Great British Energy Bill

Lord Offord of Garvel Excerpts

Committee stage
Wednesday 22nd January 2025 Grand Committee

Moved by

[Lord Offord of Garvel]

111: After Clause 7, insert the following new Clause—
“Impact assessment of offshore wind energy installations and generation(1) The Secretary of State must assess the impact on—(a) the environment, and(b) animal welfare standardsof offshore wind energy installations and generation which occur under Great British Energy’s functions.(2) If an assessment under subsection (4) determines that relevant offshore energy installation and generation—(a) is causing environmental damage, or(b) has significant animal welfare issues,then Great British Energy must cease facilitating, encouraging or participating in the relevant activity.”Member's explanatory statement
This would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak to Amendments 111 and 112 in my name, and in support of Amendment 113, in the name of my noble friend Lord Fuller.

Amendment 111 would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies. Amendment 112, also in my name, similarly requires an environmental impact assessment, but with the focus on the decommissioning of oil and gas structures.

The threat posed by the installation and generation of offshore wind farms and tidal energy is not new to the House. Many will be familiar with these concerns, as we on these Benches raised such issues in Committee in debates on the Crown Estate Bill, and discussed the purpose of electricity generation and the Crown Estate’s role in the stewardship of our seabed.

In considering the amendments in my name and that of my noble friend Lord Fuller, we must again address the Crown Estate’s strategic and unprecedented partnership with Great British Energy, which is estimated to result in up to 30 gigawatts of new offshore wind developments reaching seabed lease stage by 2030. We should expect to see considerable and accelerated growth in offshore renewable energy projects, with offshore wind contributing significantly to these efforts. The UK is the second largest offshore wind market in the world. Under the new Government, allocation round 6 has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream.

The speed and scale of these planned developments raises concerns about the impact on the marine ecosystem, as expressed by bodies such as Birdlife International. As stewards of our seabed and investors in and facilitators of offshore renewable energy projects, the Crown Estate and GB Energy have a duty to assess the impact of offshore energy installation and generation. GB Energy must restrict such installation and generation if it is found to cause the environment and its associated animals harm. Environmental concerns linked to the installation of offshore energy projects and the operation of these technologies include, but are not limited to, increased noise levels, the distortion in light pollution, and the potential impact on carbon storage and the biodiversity of the seabed and its composition.

In an overview of the ecological impacts of offshore wind on the marine environment, Birdlife International highlighted the impact of the installation and operation of offshore wind farms on marine animals. It found that the installation and generation of offshore wind technologies produces underwater noise, affecting the echo location behaviour of marine mammals. Porpoises, seals and marine birds have been shown to be displaced by wind farms, with some marine birds displaying consistent avoidance behaviour during breeding seasons. Noise pollution produced by piledriving has also been found to impact the behaviour of pelagic fish.

I have briefly outlined the impacts on our environment caused by offshore wind, yet other technologies also have the potential to cause significant harm. I am grateful to my noble friend Lord Fuller for addressing the threat tidal energy poses to the fish which inhabit our seas. As he will no doubt discuss this impact in more detail, I will succinctly outline the problems associated with tidal energy generation, which is foreseen to increase rapidly in the coming years. Tidal turbines in open water could result in additional mortality caused by rotor blade collision. This is significant, as tidal waters serve as key feeding areas for fish, as well as passage corridors for migratory fish. Other risks include changes in underwater noise, electromagnetic fields and habitats, and displacement.

Finally, I hope the Minister will listen to the concerns highlighted in the amendments in this group and will confirm to the Committee that he recognises that Great British Energy is in a unique and critical position to assess and minimise the impact of offshore energy installations on our environment and the marine life which inhabits it.

[Lord Fuller (Con)]

My Lords, I rise to speak to my Amendment 113. I have previously tabled amendments to the Bill on land, and now I return to the sea, which well fits someone whose territorial designation is Gorleston-on-Sea in the county of Norfolk.

These amendments require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal energy technologies and their associated cabling. When we consider tidal energy, I am not thinking just about the fish, important though they are—in the tidal races, the machines can mash their flesh—but about sea-birds and the rest of the marine flora and fauna. I am thinking about not just living creatures but the wider environmental effects that may happen slightly away from the installations of the machines themselves, in the associated cabling that links those machines to land—a topic I will return to.

