Energy Prices
Lord Howell of Guildford Excerpts(2 years, 10 months ago)
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Lord Callanan (Con)
I am not clear what further plans the noble Baroness is referring to, but, as I mentioned, we have a whole series of mitigations in place to protect precisely the people whom she mentioned. For example, the warm home discount scheme has helped millions of people at a cost of several billion pounds, and we will continue with policies such as that to help the most vulnerable.
Lord Howell of Guildford (Con)
My Lords, is it appreciated in this drama of exceptionally high prices that the whole process of moving to a decarbonised world and energy transition requires the most careful management of balance between supply and demand? If supply is discouraged or undermined while demand is still rising, we will get again and again the huge, volatile and extremely damaging rise in fuel and power prices that we have now. Is that not the main lesson to be learned from the mess that we are in now?
Lord Callanan (Con)
I know that my noble friend, as a former Energy Minister himself, is very experienced in these matters. Of course, the underlying point that he makes is right—but it is a transition that will take place over many years and, in the meantime, there will of course be considerable demand for fossil fuels.
Oil and Gas Authority: Remit
Lord Howell of Guildford Excerpts(2 years, 11 months ago)
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Lord Callanan (Con)
I actually agree with the first part of the noble Lord’s question that production from the North Sea is on a declining pathway. Our usage is, of course, on a declining pathway as we transition to net zero.
Lord Howell of Guildford (Con)
My Lords, I declare an interest as set out in the register. Would it not be helpful to explain even more clearly to the public that none of the needed energy decarbonisation or transition is going to happen smoothly without a proper back-up of swing suppliers and fuel sources? Unless there is a prudent level of continued investment in fossil fuel sources, we will see many more of the violent fuel and energy price spikes we have now, which cause considerable stress and hardship for millions of households experiencing this every day and threaten our national security.
Lord Callanan (Con)
I know my noble friend speaks with great authority on this as a former Energy Minister himself, and I agree with him. Of course, the ultimate solution to the problem of high gas prices is to use less of it. Indeed, we are doing that, and we are continuing to develop our renewable sources. We have one of the largest productions of renewable sources in the western world. However, fossil fuel generation, such as unabated gas-fired generation, currently plays an important role in keeping Britain’s electricity system secure and stable. The development of clean energy technologies means that it will be used less frequently in future, but it will still be required.
Shortages: Protection for the Vulnerable
Lord Howell of Guildford Excerpts(3 years, 1 month ago)
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Lord Callanan (Con)
The answer to the noble Lord is yes. A number of energy companies have, sadly, gone to the wall, but the supplier of last resort scheme has so far been successful in transferring to other providers. We have other administrative regimes in place should they be necessary but, so far, the SoLR process has worked well.
Lord Howell of Guildford (Con)
My Lords, the shortage of energy is going to be felt by those households which simply cannot afford the soaring energy prices. Given the forecast that gas prices are going to go up another 30% next year on top of the already very high levels, are the Government considering further measures to alleviate the intense hardship that this will cause for millions of families? This could be done, if not by removing VAT, which may be difficult, by vastly expanding the warm homes discount or easing or temporarily suspending some of the many green levies that bump up our energy bills. Is some further action being contemplated?
Lord Callanan (Con)
Of course, my noble friend will be aware that domestic fuel, such as gas and electricity, is already subject to a reduced rate of 5% of VAT. He will understand, I am sure, that I cannot comment on any speculation about any other changes that might happen in the Budget, beyond saying that protecting consumers is our top priority, which is why the energy price cap will remain in place. I announced earlier the other levels of support that we have in place.
Energy Prices: Electricity Bills
Lord Howell of Guildford Excerpts(3 years, 1 month ago)
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Lord Callanan (Con)
Of course, we do have a comprehensive energy policy. Many of the technologies that the noble Lord refers to are difficult and expensive, but we are funding research into a lot of them. The problem with electricity, as the noble Lord will be aware, is that it is very difficult and expensive to store on a large scale.
