Energy Bill [HL]

Lord Haworth Excerpts

2nd reading
Tuesday 19th July 2022 Lords Chamber

[Lord Haworth (Lab)]

My Lords, this Bill, referred to as the energy security Bill in the Queen’s Speech, must be one of the biggest pieces of legislation introduced in your Lordships’ House in a very long time, if not the biggest. It comprises 13 parts, 25 chapters and 19 schedules and runs to 328 pages, not counting the 14 pages merely listing the contents, and weighs in at 1 kilogram on my bathroom scales. Will it make much difference?

The Bill’s stated aim is to

“Make provision about energy production and security and the regulation of the energy market, including provision about the licensing of carbon dioxide transport and storage; about commercial arrangements for industrial carbon capture and storage and for hydrogen production; about new technology, including low-carbon heat schemes and hydrogen grid trials; about the Independent System Operator and Planner; about gas and electricity industry codes; about heat networks; about energy smart appliances and load control; about the energy performance of premises; about the resilience of the core fuel sector; about offshore energy production, including environmental protection, licensing and decommissioning; about the civil nuclear sector, including the Civil Nuclear Constabulary; and for connected purposes.”


In addition to all this, it is worth noting that the accompanying Delegated Powers Memorandum, which clarifies and justifies the necessary powers and which has been prepared to assist the Delegated Powers and Regulatory Reform Committee in its scrutiny of the Bill, runs to a further 189 pages. This is truly a mammoth piece of legislation, and the above description was not complete, as there are three further sets of provisions to be added during the passage of the Bill, as the Minister mentioned in his opening speech.

It is the first major energy Bill for many years and has been long in gestation, though an added impetus to its scope and comprehensiveness has been given by the COP 26 commitments, which the Government have so far been keen to support, and the sharpened realisation of the vulnerability of our energy security in light of the Russian invasion of Ukraine and the ongoing war. The fact that it is deemed suitable for starting its passage in the Lords suggests that the Bill will not be seen as highly controversial, notwithstanding that it has now appeared as the Energy Bill, a much shorter title than the previous one: this must be the only thing that is shorter.

The Secretary of State and the Minister of State wrote to all Peers on 6 July, setting out the rationale for this “landmark legislation”. The letter helpfully sought to simplify the description of the overall approach under three headings or pillars. To recap, pillar 1 is leveraging in private investment in clean technologies and building a homegrown energy system. Pillar 2 is reforming our energy system to protect consumers from unfair pricing. Pillar 3 is ensuring the safety, security and resilience of the UK’s energy system. It is the provisions under this third pillar that I wish to briefly comment on and broadly welcome.

It has long been a feature of our energy system, and the effect of privatisation all those years ago, that it moved from being one that was nationalised and under central control to one in which the hidden hand of the market would be central. That was the whole point. Those who did not share the enthusiasm for this ideological approach tended to point out that trusting to luck and hoping for the best was not an adequate policy, but the zeitgeist of that era was dogmatic. Adam Smith’s hidden hand must be allowed to prevail, and so it has for over 30 years, albeit, as the Minister is keen to emphasis, in a regulated market.

It was because of the Prime Minister’s clear statement in the British Energy Security Strategy White Paper in April this year, saying that action would be taken to drive future energy policy rather than leaving it to market forces, that I welcomed the Bill in the debate on the Queen’s Speech. Prime Minister Johnson committed in that document to establishing the “Great British Nuclear Vehicle”. I have searched the Bill high and low and cannot find any mention of this very Johnsonian concept. What has happened to it?

The Bill does provide for the establishing of an independent system operator, apparently hitherto known as the future system operator. This is to be

“an independent, first of a kind body, acting as a trusted voice at the heart of the energy sector.”

If that means what I think it means, there will at last be a strategic planning mechanism, and then I would be wholly in favour of it. The background briefing notes note that this body will provide strategic oversight across electricity and gas systems, though with no particular mention of nuclear. It will drive progress towards net zero, energy security and minimising consumer costs.

