Scotland: New Nuclear Power Generation

Lord Offord of Garvel Excerpts

Tuesday 18th March 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, we are always open to discussing nuclear power in that group, and with the Scottish Government. However, it is very difficult to make progress in view of the current Scottish Government’s position on nuclear. I can say that, on 6 February in the Scottish Parliament, Anas Sarwar, the leader of the Scottish Labour Party, called on John Swinney, the First Minister, to drop his ideological opposition to nuclear power in Scotland.

[Lord Offord of Garvel (Con)]

My Lords, the GMB came out and said that the Scottish economy is losing out to the tune of £1 billion because of the Scottish Government’s ideological indifference to nuclear. Am I right that, last week, the noble and learned Baroness the Advocate-General said that there had been a fundamental reset in the relationship between the UK and Scottish Governments? I ask the Minister if this is not the time to demonstrate that reset. Can we please have a joined-up, holistic strategy for nuclear that does not stop at the Tweed?

[Lord Hunt of Kings Heath (Lab)]

My Lords, there has been a reset and we have been in close discussions with the Scottish Government on a number of energy matters, but the fact is that the Scottish Government are opposed to new nuclear development. I agree with the noble Lord—and Anas Sarwar said it too—that the refusal to allow new nuclear power plants is costing Scotland billions in investment and thousands of jobs, which will go to England and Wales instead. I agree with that, but the fact is that we are dealing with the Scottish Government, who, at this stage, are not prepared to go for new nuclear.

Licensed Oil and Gas Fields: Emissions

Lord Offord of Garvel Excerpts

Tuesday 11th March 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, we are of course in discussions with His Majesty’s Treasury over the next spending review and it would be premature for me to comment on any of the detail. Clearly, carbon capture, usage and storage have a very important role to play in the future, and I have noted my noble friend’s elegant bid for investment in Scotland in that regard.

[Lord Offord of Garvel (Con)]

My Lords, the Government have repeatedly refused to clarify whether Jackdaw and Rosebank will be shut down under their policy of refusing to grant any new oil and gas licences. That is despite both licences being granted in 2022 and 2023 in recognition of their contribution to net zero and to our national energy security. Will the Minister please clarify that this is not another example of government policy being dictated by lawyers rather than by politicians? How does he expect the Chancellor to fulfil her growth agenda with the most expensive energy prices in the OECD?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the best way to deal with energy prices is to move from being utterly reliant on international gas prices subject to the volatility that has arisen from the invasion of Ukraine by Putin. That is why we must move towards clean power as soon as we possibly can, to give ourselves energy security.

I cannot answer that question in relation to Rosebank and Jackdaw. The original consent decisions were subject to judicial review, which was paused pending the outcome of the Finch judgment. In the light of the Finch judgment, as I have said, we are consulting on new environmental impact assessments. When we have produced those, it will then be up to developers to make applications for consents according to the new guidelines we have produced. I cannot forecast the outcome of that process.

Warm Home Discount

Lord Offord of Garvel Excerpts

Monday 3rd March 2025 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, the Government have announced an expansion of the warm homes discount: a change that will see more low-income households receive a £150 payment to help them heat their homes. However, this payment is likely to be inconsequential for many households when compared with the increase in the energy price cap. The change to the warm homes discount is only a temporary fix. Ultimately, energy bills for both the British consumer and British businesses are far too high—something I am sure noble Lords on all Benches will agree on.

The Government must look to prioritise cheap energy if they are to protect the most vulnerable households. Instead, they have chosen an approach driven by ideology and it will be the British people who pay the price. The rush to ramp up renewables to meet their own unilateral target of clean power by 2030 will only push up prices and further increase energy bills. The network costs on people’s bills will be increased as the Government race to build twice as much grid in the next five years as has been built in the past decade.

Additionally, the OBR has said that environmental levies will increase from £12 billion to £14 billion by 2030, driven considerably by the hidden costs of renewables. This too will end up on consumers’ energy bills. Indeed, a close look at consumer energy bills demonstrates that half the bills are now accounted for by subsidies and network charges.

