Energy Bill [HL]

Debate between Lord Oates and Baroness Blake of Leeds

Committee stage
Wednesday 7th September 2022 Lords Chamber

[Lord Oates (LD)]

My Lords, I declare my interest as a member of the UK Hydrogen Policy Commission. I do not disagree with any of the amendments, and having a stringent green hydrogen standard is important. However, it is also important to stress that hydrogen is for use not only in home heating—I share some of the noble Baroness’s scepticism about that—and there are very significant uses of hydrogen at present in the chemical industry and as a feedstock in fertilisers. They must clearly be the priority, and we certainly need green hydrogen for that, which is a lot of green hydrogen. Although I absolutely share the ambition on tight standards for green hydrogen, we will definitely need it there, and in some of those hard-to-decarbonise areas such as steel production and the building industry. We should absolutely use it for purposes where electricity is not an easy solution, but let us not talk it down or talk about it as if it is a solution only to home heating, where I agree it probably is not practical.

[Baroness Blake of Leeds (Lab)]

Just to add to that list of uses, I am interested in the development of the hydrogen village, as outlined in the Bill, which is a really interesting example. There are also other uses in transport, for example, which are very well advanced, and we very much look forward to the outcome of those debates.

I do not want to prolong the debate, but the obvious question to me is that a standard has been established and had extensive public consultation and multiple engagement sessions with experts by stakeholder groups, as I understand it. I just wonder why we would want to undermine all that work and complicate the situation by suggesting that the Secretary of State could override the standard. Perhaps the Minister could, in his summing up, give us a very clear explanation of how any changes to the standard and protection might be achieved, to ensure that stakeholders and the public are kept informed, as this is, as we have heard, an area of both enthusiastic response and concern.

Energy Security Strategy

Debate between Lord Oates and Baroness Blake of Leeds

Wednesday 27th April 2022 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for coming here to answer our questions. However, I am disappointed that we only have this opportunity 20 days after the publication of the strategy, due to the Government’s decision to publish it while the other place was not sitting and thereby avoid immediate scrutiny.

On the Statement itself, I will begin with the aspects that we welcome. The last Labour Government gave the go-ahead for new nuclear sites in 2009, which have seen little-to-no progress. It now time for the pace to pick up on Sizewell C and the development of small modular reactors. The establishment of Great British Nuclear, if it achieves its goals, should be welcome, but, frankly, what is needed is action rather than additional bureaucracy and figures plucked out of the air without regard to cost, speed or deliverability. Can the Minister set out a timetable for the establishment of this body and, more importantly, the delivery of the eight reactors the Statement suggests could be set up at a rate of one per year?

We also welcome the Government’s target for offshore wind of up to 50 gigawatts by 2030. We need to ensure that developments of this kind lead to creating British jobs, which is not always the case under schemes from this Government. Can the Minister offer assurances that this will be addressed as the strategy is implemented and that other necessary steps to achieve it, such as grid investment in the North Sea network, will be taken?

However, the main issue with the strategy is what is missing. In short, these steps, while welcome, will not provide for households struggling with the cost of living crisis. They do not constitute the green-energy sprint that is needed to cut household bills, reduce reliance on Russian imports and cut emissions this decade. Measures that could have made an immediate difference to households and businesses have been ignored. On the cheapest, quickest, cleanest renewables such as onshore wind and solar, the Government have caved to Back-Bench pressure.

Onshore wind is four times cheaper than gas and overwhelmingly popular, but hundreds of projects that communities want, and are ready and waiting for, have been blocked. Earlier versions of the strategy showed that the Government were well aware of this, yet this strategy contains little beyond vague platitudes, and nothing to reverse the results of their ban on onshore wind projects in 2015, which destroyed the market, with only 20 new turbines granted planning permission between 2016 and 2021. Doubling onshore wind capacity to 30 gigawatts by 2030 could power an extra 10 million homes, add £45 billion to the UK economy and create 27,000 high-quality jobs. Does the Minister accept that bills will be significantly higher as a result of this failure?

The story with solar is not much different. Slashing solar subsidies in 2015 crashed the market, and many projects that could have been enabled are waiting in abeyance. Why have the Government watered down their ambition, rather than properly committing to tripling solar power by 2030?

