Great British Energy Bill

Lord Hunt of Kings Heath Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I will speak very briefly. If I may, I will call out the elephant in the room on this Bill. We have had 10 groups of amendments turned into 18 groups on this final day in Committee—over half of the groups that we are discussing today are the result of one party degrouping amendments. We have spent over two hours speaking to the first group of amendments, and we have 18 groups to speak to today. I have heard a lot of speeches, but in the case of many, I could not tell which amendment they were even speaking to.

I will say just this: we support the Government and the Bill. This is an extremely important Bill. I am pleased to see action taken on these measures after the Conservative Party failed to do anything about it, left bill payers vulnerable to the increase in bills as a result of the war in Ukraine and ended up spending £40 billion of taxpayers’ money subsidising bill payers for no long-term benefits. In this group, we are generally supportive of Amendments 61, 65, 69, 70 and 74. For groups that we feel were unnecessarily degrouped, we will probably not make comments.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, I am very grateful to the noble Earl, Lord Russell, because it seems to me that we have “enjoyed” what essentially has been a rerun of previous debates, with Second Reading-type speeches, when the key concern, as the noble Baroness, Lady Noakes, suggests, is Clause 6 and the power of direction.

So I do want to come back to the intent of Clause 6. First, we want GBE to be operationally independent. A founding principle of GBE is that it should be independent as far as possible in executing its functions. The Bill is focused on making the minimum necessary provisions to establish the company. At Second Reading, some noble Lords opposite accused the Government of drafting the Bill in a way that meant we would use Clause 6 to micromanage GBE. We have always maintained, as the noble Baroness, Lady Noakes, rightly pointed out, that this is a backstop provision, yet now noble Lords opposite seek to micromanage both the Government and GBE by these various amendments, most of the issues in which we have already debated.

Secondly, we have set up GBE as a company for long-term success and as an enduring institution. Some of the amendments, which include short-term targets, would be wholly inappropriate in legislation. Indeed, it would be more appropriate for the Secretary of State to set priorities via the statement of strategic priorities in Clause 5, of course within the framework of Clause 3.

My third point is the intended use of the power in Clause 6. Let me make it absolutely clear, as I have done in the past, that the power to give directions to GBE is intended only for urgent or unforeseen circumstances. These amendments would widen the intention unnecessarily. The noble Baroness, Lady Noakes, is right about the relationship between government and such organisations. She and I have both had experience in relation to the NHS; it is a slightly different set-up, but we are talking about the relationship between a government department, the Secretary of State and public bodies. She will know that there the Secretary of State has always had a power of direction, but I think it has had to be used only a handful of times. The reason of course is that chief execs of NHS bodies understand that the Secretary of State is able to set the overall direction of the National Health Service without having to call on what is essentially a backstop power.

My fourth point on a number of the amendments is that the existing reporting requirements are set out in the Bill, which makes provision for GBE to produce and publish an annual report and accounts. They will undergo external audit; they will contain information on the activity of the company over the year; and they will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures. GBE may also make information available through reporting, such as when projects or investments are announced. We think that that is sufficient accountability.

On some points raised by noble Lords on Amendment 59, we believe that in an unstable world, the only way to guarantee our energy security and protect bill payers permanently is to speed up the transition from fossil fuels to home-grown clean energy. This is consistent with advice from the Climate Change Committee and it is why we have set an ambitious target to reach clean power by 2030, which the independent NESO considers achievable. We believe that the key role of BGE is focused on driving forward deployment.

I say to the noble Viscount, Lord Trenchard, and the noble Lord, Lord Howell, that I agree with them on the importance of nuclear power. But I say to the noble Lord, Lord Howell, that this is the second time he has tried to divert the Government from supporting Sizewell C. I say to him that this is a massive development and we are moving to final investment decisions over the next few months. It will produce 3.2 gigawatts, it is a replica of Hinkley Point C, 80% above ground, and we have the regulated asset-based approach which will bring in private sector expertise and disciplines. So, in agreeing with him on the importance of small modular reactors and advanced nuclear reactors, we should not underestimate the potential of Sizewell C—and indeed Hinkley Point C when it comes on line, I hope at the end of this decade.

Of course I take the points that data centres will need a lot of electricity, that grid capacity issues are vital and that we need more investment in the grid. I also take the point made by the noble Lord, Lord Berkeley of Knighton, about the beauty, or not, of pylons. I of course accept the point he makes, but we are going to have to have more pylons. None the less, they will have to go through vigorous planning and meet environmental protection requirements.