So, despite the general election pledge to cut bills by £300, it is plainly clear that the Government have chosen to put a political dividing line before any approach that will reduce the cost of energy. It is their decision to shut down the North Sea. This is an industry that generates billions in tax revenue, supports 200,000 British workers and produces home-grown energy. But the Government have opted instead for a tunnel-vision approach on renewables that relies on coal-power technology imported from China. This will not decrease energy bills by £300, as was promised.

I remind the House that the Prime Minister said:

“I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government”.


So can the Minister confirm how much energy bills will rise by before households see the promised £300? Will he confirm whether the Government intend to produce a full-system cost analysis of the impact of the clean power target of 2030 and the impact it will have on consumer energy bills? Finally, will he tell the House how much the Government expect levies to increase by over the next five years?

[Earl Russell (LD)]

My Lords, I welcome this Statement—in particular, the clear commitment to provide a one-off payment for next winter. These payments will help with continued rising household energy costs, as the energy price cap has risen again by 6.4%. Until we break our dependence on gas for 30% to 40% of our electricity generation and 85% of our home heating, we will remain at the mercy of the volatile international markets.

Indeed, households are set to pay over £800 more per year for their energy compared with the winter of 2020-21—a 77% increase. The UK has spent £140 billion on the international gas market since the war in Ukraine started, for no long-term energy security or reduction in the energy bills being paid. That is 10 times the total GB Energy budget to date.

We have 6 million households living in fuel poverty today, and most of them have been for some time. We have some of the worst-insulated homes in Europe and some of the highest energy bills. High energy bills are a continued legacy issue and are, in part, a direct result of the last Government’s failure to do more to transition to renewable energy earlier. Progress is being made on the transition and we welcome this.

The Climate Change Committee is absolutely clear and unequivocal. Politicians who oppose action on net zero will make their constituents poorer by driving up their energy bills. Although we welcome these measures, we ask the Minister to go further and introduce this much-needed help now, to provide help for those who need it now, and not to make people wait until next winter.

We also call on the Government to scrap the energy price hike for the nearly 10 million pensioners who lost their winter fuel payment and to provide more help to other vulnerable groups, particularly those with disabilities. The estimated cost is about £130 million. We also call on the Government to ensure that all energy companies sign up to a single social tariff as soon as possible, to provide a long-term, stable mechanism for helping to reduce fuel poverty.

We need to do more to smooth the energy price costs as we drive over the energy transition speed bump in the road ahead. We have constantly called for an emergency 10-year home insulation programme. Domestic home heating is still 77% gas powered. We need a huge and urgent increase in the number of heat pumps installed.

Finally, I want to ask about long-term reforms and for some clarity on the direction of travel on measures to reduce our energy bills, and in particular about electricity market reform, which feels like an idea whose time has come. Does the Minister agree? When can we expect progress?

Our electricity prices are linked to the global fossil fuel market. Natural gas prices thus set the UK market electricity price. Will this Government look at the option for decoupling electricity market structures so that we have one rate for gas and one for electricity? Is it not time to stop the artificial inflation of the price of our home-generated renewable electricity, so that the savings can be passed on to our bill payers?

Will the Government publish reports on these matters? Will they also look at reforming contracts for difference?

I am disappointed that we do not have consensus on climate change, but my hope is that we could have consensus on electricity market reform as a measure to save bill payers money.

Climate Change

Lord Offord of Garvel Excerpts

Monday 3rd March 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

The right reverend Prelate is absolutely right to identify those issues. It is worth making the point that the World Meteorological Organization has recently confirmed 2024 as the warmest year on record. I also refer the right reverend Prelate to the UN biodiversity summit in Rome on 25-27 February, where key decisions were agreed on resource mobilisation, monitoring and review of the global diversity framework. On his specific question, I will follow up with a letter.

