(1 week, 5 days ago)
Lords ChamberMy Lords, my noble friend is right to explore the contribution that nuclear will play in the lead up to 2030, but of course beyond, which is why we have the building of Hinkley Point C, then Sizewell C when we get to a financial investment decision next year, then the SMR programme and then the AMR programme. As far as small modular reactors are concerned, Great British Nuclear is conducting a technology exercise at the moment; it is in financial discussions with four of the companies concerned. We will come to the issue of spend and public support in the multiyear spending review that is taking place over the next few months.
My Lords, I am sure the Minister will agree about the importance of making sure that we continue to make efforts to reduce the costs of energy for industry. Some 56% of UK businesses would like to increase their on-site power generation, so what are the Government doing to help industries undertake such actions to help with their renewable energy?
My Lords, first, of course I very much agree with the noble Earl in wishing to see a reduction in the cost of energy, particularly electricity, for our businesses. We believe that in the long term—and in the medium term, to 2030—clean power is the way to do it. He raises a very important point: one of the responses, as he will have seen in the US, is the linking of heavy energy users, which can be companies such as Amazon, with their data centres, to nuclear power generation through advanced modular reactors. Of course, the other very important issue is getting connections to the grid, which is why the clean power action plan is so important in relation to speeding up those connections.
(2 weeks, 6 days ago)
Lords ChamberMy Lords, I cannot really respond better than by saying that my noble friend answered the point thoroughly. We at the Department for Energy Security and Net Zero keep a close eye on skills needs. In fact, the whole energy sector has great potential for growth in really high-skilled jobs in the future. Since 2021 the department has invested over £28 million in skills and training, which has resulted in 33,000 training opportunities in retrofit, clean heat and energy efficiency roles. I take the noble Baroness’s point and we keep this issue under very close review.
My Lords, cold homes drive up ill health, our energy bills and our emissions. At least one-fifth of the UK’s CO2 emissions come from home heating and our homes are some of the worst insulated in western Europe, with 27 million of our homes needing to be retrofitted. Does the Minister agree that property-linked finance makes sense? I ask him to look at it in relation to heat pumps, particularly with a view to bringing in enabling legislation and pilot programmes so that the Government can find the schemes that really work.
I agree with the premise of the challenge that we face. We responded positively, as do I, to the proposals made by the Green Finance Institute, which is why we are working on this seriously and discussing it with it, and we will be looking at the outcome of the pilots in commercial properties that the GFI is going to take forward in the next few months. But I have to point out to the House that this is not easy. Current experience suggests that unless you can ensure that a scheme is easy for people to understand and know what they are getting themselves into, and can offer competitive interest rates, it is not going to fly. We need to make this a credible scheme.
(3 weeks, 5 days ago)
Lords ChamberMy Lords, I rise very briefly. I thank noble Lords for bringing forward these amendments. These are really important issues that are worth examining in Committee. However, on these Benches we do not feel that any of these amendments really provide proper solutions to some of the problems that are contained within this Bill.
We feel that GB Energy is separate and distinct from the National Wealth Fund; as GB Energy grows and develops over time, that will become clearer. We welcome the setting up of GB Energy, and we think it is absolutely essential that Britain has a chance to own and manage part of its energy resources and that we are investing in having our energy security and independence.
I read recently on the old Government’s website a press brief from No. 10 during the Sunak Government, which proudly proclaimed that they had spent £40 billion subsidising home owners and businesses through the energy price crisis that we had in the last few years. Obviously, that cannot continue, and our bill payers are suffering, which is not good for us.
We do not really feel that having minority equity stakes is the answer to these problems either. There are problems in this Bill: the Government have chosen to have a very short Bill; the strategic priorities are not written up and are not ready; Clauses 5 and 6 give more control than the Government should have without adequate parliamentary scrutiny—I recognise that this has been picked up by reports in this House. Those are all matters we can discuss and work constructively with the Government to find solutions to them. Ultimately, this is a useful conversation, but we do not see the answers within these amendments; we see the answers within other amendments that are yet to come.