On jobs and Amendment 60, GBE aims to revitalise the UK’s industrial areas and we think that, by situating its headquarters in Aberdeenshire—which I am sure the noble Lord, Lord Bruce, will welcome—it will be able to leverage the skilled workforce available there and throughout Scotland. More broadly, we have set up the Office for Clean Energy Jobs to promote clean energy employment and focus on skills development and training in the core energy and net-zero sectors.

Amendments 61 and 76 concern supply chains, which are of course very important indeed. GBE’s founding statement has already made it clear that my department expects the company to prioritise the development of supply chains and to report to government on progress. To come to the noble Lord, Lord Alton, of course we have debated these matters over the years and I absolutely understand where he is coming from. But it will be for GBE as an operationally independent company to determine the projects and technologies it chooses to invest in, in accordance with its objectives. It will be expected to respect human rights under the Human Rights Act 1998 and it will be subject to the provisions on forced labour and supply chains, both under the Modern Slavery Act 2015 and the Procurement Act 2023.

We recently set out our Clean Power 2030 Action Plan, which requires significant deployment of solar electricity—noble Lords are right on that. Developing sustainable, diverse and resilient solar supply chains, free from forced labour, is important for the Government. As the noble Lord, Lord Alton, knows, we also have the Solar Taskforce, which will be looking at these matters.

On Amendment 63 on the cost of fulfilling the company’s strategic objectives, I can assure the noble Lord, Lord Petitgas, that the Secretary of State will set ambitious but achievable objectives for Great British Energy that can be achieved through the funding envelope. GBE will be backed, as noble Lords will know, by a capitalisation of £8.3 billion over this Parliament, and its objective is to crowd in additional private sector investment. However, it will be subject to HM Treasury’s value-for-money guidelines and, like existing publicly financed institutions, its investments will be subject to safeguards and risk assessments.

On Amendments 69, 70 and 85A, on the impact on carbon emissions of GBE’s investments, the company is committed to advancing the deployment of clean energy to aid the Government’s goal of decarbonising our electricity system by 2030. The amendments would require a report to be produced for every investment made by Great British Energy, which seems neither proportionate nor effective. On importing energy into the UK, we acknowledge that reliance on imported fossil fuels presents economic and security risks, as evidenced by the situation following the Russian invasion of Ukraine. The best response is to increase domestic power generation through renewable energy sources and nuclear power, while simultaneously transitioning to more sustainable methods for heating homes, fuelling vehicles and powering industry. These can substantially mitigate our exposure to volatile international markets and energy price fluctuations. We see GBE as being at the heart of those efforts.

[Lord Hamilton of Epsom (Con)]

Does the Minister accept, however, that converting oilseed rape into aviation fuel does not produce clean energy?

[Lord Hunt of Kings Heath (Lab)]

My Lords, we rely on agreed definitions as to whether an energy is clean. The noble Lord mentioned biomass and Drax. He will know that the Government’s view, which his party also took when in government, is that the carbon absorbed by the forestry that replaces what has been transported to Drax more than covers the carbon expended in the process of bringing it to Drax, including the use of shipping. For 14 years, the party opposite accepted that this was an appropriate definition.

I turn to my noble friend Lord Berkeley’s amendment, on the risk to off-grid households and the value of renewable liquid fuels to these households. The noble Lord, Lord Bruce, also covered that point, and I listened with great care to what both had to say. Clearly, we want fuel-poor and off-gas-grid homes to benefit from the transition to net zero. The current energy company obligation includes incentives to deliver measures such as low-carbon heating to off-gas-grid rural homes in Scotland and Wales. Phase 2 of the home upgrade grant provides energy efficiency upgrades and low-carbon heating measures to low-income households living in the worst performing off-gas-grid homes in England in order to tackle fuel poverty.

We recognise that renewable liquid fuels could play a role in decarbonising heat off the gas grid. We therefore expect to prioritise the use of renewable liquid fuels for the small number of homes that are not readily suitable for electrification, as these have the fewest options to decarbonise through alternative low-carbon technologies. My noble friend Lord Berkeley suggested a meeting on this; I am very happy to engage with him and, indeed, with the noble Lord, Lord Bruce.

Amendment 76, tabled by the noble Lord, Lord Offord, and Amendment 77, tabled by the noble Baroness, Lady Bloomfield, relate to sourcing materials for GBE projects from the domestic supply chain. Adding the proposed detail to the Bill would too narrowly restrict the company in carrying out its activities, halting the potential feasibility of projects where UK sourcing is not currently possible.