[Lord Offord of Garvel (Con)]

My Lords, China is top of the league table for global CO₂ emissions, accounting for roughly a third of the total. In contrast, the UK’s share is a paltry less than 1%. In the last year alone, China had more coal capacity in construction than at any point in the last decade and, as a result, China’s industrial energy prices are seven times cheaper than the UK’s. Today, respected economics professor Gordon Hughes has said that the UK Government’s drive for net zero at any cost will add £900 to annual household costs. While we play the good little boy scout on net zero, does the Minister believe that this is an equitable trade-off for the British public?

Great British Energy Bill

Lord Offord of Garvel Excerpts

3rd reading
Tuesday 25th February 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I will speak first to the amendment in the name of the noble Lord, Lord Hunt, which is supported by the noble Lord, Lord Vaux. These Benches are pleased to see that continued progress has been made and that this government amendment has been brought forward. There has been a unanimous voice across the House that there needed to be more reviews in the Bill and that it was important to have this amendment, so we are pleased to have it in place.

I echo what was said on the Government’s amendment to the amendment and the addition of proposed new subsection (4)(a), which requires a copy of the review to be sent to the devolved Ministers 14 days before it comes to Parliament. My assumption is that that is there so that the devolved authorities have a chance to comment on the review and that those comments have a chance to come before Parliament, but it would be useful if the Minister could confirm why that new subsection has been added and what the Government’s thinking is on it.

We welcome the review, but it is happening over a five-year timeframe, with the first review completed at the important date of 2030. If the Government recognise the need for the review, why not have it on a more regular basis? A three-year or four-year timeframe would be more useful for this proposed new subsection to have the effect that the Government intend it to have.

I turn beyond the amendment to what I want to say at the end of Third Reading. These Benches have been consistently supportive of the Government and their objectives in this Bill. We believe that, done well, GB Energy will help to secure our energy independence and reduce our reliance on volatile international gas markets, which have proved so costly for UK bill payers and our economic prosperity.

The previous Conservative Government spent some £40 billion subsidising bill payers, and that money provided no long-term benefit to our overall energy security. Just this week, the Energy and Climate Intelligence Unit published a report on the anniversary of the invasion of Ukraine, stating that £140 billion has been spent by the UK on the international gas markets since 2021—the equivalent of £1,300 per person. Again, this has brought no long-term benefits.

We have the third-best wind resources in the world, so it is great to see that these are finally being properly developed to bring us long-term energy security and to reduce costs for our energy bill payers. The CBI reported this week that the green economy contributed £80 billion in gross value added to the UK economy last year and grew at a rate of 10%—three times faster than the rest of the UK economy.

Having said all that, I always felt that the Bill was a little bit too short and lacked the content that it needed; that has caused us some challenges when scrutinising it. We welcome all the amendments that have been passed; we believe they add value and that the Bill leaves this place in a stronger position than when it arrived. I am particularly grateful to the Minister and his Bill team for including community energy in the Bill. This is a really important amendment, and it will benefit our communities and help with the energy transition. Community energy has been supported by MPs and noble Lords on all sides, so this is a win for everybody. I am grateful to Power for People, which has provided support to all of us on these matters, and we will continue to press the Government, as others have already mentioned, on the future of the community energy fund.

We also welcome the other amendments that were tabled: the amendment on strategic priorities; and the amendment that the noble Baroness, Lady Hayman, negotiated with the Minister on sustainable development.

Finally, if noble Lords will excuse me, I want to say something about the words that we use as parliamentarians and how we talk to each other on the issues of climate change. I deeply regret the end of the political consensus on climate change. My personal feeling as a relatively new Peer in this House is that while bits of our debates on this Bill were excellent, there were too many moments when points were repeated, purely party-political points were made that did not improve or challenge the Bill, filibustering took place, or we had numerous votes that took place very late at night.

The public support action on climate change. Polling consistently shows 70% support. The public also want to see reductions in their energy bills; they do not much care, frankly, how that happens, but it requires all of us to make progress. These matters are challenging enough to address with a sense of consensus, and they are made even more difficult when political hostility is added to the mix. My final point is that we must all work better together so that we can all achieve more.

