COP 29

Lord Howell of Guildford Excerpts

Thursday 28th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, on the issue of tidal potential, my noble friend may be interested to know that the noble Lord, Lord Alton, has tabled a related amendment for consideration in Committee on the Great British Energy Bill, and I look forward to discussing it. Of course, I recognise the potential, and we will be very happy to discuss that with the mayor and other local bodies—that is without commitment, I have to say.

On electric vehicles, obviously there has been a lot of discussion recently of the decisions of commercial manufacturers. We are committed to the manifesto commitment to phase out new cars powered solely by internal combustion engines by 2030. We realise that there are many challenges for industry at the moment. Ministers in the relevant departments are engaging with key industry figures, and obviously, we want to work very closely in partnership with industry to tackle some of the challenges that have been raised.

[Lord Howell of Guildford (Con)]

My Lords, the Minister made it clear that a number of targets appear to be floating around, as my noble friend touched on when he opened the discussion. Is the 2030 target anything to do with net zero, or is that just an ambition for cleaner energy? I have heard that target described as “base camp”, which means we have not started climbing even when we get there. Would he agree with that description? It is rather different from some of the descriptions the Government have offered in the past.

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is always interesting to have the noble Lord’s perspective, given his long-standing interest in energy. He enjoyed being Energy Secretary, and it is good that we have a department focused very much on energy issues. I think the target is consistent: 2030 is the aim for clean power; the 2035 goal we have agreed on the reduction in greenhouse gases is the UK offer that we have made. The actual target we have set is an 81% reduction in emissions by 2035, against a 1990 baseline. I am clear that this is consistent with 2030—in other words, the 2030 target takes us on to the 2035 target we have now agreed. The noble Lord asked that question on Monday, and we are clear that we are being consistent; and obviously, we are taking the advice of the Committee on Climate Change on this.

Great British Energy Bill

Lord Howell of Guildford Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I declare my interests in energy-related companies, institutions and organisations, as in the register. I join most heartily in the comments made on the maiden speech we have already heard in this debate, by the noble Baroness, Lady Beckett. She seems to have held an enormous portfolio of high offices over the years, and the way she has swept through the offices of state makes many of us look like part-time politicians. She was Secretary of State for Trade, as the noble Lord just mentioned, Foreign Secretary and—if my memory serves me right, and it serves me wrong more and more nowadays—I think she was leader of her party as well. Anyway, she is a considerable and major figure who we are honoured to have among us as we grapple with the huge new issues sweeping into politics and policy today.

Obviously, I am also looking forward to my amazing noble friend Lord Mackinlay’s maiden speech, which I am sure we will all listen to with enormous interest.

An entirely new politics of energy is taking shape at the moment, at a very rapid rate. I am referring not just to the prospects of President Trump, who, of course, has announced that he will break totally with all the major assumptions on which this Bill and many other energy policies are based, so we will have to think anew on all that. I am talking about the fact that we are heading into yet another era of oil and gas surplus. It all goes up and down in very volatile ways; it always has and will continue to do so.

The new Secretary of State, Mr Miliband, has said that he has, I think, three priorities—he has many, but three in particular. The first is to save the planet; that is the climate change challenge, of course. The second is to create jobs. That is certainly right, because we are heading into a considerably bigger change in world energy than the Industrial Revolution. There will obviously be a huge shift in the patterns of jobs, training and the education behind them.

The Secretary of State’s third concern is lower energy prices. I am very glad to hear that, too, because it makes me uneasy all the time, as I am sure it makes all of your Lordships, that probably 3 million or 4 million families wake up every morning in this United Kingdom of ours in desperation and apprehension about the coming winter and how on earth they are going to pay—or even try to pay—for the necessary energy for putting hot food on the table, heating, cooking, hot water and a comfortable home, which they know they cannot do. The sums still do not add up. Energy cap or no energy cap, they are impossible prices for millions and millions of households in what is supposed to be a mature and rich country in which we look after our citizens. So I am very glad that he puts that as one of his trio. Maybe there are others.

So how will this new body, the Great British Energy company, help tackle all this? The first thing I would add, which has not come up very much in any of our recent energy debates, is that we must be clear about what the real situation is. To get to an all-electric society by 2030, which I think is the Government’s aim—or is it by 2035? I am not quite sure—will require five times more electricity than we are generating now. People say “No, no, that can’t be true”. I was just looking at the briefing from the voice of the energy industry, which says, “Oh, it’s all right. Today, the UK’s electricity grid is powered more by renewable and low-carbon sources of energy than fossil fuel”. Wait a minute; that cannot be right. It sounds right and it may be true at this moment, but, if we are talking not about the electricity grid but about the UK’s economy, that is powered vastly more by fossil fuels than by renewable energies of any kind. This is a complete misapprehension of the reality, which is that renewable energy provides slightly under 10% of the nation’s total energy usage. It is the other 90% that has to be decarbonised if we are to get anywhere near net zero by 2030 or 2035. It is important to start with a realisation of the colossal hill we have to climb to get to a situation where net zero of any kind, even by 2050, is faintly achievable.

