the Secretary of State has the power to revoke the designation of Great British Energy by notice. Am I right to be alarmed that this is an open goal for the Conservatives? Public money under public ownership of such a fund should be consistent and for the long term. It must be shielded from short-term political interference and be appropriately financed.

On previous assessments, total infrastructure requirements on the pathway to net zero have been assessed at £28 billion per year. While that ambitious investment by government may be beyond reach in the near term, is my noble friend confident that £8.3 billion of capitalisation over the course of this new Parliament will be sufficient? Does he envisage this to be sufficient essential investment, and is he confident in the checks and balances necessary to provide effective value for money for public funds? When he comes to reply, can my noble friend explain how recent announcement of investments in carbon capture and storage may go ahead in conjunction with the structure of the Bill? In this, I refer to the remarks of my noble friend Lady Winterton.

Great British Energy must be more than a bit player in hastening the nation towards energy security from renewable power sources. While welcoming the Bill and noting the issues debated in the other House, I draw attention to a few areas of interest in the setting of objects under Clause 3 and strategic priorities under Clause 5. Great British Energy aims to ensure that clean, home-grown energy makes Britain a clean energy superpower by 2030. NESO’s recent Clean Power 2030 report identifies demand flexibility as a key factor in achieving clean power. Does the Minister agree with this assessment and acknowledge that the UK’s clean energy plan should also focus on the demand side, which, unlike supply-side flexibility, is not subject to the same administrative, regulatory or cost barriers that are often seen with supply chain solutions for clean energy? Does he support NESO’s plans to offer the demand flexibility service, a scheme facilitated by the smart metering network, all year round?

Alongside the Government investment, does the Minister agree that the smart metering network can help households to adopt more flexible, cost-effective behaviours through better understanding their usage? While investment in clean, home-grown energy is urgently needed, there are also existing assets that can help the Government’s mission to make Britain a clean energy superpower. Does my noble friend the Minister agree that in a time of fiscal constraint, alongside this Bill, the Government need to take advantage of existing national assets, such as the smart metering network, as this can help manage energy demand and can be harnessed to unlock wider benefits, such as identifying and targeting support to retrofit energy-inefficient housing?

Furthermore, it seems counterproductive to withdraw renewable energy sources by temporarily closing down their supply at various times. Can my noble friend the Minister confirm that energy storage is part of the objects contained within the Bill? With GB Energy set to turbocharge production into renewable energy, all of which we will need in the grid, does my noble friend agree that maintaining grid stability and reducing balancing costs will be vital for hitting the clean power ambition and maintaining UK energy security? Will he also look at how the smart metering network can help the Government deliver that much-needed stability and flexibility?

One of the aims of the Bill is to ensure more value for bill payers and taxpayers. Does the Minister agree that existing infrastructure, such as smart meters which provide more accurate information about energy usage, leading to lower consumption and bills, also has a major part to play in the Government’s plans to reduce those energy bills? For example, although the Bill outlines ambitious plans for clean energy development in the future, many households continue to face fuel poverty. Does the Minister acknowledge that we could better utilise existing infrastructure to deliver solutions more quickly, whether by saving users money on their bills or by providing anonymised data, which can identify those most at risk of or living in fuel poverty who would benefit from that targeted assistance? Can he confirm that encouragement and examination of these smart meters and their progress will be part of the Government’s agenda?

It is interesting that this Second Reading debate is happening today when, next Wednesday, we will be drawing the nation’s attention to Fuel Poverty Awareness Day. I draw my remarks to a close by noting how appropriate it is that my noble friend Lord Hunt of Kings Heath is once more the Minister introducing a landmark piece of legislation, as it was he who oversaw the climate change legislation in your Lordships’ House in 2008. I wish this legislation as much success as he brought with that Bill.