On jobs, I take the point made by the noble Lord, Lord Bruce, concerning the importance of the UK continental shelf and the need for an orderly transition. My daughter supported her career as a wireline engineer in the oil and gas industry working out of Aberdeen, and I am well aware of the importance of the sector, what it has contributed to the UK economy and the skills and dedication of the people working there. As we have described, we want an orderly and just transition.

GB Energy will be committed to helping drive the growth of supply chains in the UK to accelerate the deployment of key UK energy projects. It is important, however, that we comply with the international trading rules that the UK is bound by, such as prohibitions on requiring local content contained under various agreements under the WTO.

Amendment 80, in the name of the noble Lord, Lord Petitgas, requires the Secretary

[Lord Alton of Liverpool (CB)]

I am sorry to interrupt the noble Lord, but I wonder if I can press him further on the issue of jobs and the impact on our own economy when countries run, in their own jurisdictions, the kind of slave labour arrangements that I and others referred to earlier. He will have seen the information about the loss of electric vehicle-related jobs because of the flooding of the market—we do not have any tariffs on those vehicles, whereas every other G7 country does. He will know that, in the last quarter, the trade deficit with China was some £32 billion but at no time since 1995 has there ever been surplus on our side of the equation. How can we justify, therefore, pouring more money into the economy of a country that relies on slave labour? It cannot just be left to companies, even Great British Energy, to identify whether a country is using slave labour or not; surely that is a matter for the Government, too.

[Lord Hunt of Kings Heath (Lab)]

The noble Lord raises matters of great geopolitical importance and importance to the UK’s economy. He will have seen that my right honourable friend the Chancellor has been in China in the last few days, seeking to engage that country in relation to economic co-operation and development, within appropriate security safeguards. We want to see jobs in the energy sector developed as much as possible in the United Kingdom, but equally, we are operating in a global economy. For very good reasons, we are concerned about the introduction of tariffs which may inhibit international trade, and we must also be mindful of the economic value-for-money issues that clearly have to come into play in this area.

Let me return to the Bill and what is appropriate for us to include in it. We believe that this issue is a matter for GBE, working within the constraints set through the statement of priorities and through Clause 3, and also in relation to the further work we are going to do. We have mentioned solar, and noble Lords are right that much of the raw material for solar panels comes from China, although it is British companies working in the United Kingdom that benefit more from the value of the work on solar installations.

Turning to the amendment of the noble Lord, Lord Petitgas, as a publicly owned company, GBE will be held accountable through regular reporting to my department. It will be subject to HM Treasury’s value-for-money guidelines, its investments will be subject to safeguards and risk assessments, and it will invest in the private sector to share risk and reward.

On green taxonomy, a decision about how a potential UK green taxonomy could be used or applied has not yet been finalised. The Government have launched a consultation to gather views on the value of the case for a UK green taxonomy, and it will close on 6 February.

We need to come back to what Clause 6 is for as a whole. It is a backstop which one hopes would never have to be used; it is not a way to encourage the Secretary of State to micromanage a company that we very much want to be operationally independent.

[Lord Petitgas (Con)]

I want to go back to the point about the company acting independently. There is little bit of confusion about this company being an energy company, as opposed to an investment company. There will be myriad small investments. If it acts independently, which is fine, it needs an investment committee, and I have not read anywhere that there will be one. The chairman-elect is Jürgen Maier. He may know the sector but he is not an investor. So, effectively, taxpayers will be limited partners in an investment company without an investment committee and with a chair who is not an investor, so it is not unreasonable to ask for information about rates of return and to understand exactly how it will be done. If the answer is, “Don’t worry, it’s an independent company but value for money will be done by the Treasury with DESNZ”, that is a different governance process, but the governance of investment and selection to me remains relatively obscure.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do not really think I can go any further than the remarks I have made this afternoon. It will ultimately be for GBE’s board to decide how it will arrange its board committees. I have noted what the noble Lord said about an investment committee. I will certainly draw his remarks to the attention of Jürgen Maier, who may not be an investment expert, as the noble Lord suggests, but my goodness me he has a lot of experience in this sector.

[Lord Offord of Garvel (Con)]

My Lords, in bringing the debate on these amendments to a close, I can deal head-on with the Minister’s comments and those of the noble Earl, Lord Russell, about the time given to the Bill. We have so far had one and a half days in Committee and we have one further day allocated, which will be only two and a half days on a Bill that spends £8.3 billion of taxpayers’ money, has no detail on how that money will be spent and gives endless power to the Secretary of State for Energy. It is entirely reasonable that we scrutinise it. The weekend’s press was full of the energy crisis that we face, with the shortage, storage and national grid issues.

