Biomass: Power Generation

Lord Howell of Guildford Excerpts

Wednesday 13th March 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Lord posed a number of different questions. First, as I said, sustainability criteria are extremely strict. They are policed by Ofgem. I have spoken to the chief executive of Ofgem about this—it is investigating the allegations. It is Ofgem’s job to uphold the rules and it will not hesitate to take action if the rules are breached. We have some strict sustainability criteria, and it is important that Drax and every other producer abides by those rules. Drax is responsible for about 5% of the UK’s electricity generation, and noble Lords should be aware that this is important for keeping the lights on, and for British energy security.

[Lord Howell of Guildford (Con)]

I agree that there is biomass and biomass, but in this case trees are being cut down to provide wooden frames to replace steel frames in construction, and are therefore contributing to carbon reduction. I understand that the residue of that cutting down—the sawdust and so on—makes up the pellets that we are talking about now for Drax. Should that other side not be borne in mind, together with my noble friend’s view that it is a very complex matter? Just going for the obvious target often leads to the wrong, opposite results?

[Lord Callanan (Con)]

My noble friend is right. It is a complicated subject and should not be the subject of easy sloganeering or campaigning. A number of different issues are involved. What the primary wood is used for is, of course, a matter for the US authorities and for the Canadians.

Civil Nuclear Road Map

Lord Howell of Guildford Excerpts

Monday 15th January 2024 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, this road map is extremely welcome. However, in view of the fact that Hinkley Point C is now €15 billion over budget and many years late, and has almost bankrupted Électricité de France, with the Chinese partners reportedly stopping all further payments, does my noble friend think it wise to make a replica of the Hinkley Point project at Sizewell C and make it the spearhead of our nuclear programme, when smaller modular reactors and new technologies could be ready many years sooner and with much less burden on the taxpayer and the consumer?

[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.

Hydrogen Heating

Lord Howell of Guildford Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Callanan (Con)]

With respect to the noble Baroness’s first question, I think she needs to read the letter from the leader of Redcar Council more carefully. I do not think it supports the analysis she gave. Nevertheless, I have said on numerous occasions that no hydrogen village trial will take place without strong support from local residents. On the noble Baroness’s second question, yes, hydrogen does have a high global warming potential, which illustrates the importance of not allowing it to leak at all.

[Lord Howell of Guildford (Con)]

My Lords, is the National Infrastructure Commission’s report really welcome? What it says in that report is that hydrogen molecules are just too difficult for 23 million domestic supplies at home. It wants to dig up or close down entirely the existing retail gas distribution system as well, because it thinks it does not fit in with our global aims—and it is absolutely right. And it wants to turn us into an all-electric economy. But have we got the slightest clue where all this extra electricity will come from, how it will be transmitted and delivered, and how that can be done at reasonable cost to the consumer? Until we have a clearer view on those things, it is very hard to just say that we welcome the NIC report.

Electricity Network Connection Action Plan

Lord Howell of Guildford Excerpts

Wednesday 22nd November 2023 Lords Chamber

[Lord Callanan (Con)]

If that were the case then, yes, I would agree with the noble Lord that it is a farcical situation.

[Lord Howell of Guildford (Con)]

My Lords, the excellent document Powering Up Britain talks about a 100% increase in national grid capacity to deliver an all-electric economy by 2050. National Grid itself talks about a much larger figure: a 200% or 300% addition in the national grid. Can the Minister guide us on which he thinks is the most reliable of those estimates? Can he also tell us how it is all to be financed and, indeed, how the planning system will be sped up so that we can achieve anywhere near that by 2050?

[Lord Callanan (Con)]

My noble friend asks good questions. The figures are that peak demand for electricity is expected to increase from 47 gigawatts in 2022 to between 90 and 120 gigawatts in 2035, as transport, heating and industry electrify. We think that this will require between 260 and 310 gigawatts of generation capacity connected to the network by 2035. To do all these things, we of course need to reform the planning system, which we are doing through national policy statements and through the action plan announced today.

Climate Financing

Lord Howell of Guildford Excerpts

Tuesday 17th October 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Lord asks a good question, which is slightly beyond the remit of the original Question. I point him to the answer that I just gave to my noble friend: empowering women and girls, giving them more control over their own reproductive rights, is very important in this area.

[Lord Howell of Guildford (Con)]

My Lords, I see that Janet Yellen, the American Treasury Secretary, estimates that it will take around $81 trillion—I repeat, $81 trillion—to get anywhere near the Paris targets by 2050. So, are we in the right ballpark at all in talking about £100 billion? If we are, is there not a need to concentrate on the gigantic coal burning of China, which is still around 1,000 times ours, as well as the huge coal burning of India and America? These account for 60% of the world’s emissions increases; is this not where the money should go?