Lord Howell of Guildford (Con)
My Lords, it is obvious that in the short term, with soaring international gas prices, what can be done is understandably limited. Rescue support for heavy energy users obviously will help if it comes quickly, but should we not also consider temporarily suspending some of the heavy green surcharges, carbon penalties and the latest, rather poor idea, of taxing gas even further? For the medium term, have the real lessons been learned, namely that for an orderly and sustainable energy transition, we need more gas and electricity storage for back-up and swing supplies, a rapid sort-out of our faltering nuclear replacement programme, some coal-fired stations in reserve, and low rather than high home fuel prices to ease widespread hardship and prevent backlash?
Lord Callanan (Con)
We are taking a range of important steps to decarbonise the electricity system and to provide more homegrown electricity generation as our supplies from the North Sea dwindle. The problem with my noble friend’s argument is that providing more storage does not alleviate the high prices. Many European countries have much greater levels of gas storage, but their prices are even higher than those in the UK.
Net-zero Carbon Emissions: Behaviour Change
Lord Howell of Guildford Excerpts(3 years, 2 months ago)
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Lord Howell of Guildford (Con)
My Lords, I warmly congratulate the noble Baroness, Lady Blackstone, on the extreme timeliness of her Motion, amid the final preparations of the build-up to COP 26 in November. I declare my related interests in energy issues, as set out in the register.
Currently, I see two major public behavioural barriers to addressing successfully the dangers of climate change and extremism. One—noble Lords can read about it in this morning’s papers—is exemplified by Extinction Rebellion and its associates. Frankly, they have done untold damage to the climate cause here, hurting a lot of people quite unnecessarily along the way.
The second, more serious, barrier, or problem, is the ocean of wishful thinking that still surrounds the preparations for COP 26 and the UK’s own net-zero goal, as well as the priorities being urged by the Climate Change Committee. Our net-zero goal, if it can be achieved, will of course have no direct impact on rising world emissions; we are brave but too small for that. That is just a statistical fact. Furthermore, the “zero” applies only to the production of carbon and not to the swathes of carbon embedded in the CO2 we import and consume instead of generating it here, as authorities such as the excellent Professor Dieter Helm constantly remind us.
The theory, I know, is that, by going all out for UK net zero, which might be attainable in the UK at considerable cost and hardship, we will set an example, offer a model for others and gain moral standing. The fact is rather different. The fact is that global emissions are all set to resume a rapid rise anyway after the year’s pause of the pandemic because, for most of the major emitting nations and regions, while they may note—even admire—our efforts, development and the escape for millions from poverty are the absolute priorities. For China, India, Indonesia, Bangladesh and Brazil, to name but a few, these are goals from which they deviate at their peril. Of course, that is why we can see that some of these countries have rejected the COP 26 wording for an end to coal generation.
As a consequence—this must be faced as a reality—world demand for oil, gas and coal will inevitably continue to grow in the years ahead, thanks mainly to the Asian and African utilities. For the advanced economies, the best path to curbing soaring emissions of carbon and of methane, which is an even worse greenhouse gas, lies in a different direction to the one we are currently being enjoined to pursue in this country.
The Climate Change Committee asserts that, for us, net zero is compatible with our climate interests and targets. That is definitely not so under present policies. As the emissions figures clock up—as they will—going flatly in the opposite direction of the Paris goals, which require not just levelling but falling numbers, there will be considerable frustration and anger. Talk of betrayal will come not only from the likes of Greta Thunberg.
Legally binding reduction targets, extracted with huge effort by COP 26, will be washed aside by reality, simply because Governments in the big emitting countries, although they may have serious carbon-reduction targets, have no choice but to press ahead with power supply expansion by the quickest and, in many areas, the cheapest available means, including by using the sunk capital in their present energy systems. If we can offer a useful model to assist them in escaping this trap and decarbonising their entire energy grids, it must be built around a massive technology input, showing how all the smoking chimneys of Asian and African electric power, and all the coal stations, current or planned, could be retrofitted or capped with carbon capture swiftly and affordably, allowing an expanding flow of plentiful cheap energy to continue. This is the essential ingredient of sustainable growth.