My Lords, we have started our proceedings in Committee with a very interesting discussion about the relationship between Great British Energy and the National Wealth Fund. I certainly agree with the noble Lord, Lord Offord, on the importance of our debates on energy and net zero more generally and with the noble Lord, Lord Howell, about the complexities of our energy system and the challenges that we have undoubtedly set ourselves. The recent report by NESO, the National Energy System Operator, sets out those challenges, but gives us some confidence that we can achieve them.
Amendment 1, in the name of the noble Lord, Lord Offord, seeks to require that Great British Energy must be a subsidiary of the National Wealth Fund. Clearly, he indicated he wanted to explore in more detail the relationship between the two organisations. I should say at once to the noble Lord, Lord Howell, that we are certainly not creating organisations for the sake of it. As someone who has spent most of my life dealing with NHS structures and restructuring, I have learnt over the painful years that simply creating new organisations and merging other ones very rarely leads to a successful outcome. We believe that Great British Energy is a key component of our energy and net-zero strategy; that is why it was a manifesto commitment and why we are determined to plough on with this proposal.
On the relationship and the difference between the National Wealth Fund and Great British Energy, the Government have stated very clearly that we see the National Wealth Fund as the state-owned investment bank and wealth fund. It will invest across clean energy sectors, including green hydrogen, green steel, gigafactories and ports, as well as other sectors central to delivering our industrial strategy. On the other hand, Great British Energy will be the UK’s state-owned energy company. It will own, manage and operate key energy projects across the country, including making investments across the clean energy sector and supporting the development of clean energy technologies. It will also support local power and community energy projects as well as supply chains. This is a distinct role, which is why GBE should be a stand-alone company focused on its important mission.
Yes, I want to be absolutely clear: nuclear clearly falls within the definition of clean power, so it would be within the competence of Great British Energy to invest and do the other things in the Bill in relation to nuclear. However, we have Great British Nuclear, which I believe will continue. We are still finalising discussions, but GBN is focusing at the moment on small modular reactors. The department is involved in major funding of the nuclear developments, but GBE could also invest in nuclear energy. I hope that is clear.
I turn to oil and gas. Amendment 25 from the noble Earl, Lord Russell—and the noble Lord, Lord Bruce, who was not able to be present—would require Great British Energy to consider oil and gas supply chains and a reduction in and decarbonisation of oil and gas production. I say to the noble Earl that I understand the need for a just transition and acknowledge the skills of people working in oil and gas in the North Sea.
The Bill is focused on making the minimum necessary provisions to enable the establishment of this operationally independent company. Clause 3 provides the framework for Great British Energy’s functions and limits the areas where it can act, but it does not say how Great British Energy should deliver its functions or objectives. One of the worries about the noble Earl’s amendment is that it would widen the intention of this clause, perhaps unnecessarily. I say to him that, as we invest in the UK’s energy potential, we want to rebuild supply chains at home, of course. In relation to oil and gas, we want to help the transition and use the skilled workers in the most effective way possible. Oil and gas production in the North Sea will be with us for decades to come, so we want to manage the North Sea in a way that ensures continued support for that sector but enables some of the workers there to transition to other sectors, particularly in energy where they have such expertise.
Amendments 30 and 33 in the name of the noble Baroness, Lady Boycott, wish the Government to confirm or state that biomass is not included in the definition of clean energy in the Bill. Although I understand that many noble Lords share her viewpoint, as was clear from the Oral Question we had a few weeks ago, the Government believe that biomass plays a role in balancing the energy grid when intermittent renewables are not available. It is well evidenced that sustainably sourced biomass can provide a low-carbon and renewable energy source. That view is supported by both the Inter- governmental Panel on Climate Change and the Climate Change Committee.
Biomass sourced in line with strict sustainability criteria can be used as a low-carbon source of energy. Woody biomass that is sustainably sourced from well-managed forests is a renewable, low-carbon source of energy, as carbon dioxide emissions released during combustion are absorbed continuously by new forest growth.