[Lord Callanan (Con)]

My noble friend of course makes an important point. My reaction is that it is at least a start. Given the financial pressures on many developing countries, it is important to start the financing process. The £100 billion will be a commitment and will help many poorer parts of the world. He is also right that we need to work with China and the US to drive down their coal emissions. I am delighted that, in this country, coal will be completely gone from our power system by next year.

Net Zero (Economic Affairs Committee Report)

Lord Howell of Guildford Excerpts

Monday 16th October 2023 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I apologise for delaying the Front-Bench speakers a few minutes in their replies to what I regard as a really excellent report. In fact, I rate it the best one that has so far come from your Lordships’ House on the great energy transition.

In my brief intervention I will simply add one point. The report rightly explains that most of the funds for the great energy transition ahead will have to come from the private sector, which will have to do the heavy lifting. Governments may be strapped for cash—all Governments, not just this one, or any future one—but, as the report rightly says, there is certainly a huge amount of investment money around the world in both pension funds and sovereign wealth funds. Indeed, I declare an interest in advising one of the biggest funds, as in the register.

These funds will come here only if there are investible projects, and this applies acutely in the nuclear power field, which is central to our all-electric future. The present UK plan, as I understand it, is to build another mega-gigawatt plant at Sizewell in Suffolk, described as a replica of the unfinished and vastly overbudget one now being built at Hinkley Point C. This is just not very attractive for investors; even with the regulated asset-based idea, which piles the money on the consumer and taxpayer from the start, the attraction is not really there. The EPR design is anyway full of problems; even the French say that it is too complicated. The prize one that was supposed to work in China had to be partly closed, and others are full of difficulties. The taxpayer and the struggling consumer have to carry the full burden and a good deal of the risk.

Smaller new designs, which are becoming available and can be built much quicker off site, should right now be the absolute priority, as in many other countries. They could be highly attractive to investors and are ready to produce clean electricity from existing nuclear sites. Of course such sites will have the wiring already, which many other sites do not, and they can be ready before these risky and out-of-date white elephants are anywhere near finished, and well before the end of this decade. Therefore they will make a major contribution to our net-zero aims.

Please will my noble friend confirm that the Government are at least aware of those key facts before they mistakenly plunge ahead with Sizewell C, committing billions to it, which I understand could be very soon? Indeed, it would be nice if the opposition spokesmen could also confirm that they are aware of these realities, which so far seem to have escaped too many people.

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

Lord Howell of Guildford Excerpts

Wednesday 7th June 2023 Grand Committee

[Lord Howell of Guildford (Con)]

My Lords, this is a very interesting report about people’s motives and communications, from a very distinguished committee, which many of us have read with great interest. My only regret is that there is a certain coyness in the report about cost—the cost of buying into the green energy transition. You may say, “What about cost?”. The point is that costs and savings are the decisive behaviour issue for most people when they have to look at their budget and decide how much to spend and by how much they will be supported from outside.

Of course, it is all okay for the wealthiest 10%—that, we know. They have enough cash to install ground heat pumps or air heat pumps and hope that they will perform and be efficient. That is no great skin off their nose and no great challenge because they have the money. That is for the 10%, but for the other 90%—not just the poorest end but practically every family in the land, certainly throughout the middle and lower-income groups—it is not like that at all. They are dealing with a budget where every penny counts and having to embark on new expenditure and decisions such as this for their homes, small businesses or whatever, is quite a different proposition.

I declare an interest in that I advise Mitsubishi Electric in Europe, one of the biggest producers of heat pumps and air-conditioning. It is working very hard to bring down the cost of this machinery, particularly heat pumps, making them more amenable and accessible for those living in flats, apartments and so on, and making them more efficient in delivering the heating, comfort, hot water and so on that people want. It has some way to go.

The report states, very frankly, that there is “limited understanding” of this whole area. That is certainly true and it applies particularly to the confusion in the public mind, which is aggravated by disgraceful media coverage claiming that decarbonising the present electricity sector is the answer to everything. One gets ridiculous headlines in the newspapers on days when wind power supplies 100% of our electricity, saying that that has solved the problem—“We’ve decarbonised; no need to worry”—so people sit back, unaware that that is only a tiny part of the decarbonisation process. Last year, the electricity sector accounted for 18% of our total energy usage, so the other four-fifths—the other 81% or more—of fossil fuel energy has to be decarbonised. We have hardly started; this is just the foothills. What about the other 80%? This is a gigantic new area, which will require vast low-carbon investment in nuclear power and wind, as well as a virtually new national grid.