I note, finally, that many of our own green voices are actively against carbon capture from burning oil, coal and gas, just as they are actively against the search for cheaper nuclear power. That eliminates two of the main means of checking global emissions growth. This is not progress; it is going backwards towards certain failure. Demand for fossil fuels worldwide will grow further before it falls.
If we are truly serious about averting climate catastrophe, we should be looking in other directions. Time does not allow me to expand on those: they are available, possible and should be tackled honestly. The COP 26 planners should be looking at these areas, instead of trying to pull together the shaky bandwagon of net-zero commitments, which will not—indeed cannot—materialise without fundamental changes in our policy direction and in the whole of Asia. Nothing short of that will do. Perhaps it is time to be honest, change direction and thereby remove a big barrier of misunderstanding and misdirection for genuinely lasting success for the forthcoming COP 26 conference in Glasgow and our national contribution to the climate struggle ahead.
Lord Oates (LD)
My Lords, I declare my interest in the register as chair of the advisory board of Weber Shandwick UK. I am delighted to follow the noble Baroness, Lady McIntosh of Pickering. I thank the noble Baroness, Lady Blackstone, for bringing this important debate and all noble Lords for their contributions to it. As other noble Lords have said, it is particularly timely as we look forward to COP 26 in November, when we as a country have a clear responsibility to show leadership. I also thank all the organisations that have briefed us. I very much endorse the proposal of the noble Lord, Lord Browne of Ladyton, for a portal on which all these things could easily be accessed by us—and perhaps more importantly, they could be on the register.
Sadly, on the issue of the public engagement that will be needed to achieve the behaviour change required to achieve net zero, our Government are failing to show leadership in the UK, let alone in the world. Worse, as my noble friend Lady Randerson said, the Government are promulgating the fantasy that we do not have to significantly change behaviour in, for example, transport, because technology will take care of it—the cake-and-eat-it approach. That just will not wash, given what we face.
As the noble Baroness, Lady Blackstone, mentioned, Article 6 of the UN Framework Convention on Climate Change and Article 12 of the Paris Agreement both set out responsibilities on the parties to take to engage their citizens and measures to enhance climate education and awareness. The noble Baroness, Lady Bull, made a compelling point on the importance of education in this process.
At this point I want to take on some of the comments made by the noble Lord, Lord Howell of Guildford. He made an attack on XR, which he said had done untold damage to the issue of the climate. I disagree with some of the tactics of XR, but I understand the reason for them. As I said in the debate on the Police, Crime, Sentencing and Courts Bill earlier this week, the reason XR and others are taking action on the streets is the reckless failure of this Parliament to take sufficiently urgent action to address the climate emergency, and the years of deniers and now delayers. I also reject his view that we cannot as a country have influence and that it is all somehow hopeless.
In 1940, when Britain stood almost alone against fascism, we did not say, “We cannot do this because it is too expensive, no one else is doing it and we will probably be defeated anyway.” Actually, some people did say that, but thankfully they were not heeded. Instead, we recognised that we faced an existential threat and had to do whatever was necessary to counter it, whatever the cost. We had to lead the world until others stepped forward to join us in the fight. Thank God that approach was taken.
As I have said, lack of public awareness of the scale of the challenge we face and the changes we have to make is a real problem, but there is also a lack of understanding of the benefits that can accrue to our economy and our quality of life. It really is the responsibility of all of us, but particularly of the Government, to take the lead in engaging the public.
Lord Howell of Guildford (Con)
I agree with a lot of what the noble Lord says, but he has not quite understood my message—of course, that is my fault for not having the time or the clarity. The contribution this nation ought to be making is going to be very expensive and very extensive and could be very effective. What I am arguing is that the contribution we are making now—and putting the resources where we are, like removing gas boilers from 27 million homes—is not the way to do it. Vast resources are required to be transferred to the developing world from us—$100 billion has been mentioned and probably at least one nought should be added. It is not a question of not contributing; it is a question of making the right contribution.
