Great British Energy Bill

Debate between Lord Hunt of Kings Heath and Earl Russell

Committee stage
Wednesday 22nd January 2025 Grand Committee

[Lord Hunt of Kings Heath (Lab)]

My Lords, that is a very interesting comment indeed.

I turn to Amendment 127, the effect of which I resist because in the end, it is inconsistent with our intention to set up GBE as quickly as possible. I understand noble Lords’ concerns about information being available now, but we are keen to see GBE up and running. The statement of strategic priorities will ultimately be subject to parliamentary scrutiny. We want GBE to play a full part in the discussions on it and the framework document will be extensive, following normal procedure.

On that basis, the Government are not willing to move in that area. However, I am looking at some of the issues around the statement of strategic priorities, particularly in relation to timing, and will perhaps give a sense of some of the pointers that will be raised in it. I will continue to have discussions with noble Lords on that between Committee and Report.

[Earl Russell (LD)]

I thank all noble Lords who have taken part in this debate. I start by reflecting the Minister’s last sentence in his response to this group of amendments. I thank him and his officials for the open nature with which they have engaged and continue to engage with us. The prospect of further discussions on these issues prior to Report is very welcome from my point of view.

As I have said, I recognise the need to set up GB Energy at speed, and I recognise that it needs to exist to feed into the strategic priorities. I particularly welcome the Minister’s last sentence. As I said, my amendments in this group were about trying to find a compromise and a way forward. I also welcome his comments from the Dispatch Box on the framework document, guaranteeing that it will be produced and will be extensive and follow the proper course of action. Again, those are welcome documents, and I am sure that Members of this Committee will note them.

It is welcome that GB Energy will be headquartered in Aberdeen. It is my opinion that GB Energy will help to create good and stable green jobs. The Minister said that 90% of oil and gas offshore jobs have high levels of transferrable skills. I think we can all agree that we need a just and fair transition for the people who work in our oil and gas industry, and we all need to keep that in mind. The Committee will also note the Minister’s comments on Amendment 127. With that, I thank all noble Lords for taking part in what has been an interesting set of debates.

Small Modular Nuclear Reactors

Debate between Lord Hunt of Kings Heath and Earl Russell

Wednesday 22nd January 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, as the SMR contracts have been delayed, has the proposed twentyfold increase in AI been included in the clean power plan? What are the Government’s proposals to deliver the energy required and meet our energy net-zero targets if SMRs will not be ready before 2032?

[Lord Hunt of Kings Heath (Lab)]

My Lords, obviously, we are all very excited by the potential of AI. My understanding is that current electricity demand from, for example, data centre growth—which is part of the package that the noble Earl is referring to—would in 2022 account for 4.05% of UK electricity consumption. NESO’s analysis of future energy scenarios reckons that data centres could increase annual electricity demand by between 27 and 62 terawatt hours by 2050, with estimates of total annual electricity demand ranging from 533 to 700 terawatts hours. Obviously, we are giving this a great deal of consideration.

Great British Energy Bill

Debate between Lord Hunt of Kings Heath and Earl Russell

Committee stage
Wednesday 15th January 2025 Grand Committee

[Earl Russell (LD)]

I thank the noble Lord. I would be keen to hear what the Minister has to say in response to that amendment.

[Lord Hunt of Kings Heath (Lab)]

My Lords, this has been a very interesting debate and I am grateful to noble Lords for what they have said. I will start with Amendment 102, tabled by the noble Earl, Lord Russell, and supported by the noble Viscount, Lord Trenchard. As he said, the amendment focuses on Great British Energy’s relationships with its key stakeholders and would require the company to publish a report every two years detailing its relationship with a number of named public bodies.

As I have already said, we of course expect and want Great British Energy to enter into a number of partnerships or relationships with other public bodies. This will include public bodies beyond those highlighted by the noble Earl, including, for example, those operating in the devolved Administrations—although I agree with him very much about the importance of the relationship with the Crown Estate.