[Lord Offord of Garvel (Con)]

My Lords, in concluding for His Majesty’s loyal Opposition, I thank noble Lords from across the House for their tenacity in scrutinising the Bill, and in particular the noble Lords, Lord Alton of Liverpool and Lord Vaux of Harrowden, for their amendments. On my own Benches, I note the contributions of many noble friends, who have done sterling work to temper what is a misguided piece of legislation which will not deliver cheaper energy for UK households or businesses.

GB Energy is flawed because it exposes the conflict at the heart of this Government between the Chancellor’s stated priority of economic growth on the one hand and, on the other, the accelerated pursuit of net zero at any cost that the Energy Secretary has made his ideological obsession. While this scrap rages at the centre of Whitehall, there is only one loser: the public, who, it has been confirmed today, will be loaded up with the price of net zero to the tune of another £111 per household this year. That is directly because of this Government’s policies and a far cry from the promise in the Labour manifesto of a reduction in energy bills by £300 per year per household—a manifesto pledge which this Government have refused to include in this legislation.

As the Bill has progressed through your Lordships’ House and the other place, the chasm between rhetoric and reality has indeed been exposed. I believe that in a decade we will look back and ask why we invented this cardboard cut-out company. But despite our deep scepticism, it would be churlish not to wish GB Energy a positive start, so I offer some start-up advice. With its £8 billion of borrowed money, the first order of business should be a feasibility study of all the energy sources available to us in the UK. If it does so, it will discover the following. The dash for renewables at any price is a folly. In doing so, we are loading excessive costs on to our energy bills, to the point now where our industrial energy in the UK is five times more expensive than in the US and seven times more expensive than in China. All the while, we are offshoring jobs from the UK to China, turning UK revenue into Chinese profits. This is impoverishing our nation.

The Government are denying the facts. We are an energy-rich country, and our hydrocarbon industry is the envy of the world in terms of compliance and sustainability. Surely it is irresponsible to refuse to even explore the opportunities that onshore gas could bring, while of course undertaking an assessment of risk. The fact that this Government’s policy continues to tilt towards shutting down offshore oil and gas is surely an affront to the hundreds of thousands of skilled workers in Aberdeen and the north of Scotland. They surely deserve better than this.

Meanwhile, both parties agree that nuclear is efficient and clean, but it should be accelerated. We should cut the red tape by unleashing our homegrown engineers while being unafraid to learn from those, such as the Koreans, who have been able to roll out nuclear energy more quickly and at a lower cost.

If GB Energy does this feasibility study, it will realise the facts and then it should pivot net zero accordingly to ensure that our transition to a cleaner energy system is both fair and affordable to UK households and industry. For the sake of the country, we can only hope that it does so.

Finally, I believe it is important to state unequivocally that my own party must reflect on the last 14 years of government energy policy. The verdict of the electorate in July was clear and resounding. As many noble Lords are aware, an error does not become a mistake until one refuses to correct it, and I would encourage the current Government to heed these wise words.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we were debating my amendment, but we seem to have done the “the Bill do now pass” speeches as well, so if noble Lords allow, I will do both in my response.

I thank noble Lords for their general welcome for my amendment. I think it is a very satisfactory outcome of our debates in Committee and on Report. On the question asked by the noble Lord, Lord Vaux, and the noble Earl, Lord Russell, about the devolution aspect, the noble Earl put his finger on it. It seems perfectly appropriate that the devolved Governments should receive a copy before publication, because that then allows them to have sight of any findings that might be relevant and which they may have to answer on the day of publication. No slight is intended to Parliament in this, it is just the normal business of Government-to-Government relationships and courtesy. That is why we withdrew the original amendment and replaced it with the revised one, in the light of representations made to us by the devolved Governments.