Confusing changes in terminology and the seeming disappearance of “Great British Nuclear”, whatever it was, do need a fuller explanation. Nevertheless, I welcome this Bill and look forward to the Minister’s response and to the on-going passage of this landmark —we hope—legislation.

Queen’s Speech

Lord Haworth Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Haworth (Lab)]

My Lords, I very much welcome the commitment in the Queen’s Speech to introduce an energy security Bill. This measure is designed to implement the provisions of the policy paper, British Energy Security Strategy, which was published as recently as the beginning of April. It has taken a war in Ukraine to finally convince the Government to actually take action to drive our energy policy, rather than leaving such matters to market forces. This is clearly implicit—one of the Prime Minister’s favourite words—in the decision to establish the “Great British nuclear vehicle”. This body will be tasked with helping projects through every stage of the development process and developing a resilient pipeline of new builds.

Whatever might be claimed to have been the benefits of the decisions on privatisation taken by Mrs Thatcher and her Government all those years ago, the effect of leaving major investment decisions largely to chance has undermined any effective energy security strategy. I acknowledge that there were some benefits of privatisation, particularly in the short term. For instance, establishing competition in the market helped keep electricity prices lower than they might otherwise have been, with the benefit, in the short term, of reducing the number of households in fuel poverty—that bit worked. I was very interested in the remarks of the noble Lord, Lord Wakeham, about this, because he was so intimately involved.

However, having said that, it was always obvious that leaving electricity production and distribution to market forces was a policy of simply hoping for the best. I quote the Prime Minister’s own words, in the foreword to the policy paper, where he says that

“we drifted into dependence on foreign sources. Sometimes this was through deliberate planning; more often it was the byproduct of policy fudges, decision-dodging and short-term thinking. But … the result today is all too obvious”.

Quite so.

I made my maiden speech in your Lordships’ House as long ago as February 2005. I spoke about the growing environmental crisis due to climate change and about glaciers melting and, in some cases, collapsing altogether. I had in mind those in the great mountain ranges, particularly the Himalayas and the Caucasus. The catastrophic collapse of the Kolka Glacier in North Ossetia is now recognised by the world’s glaciologists as most probably the largest glacier collapse ever identified, at least in the past 20,000 years. It barely made a footnote in the newspapers, not even in Moscow, although it should have served as a massive wake-up call. This was in September 2002, almost 20 years ago.

At that time, little was known about the fast-melting Greenland ice sheet, or the great dangers posed by melting ice in Antarctica, matters which have now been extensively researched, especially on the Thwaites glacier in western Antarctica, revealing the dangers all too alarmingly. Back then, I urged the Labour Government to urgently consider restarting the civil nuclear programme in Britain, which had stalled after the accident at Chernobyl in 1986. In 2007, the energy White Paper opened the door to new nuclear, but without quite committing the Government; a year later, the 2008 White Paper on nuclear power announced an aspiration to restart the nuclear programme, which envisaged up to eight large new stations being built on the sites of former nuclear plants already closed or closing.

What has happened in the last 15 years? One new nuclear plant is being built, at Hinkley Point, but it is not yet finished. There is a plan of sorts to build a second new plant at Sizewell, but it still awaits planning permission. It is not exactly impressive; it is a very British way of stumbling forward and hoping for the best, and hoping that signals from the Government will result in energy firms coming forward with active plans, which is a policy failure on an almost epic scale. So I welcome the initiative that the Government have finally taken and look forward to the energy security Bill finally ending the laissez-faire approach to these matters. I welcome the commitment to provide up to £1.7 billion of direct government funding to enable one major nuclear project to reach a final investment decision in this Parliament. I welcome the investment of £100 million to Sizewell C, and the commitment to invest £210 million to develop small modular reactors with Rolls-Royce.

In conclusion, the energy security Bill is welcome news; it is long overdue. A measure such as this could and should have been introduced 20 years ago—certainly after the 2006 energy review, which explicitly recognised the threat that Russia presented to the West after the temporary suspension of gas supply to Ukraine on 1 January that year. However too little and rather too late, this Bill is surely better late than never.