Some 27 million households now use about 6 kilowatts of electricity a day. If all gas and oil are illegal and unavailable—just not there—by 2030, each household will need 29 kilowatts, on average. Obviously, some will need much more; some less. This is about 4.5 to 5 times what is currently produced. This nation produces about 65 megawatts of electricity a day, half of which comes from renewables. On good days, all of it comes from renewables but, averaged out over a year, 30 to 40 megawatts come from renewables.

The most sober estimates are that, between now and 2030 or 2035, we will need 200 gigawatts of clean, green energy, plus a back-up system of intermittency, because the wind does not blow all the time and we have not finished redeveloping and rescuing our nuclear industry. The decisions have not yet been made and we have all the problems of storage and hydrogen yet to solve—although they will play their part in in the future and their place will come.

In short, fossil fuels may be fading over the next 20 to 30 years, but in modern economies electricity demand will not fade. On the contrary, it will grow. Although there are mitigations, which I will address in a moment, they will not help the fact that we have to produce vastly greater amounts of electricity. The question is, who will pay?

There are good things in what the Minister and others have said: that this Government are anxious and realise that, being short of money, they will have to rely on the private sector. I would like to hear much more about the private sector, if we are talking about sovereign wealth funds, pension funds with £3 trillion, insurance funds or other international sources of investment. They have the money and the Government have the challenge and the need to finance this colossal energy transition. Somehow, we have to think of new ways to bring these two sides together, possibly as the grandson of the private finance initiatives of the end of the last century—something, at any rate, that faces up to the fact that very large new sums of investment are required.

Will they save the world, as the Energy Secretary wants? Well, we produce about 1% of emissions at present, a tiny little bit. Carbon emissions are rising faster than ever; methane emissions are 80 times as vicious in global warming and are rising faster than ever. Carbon capture and storage will need to capture the carbon that we will still be producing, because obviously will go on burning gas or electricity for many years to come. These schemes are beginning, but they have not got very far and we have not heard much about them.

Meanwhile, the wider world is still dedicated heavily to coal. The Secretary of State wants more jobs. Of course, there will be a lot more green jobs, but many jobs will be lost in the energy transition—thousands in oil and gas and in many other parts of the industry as well, particularly where that industry’s high energy costs undermine our competitiveness and we lose exports.

Lower bills? I just cannot see it. The consumer will have to pay somehow, in some way, for the huge transition. Far from being a world leader, as several people have suggested, we are falling dangerously behind. I will enumerate the real reasons why we are in serious difficulty.

First, the nuclear situation is a mess. Hinkley is turning out to be immensely expensive, years behind on timing, and years over budget. A proposal for Sizewell C as a replication of Hinkley is a very questionable proposition. No private investor will touch Sizewell C with a bargepole. It will cost £20 billion, take 10 years to build, and will not help at all with the move towards net zero.

Secondly, the entire grid needs a remake to accommodate the switching stations bringing our electricity—which has to increase on a great scale—from the North Sea to the market. We can bring it to the coast; it then has to be transmitted to consumers, homes and industry by an entirely new system of pylons. As an example, the Hinkley transmission system, which is being put in now, has taken 10 years to get going. It took seven years of planning argument followed by three years to build.

Thirdly, about 1,000 to 1,500 new pylons will be required. We are told by the national grid that they cannot go underground. I would like to hear a lot more about what Great British Energy can do to change that situation because that will involve years and years of planning as well.

Fourthly, the interconnector system, on which we rely very much, from all the countries around us, as well as from Morocco, is falling behind and not yet under way at the pace that it should be.

Fifthly, according to the Times, we are trying to take the whole thing at breakneck speed, and we all know that in politics the faster you push people without consent, the slower the realisation.

Sixthly, heat pumps are not yet fully efficient, especially below 40 degrees Fahrenheit, and therefore cannot solve the problems of heating domestic homes in the way we want.

Seventhly, this new organisation seems to be part of a sort of political or institutional indigestion. We now have GBE; we already have Great British Nuclear—how they are related I have no idea. We have NESO, which is the operator of the whole system of energy, or is said to be. We have Ofgem, of course, and the national wealth fund, which is deeply involved in this area. We have the UK Infrastructure Bank and many more ministries. All of these have a finger in the energy pie.