[Lord Hunt of Kings Heath (Lab)]

My Lords, with the greatest respect, there is no energy crisis.

[Lord Offord of Garvel (Con)]

As I said, the point of government is to ensure that there is no energy crisis and at the weekend we had reports of there being gas supplies for less than one week, which is concerning to the public. Therefore, it is only fair and reasonable that Parliament debates that in some detail.

[Lord Hunt of Kings Heath (Lab)]

My Lords, what we had was one company looking for government subsidies using the opportunity to make alarmist headlines.

[Lord Offord of Garvel (Con)]

The point is that this is a topical debate that the whole of the public are interested in. They understand energy prices like nothing else now. They understand that, in terms of their household budgets, this is a major part of their cost of living and it is only reasonable that we get to debate this.

The amendments in this group are straightforward and simple. They are nothing to do with micromanagement; they are only to do with the accountability and transparency of this new company, which, as my noble friend Lord Petitgas pointed out, is not an operating company. The public think this is a company that makes cheap energy. It is an investment company sitting on one floor of a building in Aberdeen making investment decisions, and we have no idea how it will do that.

At the last election, the Government made promises to working people on this topic: to reduce energy costs, create jobs and drive forward our energy transition. Therefore, taking my noble friend Lady Noakes’s constructive point, we can argue about how we deliver the substance of these amendments, but we should not ignore the substance. Is it not fair and reasonable that we have in the Bill some consideration of government promises made to the public about the cost of energy—£300 in savings, which, incidentally, is £8 billion, the same amount as is being invested in 28 million households at £300—or the fact that 650,000 jobs are to be created? Is it not reasonable that the Bill somewhere talks about the fact that we want a strategic priority for the UK to develop its own energy supply chain? Is it not unreasonable that we have amendments that deal with how we make sure that the supply chain is fair? We have talked about a fair transition: well, where is the fair transition, to pick up what the noble Lords, Lord Bruce and Lord Alton, said, when we destroy our own highly skilled jobs in the north-east or end up using products made under dubious circumstances in overseas territories?

I would argue that all these amendments need to be considered. There is consensus in this House that we need energy security and that we need to get to 2050. The question is: why is this being speeded up artificially when we and the technology are not ready? Why are we doing this artificially?

My final point has been mentioned by many noble Lords so far: none of this works without the plumbing working. The national grid needs a serious upgrade and comprehensive investment to deliver this. If in these straitened times—we are continually reminded by the Government Benches that there is no money—there is a spare £8 billion, should it not be better used by being put into the national grid once and for all? In the meantime, given that we are where we are in Committee, I beg leave to withdraw the amendment.

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[Lord Teverson (LD)]

My Lords, can I make a comment on that? I am a trustee of the green share in the Green Investment Bank, which was privatised by the Tories after it was set up by the coalition Government. It was a very profitable operation, although it was fully publicly owned. The issue was that it was almost too conservative in terms of making money under Treasury rules, so it did not make as much of a difference—it did make a difference—as it should have done. One of the risks is that GB Energy could be too conservative because the Treasury is too close to it and will not let it do the innovation that needs to happen for decarbonisation to take place by 2030.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I want to make just two points. The noble Lord, Lord Teverson, made a very interesting and wise contribution. I say to the noble Lord, Lord Hamilton, that of course I have heard the expression that Governments are not very good at picking winners. That is why we have set up GBE. We will have a company with people with expertise to enable investments to take place within the context we set under Clause 3 and Clause 5 as strategic priorities. None the less, it will have operational independence.

The noble Lord, Lord Teverson, is right; noble Lords in their various amendments are seeking to pin down GBE through excessive reporting requirements. The risk is that GBE, far from being allowed to flourish and develop, will be inhibited and micromanaged. That is why these amendments are wholly inappropriate in relation to Clause 6. The power of direction is not to be used in the way that noble Lords are suggesting; it is a backstop power. What is the point of setting up GBE if we are to undermine its independence in the way these amendments suggest?

[Lord Offord of Garvel (Con)]

My Lords, as in the previous group, these amendments are not designed in any way to micromanage. There is very little in the Bill that gives us any indication of how this company will operate. As indicated by my noble friend Lord Petitgas, it is an investment company without an investment committee or any investment directors. All that is being sought by these amendments is some level of accountability and scrutiny.