Lord Oates (LD)
I thank the noble Lord for his intervention and I take his point, but we have to do some of the things in regard to decarbonising our homes as well. We face a vast challenge and we cannot duck any of it. I hope that he therefore very much supports the position of my party and of many Peers in this House, which was absolutely against the cut in the 0.7% of GNI going to those economies that he mentions.
As the noble Baroness, Lady Blackstone, and other Peers have mentioned, the Tony Blair Institute for Global Change argued in its excellent report on the role of behaviour change in delivering net zero that we need to focus very much on key measures that people need to take, and not to overwhelm them with all the measures it would be possible to take. Among those are reducing car and air travel and, as other noble Lords have mentioned, a cut in dairy and meat consumption, which is often not understood. The noble and right reverend Lord, Lord Harries, shared some of the figures that were set out in that report—I think they were BEIS figures originally—on public attitudes and public understanding, and they show a great deal that needs to be done. I think his suggestion of a simple public information document to every household to start this process would be a good thing.
My noble friend Lady Sheehan referred to the Climate Change Committee report that argued that public engagement should be an absolutely key priority for government. According to that report, 62% of measures that are needed to reach net zero require change to public behaviours and we need a meaningful effort to engage across all areas of the country, particularly those dependent on high carbon-emitting industry. We need to ensure that there are a diverse range of messengers giving these messages. They have to be not just us as government or organisations talking down to people; they have to be about interactive communications and participatory engagement.
We all have a role in changing our behaviour—government do, business does and academia does. Perhaps most importantly or very significantly in the business world is the finance industry. The noble and right reverend Lord, Lord Harries, mentioned what we can do, and what organisations such as the Church of England do, in terms of investments, but we really need the finance industry and the regulators to put in place measures to ensure that capital does not continue to be misallocated, as it is now, towards those industries that threaten our climate and instead is allocated to those industries that can help rescue us from the situation we find ourselves in.
The difficulty we have is that, given the importance of behaviour change and given its vital role in reaching the Government’s targets, which the Government acknowledge, it is deeply alarming that the Government appear to have no strategy at all. I reinforce the question from the noble Baroness, Lady Blackstone: can the Minister tell us whether such a strategy will be in the net-zero strategy, because it is clearly a priority? We also need to learn from international partners. The noble Baroness, Lady Blackstone, mentioned some countries, including a domestic example in Scotland, but our COP 26 partner, Italy, is a leader in public engagement on this subject and we should learn from it. We should also learn from and work with local government, because it is a trusted partner that can help to deliver some of those measures on the ground.
As the right reverend Prelate the Bishop of Blackburn said, we cannot just expect people to change their behaviour if we do not give them the opportunity to do so. There are so many policies that need to change if the Government are to allow people to make the changes they often want to make. You might want to change your car to an EV but you do not have off-street parking and there are no chargers on your street, or if you use a commercial charger, it costs you six times as much as if it is from your domestic electricity supply. There are all sorts of things like that that need to be fixed as well.
We all know that climate change is not waiting on our procrastination; it is taking advantage of it. We also know that public engagement and awareness campaigns cannot be effective overnight, but more often take a period of years, which underscores the urgency of action now. The Government need to get on with this, to correct their lack of strategy and to do so now. They need to show a lead in this country and a lead in the world.
Net-Zero Carbon Emissions
Lord Howell of Guildford Excerpts(3 years, 5 months ago)
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Lord Callanan (Con)
The noble Lord is quite right that we need to involve local authorities and we are doing that. Indeed, local authorities are one of our key partners in many of our strategies, such as the local authority green homes grant. I am the Minister responsible for this. We are working closely with local authorities and so far they are doing an excellent job in helping us deliver it.