The need for co-ordination, and the working out of salaries of every individual, will be colossal. I think that we have an old “socialist Adam” showing through here. It is like the old Neddy system, on which I served many years ago—it is all right as long as we deal with the big boys in the trade unions and the corporations, and the other 99% of enterprises in this nation can go hang. That, I am afraid, will not solve the problem any more than some of these other organisations.

All the world is on fire at the moment, and energy reliability is absolutely essential for a modern industrial nation. This morning, we had Lord Cormack’s memorial service, at which someone reminded us that Lord Cormack would ask, wisely, about new policies: “Is it a plan or is it a story?” Even after listening to the marvellous clarity of the noble Lord, Lord Hunt, I am, frankly, not at all sure which this is. I am sure that the Great British Energy system needs to get its climbing boots on, because the mountains it has to climb are very high and very dangerous. This is the serious situation we face, and which we are only just beginning to address. There is a long, long way to go.

Electricity: Cost-competitiveness

Lord Howell of Guildford Excerpts

Thursday 16th May 2024 Lords Chamber

[Lord Callanan (Con)]

We already have considered estimates—work on this is going on all the time. It is a constantly evolving picture, and we take into account the views of all experts. It is undoubtedly true that renewables are intermittent: we had huge amounts of solar earlier this week, but, looking at the weather outside, I think we will not have quite so much today. That is why we need a diversified supply—nuclear, long-term storage and intermittent storage—to take account of the fact, which we know is true, that renewables are cheap, effective and quick to deploy, but they are intermittent, which is why we need a variety of technologies.

[Lord Howell of Guildford (Con)]

My Lords, following that last question, do the costs that the Minister gave include all the grid and system costs, as well as everything that has been referred to? Will the Minister agree that it is important to get these different costs right if we are going to gain public consent for the various incentives, taxes and charges that will be necessary to guide the system forward? As for gas, which is also mentioned in the Question, is it not the position that, in the long term, it will continue to have a substantial place, particularly in generating electricity? Is it the position that we need to ensure that its carbon emissions are handled by carbon capture and storage schemes, two of which are currently beginning? Should we not be giving a lot more attention to this area if we want a net-zero world?

[Lord Callanan (Con)]

The costs that I quoted are what are called the levelised costs, which are an industry standard, and they take account of other system costs. But, as I said, we will of course need back-up and storage. What the noble Lord said is true: gas will play an increasingly marginal role, but it will play a role in ensuring that we have energy security going forward. The estimates are that we will have about 7% of gas generation by about 2035.

Home Insulation

Lord Howell of Guildford Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

Indeed, my noble friend makes a very good point about the extent to which electricity usage will grow. Actually, the peak electricity usage in the UK occurred a number of years ago. We have actually been becoming more efficient in how we use electricity, with better lighting, et cetera. Clearly, if we move to more electric vehicles and more electrically powered heating, along with some of the circumstances that my noble friend outlines, electrical use will go up. We are spending many tens of billions of pounds on upgrading the electrical grid and rolling out increasing amounts of renewable: offshore wind, tidal, solar and so on. But in essence my noble friend is right that we need to plan for an electrical future.

[Lord Howell of Guildford (Con)]

My Lords, following on from that last question, my understanding is that, to have the all-electric, decarbonised, net-zero goal that we really want, we will have to produce and indeed consume about four or five times the present amount of electricity, from various sources. Here we are looking at an area that might reduce the growth of demand by some percentage—and the Minister mentioned the huge figure of some £2.5 billion. Can he give us some idea of what that percentage is? Will we use a quarter less electricity than otherwise, or half, or merely one-tenth? Can he give us a rough idea of where the money is going and what it is going to achieve?

[Lord Callanan (Con)]

I do not quite understand the noble Lord’s question. We will clearly use more electricity as we roll out more electric vehicles, the electrification of heating, et cetera—but we will use it in different ways. There are ways, for instance, in which we can do load spreading. One of the advantages of smart meters is that they allow people to consume electricity at different times and take advantage of different time-of-use tariffs, et cetera. So, as well as having particular peaks, we can also spread out those peaks over longer times of the day. There is a lot of demand management we can do, as well as increasing the amount of renewables we have on the grid, which we are doing.

Hydrogen Energy

Lord Howell of Guildford Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Viscount is absolutely right. I am a huge advocate of hydrogen precisely because of its role in long-term energy storage in the circumstances that he outlined—when the wind does not blow and the sun does not shine. We were debating whether it has a viable use in home heating. I submit that electrification and heat pumps are a much more efficient way of heating homes.