Once again, I say that when promises are made to the public that the Bill will address their concerns, it is not unreasonable that we ask for amendments to be made accordingly. For example, looking at employment in Amendment 68, we are simply asking for a report—as the noble Lord, Lord Bruce, said—on the impact these investments make on employment and bills. Why is that an unreasonable thing to say? We have 200,000 people in highly skilled jobs in the North Sea. They are worried that they are about to be phased out unilaterally and prematurely. Why is it unreasonable to have somewhere in the Bill a requirement that GBE comes to Parliament and explains what it is doing in relation to employment in this key sector?

As we have said before, the Bill has failed to substantiate the promises made. The job of the Opposition is to highlight that and to make it clear that this needs to be debated and scrutinised. That is what we will continue to do. In light of that, for now I will withdraw the amendment.

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In conclusion, Amendments 63, 73, 104 and 105 offer a practical and necessary solution to ensure that the best land is reserved for food production while still allowing for renewable energy development on less productive land. This is not an either/or situation; it is a matter of finding a balance that serves both our energy needs and our need to protect the land that sustains us.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I welcome the contribution of the noble Lord, Lord Fuller, on his first set of amendments. Of course, he is right that our food security is very important indeed to this country, just as moving as quickly as we can towards clean power is also very important, and I certainly accept that of course there is a balance to be drawn. Certainly, the importance of maintaining our natural resources to support UK agriculture, and supporting local stakeholder consultation in affairs that affect their surroundings and the quality of the environment, are values that I share with noble Lords who have spoken in the debate tonight. But I must come back to the fact that we are talking about Clause 6 and the issue of whether we should seek to amend Clause 6 in the directions that the Secretary of State can give to GBE.

I repeat what I said in the first two groups: these directions are a backstop where an intervention is needed, not a way in which to develop policy in relation to land use. In response to my noble friend Lady Young and other noble Lords, my understanding is that the Government plan to publish a 12-week consultation on land use early in this year. The consultation will inform the publication of a land use framework in England, to be published later on in this year.

I have also noted constructive comments about the need for us to develop—indeed, some noble Lords wish us to mandate—the use of solar in warehouses and in industrial and domestic properties, and these matters are under very urgent consideration at the moment. But we will always need ground-based solar, as well as onshore wind, as the noble Lord, Lord Teverson, suggested, which of course is why we got rid of what was in effect a ban that the last Government so grievously introduced in relation to that development.

The projects that GBE will be concerned with, that it will invest in and that it will give guidance and encouragement to—because of course that is an important part of its role, too—will be mandated. Inevitably, its job will be to consider government guidance on the most suitable land for renewable energy projects, and any project that it is involved in will be subject to the same rigorous planning processes that currently exist to protect agricultural land, minimise the impact on food security and provide ample consideration for local community interests.

The environmental impact assessment regulations of 2017 require that certain types of projects, including large-scale renewable energy developments, undergo an environmental impact assessment to assess their potential impact on the environment. Developers must also ensure that their projects comply with environmental regulations, which can include mitigating impacts on local wildlife, water resources and soil quality.

Further, the National Planning Policy Framework includes the preservation of agricultural land for food production as a key consideration in its legal framework governing renewable energy projects. It emphasises the need to protect the best and most versatile agricultural land, namely grades 1, 2 and 3a, from development that could compromise its productivity. Developers must consider the classification of the land involved in renewable energy projects and ensure that developments do not conflict with planning policies aimed at safeguarding agricultural land.

On the noble Lord’s suggestion that there is a dash for renewables, yes, there is a dash for renewables—I do not deny it. We have to have a dash for renewables. But that does not mean that existing protections are being overridden. Of course we recognise that poorly sited onshore projects can have impacts on the local area, which is why we will retain important checks and balances to protect the environment.

But, in the end, we come back to why we have Clause 6. It is a backstop power which we hope will never have to be used; it is not a way of seeking to change policy in relation to land use.

[Lord Fuller (Con)]

My Lords, we have had a good debate that has explored the tensions between food and energy security in the context of the national interest. It has recognised the tensions between the establishment of a private company, GB Energy, acting as it is required to do in its own narrow self-interest, and its responsibilities as a public body with a duty to set the right example.

I have taken from some of the comments that, “Lord Fuller has perhaps played the right notes but in the wrong order”. I am not Morecambe and Wise to my noble friend Lord Roborough, but I would just like to refer to some of the points that have come along.

I am grateful to the noble Lord, Lord Cameron of Dillington, for his comments on the balance of land use and the importance of the “tilted balance”. Please do not misunderstand: my amendments are not saying that there should be no solar or renewables, or that we should have only food production. It is about where we put this thing in the tilted balance.