I think it was implied in what I said earlier that we are absolutely certain, as part of the rigorous reporting requirements that the organisation will need to take part in through its annual reports and accounts, that it will report on activities undertaken as part of these partnerships. That seems to me a perfectly sensible request, which I can affirm readily. In view of that, I am not sure that you need a separate report, but we can make it very clear to GBE that we expect it to report on this regularly. We have already publicly committed to setting out how Great British Energy and the National Wealth Fund will collaborate and complement each other. I can assure noble Lords that we have made the same commitment on Great British Energy’s relationship with Great British Nuclear.

In terms of Great British Energy’s relationship with Ofgem and the National Energy System Operator, again, we would expect GBE to be subject to the same legal and regulatory frameworks as other entities. Clearly, when it comes to the Crown Estate, I readily say that, of course, GBE will report on its relationship, just as the noble Earl said. The Crown Estate will be doing similar, and we hope that there will be a consistency of approach in their reports. I am sure that there will be.

Turning to Amendments 94 and 103, which would require independent reviews of Great British Energy’s effectiveness, I thank the noble Lords, Lord Offord, Lord Vaux and Lord Cameron, and the noble Baroness, Lady Noakes, for putting their names to them. We all agree that Great British Energy needs to be accountable, transparent and clear about how it is delivering against its objectives and the statement of strategic priorities. The Bill already ensures that GBE will provide regular updates through its annual reports and accounts. These documents will be laid before Parliament, ensuring public accountability. Clause 5 provides that GBE must “act in accordance” with the priorities set out by the Secretary of State. To ensure this, Great British Energy must publish a strategic plan on how it will deliver those priorities, and it will update this plan regularly.

On the question, generally, of a review, I certainly understand the point that noble Lords have made and agree that reviews are important. I am prepared to consider the principle of a review between Committee and Report. I would not want to get into a debate about how regular those reviews should be. It is important that GBE has a good run before it is subject to such a review. Equally, I do not think you want a review happening on a regular annual basis because that would detract from its ability to perform effectively, but I understand the principle of a review. I will take this away without commitment at this stage, but I am happy to talk to noble Lords between now and Report about it.

Coming back to additionality, we obviously agree that it is an important principle, and we would expect Great British Energy to learn from the UKIB/National Wealth Fund approach. Of course, GBE has rather a wider role than the National Wealth Fund, particularly in that it is not just an investor but a developer, and it has an important future role to play in trying to get rid of some of the barriers to investment that we have seen in the energy sector.

Having said that, I think additionality will be covered. Equally, we accept that undertaking reviews from time to time is important. But they should not be done so frequently that they lose impact in what they are there to do. I hope noble Lords will accept that I have tried to be constructive in my response to these amendments.

--- Later in debate ---

[Earl Russell (LD)]

Oh, I am sorry.

[Lord Hunt of Kings Heath (Lab)]

But we are coming to that.

[Earl Russell (LD)]

I thought the noble Lord had moved on; I apologise for interrupting.

--- Later in debate ---

[Earl Russell (LD)]

I thank all noble Lords who have taken part in the discussion on this group of amendments, and I thank the Minister for responding to me; I apologise for interrupting him. I appreciate everything he said, and I appreciate that there will be reports on GB Energy and that there are lots of opportunities for parliamentary scrutiny. It is appropriate that we ask these questions. The amendments in this group and others look to go a bit further to ensure that certain things will be reported on.

In response to the discussion on the previous group, the noble Lord, Lord Hunt of Kings Heath, asked me whether we were looking for a separate report. In my mind, this is about making sure that GB Energy produces a really good-quality annual report that covers a broad range of areas and is open and transparent about its activities.

[Lord Hunt of Kings Heath (Lab)]

Perhaps I may intervene. In the discussion on the first group of amendments, I promised to write a letter to noble Lords focused on financial information. It might reassure noble Lords if I pick up that challenge and say that we should perhaps also try to encompass the annual report arrangements. If that would be a sensible way forward, the letter will set this out very clearly in writing so that noble Lords can see it after Committee but before Report.

[Earl Russell (LD)]

That would be greatly appreciated and would really reassure us. That was the point that these amendments were trying to get to, so I thank the Minister.