On the timings of the review, noble Lords will know that we had in mind, at first, the UK Investment Bank, which I think has a seven-year review period. The noble Lord proposed three years and in the end we compromised. That is not unreasonable: Great British Energy must be allowed some time to set itself up and get itself into working order and then, at an appropriate point, we will have a review. It is worth making the point that GBE’s work does not come to an end in 2030; that is just a deadline we have given for clean power. We expert GBE to go on for many years to come, and therefore it is going to be a judgment, but we think five years is not an unreasonable time.

I say to the noble Lord, Lord Naseby, that I agree with him about the potential for small modular reactors —we have a programme that Great British Nuclear is running at the moment and I hope it will be able to come to some important decisions over the next few weeks and months—and he is absolutely right to mention them. I also share his view about the potential of hydrogen. We do not disagree at all with the noble Lord on that.

As far as community energy is concerned, this was raised on Report and I do not think there is anything more I can say at the moment. Clearly, we recognise the important role that community groups can play. Our intention is that Great British Energy will build on existing support, by partnering with and providing funding and support to local and combined authorities, as well as community energy groups, to roll out renewable energy projects and develop up to 8 gigawatts of clean power. I am afraid I cannot give any more details at the moment, but I understand and take note of what noble Lords have said about the companies concerned. I take this seriously and will ensure that it is considered, and we will set out further details in due course.

On the issues raised by the noble Baroness, Lady McIntosh, about sustainability, let me be clear that the independent review is focused on the effectiveness of GBE in delivering its mission. It will cover all aspects of the work of Great British Energy and will not focus solely on its financing, as the noble Baroness feared. To give an example, one of its important roles will be to clear the way to allow developers to come in. That will be an important part of the review. Furthermore, as I have already said to the noble Lord, Lord Vaux, additionality will be an important part. Clearly, the amendment that I brought on Report—about GBE needing to keep under review the impact of its activities on the achievement of sustainable development—means that that will be part of any review undertaken by the independent reviewer. I hope that reassures the noble Baroness.

Rosebank and Jackdaw Oilfields

Lord Offord of Garvel Excerpts

Wednesday 12th February 2025 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, on many occasions in this House the Minister has made it clear that he recognises the importance of oil and gas to our energy transition. In fact, net zero 2050 envisages that up to 25% of our energy will still be coming from our own clean hydrocarbon fields, and that figure includes Rosebank and Jackdaw. I ask the Minister plainly: what is plan B if these critical fields are not granted a future licence?

Electricity Capacity (Amendment) Regulations 2025

Lord Offord of Garvel Excerpts

Wednesday 12th February 2025 Grand Committee

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

My Lords, this instrument, laid before the House on 16 December 2024, seeks to make technical improvements and changes to the capacity market scheme—the Government’s main tool for ensuring security of electricity supply in Great Britain.

The capacity market was introduced in 2014 and is designed to ensure that sufficient electrical capacity is available to meet future predicted demand, to maintain the security of electricity supply. It provides all forms of existing and new-build capacity with the right incentives to be on the system to deliver when needed. It covers generation, storage, consumer-led flexibility—formerly known as demand-side response—and interconnection capacity.

Through capacity market auctions, held annually, one year and four years ahead of delivery, we secure the capacity needed to meet future peak demand under a range of scenarios, based on advice from the capacity market delivery body—the National Energy System Operator, or NESO.

Since its introduction in 2014, the capacity market has contributed to investment in just under 19 gigawatts of new, flexible capacity needed to replace older, less efficient plant as we transition to a net-zero economy. To date, the capacity market has been successful in ensuring that Great Britain has adequate electricity capacity to meet demand, and continues to be required to maintain security of supply and provide investor confidence. To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation, based on our day-to-day experiences of operating the scheme.

The draft instrument makes changes to eight regulations, to deliver technical improvements and changes that support the functioning of the capacity market, which have been identified and explored through consultation. This will improve security of supply. It will also accelerate investment in low-carbon technologies, increasing the role that they play in the capacity market, supporting the Government’s 2030 clean power mission.