I am grateful to my noble friend Lord Roborough for shining a light on the fact that, notwithstanding that the Minister said, “Well, there are rules to be followed”, the rules are not being followed. That is why it is important that these amendments are made to the Bill, because we cannot really give the benefit of the doubt: if hitherto they have not been followed, why will they be followed now?

I am grateful to the noble Baroness, Lady Young of Old Scone, but even more grateful to the noble Earl, Lord Caithness, for being gentle with her so I did not have to be.

The noble Viscount, Lord Goschen, talked about the broad picture, and I am grateful to the noble Lord, Lord Bellingham, for his point about tenants, because that has been lost as part of the social fabric in this.

I will be brief. This is such an important issue that I do not feel we can just leave it on trust that the Minister for Energy Security will necessarily dovetail in with the Minister for Food Production to get that tilted balance right. The nation cannot risk GB Energy going rogue, and there has to be a better way with that. It is hard. Energy security and food security can be bedfellows: we are not being fundamentalist about this. At heart, my amendments are about putting food production on the best land, and solar and other renewables on other land.

We have we have fleshed out quite a few details and I know we are in Committee. I hope the Minister will meet with me and colleagues before Report, so that important safeguards can be taken into account in the Bill, if not in Clause 6 then perhaps somewhere else—who knows? I also hope that we may even have the heralded land use framework which the noble Baroness, Lady Hayman, promised before Christmas—but there we are.

On the basis that the Minister will meet me, I am prepared to withdraw these amendments, but in so doing I signal my intention to re-present them on Report, having taken soundings from colleagues that, if we cannot make satisfactory progress towards getting an acceptable way forward, we may need to test the opinion of the House. Meanwhile, I beg leave to withdraw my amendment.

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If the Government are to invest in nuclear energy, using GB Energy as their investment body, they must look to improve the global competitiveness of the UK nuclear industry and seek to crowd-in private investment. High start-up costs of nuclear projects and the potential for cost overruns have long been a daunting obstacle to the private financing of nuclear power plants. Considering this, the Government must look to create a market which is attractive to private investors if they are to achieve their goal of decarbonisation. I look to the Minister to confirm how the Government propose to support and attract this private investment. What consideration have they given to the competitiveness of the UK nuclear sector compared to that in the US, for example, or in France, as my noble friend highlighted? Have the Government carefully considered the many ways by which they can finance nuclear projects? Finally, will the Minister confirm or deny whether GB Energy will be involved in supporting the nuclear industry by way of loans, guarantees or any other financial support?

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is always good to have a discussion about nuclear energy. The noble Viscount, Lord Trenchard, is ever consistent in putting forward his views. I assure him and the Committee that the Government see nuclear power as having a vital and important part in our energy mix.

I say to the noble Lord, Lord Hamilton, that the fact is that no technology is mentioned in the Bill, and that is quite deliberate—so the absence of nuclear in the Bill should not be taken as an indication that we do not think that it has an important role to play. I say to the noble Lord, Lord Offord, on Labour’s record on nuclear, it was in fact a Labour Government, in 2008, who took the decision that we would go back to new nuclear. Shortly afterwards, I was appointed a Minister of State at the Department for Energy and Climate Change, and I took part in many discussions at that point about how we got the sites, developed the supply chain and attracted investment. The fact is that we were succeeded by a coalition Government, followed by a Conservative Government, and it was not until, I think, 2017 that a final investment decision was made in relation to Hinkley Point C.

I am very proud of the nuclear sector. For all the challenges that Hinkley Point C has had, the fact is that a UK supply chain has been developed. The point about replication at Sizewell C is that that supply chain can then continue to service Sizewell C. We then want to see small modular reactors and AMRs developed, because we see them as having great potential. I say to the noble Viscount, Lord Trenchard, that he has not responded to the points raised by his colleague, the noble Lord, Lord Howell, in relation to Sizewell C. I am sure he will agree with me that, if we were to pull the plug on Sizewell C at this point, it would have a devastating impact on the confidence of the nuclear sector, in this country and globally. Actually—although he is not here—the point about replication is about the derisking of Sizewell C, building on what happened at Hinkley Point C, including the design changes and all the other issues, such as the time it took to develop the supply chain and the productivity issues. The case for Sizewell C is very strong indeed, and we look forward to moving towards a final investment decision over the next few months.

On the relationship between GBN and GBE, we have decided that GBN will remain a separate legal entity. That is important, because it makes sure that we have a body that can focus completely on nuclear energy, but working very strongly together with Great British Energy. The two chairs have met and have, I believe, built a very strong relationship already. I expect them to be able to work in strong partnership in future. I do not think it is necessary to put onerous requirements in the Bill. Certainly, Clause 6 is not the way in which to do it.