The noble Baroness mentioned the Ofgem investigation, which she will know was about incorrect data being provided. It would be fair to say that Ofgem did not find the process at fault; it was the data provided. She asked me what visits officials in my department had made to the US. Officials have been in contact with US regulators but I would be happy to provide her with more details on what we have been doing.
The noble Baroness also mentioned BECCS, as it is known, or bioenergy with carbon capture and storage. Again, the Committee on Climate Change and the International Energy Agency recognise that BECCS can play a significant role in supporting net-zero targets through the delivery of negative carbon emissions with the co-benefit of producing low-carbon energy.
The noble Lord, Lord Alton, spoke eloquently and passionately to Amendment 91 on tidal barrages. I listened to the noble Lord, Lord Cameron, too, who suggested that tidal barrage and, in particular, lagoons play to the UK’s strength. The noble Lord, Lord Wigley, also spoke. The National Energy System Operator—NESO—is leading a network innovation allowance project aimed at establishing a holistic knowledge base on the potential development and impacts of tidal barrage in Great Britain within the context of grid operability. That is a very important development that I hope picks up the point that noble Lords have raised—the situation may have changed over the past 10 or 20 years.
I look forward to discussing the Mersey barrage with the noble Lord, Lord Alton. When I did this job at the Department of Energy and Climate Change from 2008 to 2010, I chaired a forum that we established on the Severn estuary potential, so I would certainly be interested in taking discussions forward on the Mersey barrage.
I hope that I have reassured most noble Lords that the energy technologies they wish to see supported can be covered in the Bill, but Great British Energy must be allowed to make its own decisions within the context of the objectives and strategic priorities the Secretary of State will set.
I thank the Minister for his detailed response to all the amendments in this group. I want to follow up with a quick question. I and the noble Baroness, Lady Grender, asked the Minister whether any consideration will be given to rolling the warm homes plan into GB Energy. The answer might be that no consideration will be given, or that the Minister does not have an answer—though he could possibly have one in a minute. I am happy to take a written response or come back to it at a later stage.
My Lords, I am not aware of any intention. I will certainly write to him if I have got that wrong but I am not aware of any intention to do it. The whole issue of home insulation and heating is crucial to getting to net zero and we are giving it a huge amount of attention.
(3 weeks, 6 days ago)
Lords ChamberMy Lords, I understand the point the noble Lord is raising. My department is exercised by the advantage that could be brought. We are in discussions with the Welsh Assembly Government and my colleagues in the Department of Health and Social Care. I cannot say at this stage whether we can bring this to a successful outcome, but I certainly see the merits in what he is arguing.
My Lords, can the Minister update the House on the importance of the agreement reached on the sidelines of the COP summit with the United States, which seeks to speed up the deployment of cutting-edge nuclear technology, helping to decarbonise our industry? The agreement aims to support information sharing on advanced nuclear technologies to help make them available to industry by 2030. How important is this agreement, and how will it help us to make sure that this technology is actually deployed?
My Lords, it is a very important agreement. We have a very good relationship with the US on all things civil nuclear, and this will enable us to enhance that. I should also say that at COP, six new countries joined existing countries in declaration of an aim to triple nuclear power globally by 2050. There are now 31 signatures, which is very important. It is an indication that globally we are seeing a renaissance in nuclear, in which this Government wish our own nuclear industry to be a part.
(3 weeks, 6 days ago)
Grand CommitteeMy Lords, these regulations were laid before the House on 28 October. They form an important part of the Government’s commitment to accelerate the deployment of the low-carbon electricity technologies that are critical to achieving the Government’s clean energy mission.
The contracts for difference scheme is the Government’s main mechanism for supporting new low-carbon electricity generating projects in Great Britain. Contracts for difference are awarded through annual, competitive auctions where the lowest-priced bids are successful. The sixth allocation round, which ran earlier this year, was the largest round ever and more than double last year’s round held by the previous Government. It awarded contracts to 128 clean energy projects across Great Britain, capturing 9.6 gigawatts of renewable capacity and generating enough electricity to power the equivalent of 11 million homes.