--- Later in debate ---

[Earl Russell (LD)]

I apologise; I thought that it was acceptable. The noble Lord should have intervened earlier if it was not. I would not have done it if I had known that it was not acceptable, so I apologise to the Committee.

[Lord Hunt of Kings Heath (Lab)]

We certainly got the noble Lord’s point.

This has been an interesting debate with which to finish today’s proceedings. I start with Amendments 106, 107 and 115. The debate between the noble Lords, Lord Teverson and Lord Hamilton, on the benefits of oil rigs and other structures for fish populations allows me to say that other energy infrastructure can also have a positive impact on nature. We know, for instance, that wind farms can coexist with farmland easily. We have examples of solar meadows, which is a practice of growing wildflower meadows on solar farms. I have heard talk of green corridors, where beautiful new pylons are built to extend the grid. I am not being facetious here, as we need to look at ways in which energy can contribute to nature recovery. It is an important point to make.

I agree on the importance of our coastal communities and commercial fishing, as reflected in Amendments 106 and 107. Amendment 115 would require GBE to consult annually with the commercial shipping sector and fishing industry. I would expect GBE to provide regular updates on its work on such issues through its annual reports and accounts. We know that the projects that Great British Energy is likely to be involved in will all be subject to relevant regulations, including environmental impact assessments. There will be statutory stakeholder engagement to understand the potential impact of development. In line with other energy developers, GBE will consider the impact and risk of its activity on the commercial shipping sector and fishing industry, as it will other affected stakeholders. I will draw these remarks to the attention of the chair of GBE, so he can understand the importance of the issue that the noble Lord, Lord Offord, has raised.

In relation to coastal communities, there will be many opportunities in the energy sector in the future. We talked about the challenge of the North Sea transition. We obviously hope that, as jobs reduce in the oil and gas sector, the people involved can take up other jobs, some of which I hope will be in the wider energy sector. But overall, GBE has an important contribution to make in this area.

On Amendment 114, the noble Lord, Lord Teverson, raised an important point on the Ministry of Defence and security agencies. Clearly, to ensure resilience, GBE will have to consider the impact and risk of its activity on offshore installation, including its pipeline and cable connections, within the context of relevant security regulations and hostile state action. It is a very important and serious matter. All nationally significant infrastructure projects, which include projects in the energy sector over 50 megawatts, undergo rigorous scrutiny to monitor and mitigate security risks. In the end, these decisions fall to Ministers to make in relation to development consent orders.

There was an interesting debate on air defence issues between the noble Lords, Lord Teverson and Lord Hamilton. I have to say that my department is working very closely with the Ministry of Defence on these issues. We are talking closely and working to ensure that our own offshore wind ambitions can coexist alongside air defence. MoD programme NJORD will deliver an enduring radar mitigation solution, which will prevent turbines from interfering with MoD radar systems. In the context of our more general working relationship with the Ministry of Defence, it will be a responsibility of GBE to consider and consult relevant stakeholders. My department will of course ensure that that happens appropriately.

Amendment 118, tabled by the noble Baroness, Lady Bloomfield, would place a nature recovery duty on Great British Energy. Let me say at once that we are absolutely committed to restoring and protecting nature and meeting our Environment Act targets. We want GBE to focus on its core mission to drive clean energy deployment, but I assure the noble Baroness that the projects that GBE invests in and encourages will be subject to all environmental and climate regulations, in the same way that every other company is.

I draw her attention to our recently published Clean Power 2030 Action Plan, which dedicates an entire section to

“Integrating clean power and the natural environment”.


I was going to quote from it, but I do not think I need to do now. We are launching an engagement exercise in 2025 to invite communities, civil society and wider stakeholders to submit their ideas on how we can best encourage nature-positive best practice into energy infrastructure and development. Feedback from this exercise will allow the Government to better understand how we can integrate nature restoration through the clean power 2030 mission. We very much agree with the substance of what the noble Baroness said.