The main hole in the Statement, for all those millions of people paying at least an extra £170 per year on energy bills, concerns energy efficiency. Energy efficiency is the best, quickest, most effective way to reduce energy bills, but there is no new money for it. Vulnerable people in this country need a national emergency plan to insulate homes, which could cut bills for the millions of pensioners and low-income households who need it most. At the same time, it would create new, skilled jobs. Instead, vulnerable people are being condemned to live in cold, draughty homes and paying more than they need to. The Minister previously admitted that the Government were keen to go further. So, who stopped them, the Secretary of State or the Chancellor?

The Government have missed another opportunity to close the door to fracking and continue to float the idea of a new coal mine in Cumbria. They have also failed to adopt Labour’s proposal of a windfall tax on oil and gas firms that are making record profits while bills skyrocket. Overall, it is fair to say that the energy strategy is disappointing and underwhelming. We can only ask how the Minister expects to reassure your Lordships’ House of the Government’s commitment to net zero if they continue to act to the contrary.

[Lord Oates (LD)]

My Lords, there are things to welcome in this Statement but unfortunately, there are also many missed opportunities. Energy security is obviously critical at this time, but we must understand that it is about not just security of supply to the United Kingdom but the fact that millions of households right now feel a complete lack of security regarding their ability to pay their energy bills going forward, and particularly as we go into the next cold period.

The Government had an opportunity to take up my right honourable friend Edward Davey’s proposal: a windfall tax on the super-profits of the oil and gas industry, which the Labour Party has also argued for. That could have unlocked finances to give further support to people who will be desperately vulnerable this winter.

As the Liberal Democrats and many others in this House have repeatedly stated, curtailing the wasted energy that leaks out of our buildings should be the No. 1 priority in the hierarchy of measures we take to improve our energy security, reduce carbon emissions and cut costs for households. But there was nothing new in the Statement on this front. I asked the Minister at Questions yesterday why the number of insulation measures installed annually in the UK had fallen from a high of 2.3 million during the coalition to an average of less than 10% of that peak since then. He did not really give me an answer, to be honest, but I do not blame him for that. If he was unconstrained by collective responsibility, he would be able to be clear that it was down to the myopic foolishness of the Treasury, which has kyboshed many of the schemes that have been brought forward in the past. Not least of these is the green homes grant, which was destroyed by its lack of understanding that this has to be a long-term project, not a short-term stimulus measure. I hope the Minister will not be deterred, however, by that myopia, and will continue to urge his government colleagues to take a more creative approach to this issue, including fiscal measures such stamp duty discounts and council tax rebates for homes that improve their energy performance certificate ratings.

Can the Minister also tell us when the new ECO4 regime, which he mentioned yesterday, comes into effect? Am I correct in thinking that there is gap between ECO3 and ECO4 coming into effect? If so, why is that being allowed to happen?

Like the noble Baroness speaking for the Labour Benches, I welcome the extra commitments on offshore wind, but I also share her view that this is a massive missed opportunity for onshore wind. Onshore wind, as has been said, is one of the cheapest ways of powering green energy, and it is absolutely reckless that we are putting it aside.

On oil and gas, I hope the Government are really thinking about the danger of stranded assets on any new exploration. That is a dangerous thing.

I should declare my interest as a member of the UK Hydrogen Policy Commission in saying that I very much welcome the Government’s commitment to doubling their ambition to 10 gigawatts by 2030, and that for the first time, at least half of that will be green or electrolytic hydrogen.

Our ambitions are now similar to those of many of our international competitors, which is welcome, but the funding allocation behind them is completely different. We are not putting in anything like the money that our competitors are. Could the Minister look at that issue in particular?

Finally, will the Minister also look at the support that will be needed by local authority planning departments and councillors, which will have to deal with an increasing number of hydrogen-related planning applications? Currently, most do not have the necessary skills or resources to deal with them or to address the inevitable concerns. Will he also look at the regulatory environment that will be required? The hydrogen strategy suggests that regulations will be made on a piecemeal basis as hydrogen is scaled up, but this misses the point that regulatory certainty is absolutely required if the scale-up is to happen at all. I hope he can address a few of those questions.

Boiler Upgrade Scheme (England and Wales) Regulations 2022

Debate between Lord Oates and Baroness Blake of Leeds

Monday 4th April 2022 Grand Committee

[Lord Oates (LD)]

My Lords, I too thank the Minister for his comprehensive explanation and for having spared the time last week, with his officials, to explain some of this stuff to me. It is welcome that we have a simpler scheme and that the Government are trying to understand that big schemes that cannot be met with the skills required, et cetera, do not bring any benefit. These are the key things that arise from the scheme.