The noble Viscount, Lord Trenchard, is concerned about the approach that GBN is taking to the SMR technology selection process. It was instituted by his own party in government, and I think he was critical of his own Government. Well, I am not. I think the SMR technology assessment was absolutely the right thing to do. In September 2024 it concluded the initial tender phase of the process and downselected four companies. We hope for further progress over the next few months.

I recognise the huge potential that AMRs bring, and we will respond to the alternative routes to market consultation. We are obviously very keen to do what we can to attract nuclear company developers in this country.

On the impact of competitiveness, I really do not think the Bill is an appropriate vehicle for those considerations, and nor do I see that being part of Great British Energy’s role. But of course I want there to be a thriving nuclear industry in this country. I want to see us build on the supply chain that has been built around Hinkley Point C and then on to Sizewell C, as I have said.

In conclusion, I hope the noble Viscount will recognise that while he may disagree with elements of the Government’s policy on nuclear, he should be under no misapprehension: we believe that nuclear provides an essential baseload. We will continue to support the industry in the future.

[Viscount Trenchard (Con)]

My Lords, I thank the Minister very much for his reply, and I thank my noble friend for his intervention. To some extent I am heartened by the Minister’s words, although I remain a little unconvinced by his assertion that he sees nuclear as being so important. There is a fundamental difference between GBE and GBN, in that GBE has £8.2 billion of capital and GBN has only a few hundred million. The two vehicles are completely different, so I would be rather more relieved if the Minister had explained that the capital made available to GBE would equally be available to nuclear projects that GBN might recommend for investment.

[Lord Hunt of Kings Heath (Lab)]

Can I just respond? Nothing precludes GBE from investing in a nuclear development.

[Viscount Trenchard (Con)]

I thank the Minister again for his reply. Nevertheless, GBN does not have any money for investment, so GBN is by definition a very different kind of vehicle compared with GBE. In light of the Minister’s reply, I would like to withdraw my amendment for now.

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[Lord Offord of Garvel (Con)]

My Lords, as we have heard throughout the debate on this Bill, as well as in the other debates in this House on the future of our energy, we know that renewable energy by its nature will always be unreliable. It is, by its nature, intermittent. Many of us have expressed concern that this undeniable fact will result in shortages. As has been mentioned by my noble friend Lord Murray, last year Europe in fact experienced several episodes of Dunkelflaute. On the other hand, as has been highlighted by my noble friend Lord Ashcombe, what happens to energy supply in periods of persistent sunshine and wind?

Unfortunately, we find ourselves in a position in which the national grid is unable to cope with excess renewable energy supply. Grid capacity is a particular challenge for the offshore wind sector, because those sites are necessarily located far from sources of demand. Currently, the national grid pays renewable energy generators billions to reduce supply when there is more renewable electricity than the grid can manage. This problem will only be compounded by the Government’s ambition to build renewables faster than we can develop and connect them to the grid.

With that in mind, we should address the fact that the timeframe for obtaining grid connections for a new energy project can reach 10 years. Not only this, but a project without a grid connection today may not come online until well after the Government’s target of grid decarbonisation by 2030. There is no doubt that the renewable energy projects that will supposedly be supported by the establishment of Great British Energy will face the same connectivity difficulties.

As my noble friend Lord Ashcombe highlighted, over £1 billion was coughed up by bill payers last year to pay renewable energy generators to curtail excess supply, including £20 million in one day alone. This will only worsen under the Government’s agenda, and it will be consumers who will bear the cost via their energy bills. If renewable generation is scaled up so rapidly without the grid capacity to transmit it to the areas of high demand, those curtailment payments will only increase. We know that excessive curtailment fees are already being paid to wind farm operators who are generating more power than can be used. This is paid to get operators to switch off their wind farms and avoid overloading the grid. How ridiculous is that? We expect these curtailment costs only to rise under the new Government’s regime, and by 2030 it is possible that there will be a staggering £20 billion a year in subsidies and in maintaining back-up grid capacity. That equates to roughly £700 per household each year.

I turn to the amendments in this group in the name of my noble friend Lord Murray of Blidworth, which I support in their entirety. Amendment 85E requires Great British Energy to

“report annually on the impact of each investment it makes on the levels of curtailed renewable energy in the UK”.

Amendment 85D requires Great British Energy to

“invest in additional energy storage infrastructure to store excess renewable energy”,

and thereby minimise the cost of curtailing excess supply. In tabling these amendments, my noble friend has addressed many of the issues that I have discussed.