I am not against harnessing this almost inexhaustible supply of energy. The energy is there; it is year-round, predictable and reliable. It deserves to be won and it should be won. But I am not starry-eyed about the practicality of building machines that can survive in the most hostile environment, pounded by the seas and eaten away by salt-water corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to reliably engineer things in these tough, salt-aggressive environments. It is hard to engineer reliability in these unforgiving places, but that does not mean we should not try.

We know that tidal generation is best located where the water flows fastest—where it is choked through the channels, so that the speed naturally increases—so the machines can operate most effectively. Last November, I visited Saint-Malo and saw for myself the world’s first tidal barrage power station, opened in 1966; it is nearly 60 years old. It was a really impressive spectacle. It is cheap energy, but it has not come without cost. Thomas Adcock, an associate professor in the department of engineering science at the University of Oxford, says that there has been a “major environmental impact” on the Rance estuary as a result of the tidal station. He said that

“this would make it very difficult to get permission to do such a barrage again”.

Researchers point to the adverse impacts on marine life of altering sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. I saw for myself that the fast-flowing water passing through the 24 turbines left nowhere for the fish to go. Sand-eels and plaice have disappeared, and the silting has reduced the number and variation of other fauna. Sand-eels are the subject of the very first post-Brexit EU fishing trade spat, and of course they are the preferred diet of British sea sea-birds, so this is an important matter. It is in the public interest that this all be taken into account, so that mitigations can be put in place.

My amendment would require GB Energy to take into account a number of factors and to continuously monitor them when assessing energy proposals. Examples include the cumulative impacts of the installations when considered alongside the predicted impacts of other projects in the area; transboundary impacts, whereby activities in other countries, such as commercial fishing, may be affected, as we have seen; and interrelationships whereby impacts on one receptor, such as noise, can have a knock-on effect on another and disturb species. Examples include sub-sea noise, which my noble friend mentioned, physical processes such sedimentation flow —we saw this in France—and the updated navigational risk assessment possibly deflecting vessels into the path of other sensitive zones.

For offshore tidal proposals, perhaps with tethered devices, we must have regard to the cables that will transfer the energy to the coast. Coming from Norfolk, I take particular interest in the Cromer shoal chalk beds marine conservation zone. It is one of 91 such protection zones established by the last Government, by an organisation lately chaired by my noble friend Lord Banner. The MCZ is a protected inshore site 200 metres off the north Norfolk coast, extending about 10 kilometres out to sea and covering 321 square kilometres. It protects our diverse species. It is predominantly sandy, but the chalk beds provide a stable surface for seaweeds and static animals to settle and grow, and they are home to the Cromer crab, one of the important exports of our county; it is an important source of economic activity too. So, even though marine energy machines may be some miles offshore, we need to consider the whole cable system as well, particularly if it passes through places like the Cromer MCZ on its way to the grid.

None of this is mentioned in the Bill, which is a slim Bill with fat consequences. The Secretary of State is not required to give directions to GBE to take these important environmental safeguards into account. My previous amendments observed that GB Energy is a company: there is to be a fiduciary board, and it is established under the Companies Act 2006 to promote its private self-interest. So, unless it is constrained, we should not be surprised if GB Energy acts in its private interests, not the country’s interests. If it follows purely commercial principles, why should it need to take the marine environment into account unless it is directed to? This amendment would require the Secretary of State to provide such directions.

I expect the Minister to say, “This is all very well but it is not really necessary”. However, we must learn lessons from the water Bill, which flowed through this House as an example of what to do when you have a private company that is established for public purposes yet strays from the path. I do not want a repeat of that. Success does not look like having successive legislation later to cure the unintended consequences of GB Energy getting carried away because it acts in the private interest, not the public one.

Let us put protections in the Bill now. This amendment would provide a simple safeguard, along with those proposed by my noble friend Lord Offord of Garvel, so that the Secretary of State is directed to ensure that sensible precautions are taken to protect our fisheries, sea-birds and other flora and fauna in the whole end-to-end tidal generation system, from the coast all the way to the grid. I am not trying to block tidal power and I am certainly not seeking to add cost or complexity—still less a set of directions or to provide excessive control. My concern is to make sure that this private body, established for public purpose, acts in the wider public interest—not just its self-interest—as to its environmental responsibility and sets an example to others.