The noble Lord, Lord Jones, raised the issue of skills, which are fundamental to everything in this area, not just in terms of heat pumps. As we green our economy, we have to ensure that we build our skills base. I know that the Minister talked about a lot of money having been spent on training under the previous green homes grant scheme and the money being spent by manufacturers. But we need to ensure that the Government, working with local authorities, skills providers and industry, are really looking across the piece about greening the economy and how we ensure that the skills are there to do it.

As I understand it, the grant scheme is to be installer led. That is obviously beneficial because the installers will, I hope, get used to that process, which will make it a bit less daunting for consumers. It is also encouraging that proper quality assurance is being required although, again, that clearly also constrains the ability to meet demand.

It is very important that all those installers will be required clearly to advise home owners on the appropriateness or otherwise of installing a heat pump in their property. As we have heard from the noble Lords, Lord Carrington, Lord Jones, and Lord Vaux of Harrowden, properties vary immensely. The performance of these pumps also varies and public confidence in the scheme should not be lost—as the noble Lord, Lord Vaux, said, it could really disappear overnight. If people feel that it has been oversold and they have been provided with replacements for their heating systems which do not achieve the heat and hot water that they are used to, or have been promised, we will have a real problem. I hope that the Minister will be able to reply to those important points that the noble Lord raised.

I do not have a heat pump in my own property. I sought to get one installed under the green homes grant scheme; unfortunately, that scheme came to an end, but my property was also said not to be suitable. It is clear that not every property is suitable and that we will really have to think about those which are not. Although a lot of rural properties may well have the space for a ground source heat pump, many of them may be old and poorly insulated and it may also be difficult for heat pumps to operate effectively there. I notice that, for off-grid properties, biomass boilers are to be allowed. In response to the question of the noble Lord, Lord Carrington, I would be interested to know whether liquefied natural gas made from the organic materials that he talked about would be counted as biomass.

We have also heard about two gaps in particular, one of which is the seven-week gap in this scheme, which is obviously an important concern for manufacturers. But we also heard about the gap raised by the Secondary Legislation Scrutiny Committee between the Government’s ambition of 600,000 heat pumps being installed per year by 2028 and the 30,000 each year over the next three years under the grant scheme and the 200,000-plus heat pumps it is estimated will be installed in new builds when the new future homes standard come in. There is still a big gap there, and I am not entirely convinced that the Government have thought through how they can match their ambition with delivery.

If we are to decarbonise domestic home heating in this country, we cannot rely simply on grant schemes. I know that lots of different schemes are running, which sometimes overcomplicates things for consumers, but we really need to have fiscal incentives in place as well to encourage home owners to take various measures that can help not only to decarbonise the heating system but reduce demand, because reducing the amount of energy that we waste must be one of the central things we do. We cannot have systems in place that disincentivise the installation of heat pumps via the impact that the noble Lord, Lord Vaux of Harrowden, explained on the energy performance certificates. It would be interesting to hear the Minister’s response on that as well.

Finally, we on the Liberal Democrat Benches commend the Government on their ambition in this area and on having learned some of the lessons of the green homes grant scheme. There is obviously an issue about how we meet this 600,000 target. I am not sure that all the detail is there, but we hope to hear more about it in the coming months.

[Baroness Blake of Leeds (Lab)]

My Lords, in debates such as this, from listening to the excellent contributions from my noble friend Lord Jones, and the noble Lords, Lord Carrington, Lord Vaux of Harrowden and Lord Oates, more questions come up as we go along. I look forward to the Minister’s response on some of the technical details.

I go along with the general response in welcoming the purpose behind the scheme. The ambition is clear. Obviously, the context is the imperative to decarbonise for our net-zero targets and energy security is absolutely at the forefront of everything we are discussing at the moment, but perhaps we have not dwelt enough on the link with the cost of living crisis and the real concerns we have about people being able to afford to heat their homes, as well as all the other challenges for people bringing up families, in particular, and older people, who are also making terrible decisions about heating or eating. There is a very complex background to this, as we have heard.

The main question we have running through this is whether the amount of funding available—I thank the Minister for the detail on the background to the upgrade scheme—realistically has a chance of delivering the number of conversions laid out in the proposals.

I go to personal experience. I have talked to people over the past few days who have been considering upgrading their boiler and heard clearly the reasons why, at this moment, they have decided not to go down that route. Of course, the fundamental one is cost, but efficiency is also a major concern. Noble Lords know my background in local government; I know that the Minister visited Leeds to look at a scheme for retrofitting housing. The biggest challenge we have is retrofitting and suitability for purpose.