Gas Storage Levels

Debate between Lord Hunt of Kings Heath and Earl Russell

Tuesday 14th January 2025 Lords Chamber

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

My Lords, I am grateful to the noble Lord for his question. First, I must remind the House that, on Friday, National Gas confirmed that:

“The overall picture across Great Britain’s eight main gas storage sites remains healthy”.


The diversity of Great Britain’s sources of gas supply means that we are less reliant on natural gas storage than our European counterparts. This includes, as the noble Lord suggests, supplies from the UK continental shelf; our long-term energy partner, Norway; international markets via liquefied natural gas; and interconnectors to the European continent.

I understand and fully accept what the noble Lord says about the North Sea and the contribution of the oil and gas sector, which we have debated, but it is essential that we move as quickly as possible to clean power. Clearly, by 2030, that will give us a great advantage in energy security. We will look for low-carbon, flexible technologies to ensure that we have the proper balance when we get to clean power. We want to see a successful transition in the North Sea, recognising the contribution that it makes and will continue to make.

[Earl Russell (LD)]

My Lords, does the Minister agree, first, that this is a fabricated scare story? There are no issues with our gas. It is not running out and it can be quickly resupplied via pipelines and LNG. Secondly, does he agree that the best resolution is the rapid end to the Conservative’s legacy of overdependence on very expensive imported foreign energy? To that end, the Conservatives would be well advised to stop filibustering on the Great British Energy Bill, which will greatly improve our energy security, decrease our overdependence on expensive imported foreign gas from tyrants such as Putin, bring down energy bills and costs for bill payers, and help us to meet our energy and climate targets.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am glad that I was not alone in thinking that we enjoyed a filibuster last night. What is tragic is that the Conservative Party is clearly retreating from net zero and clean power and has become obsessed with gas. This is not the way that we need to go. The noble Earl is quite right. Centrica chose to put out what I can only describe as an alarmist statement. NESO and British Gas are quite clear that we did not face a crisis and that we have adequate supplies. I hope that those who were involved in making those claims last week will reflect on the concern that they caused.

Great British Energy Bill

Debate between Lord Hunt of Kings Heath and Earl Russell

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.

Energy Costs for Businesses

Debate between Lord Hunt of Kings Heath and Earl Russell

Tuesday 17th December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My 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.

[Earl Russell (LD)]

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?

[Lord Hunt of Kings Heath (Lab)]

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.

Private Low-carbon Investment: Green Finance Institute Report

Debate between Lord Hunt of Kings Heath and Earl Russell

Monday 9th December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My 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.

[Earl Russell (LD)]

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.

[Lord Hunt of Kings Heath (Lab)]

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.

Great British Energy Bill

Debate between Lord Hunt of Kings Heath and Earl Russell

Committee stage
Tuesday 3rd December 2024 Lords Chamber

[Earl Russell (LD)]

My 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.

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

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.

--- Later in debate ---

[Lord Hunt of Kings Heath (Lab)]

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.

[Earl Russell (LD)]

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.

[Lord Hunt of Kings Heath (Lab)]

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.

Contracts for Difference (Miscellaneous Amendments) Regulations 2024

Debate between Lord Hunt of Kings Heath and Earl Russell

Monday 2nd December 2024 Grand Committee

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

My 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.

[Earl Russell (LD)]

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?

Great British Nuclear: Modular Reactors

Debate between Lord Hunt of Kings Heath and Earl Russell

Monday 2nd December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My 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.

[Earl Russell (LD)]

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?

[Lord Hunt of Kings Heath (Lab)]

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.

COP 29

Debate between Lord Hunt of Kings Heath and Earl Russell

Thursday 28th November 2024 Lords Chamber

[Earl Russell (LD)]

My 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.

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

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.

Domestic Solar Panels

Debate between Lord Hunt of Kings Heath and Earl Russell

Monday 25th November 2024 Lords Chamber

[Earl Russell]

To ask His Majesty’s Government how they plan to increase the number of homes fitted with solar panels.

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

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.

[Earl Russell (LD)]

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?

[Lord Hunt of Kings Heath (Lab)]

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.