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The key point is that the environmental protections are in place. Noble Lords may say that they need to be improved—and the Government will listen to that—but, equally, I think many of us agree that the current planning system needs reform and that we need to speed up approvals where appropriate. I am not going to fall for the question from the noble Lord, Lord Hamilton; all I can say about what was in the newspapers this morning is that it was purely media speculation. However, lying behind it is the aim of the Government, which will have to be cross-departmental, to reform and speed up the planning system, and potentially to deal with the bat issue. But it must be done while ensuring that we maintain our environmental protections. It is on those protections that we should depend, not on giving Great British Energy a duty that it is not right for it to discharge.

[Lord Offord of Garvel (Con)]

My Lords, in concluding this group, I thank all noble Lords who have made thoughtful contributions on it. We are dealing with the impact of GB Energy and its activities on our environment.

In my concluding remarks, I will briefly mention Amendment 118, in the name of my noble friend Lady Bloomfield, which was discussed previously and is closely tied to the same issues raised in this group. That amendment would create a statutory duty for GB Energy to behave in a way that looks to promote nature recovery. The British Ecological Society has found that nature-based solutions can help to resolve the problems of climate change by reducing atmospheric greenhouse gas concentration. The alarming truth is that England is widely considered to be one of the most nature-depleted countries in the world, following historic and ongoing declines.

We must also note a point raised in the debate this afternoon: it is not just the deployment of wind farms or tidal technologies that causes environmental damage. If GB Energy is also set to decommission, as we have discussed, or to repurpose oil and gas structures, it must assess and mitigate the risk of this practice on the environment. As my noble friend Lord Fuller so rightly explained, GB Energy is a public company; it is only right that it acts in the public interest. I do not see why the Minister would disagree, but I thank him for his detailed response. In the meantime, I beg leave to withdraw the amendment standing in my name.

Amendment 111 withdrawn.

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[Lord Petitgas (Con)]

My Lords, I will make a link between Amendments 118, 118A and 130.

On Amendment 130, it will be interesting to see whether we get the results, but my impression is that, in this country, there is not a single net-zero or renewable project that is not subsidised by the Government in some way. In fact, that is one reason why there has been so much private capital: with the electricity price being run off the marginal cost of gas turbines and the marginal cost of renewable energy—particularly from wind farms—being zero, in effect, there is no way not to make money in that business.

This raises a question around the subsidisation of the whole system, including whether GBE should pile in further when it is already subsidised. It also raises the question of whether we need GBE, because we already have private capital in the system. In fact, we probably have more wind energy than anybody else in the G7. We have said this before. There is a lot of private capital coming into this industry.

The real question is less about GBE and more about what level of subsidisation we are prepared to put in. This may explain why we have the highest energy costs in the G7—double those of the US. This morning, my noble friend Lord Howell talked about Stargate and the announcement made by the US. We will find it very difficult to compete—let alone not having the money, our energy costs are double those of the US—if we want to run LLMs and supercomputers.

[Lord Offord of Garvel (Con)]

My Lords, I thank and express my support for my noble friends Lord Frost and Lord Hamilton of Epsom, whose amendments address the matter of subsidised renewable energy technology. Considering that GB Energy is already supported by £8.3 billion, I see no viable reason why it should invest in renewable energy projects that are already substantially supported by government subsidies and funded by the British consumer, as my noble friend Lord Petitgas highlighted. Surely it is essential that the renewable energy industry in the UK is not reliant on government handouts for ever. We must look to create an environment that promotes competition and innovation and mitigates the likelihood of inefficiency.

At present, the Government subsidise low-carbon electricity initiatives through contracts for difference, where they guarantee developers a fixed price for the electricity that they generate. This is funded via a levy on consumer bills and, at the end of last year, the Government were considering holding the largest auction yet in 2025 despite recent scrutiny over consumer energy bills. The British consumer is already burdened by the cost of turning off wind turbines to avoid overloading the power grid; this costs the UK £1 billion a year, with that predicted to rise to more than £3.5 billion in the next decade. Why should the taxpayer be burdened numerous times?

According to the OBR, environmental levies are around £12 billion. This amounts to £400 per household in the UK. Yet the cost of offshore wind is less than current market prices and those agreed in auction rounds. If renewables are supposedly cheaper, I query why we are paying these subsidies in the first place. The truth is that the Government’s clean energy by 2030 agenda will require substantial levels of borrowing, which will be spent on subsidising renewable energy technologies. This rushed target will only cost the consumer more. It will not cover energy bills by the £300 a year promised during the election campaign.

