Great British Energy Bill

Debate between Lord Howell of Guildford and Lord Cameron of Dillington

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest, as in the register, in connection with energy-related companies. I will raise two questions on Amendments 59 and 65 in this bunch of amendments before the Minister starts to wind up—if that is what is coming next. I know that Amendment 59 is about household energy bills, but I start by observing that, as far as industrial energy bills are concerned, it is a disgrace—frankly, it was not much better under the previous Government—that, according to government figures, we now have some of the most expensive electricity prices in the entire world. That cannot be right. It obviously undermines our competitive power and economic growth. Obviously, therefore, it is holding back the whole investment in the energy transition and it is a classic case of shooting ourselves in both feet. That is the electricity scene.

As for household energy bills, there is an irony here, because the truth, as I shall try to demonstrate in a few words, is that the best chance of keeping down domestic energy bills, with all the other circumstances, many of which are completely unpredictable, is not through anything that Great British Energy is empowered to do at present, as the Bill stands. It lies in cutting down the colossal costs of having standby facilities in standby production from some combined cycle gas generation, but even more in having some cheaper forms of nuclear development than those we have had in the past—or indeed in the present, because all our current nuclear developments are wildly over cost.

The key lies in getting private money into shorter-term, smaller and more flexible, nuclear modules. That is what we should be doing; it is what many other countries doing, and it will be the way in which to greatly reduce the overall cost of having a reliable energy supply for a modern industrial nation, which includes facilities for 3,000 hours a year when the wind does not blow. Today is probably one of them, as my noble friend Lord Trenchard was arguing. A strong, intermittent standby system has to be there, and we know it is very expensive, by definition, if it is not being used all the time. We cannot sell electricity all the time—on the contrary, in many cases, as we can read in the newspapers today and yesterday, colossal sums of taxpayers’ and consumers’ money have to be paid in order to not produce electricity. There is a fatal difficulty here that we have to resolve.

The point is that, if we want costs to be held down, the way to do it is by making sure that private money can be mobilised, which it can for smaller nuclear reactors, whereas we all know that private money does not wish to touch with a barge pole a so-called replica of the gigantic Hinkley C EPR design, which is a difficult design and bound, although it calls itself a replica, to be miles over cost and cost-forming of the Government at Sizewell C as well. That is a way to ensure that costs and energy bills stay up, and that is the opposite of what we are trying to achieve.

The simple answer to this bit of the excellent Amendment 59, which I totally support, is that, if we can now begin to get a grip on the whole nuclear side and bring GBN together with Great British Energy and work in a serious approach to managing our, at present, wildly costly and unmanageable energy supply, we will begin to get a chance of getting that £300 off bills. Personally, I think it going to be very hard to achieve, but that is the one way it can be done—by getting private money in, because the Government have not got any money and have to go to the consumer, the taxpayer and the borough to get the money. We all know what that is costing, and all of it ends up in charges on taxpayers and working people and their hard-earned earnings.

That has to be answered, if this is going to stand. I hope that the Minister will go to his colleagues in the department, and maybe in the Treasury as well, if he can get any response from them, and point out that this just does not make sense. It does not fulfil the aims that the Government want, the Opposition want and all parties want. As the noble Lord, Lord Alton, and others have said, this is not a bipartisan issue, at least in this House, because we all know on both sides of this House that this does not make sense—and this viewpoint should be passed on to the Secretary of State politely within the department, so he can modify his approach, particularly on the nuclear side, where I worry a great deal that we are on the wrong track. We are heading to the wrong track, while others are racing ahead. That is all I wanted to say on Amendment 59.

Amendment 65 is interesting, because it is really about the level of demand that the National Grid will be able to meet. Many people—again, bipartisan—are worried that the estimates that seem to be in the mind of the department are miles too low. The figure of 200 gigawatts is being pushed around—others say 300 gigawatts. Today, there is something more in the newspapers that should make the Government think again on this one. We are told that we are going to have colossal data centres. Indeed, it says in one newspaper that we will have one of the world’s biggest data centres to move into the age of AI, modern innovation and investment and the kind of society and industrial and consumer pattern that will have in the second half of the present century. That is what we must be doing. Bit data centres are hugely expensive in energy demand; they drink up energy in colossal volumes—and that is on top of the hope or ambition of the Government for decarbonised, clean energy by 2030, or maybe 2035. Maybe it is to be 95%; there are all sorts of modifications coming out all the time. On top of that, I think that this demand will push up any reasonable estimate from 300 gigawatts to 500 or 600 gigawatts. We are moving into a hyper-electric, super-electric age and data centres will add vast amounts of demand to the system.

There are 40 million cars and trucks in this country still running on petrol; they will need to move over to EV as well. The chances of having a National Grid system fully invested to meet that kind of demand on even the 2050 timescale, let alone 2030 or 2035, is very small indeed. Does the Minister accept that, as we move into this all-electric age, there will be considerable increases in demand and that, if there is going to be effective supply for them, we must have the conversation and, what is more, the detailed explanations implied in Amendment 65. GBE should be able to go to the National Grid and say, “Can you link us up?”. The many industrial firms thinking of going over from gas-fired furnaces to electric furnaces should be able to go to the National Grid and say, “Can you link us up?” What answer are they going to get? Are they going to be told, “Come back in 15 years”, or are they going to be told, that it is all right and that we are investing to meet these colossal demands for increased electricity from every kind of energy transition, the related digital underpinning and the necessary data centre operations, which we now know we have to have in order to compete in the 21st century? Is that realised? That is my question on Amendment 65. Many other excellent comments have been made, but those are the two on which I would greatly value an answer from the Minister.

[Lord Cameron of Dillington (CB)]

My Lords, I support the last speaker on Amendment 65. When I saw Amendment 65 in the name of the noble Lord, Lord Offord, on the readiness of the National Grid for this brave new world, I realised that this is probably the key amendment to the Bill in terms of the success of Great British Energy. I am not sure that putting it into the Bill will actually make a ha’porth of difference, but there is no doubt that the issue is going to decide whether GBE is a success or not.

We need to quadruple, if not more, the size of the National Grid network, both to get power to all those new electric cars and heat pumps, et cetera, and to take power from all those new wind farms, solar roofs, et cetera, but with all the objections to the wires and pylons, I cannot see the National Grid delivering the necessary increase in this network any time soon. So, as the amendment states, GBE can really invest only in projects that have a guaranteed connection, however worthy they may be in other aspects. If no connection is likely to be in place by the time of the completion of the project, then GBE should probably save its money.