Offshore Wind

Lord Moynihan of Chelsea Excerpts

Monday 19th January 2026 Lords Chamber

[Lord Whitehead (Lab)]

My noble friend makes an important point about the amount of work we still have to do and the extent to which we have to integrate what we are doing into a whole low-carbon system that works. For example, one consequence of the previous Administration’s grievous neglect of grid development and of methods of supporting grid development is that, if we can get grid queues shorter and develop the grid itself and use it more efficiently, a lot of the constraints in the system that we are seeing at the moment will fade away. The system will be used far more efficiently with a greater amount of electricity flowing around it, making much more efficient use of what we have already.

I agree that there are some unprecedented demands coming our way, particularly as far as data centres are concerned, and we need to look at imaginative ways in which we can not only make sure that we are ready for that demand, but start to look at how those data centres can fuel their own requirements, for example, by developing data centres in conjunction with heat sources so that their heat requirements can be dealt with on site. Ways in which local grid systems, outside constraints, can feed into data centre development need to be looked at in the context of a whole system analysis of how an efficient energy system is going to work for the future. We recognise that getting a fabulous result as far as offshore wind is concerned is only part of the issue. It is a much wider issue than that, and one we have got to get right in terms of what we know will be a substantial demand for electricity in the years ahead.

[Lord Moynihan of Chelsea (Con)]

My Lord, I congratulate my noble and homonymous friend on his new position, which I am sure he will occupy with distinction. The Minister asked a question about dirty energy and how could we possibly promote it. In fact, the truth is the reverse. The Minister is promoting dirty energy. Having deindustrialised this country with impossibly expensive energy, we now buy our steel, our goods and even the solar panels for this renewable energy from China, which makes them using power from energy generation stations fuelled with coal, of which they build one per week. The dirt is going up into the atmosphere and, amazingly, it travels around the world. It does not just hang over China. That is where the dirt is. It is a complete mistake to believe that this side is against clean energy; we are just for sensible energy.

I noticed also that the Minister did not reply to my noble friend’s remark about intermittency and the fact that, right now, we have quite a lot of offshore wind, but it is not being used much because the wind ain’t blowing. Does he think that these new contracts for difference will make any difference to the wind as it decides whether to blow or not? I do not believe so.

I agree with the noble Earl, Lord Russell, that we can lead the world. We are leading the world in high electricity prices right now. Regardless of whether we have offshore wind, we will need gas, as the noble Lord implied earlier, and we are closing down our gas; we are refusing to build new gas wells in the North Sea. So, what are we doing? We are buying it from the North Sea from Norway. It was announced today that Norway’s sovereign wealth fund, its $2 trillion oil fund, has embarked on a major sell-off of its holdings in London-listed small-cap and mid-cap companies, even as Rachel Reeves hails a new golden age for the City, blah blah.

The noble Baroness, Lady Young, said, “In the bad old days nobody played the game; it is great that now they are playing the game”. Can the Minister confirm that the private equity houses, which are the major financiers of these contracts, agreed this very high price, which will further ruin our economy, only if they got 20 years? Is that why the noble Baroness is able to rejoice that somebody is playing the game now, because they got 20 years in which our economy will be ruined?

[Lord Whitehead (Lab)]

I do not recognise the scenario that the noble Lord paints. Not only is this AR7 settlement good for energy prices—indeed renewables and low-carbon energy have reduced overall prices by 25% because of the effect of the merit order and the driving of gas to the margins in terms of prices—but the industrial work that will be undertaken will be enormously good for a large number of jobs with the fabrication and erection of piles, jackets and all sorts of things which go with this. By the way, the Government are producing a clean energy bonus to make sure that that work is in Britain, so it is a major industrial step forward for this country in its own right.

The noble Lord mentioned that I had not said anything about intermittency. I thought that I had dealt with that issue by saying that one thing we have to do as far as our energy is concerned is run the whole system smartly. Wind, both onshore and offshore, has tremendously increased its efficiency—ie, the proportion of time it produces wind—and the issue at the moment is not whether wind collectively produces a large output on a reliable basis. After all, we had over 80 days last year when renewables and low carbon completely fuelled our energy economy. The fact is that intermittency is a problem only if you do not have a smart system to use that energy where you have it in the smartest possible way. That is why, among other things, there has been such a development imperative on batteries and other low-carbon forms of storage that distribute the energy in a much more coherent way from the sources that we have.

It really is not a scenario that I recognise. I do not think the British economy is going to be ruined by this; on the contrary, this is going to be a great leap forward for the British economy. After all, as has been said on a number of occasions, the green economy in Britain is growing three times as fast as the general economy. This is where the growth is going to come from over the next period, and is very much a leading part of that growth and the new industrial future.