Amendment 130 in the name of my noble friend Lord Frost would prevent the Bill being passed until the Secretary of State publishes a report calculating the costs to consumers and taxpayers of the UK renewable energy industry. The amendment raises the issue of transparency. If we are to pass a Bill that is so financially consequential, we must have sight of the Government’s current spending on renewable technologies.

Amendment 118B from my noble friend Lord Hamilton of Epsom would prevent GB Energy investing in a project

“that relies wholly or in part on”

government subsidies. Amendment 129 would prevent the Act being passed until

“the Secretary of State publishes a report on the appropriateness of further Government subsidy for offshore wind developments”.

These three amendments neatly touch on the concerns that I have raised. I ask the Minister to thoroughly consider the worries expressed by my noble friends.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to all noble Lords who have taken part in this debate, which reflects previous debates in Committee. It started with the noble Lord, Lord Hamilton, being worried that GBE will invest badly, not make money and invest in speculative projects, which he thought the Treasury might encourage it to do. My experience of the Treasury is that that is not how it works out in practice. Our challenge is encouraging the Treasury to make investment decisions, and the scrutiny with which it approaches this matter can be described as vigorous.

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[Lord Vaux of Harrowden (CB)]

My Lords, I wish briefly to comment on and support the intent of Amendments 122, 123 and 124 tabled by the noble Earl, Lord Russell. At the risk of sounding like a stuck record, the basic problem with the Bill is that it includes absolutely nothing about what GBE will actually do. Yes, there are the objects in Clause 3 but, as we debated at some length previously, they set out only what GBE is allowed to do, not what it is intended to do.

What it is intended to do—its objectives, if you like —will be set out in the statement of strategic priorities in Clause 5. We have not seen those and it would appear that we will not see them for a while—certainly not before the Bill passes. As the Constitution Committee pointed out, that key document will not be subject to any parliamentary scrutiny—in fact, the Constitution Committee referred to it as “disguised legislation”—nor is there anything in the Bill to prevent GBE starting its activities before that statement has been published.

As I say, we have had several debates on this, so I will try not to repeat myself. There are a number of ways to do this: the new amendments in the name of the noble Earl, Lord Russell, may or may not be the right way and we have had other amendments previously. However we do it, it is critical that at least some substantive level of parliamentary scrutiny should be available on how GBE intends to spend its £8.3 billion before it starts to spend significant amounts of money.

[Lord Offord of Garvel (Con)]

I thank the noble Earl, Lord Russell, for moving his amendment and all noble Lords who made contributions or comments. Perhaps I may take them thematically, starting with the importance of oversight. As regards the amendments in the name of the noble Earl, Lord Russell, we on these Benches are in favour of the sentiment of Amendments 122 to 124.

As mentioned by the noble Lord, Lord Vaux, the strategic priorities for GB Energy are not included in the Bill. Indeed, we have not had sight of those most important principles; we simply do not have any concrete examples of what GB Energy as a company will be trying to achieve. I must therefore ask the Minister: how can we support the Government if we do not even know what the proposed investment vehicle will put taxpayers’ money into? This House and the other place must have sight of the strategic priorities of GB Energy so that we can assess its goals, what it intends to achieve, how these goals will be achieved, in what order they will be prioritised, and how much money will be spent on those goals and priorities.

I turn to Amendment 125 in my name, which ensures that the Bill cannot come into force until a financial framework document has been laid before Parliament. Much like the noble Earl, Lord Russell, I am deeply concerned that we have not yet had sight of this most important information. I do not feel it is possible to move forward with the Bill, or GB Energy itself, until we have understood its financial structure. I therefore strongly urge the Government to produce a financial framework for GB Energy and let us examine it.

Amendment 126, in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard, requires the Secretary of State to publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. The Government are already putting at risk 200,000 jobs in the North Sea oil and gas sector in the UK but, of course, this will hit the city of Aberdeen particularly hard, as it is the centre of the UK domestic oil and gas industry. None of us would object to the Government looking to bring a more diverse range of sovereign energy sources online, but we should not be sacrificing hundreds of thousands of jobs or people’s livelihoods in the process.