It is essential that the establishment of Great British Energy does not cost the taxpayer more than the already allocated £8.3 billion, and that it assesses the impact of its investments on the cost of wasting excess supply and prioritises the means of storing renewable energy. I hope that the Minister will agree.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Murray, for Amendments 85D and 85E, which are focused on the issue of renewable energy curtailment. I must repeat, as I said earlier, that this debate is, in essence, about technologies, rather than the appropriate use of the directions in Clause 6. However, I assure the noble Lord that we are determined to increase significantly the deployment of short-term and long-term duration electricity storage to reduce curtailment.

I, too, was present in the debate on energy storage last Thursday, which was very interesting. My noble friend Lady Gustafsson recognised then that a variety of energy storage technologies would be needed to achieve net zero. That includes technologies such as lithium batteries and pumped hydropower storage—which can deploy at different scales and provide output over different lengths of time—and it can include emerging technologies, such as liquid air energy storage and flow batteries. Low-carbon hydrogen, too, can act as a low-carbon flexible generating technology and provide very long duration energy storage.

Today, around 7 gigawatts’ worth of grid-scale electricity storage is operational in Great Britain. This is made up of 2.8 gigawatts of pumped hydrogen and 4.3 gigawatts of grid-scale lithium battery storage. I add that we have announced a long-duration energy support scheme. We will publish a technical document in February. Applications will open in the second quarter, and we hope that the first agreements under the cap and floor system will take place in early 2026. It will be technology neutral, and it will be for projects that could not be built without the cap and floor system.

There are some developments in train: SSE, for instance, is doing exploratory tunnelling in the north of Scotland for pumped-storage hydro. Highview Power has reached FID in terms of liquid air energy storage near Carrington. Points on curtailment costs are well made; we see it as a key priority to accelerate network infrastructure to increase capacity on network and reduce constraints.

I do not think there is a lacuna; the Bill is constructed in the way it is. We have Clause 3 and the strategic statement of priorities in Clause 5. I hope I have reassured the noble Lord that the substantive point he raises is important and accepted by the Government.

[Lord Murray of Blidworth (Con)]

My Lords, I thank the Minister for his reply and am provided with some reassurance that the Government take storage seriously. However, for the reasons given by my noble friend Lord Ashcombe, the cost of curtailing output is presently substantial, as the Minister conceded. As my noble friends Lord Hamilton and Lord Offord pointed out, the difficulty with the current structure of the Bill is that we are not moving fast enough to secure sufficient storage capacity such that we do not need to make such large curtailment payments.

I urge the Minister to consider inserting in the Bill, at the very least, some form of requirement for reporting in relation to curtailment payments, which would encourage the market in storage capacity. With that, I am content to withdraw my amendment.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, first, I welcome so many Members of the Opposition to our debate and I look forward to their continuing interest in our deliberations going on this evening. I must confess to being somewhat at a loss, because all the points raised in this debate have been raised tonight in other amendments. What we are seeing is clearly a filibuster, and the degrouping of so many of these amendments on Clause 6 is the visible evidence of this. We have already had a debate on energy storage, which the noble Lord, Lord Murray, moved. We have already debated power lines and planning environmental protections, and we have discussed nuclear power, SMRs and AMRs. I simply do not understand. What is the point of having yet another debate on these issues, which amount to Second Reading discussions about the Government’s energy policy? We are debating Clause 6 directions. This is a backstop provision, normal in Bills of this sort in relation to the bodies that we are talking about, and it is quite inappropriate for us to seek to micromanage GB Energy in the way noble Lords have suggested.

[Lord Lilley (Con)]

My Lords, I am grateful to the Minister for his non-reply to the debate. The answer to his point about whether it is necessary is that it is impossible to overstate the importance of cheap and reliable energy to the economic growth of this country. If the only way we can have reliable energy is by having hugely costly energy, either because, as the noble Lord, Lord Reay, said, to ward off delays as we saw in recent days costs eight or 10 times what it normally costs or because to prevent that sort of risk involves spending hundreds of billions of pounds, that is hugely important. I am very sorry that the Minister, whom I normally praise for his replies, which are usually fulsome and effective and substantive, has avoided addressing those points, because they are crucially important and they have many aspects and it is important that those many aspects be investigated in the course of these debates in Committee. Obviously, I shall withdraw my amendment, but I hope that none the less that we will force the Government to think seriously about these issues before carrying us further down a route which could make our already very expensive energy even more expensive.