[Lord Howell of Guildford (Con)]

My Lords, my noble friend seems to have to answer every question on these matters these days, and he has another one coming. My understanding is that green hydrogen can be manufactured—all you need is a wind turbine or two—and stored quite near consumer markets in cities and towns, and that it is very effective for trucks and big mobile users but not much use for domestic heating because you cannot get it through the distribution system. Is that a correct assessment? If so, does it put the hydrogen issue in perspective and remind us that we will need a lot more nuclear, and will have to rely on gas as well, to get anywhere near net zero?

[Lord Callanan (Con)]

There was a lot in that question. I agree that there are great potential uses of hydrogen in long-term energy storage, as the noble Viscount just mentioned, and in the decarbonisation of some aspects of rail transport and heavy goods vehicles—particularly for non-road mobile machinery, where there are no real electrification options, and we have a number of successful manufacturers in this country. The original premise of the noble Lord’s question is what the best method of home heating is. All the evidence and reports show that, even if it were technically possible to pipe hydrogen into domestic homes, electrification is a much more efficient option.

Advanced Modular Reactors: Criticality Tests

Lord Howell of Guildford Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

Of course we would not, which is why we are offering support for many of these technologies. The noble Lord’s Question asked about criticality tests—we are aware of that requirement and are in discussions with a number of companies interested in carrying them out in the UK, but these are not simple issues.

[Lord Howell of Guildford (Con)]

My Lords, as I understand it, Great British Nuclear says that the final decision on smaller modular reactors will not be made until 2029 for the present competition, and that no smaller modular reactor will be in service until 2035—that is five years and 11 years ahead. Can my noble friend explain why it will take so incredibly long, when other countries are racing ahead?

[Lord Callanan (Con)]

I do not recognise the dates that the noble Lord cited. Great British Nuclear is obviously heavily ensconced in the design selection process at the moment, and I understand that, given a fair wind, the reactors should be online and producing electricity by the early 2030s.

Gas-fired Power Stations

Lord Howell of Guildford Excerpts

Thursday 14th March 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan)]

I thank the noble Baroness and the noble Earl for their questions, especially the noble Baroness, although I am slightly perplexed. If she thinks that this announcement was unnecessary, why did the Labour Party ask for it to be repeated in this House today, given that it makes the same point? However, essentially, I accept the point that the noble Baroness has made. We think that this capacity is necessary; it is all about security of supply. The estimate is that in 2035, it might account for only 1% to 2% of all of the capacity that might be required. We are looking forward a decade, with uncertain projections of what the demand will be, how much renewable capacity will be available and even what the weather conditions will be like that far ahead. So, this is sensible contingency planning.

On the questions from the noble Earl, we very much hope and expect that these will be hydrogen ready or capable of having CCUS fitted. Indeed, some gas plants are already taking part in the CCUS cluster sequencing process. This announcement is entirely compatible with our net-zero obligations. Indeed, this is net zero: there will be some emissions but those can be abated, eliminated or captured, or the power stations can run on hydrogen.

We are very proud of our record. We have one of the fastest rates of decarbonisation in the G20, and we announced before Christmas that we have reduced our emissions by 50%. We have the five biggest wind turbine farms in Europe, and that capacity continues to be rolled out. This is sensible contingency planning to make sure that the lights stay on at those times when, as we all know happen, the wind is not blowing and the sun is not shining.

[Lord Howell of Guildford (Con)]

My Lords, I welcome this announcement because it seems to have a strong element of realism and honesty in this whole advance towards net zero, which I personally welcome.

If the aim is to ensure that when we get to net zero, although there will be fossil fuel burning, carbon is captured from that—indeed, there will be gas burning, as there is now, as part of our existing electricity generation —does this not have to go hand in hand with dynamic development of cheaper, simpler and more efficient carbon capture and storage systems, which, if applied to gas burning, will enable us to say, “Net zero is roughly there”? That seems to be the key question, and I hope my noble friend will elaborate on it.

[Lord Callanan (Con)]

I thank my noble friend for his question. He is, of course, absolutely right, and his extensive knowledge of the power and energy system, based on his previous career, is well respected in this House. I can tell him that we are rolling out CCUS at pace. We have allocated £20 billion for support for CCUS clusters. We are progressing our two initial track 1 clusters: HyNet and the East Coast Cluster. We are in final negotiations with the transport storage systems and the emitter projects, some of which are gas power stations, within those cluster projects.

We again intend to be European and world leaders in CCUS. We have massive storage potential in the seas surrounding us; they have powered this country for many years and will help us to store emissions in the future as well. It is something that could even become a net revenue earner for the UK. We are indeed fully committed to that.

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.