The transition to green energy, if it is managed correctly and done in an orderly fashion—not on an artificially accelerated basis—has the opportunity to provide a swathe of new well-paid jobs. We must therefore hold the Government to their word that GB Energy will create 650,000 jobs, which is a big number and target. It is for this reason that the Secretary of State must publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. That will show noble Lords whether the Government are keeping their word, whether these jobs are created and will be of benefit to Aberdeen, and whether we have indeed seen the transition talked about.

Finally, I turn to Amendment 127 in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard. That amendment will ensure that the Bill cannot come into force until the Secretary of State has published a report on the cost and viability of the Government’s net-zero targets. We should transition away from the use of fossil fuels and reduce the volume of greenhouse gases we emit into the atmosphere, but it must be done in an economical and sustainable manner. I hope that the Minister has listened carefully to these concerns.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do listen carefully to what noble Lords have said. Our final debate in Committee, as the noble Lord, Lord Vaux, suggests, takes us back to some of the early debates and concerns that noble Lords have. I am particularly grateful to the noble Earl, Lord Russell, for his support. The point he made is that the cost of doing nothing will, in the end, be much more expensive than the cost of net zero. I say to the noble Lord, Lord Hamilton, that sticking to oil and gas is certainly not a free lunch, either. The noble Earl also pointed to the declining reserves in the UK continental shelf. This is a fact of life and why there were losses of jobs in Aberdeen under the previous Government. I will come back to the issue of Aberdeen in a moment.

Clearly, the effect of the amendments will be to defer the commencement of most provisions in the Bill until several requirements have been met. They include the laying before and approval by Parliament of a framework document and statement of strategic priorities, the publication of an outline statement of strategic priorities, the publication of an assessment on the expected impact of the Act on the number of jobs in Aberdeen and the publication of a report on the cost and viability of the Government’s net-zero targets. We have already discussed many of these matters in Committee and the Committee will be aware of the Government’s views and intents on this.

Our aim is to get this Bill on the statute book as soon as we can. It is also our clear intention that the statement of strategic priorities cannot be produced without the full involvement of Great British Energy in order to get its expertise, including that of the newly appointed non-executive directors, to inform the statement. This is why we do not believe that we can publish the statement of strategic priorities either during the passage of the Bill or before Royal Assent. Once parliamentary approval is given, we will ensure that we move as quickly as we possibly can to produce the statement.

On accountability, in the end, Ministers will agree with the statement that we are accountable to Parliament. I do not think your Lordships’ House is backward in holding Ministers to account for what they do. We have the Select Committee process, there are numerous opportunities for scrutiny of what we decide in relation to the statement and, of course, the statement is also subject to revision from time to time.

On the framework document, I suppose I can only repeat what I said before. We are committed to producing a framework document. It will, as framework documents do, cover the governance structure, the requirements for reporting and information sharing, and the financial responsibilities and controls. I have given this assurance from the Dispatch Box, so that is a government statement of what is going to happen. The framework document will be extensive and will follow the normal course of action. I hope that assures noble Lords that everything is being done in a proper way and with proper accountability, ensuring that Great British Energy is subject to the appropriate controls—as is only right for a body that is ultimately responsible to the Secretary of State for its activities.

We think that it is a very good thing that GBE will be based in Aberdeen; a significant proportion of GBE’s staff will certainly be based there. We think that Aberdeen will benefit from new jobs in the economy created because of GBE’s investment in renewable energy projects. I understand and very much accept the need to ensure, as we have talked about, a just transition for the people involved in the oil and gas sector. We want to do everything we can to enable offshore workers to lead the world in the industries of the future, which is why we are working very hard with businesses, employees and workers to manage our existing fields for the entirety of their lifetime and are putting in place programmes to support a transition. It is interesting that research from Robert Gordon University shows that 90% of oil and gas workers have medium to high transferable skills for offshore renewable jobs; knowing the skills that people who work in the North Sea bring to the jobs they do, that does not surprise me.

This is all I will say to the noble Lord, Lord Hamilton, in relation to President Trump’s decisions: it is interesting that, in his first term, the US actually saw quite a drive into renewable energy. It may be that we will still see the same direction under the new Administration in the end; that is for the US Government to decide. We as a Government are sticking to the Paris Agreement and to the need to get to net zero and clean power as soon as we possibly can.