Lord Howell of Guildford (Con) [V]
My Lords, I declare my interests as set out in the register. Can my noble friend explain how our planned net-zero goal actually contributes directly to checking the prospective growth in global carbon emissions and atmospheric concentrations? As these continue to rise worldwide, as they are likely to do, are any changes in priorities or in the direction of British resources to combat climate change being considered so as to make a real impact on the major emissions sources, especially the Asian utilities, where most of the increase is going to come from?
Lord Callanan (Con)
My noble friend has made a good point. The UK was one of the first major economies to legislate for net-zero emissions by 2050, and of course our ambitious domestic action gives the UK the credibility to influence and to accelerate global action. If the noble Lord looks at some of the commitments that have been made by major economies before COP 26, he will see that considerable action is being taken.
Greenhouse Gas Emissions (Kyoto Protocol Registry) Regulations 2021
Lord Howell of Guildford Excerpts(3 years, 7 months ago)
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Lord Howell of Guildford (Con) [V]
My Lords, I echo the final question asked by the noble Lord, Lord Whitty, about the true nature of our carbon footprint in the world. I will also point out that global emissions are again set to rise, and that, while the goals of greening our economy and aiming for net zero are admirable, they and the Kyoto regulations, in whatever form we now take them on board in the registry, fall far short of what is needed to tackle climate change.
I am sorry to strike a slightly negative note. However, as Jeremy Warner remarked in last week’s Sunday’s Telegraph,
“unless China and the rest of the developing world are on board, all efforts to reach a net zero world are doomed. It matters not a jot what America and Europe do to reduce their emissions if the rest of the world isn’t doing the same.”
The Kyoto Protocol is 24 years old, but here we are still struggling to curb rising greenhouse gases, both CO2 and, even more of course, methane, which is 28 times as lethal. We really do need accurate and frank guidance on how to avert world climate catastrophe, which we are just not getting from the Committee on Climate Change and other authorities. This could be the opportunity to get the change needed.
As I said, global emissions are set to rise, after a pause during the pandemic, whereas to reach Paris accord targets they should be falling by at least 7.6% per year. Rising emissions in the big emitting countries, particularly from coal burning and particularly in Asia and Africa, are about to outweigh by far any reductions we can possibly make, so carbon concentrations in the atmosphere are set to continue growing almost unabated.
Coal of course produces about 46% of carbon emissions and, unless the technology for capturing and using carbon from these world sources is vastly improved and cheapened, and applied to all coal burning throughout Africa and Asia, there is not the slightest chance of meeting climate goals, which presumably is what we are about. This is where there should be an all-out concentration of resources and brainpower.
Present policies, although they involve enormous expenditure of national resources and are desirable in our narrow national interest, are not addressing the key issues. There is no safe haven here at home from climate change. What we need is not Kyoto or Paris but a multinational endeavour, a Manhattan-scale project, at least on the scale of China’s belt and road initiative.
Without this kind of new strategy emphasis, the rise in global emissions will continue. Kyoto, Paris, net zero and all the rest will do almost nothing to check the real drivers of global warming. That is the honest and frank message that I would like to see come from these discussions to shape policy priorities, and it is the real message and policy direction which the next generation deserves and which should shape the whole approach that we take at COP 26.
Heat Pumps
Lord Howell of Guildford Excerpts(3 years, 8 months ago)
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Lord Callanan (Con)
It is indeed a good opportunity; I agree with the noble Lord. He will be aware that we recently announced a net-zero building package worth around £3 billion, and the Government are also working closely with industry to ensure that technical education provides new entrants with the skills that will be needed to install these new low-carbon heating systems.
Lord Howell of Guildford (Con) [V]
My Lords, I declare my interest, as in the register. While installing heat pumps in all newbuild homes makes a lot of sense, 23 million existing homes have gas heating that needs to be replaced as well. Estimates for doing this vary between £5,000 and £10,000 per household; I leave noble Lords to do the maths, but clearly we are talking about astronomic sums of money, even if it is spread out over the years ahead. Is this really the right resource priority in checking the fast rise in global emissions that is about to be resumed, thanks largely to Asian coal burning, when emissions should actually be falling and not rising at all? Should we not now be refocusing our strategic aims and resources more on the real-world climate dangers before us?