EV Strategy: (ECC Committee Report)

Lord Grantchester Excerpts

Wednesday 16th October 2024 Lords Chamber

[Lord Grantchester (Lab)]

I also would like to start my remarks on the progress of the electric vehicle transition by thanking the noble Baroness, Lady Parminter, for chairing the committee on this important inquiry and for introducing the debate today so comprehensively. I also thank all the clerks who help the committee so ably. I declare my interest as serving on the committee and thank the many organisations and people with an interest in the motor industry and climate change for all the submissions I have received.

Needless to say, the report was produced and responded to by the previous Conservative Government. It cannot go unremarked that the rather confused state of the transition away from the internal combustion engine was in no small measure due to mixed messaging and lack of leadership from the Conservative Government. The announcement in September last year to delay the phase-out date for new petrol and diesel vehicles from 2030 to 2035 did immeasurable damage to consumer confidence and demand, adding to the misinformation surrounding EV ownership.

The second-hand market is in disarray. The emphasis on cost without including benefits led to declining private sales over the next quarter. I am pleased to learn that throughout 2024 sales have recovered, reaching 20.8% of new vehicle registrations in September and putting within reach the first ZEV mandate of 22% for 2024, on the pathway towards the phase-out date. Will my noble friend the Minister, replying to this debate, outline the new approach of this new Labour Government? Can he confirm that the phase-out date will be restored to 2030?

In this context, further clarification as soon as possible on the phase-out of hybrid vehicles would also be very helpful to the industry. While hybrids can help consumers move towards EVs, the cost to manufacturers of tooling and dual-system production is considerable. A fresh communications strategy is a key recommendation of the report and a clear opportunity for the new Government to arrest the decline in private sales resulting from misinformation.

The car industry is fluid at present, backing EVs while simultaneously making internal combustion engine vehicles and looking to the development of hydrogen engines—mainly for trucks, construction and agriculture —and hydrogen fuel cells, which also have zero emissions but are still very expensive until there is mass manufacture. BMW and Toyota have just started collaborating on fuel cells. Porsche has just announced new technology to “save the ICE” by patenting a six-stroke petrol engine with reduced emissions.

It is an industry under severe challenge, with many competing developments, especially in the various export markets. Can my noble friend the Minister outline the current position of investments in battery technology and factories? I understand that many plans have been downsized and Northvolt is considered to be in difficulty. The challenges of EV transition resulting from weight issues and recycling still need to be faced.

Misinformation feeds off these negative aspects and brings into sharp focus the other clear recommendations in the committee’s report. The previous Government’s response was similarly unclear in its approach to taking many of the issues forward. A feature of Conservative Governments is often to fiddle with the on/off switch of consumer incentives, prematurely phasing out grants to help bring about price parity between new purchases and existing disparities on costs. I urge my noble friend the Minister to bring forward new approaches to support new technologies and developments that will support the transition to lower transport emissions. Transport remains the UK’s highest-emitting sector.

In addition to the committee’s many recommendations on costs and tax, I mention the possible extension of the delay to introducing vehicle excise duty for electric vehicles. While the forthcoming Budget will signal new approaches for the economy, it remains a challenging time for public expenditure and possible new approaches to road taxation. The committee’s report has made detailed recommendations on the EV charging infrastructure and I would welcome my noble friend the Minister’s response to the many comments other speakers have made.

Many of the several “black holes” in charge points exist in rural areas. I emphasise the need to update and modernise the grid, which crosses over into the energy market and the distribution of energy throughout the UK. There are important developments and costs associated with securing national grid connection and, in this context, the charge points, especially for high-speed recharging. Can my noble friend the Minister give your Lordships’ House any insights from his other responsibilities into the plans ahead? Can he say how the new announcements on carbon capture and storage investments will help capture carbon dioxide in the atmosphere from e-fuels, and help their development?

Finally, I mention the need for an urgent reset of how planning permissions operate for upgrading infrastructure and grid connections. This extends from high-point connection infrastructure to supporting measures that tackle the charge-point divide that exists for those with no access to driveway home recharging.

These are the key initial steps that a reset needs to take to restart the transition from high-polluting ICE vehicles towards achieving the important legal challenge of meeting the net-zero goals by 2050.