We must, though, ensure its continued success and evolve the contracts for difference scheme to drive progress towards 2030. So, building on auction round 6, we want to update the scheme through this instrument to continue our march towards a low-carbon power system. We propose, first, to extend the option of phased contracts for difference to floating offshore wind projects and, secondly, to enable the eligibility of repowered onshore wind projects to apply for a contract for difference.
On the first point, the Government have committed to radically increasing the UK’s offshore wind capacity, including floating offshore wind. As an emerging technology with less than 250 megawatts of capacity deployed worldwide, the floating offshore wind construction process is yet to be industrialised. Floating wind projects are likely to have a slower buildout rate than established fixed-bottom offshore wind, for reasons including limitations on suitable port capacity and increased sensitivity to adverse weather.
Phasing in the contract for difference allows projects to be built in multiple stages. It was designed to provide support for early fixed-base offshore wind projects by mitigating the specific commercial risks inherent in offshore project construction. Extending this policy to floating offshore wind projects will allow for greater flexibility in the construction phase, allowing delivery to more realistic timelines and providing more certainty and confidence to the wider supply chain. This reduction in project risk will, in turn, increase investor confidence in the UK’s growing floating offshore wind sector.
On the second amendment—to enable repowering for onshore wind—our analysis suggests that approximately 1 gigawatt of onshore wind will come to the end of its operating life between 2027 and the end of 2030. Repowering can help ensure that renewable generation capacity is not lost from older projects. It also provides an opportunity to increase the renewable generating capacity of existing sites through improvements in technology and more efficient use of the site. Enabling access to the contract for difference for repowered onshore wind projects offers them revenue certainty, encouraging retention and expansion of existing capacity. This supports our ambition to achieve clean power by 2030 and make Great Britain a leading place for onshore wind investment.
We have ensured a balance between decarbonisation, consumer value for money and security of supply objectives by enabling repowering only for projects which align to the fundamental contract for difference case for intervention, including high upfront capital costs, and which have reached the end of their operating life. At this point, this applies only to onshore wind. These principles will help enable us to protect the consumer, ensuring we intervene only when and where needed and where it is cost-effective to do so.
The consultation for these policy interventions sought views and supporting evidence on specific changes proposed for allocation round 7. We received a range of responses from across industry, including developers, electricity traders and suppliers, businesses operating in the offshore wind sector, and consumer and environmental groups with an interest in the electricity sector. Most respondents agreed with implementing phasing for floating offshore wind and repowering for onshore wind. Respondents also provided input on how the department should implement these policies. The department continues to engage closely with industry in the development of contracts for difference.
The instrument facilitates the evolution of the contracts for difference scheme by amending two statutory instruments made under the Energy Act 2013. It amends the Contracts for Difference (Allocation) Regulations 2014 and the Contracts for Difference (Definition of Eligible Generator) Regulations 2014. The amendments will have two effects. First, they will expand the existing phasing policy to floating offshore wind projects. The allocation regulations will be amended to allow floating offshore wind contracts for difference units to be constructed in accordance with phasing rules. The second effect is to permit repowered projects to apply for a contract for difference. The contracts for difference scheme did not previously have a formal policy in relation to repowering applications. The amendments ensure that certain generators who repower eligible generating stations can be eligible for the contract for difference. They also remove barriers which would prevent repowering applications being made.
To conclude, we think this is an important step forward in delivering clean power. It builds on the existing success of the contracts for difference scheme, which is evolving to better reflect global market realities and drive progress towards clean power targets. I beg to move.
My Lords, I rise to speak very briefly to this one. We are happy to support the amendment.
I have a couple of questions for the Minister. First, what measures are the Government taking to ensure that consumers continue to get value for money from these contracts? Secondly, is the Minister certain that the repowering process is treading the right path between getting value for money for the Government with these contracts, while not impeding further development of onshore wind energy?