Lord Callanan (Con)
My noble friend will be aware that, if we are to meet what is now a legally binding net-zero target, practically all homes—both new and existing buildings—will need to be net zero by 2050. We expect the cost of heat pumps to fall in a mass-market scenario, and the action that we are taking will help to bring down these costs—but the noble Lord highlights an important problem.
Gas Boilers and Heaters: Replacement Programme
Lord Howell of Guildford Excerpts(3 years, 10 months ago)
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Lord Howell of Guildford
To ask Her Majesty’s Government what is their estimate of the total cost of replacing gas boilers and heaters in all homes in the United Kingdom; when any such replacement programme will commence; and what charges will fall on (1) individual households, (2) property owners, and (3) tenants.
Lord Howell of Guildford (Con) [V]
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I declare my interests as set out in the register.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
We are currently developing different pathways to decarbonise heat, and as such it is too soon to estimate these costs accurately. However, the climate change committee estimates that the investment required to decarbonise the entire economy and meet net zero is less than 1% of GDP until 2050. Ensuring that the costs of transition are allocated fairly is a priority, and we will publish a call for evidence on affordability and fairness by April.
Lord Howell of Guildford (Con) [V]
My Lords, I thank the Minister for that reply. These estimates are interesting but, according to the Government’s excellent energy White Paper, there are 23 million existing homes attached to the gas supply grid. While it clearly makes sense to equip newly built homes with hydrogen or heat pumps or other technologies, is not the cost of retrofitting all existing homes—estimated by a government research paper at anything between £2,500 and £8,000, or more, per dwelling—and possibly having to replace large parts of the gas delivery grid as well, clearly going to be absolutely astronomical, whether it falls on consumers or taxpayers? Given the tiny contribution, at best, that this whole project could conceivably make to taking over all global emissions growth, is this really the wisest or most effective use of our national resources in combating worldwide climate change?
Lord Callanan (Con)
I understand the point my noble friend is making, but we do of course have a legal commitment and obligation to reach net zero emissions by 2050. Of course, 19% of total UK greenhouse gas emissions come from buildings, so we clearly need to take action in this sector. We also marry that up with an ambitious international agenda. We are hosting COP 26 this year and we will seek to persuade our international partners to follow this agenda as well.
Energy White Paper
Lord Howell of Guildford Excerpts(3 years, 11 months ago)
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Lord Howell of Guildford (Con) [V]
My Lords, I declare my interest in this area as in the register. This is a highly impressive and very ambitious programme, not least on the nuclear front, which the Minister has just been talking about. I want to ask about carbon-free home heating. There are 23 million homes in the United Kingdom—so the White Paper says—connected to the gas grid for heating, hot water and cooking. If, as we have been told, it will cost between £5,000 and £8,000 to convert each one, and if the whole national gas grid has to be upgraded to accommodate the smaller hydrogen molecules, we are talking about an astronomical sum of money and decades to complete it. Does my noble friend agree that a lot more reassurance is needed for all householders about how much it will cost each of them and how much disruption there will be in every home, and that this really is the best use of resources in the main task of combating global climate change?
Lord Callanan (Con)
I am grateful to my noble friend for his comments and particularly for his comment that the White Paper is highly ambitious. He might want to speak to the noble Lord, Lord Oates, on that. Of course, he is right to point out the immense challenge that faces us in decarbonising heat and buildings. We will publish our heat and buildings strategy next year, but there are a number of elements to that: investing in building insulation through schemes such as the ECO scheme and the Green Homes Grant; and investing in the production of hydrogen and in the various experiments and research and development on the potential for hydrogen to replace gas in the domestic grid. My noble friend is perfectly right that this is ambitious. It is an area that needs further work and study, but we are making progress. A new heat network transformation programme is launching next year, starting with £122 million of funding, which was confirmed at the spending review. The White Paper is laying the foundations for reducing the emissions from buildings, which we will build on in the study next year.