My simple message today with this excellent report is that people need to understand the scale of what is to come and how little distance we have gone, and they should understand who is going to pay, whether it is taxpayers again, who are already pressed, or the wretched consumer—one of the Government’s ideas is that the consumer will pay for the new Sizewell C reactor.

My own preference would be that we should give far more effort to mobilising private investment—billions or trillions under management in pension funds are presently going abroad—and injecting that into the vast new expenditure needed so that people can make safe decisions that mean they will not bankrupt themselves and their families by rushing into new projects which are not proven. That is the reality. Cost will guide the decisions and behaviour of most people. The more we understand that and the more we explain where the cost will be covered, the better chance we have—I think we will get there—of achieving our NZ goals.

COP 28

Lord Howell of Guildford Excerpts

Wednesday 17th May 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes an important point, citing the chairman of COP. The reality is that there will still be a requirement for fossil fuels in the years to come. There will still be a requirement in the UK, which is why we have an ambitious programme —we are spending £20 billion on carbon capture usage and storage. That still enables emissions to take place but of course they will be captured and stored back underground.

[Lord Howell of Guildford (Con)]

Regardless of the status of whoever represents us at COP 28, will the Minister make sure that the Government understand and explain to the public that while we are getting on very well in decarbonising the electric power sector, that is only one-fifth of our total energy usage? Therefore, we are only still in the foothills of trying to climb the net-zero peak target, which requires massive expansion of both nuclear power—preferably small nuclear power—and wind power on a scale not yet contemplated and not yet being invested for.

[Lord Callanan (Con)]

My noble friend of course knows this subject very well from his time as Energy Minister and makes an important point. We already have invested massively in renewables. We have the biggest wind sector in Europe by far. We have the first, second and third-largest wind farms in Europe, so we are massively expanding our renewables sector. It makes sense because particularly wind power and solar power are cheap compared to fossil fuel generation, but renewables are intermittent, which is why we will also need our nuclear generation. He draws attention to the scale of the problem we face.

Climate Change: Net Zero Strategy

Lord Howell of Guildford Excerpts

Wednesday 3rd May 2023 Lords Chamber

[Lord Callanan (Con)]

No, it is not. The figures I quoted started from a baseline of 1990, so it actually includes some of the progress made under previous Labour Governments. There is no question that of course we have a challenge: we have the oldest housing stock in Europe, a consequence of the Industrial Revolution. Six million homes were built before the First World War, so it is a challenge, but the figures still stand: we are making faster progress than any other G7 country.

[Lord Howell of Guildford (Con)]

My Lords, have the Government really taken on board, in pursuing this admirable goal of NZ, the absolutely colossal increase in electricity from renewable sources—presumably wind and nuclear are the main ones—which will be required to get anywhere near replacing all the other energy we use in the economy, which is, of course, full of fossil fuels? This is a vast task, requiring immense investment and enormous planning and, although I am encouraged by what my noble friend says, have we really begun on making the 10-times expansion of wind in the North Sea and the six new nuclear power stations if they are big, or the 30 or 40 if they are small? These are vast tasks; we do not yet hear enough about how we are going to meet them.

[Lord Callanan (Con)]

My noble friend makes an important point. I know he has a lot of experience in this area and he is right to point out the scale of the task. It is an immense challenge to be done over many years; none of this happens overnight. Some of the wind farms that are coming on stream this year were planned a decade ago; it all takes time to do, but over the next 20 or 30 years we need to make progress towards those goals. They are legally binding, so we need to meet them and we are on track to do so.

Green Investment

Lord Howell of Guildford Excerpts

Tuesday 7th March 2023 Lords Chamber

[Lord Callanan (Con)]

The short answer to the noble Lord’s question is yes, in essence. He is right to point to both these actions as potential threats, significantly so in the case of the US. The protectionist measures are the problem; we have no problem with it finally coming to the decarbonisation table. We are still waiting to see the details from the EU and will know more next week, but it does not look as though there will be much protectionism there: certainly, from the outline that I saw, none of the items listed is a particular threat. We are looking at this very closely across the Government and will be responding in due course.

[Lord Howell of Guildford (Con)]

My Lords, is this so-called Inflation Reduction Act not in fact an outright protectionist measure, very much pointing the wrong way for those of us who want freer trade worldwide? The Secretary of State says that she has been talking with like-minded countries about what to deal with and how to face the problems that the noble Lord, Lord Teverson, has raised. Can the Minister assure us that, in the United States, we are talking to a like-minded country—we thought that it was—and explaining to it the collateral damage, which could be considerable, from this ill-considered measure?

[Lord Callanan (Con)]

I assure my noble friend that we are talking to the US about the provisions, but the legislation is the legislation. We all know the history of why it ended up as it did in the US Congress. Nevertheless, we will continue to engage the US, make our points and argue for open, free and fair competition.