(1 month ago)
Lords ChamberMy Lords, we welcome this Statement and the progress made at COP 29. The world—indeed the very future of humanity—stands at a cross-roads. One path leads to a near-term end of the viable future of humanity on planet earth, and the other leads to concerted, collective and constructive change and a willingness to fight for humanity’s future. Time is a luxury that is rapidly running out. We are on the cusp of breaching our collective goal of limiting climate change to 1.5 degrees. We must keep hope alive. We must fight for further rapid progress with the little time we have left.
The near future—one that our children will experience—is one where they will need to fight climate change and deal with the ever-growing consequences of the failure to do so earlier. The tragic loss of life and destruction from Storm Bert is the latest reminder of this fact. It is not acceptable that funding shortfalls mean that the number of properties to be protected from flooding by 2027 was cut by the previous Government by 40%. Will the Minister commit to including natural flood defences as a central part of the £5.2 billion flood-defence spending to protect our communities? Much more work is also needed on adaption and resilience programmes.
COP 29 concluded with a deal that, while welcome, still leaves much to be desired. The $300 billion a year is a start, but the developed world must do more to support the developing world to implement its own clean energy and adaption programmes. It is estimated that this funding can deliver reductions equivalent to more than 15 times the UK’s annual emissions. Simply put, we can either pay now or we can pay more later. The greatest cost of all is always that of doing nothing.
We very much welcome the return of UK leadership on the world stage on climate issues, after the dying days of the Conservative Government did so much damage to our international standing and reputation with their retreat from reality. I congratulate our negotiators on their work. We welcome the commitments to new ambitious emissions targets, including the reduction by at least 81% by 2035. Delivery depends on bolder and more decisive action. We support this programme and I express our willingness to work with the Minister to help the UK to seize this opportunity.
We need concentrated and immediate action to insulate our homes, reduce energy costs and ensure that no one has to choose between heating and eating. The delay to Labour’s warm homes plan until spring 2025 is unacceptable when millions of people, including 1.2 million pensioners, face a cold and uncomfortable winter due to the cut in the winter fuel allowance. We need clearer plans to roll out heat pumps, to increase the update of electric vehicles, to fix the unacceptable delays to grid connections, and to achieve rapid progress in improving our energy security and enabling a swift reduction in energy bills.
We will work to progress the GB Energy Bill through this House, but we call on the Minister to give clear commitments to deliver clear community energy programmes. Labour must do more to decentralise the energy transition, bring much-needed jobs and growth from the green economy, and work to ensure that the benefits of our transition and increased energy security are properly communicated. Climate leadership must prioritise solutions that protect communities and restore nature. The nature and climate crises are interlinked and intertwined. We are one of the most nature-deprived countries in the world. Our 30 by 30 target still has unrealistic delivery pathways.
I note that the Statement says:
“The UK will decide what our own contribution will be in the context of our spending review and fiscal situation, and that will come from within the UK aid budget”.
On loss and damage, are these funds ring-fenced against the development cuts announced in the Budget? Lastly, I call on the Government to give the gift of time to the Climate and Nature Bill—a Private Member’s Bill being discussed in the other place. It is so important that we update our climate legislation.
My Lords, I thank both noble Earls for their comments and questions. I must say that it is good to welcome the noble Earl, Lord Courtown, to the Dispatch Box to talk on such an important issue; it is like old times. His comments were interesting because he started by talking about his own Government’s achievements in the area of climate change, net zero and the decarbonisation of our power supplies. But then he moved away from that, and it is worth reflecting that, of course, it was Prime Minister May who showed leadership on net zero, and it was the last Government who signed up to the £11.6 billion in international climate finance for the period 2021-26. They also signed up to the national adaption programme 2023-28.
It was the noble Lord, Lord Sharma, who so ably led the COP 26 Glasgow negotiations. I was just reminding myself of the ministerial meeting in Copenhagen only two years ago, co-chaired by the noble Lord, Lord Sharma, in which Ministers agreed the urgency of responding to climate change and of the need to accelerate practical action and support for a just transition to low greenhouse gas emissions. It seems to me that the Conservative leadership is essentially turning its back on climate change, and it seems to be obsessed with fossil fuels.
As we heard from the noble Earl, Lord Russell, both just now and in the Oral Question earlier, climate change is here. It is having damaging impacts in this country and globally. We simply cannot hold back: we have to charge on. I agree with the noble Earl, Lord Russell, on the importance of flood defences, charging on to net zero, heat pumps, and grid connections. His comments on the GBE Bill were helpful, and I noted his point on community energy. He mentioned the warm homes plan: we have that and continue to work on it, but we have already made some substantive announcements, which I hope he will be able to study.
There has been a lot of comment on the outcome of the negotiations, which were obviously very challenging. Developing countries were disappointed with some of the outcomes. The fact is that the focus was on finance, and the agreement calls on all actors to scale up financing to $1.3 trillion for developing countries by 2035 from all sources, public and private. Also agreed was a goal for public and publicly mobilised finances of at least $300 billion per year for developing countries by 2035. I should say that this new goal will take account of contributions from major economies such as China that are in a position to support developing countries.
Although we made strides in relation to finance and carbon markets, COP did not make progress elsewhere. We wanted much stronger outcomes on taking forward the global stocktake, agreed at COP 28, on the transition away from fossil fuels and on keeping 1.5 degrees Celsius alive. We will continue to push that as we move towards the run-up to COP 30 in Brazil.
I acknowledge that both noble Earls have welcomed UK leadership, which has been very important. The visit of the Prime Minister and the Secretary of State was influential, and it is right that Britain should be there at the negotiating table. I know that noble Lords say that we produce only 1% emissions, but there are many countries with 1% emissions, and collectively, we are very powerful. I acknowledge that we want to build on what the last Government achieved in this area. National consensus here is very important indeed.
On the 81% target for 2035, we think that that is in line with the advice from the Climate Change Committee. Clearly, we will now need to work through the implications of that. On our contribution to the £300 billion of public and publicly mobilised finance, clearly, I cannot be drawn on what that will be. As we have said, this will go into the multiyear spending review. However, overall, we can at least recognise that agreement was reached in very difficult negotiations.
I know that noble Lords are concerned about China, and I understand the issues they raise. The fact is that China disclosed that it has contributed £24 billion in climate finance to developing countries since 2016. We know that part of the COP agreement is to encourage more voluntary contributions on that basis. It is interesting that International Energy Agency figures show that China is accelerating its use of renewable energy.
There is clearly much to discuss and to tease out of the agreement, and a lot of work has to be done on the pathway to Brazil. But at least an agreement has been reached which gives us some hope that we can move forward, and for this country, the message is to charge on.
(1 month ago)
Lords ChamberTo ask His Majesty’s Government how they plan to increase the number of homes fitted with solar panels.
My Lords, rooftop solar on homes and buildings will play an important role in the drive for clean power. Details about how the Government will increase deployments of domestic solar panels will be set out in the forthcoming solar road map.
My Lords, Labour promised a rooftop solar revolution, which I welcome, tripling solar power by 2030. It now appears that this commitment has not survived contact with the housebuilding industry. Are this Government still requiring that, as part of the future homes standards, all new homes will have to have solar panels installed, as promised? If not, why? Further, France is maintaining solar panel installations on all parking lots greater than 80 spaces, generating power for 8 million homes. What consideration has been given to doing the same here?
My Lords, we are not moving away at all from the idea of a solar revolution. The noble Earl will know that, in its scenarios for 2030, the National Energy System Operator—NESO—reckons that we will need 47 gigawatts by that time. We are committed to publishing a clean power action plan, which will embrace solar plans, very soon. The Solar Taskforce is there to provide clear advice and actions on how we will take that forward. What the noble Earl said about French car parks was interesting. There has been an easing up of development rights in this country in relation to that. On the 1.5 million homes that we pledged to build in the lifetime of this Parliament, we are in close discussion with our colleagues across government about mandation, and we very much take his point on that.