Stakeholder feedback has identified a need to review the wider timescales associated with the settlement body’s calculation activities. This ensures that timelines for settlement remain appropriate. The “settlement body” refers to the Electricity Settlements Company, a private company owned by the Secretary of State, established to oversee the settlement of payments to and from suppliers and capacity providers. The draft instrument amends the timelines for the settlement body’s determination so that they are in line with those concerning penalty charges.

As part of the requirements under the Capacity Market Rules, some capacity market units must complete an extended performance test. This provides assurance that a capacity market unit from a storage-generating technology class can deliver capacity for the relevant duration. In effect, extended performance tests are a sub-function of the satisfactory performance days requirement, which requires a capacity provider to demonstrate availability during a delivery year. The policy intent is that failure to meet extended performance tests should have the same consequence as failure to meet satisfactory performance days. The draft instrument ensures that the regime is consistent and that the two demonstrations of performance are treated in similar fashion when failed.

To assist industry prequalifying for the capacity market, this draft instrument will further clarify that a capacity market unit can be prequalified only where no contract for difference has been awarded, unless the contract for difference in question has expired or terminated. The instrument also further clarifies that a contract for difference means a contract for difference or an investment contract entered into with a contract for difference counterparty, which has always been the policy intent.

Finally, multiyear agreements provide greater revenue certainty and are likely to incentivise further low-carbon participation in the capacity market, which improves market liquidity and can lead to a greater diversity of technologies. A new nine-year capex threshold introduced by this draft instrument will ensure that new and refurbishing projects, with costs that fall between the existing thresholds, are not prevented from entering the capacity market.

The instrument also enables participants to access a three-year agreement with a capex threshold of nought per kilowatt hour, available to low-carbon new build and unproven demand-side response capacity. It will remove barriers for low-carbon, low-capex technologies to access longer agreements in the capacity market. To ensure that projects meet the definition of low-carbon capacity, a low emissions determination, which is a decision that the delivery body may take, has been introduced by this instrument as a further reviewable decision type.

Two public consultations were conducted on the measures in this instrument. It contains a second phase of capacity market reforms, which was consulted on towards the end of 2023, on strengthening security of supply and accelerating investment in low-carbon technologies. Respondents were broadly supportive of the proposals included in this instrument.

We have also made a number of technical amendments to the Capacity Market Rules that support the regulations, which, as I said earlier, were laid before the House on 16 December 2024.

In conclusion, this is another instrument that follows from work that the previous Government did. It is self-evident that these technical changes are helpful and necessary, and I commend the regulations to the Committee. I beg to move.

[Lord Offord of Garvel (Con)]

My Lords, these regulations propose amendments to the Electricity Capacity Regulations 2014. While presented as essential to streamline the capacity market, we must be careful around one or two of the implications that arise.

As has been outlined by the Minister, the proposed changes stem from two public consultations held in 2023, which received broad support—especially for increasing the role of low-carbon technologies. However, there are some concerns: how will these regulations ensure long-term energy security, and will they genuinely accelerate the shift to a low-carbon system?

First, the Government seek to remove the 10-year reapproval requirement for the capacity market, allowing it to operate indefinitely without regular reviews. While this may offer stability, we ask whether this move risks stagnating the market’s ability to adapt to fast-evolving technologies and changing energy needs. Do we not need to maintain regular scrutiny of such a critical, dynamic sector, especially in the next 10 years when technology is moving rapidly?

Secondly, the regulations aim to establish the capacity market as a permanent fixture and remove any reference to it as temporary. This again raises the question of whether this shift represents a real commitment to security of supply or whether we are entrenching an outdated system that may fail to evolve with the energy sector and the technological advancements to which we have referred.

Thirdly, while the regulations repeal provisions from the EU electricity regulation that are deemed unnecessary, we must ask whether we are simplifying the system too much and whether this could leave gaps that harm flexibility and responsiveness during crises.

Fourthly and finally, the Government are focusing on low-carbon technologies. However, can renewables, such as wind and solar, provide the same reliability as traditional generation during peak demand or system stress? Will prioritising low-carbon technologies risk energy security? How will the Government ensure that the capacity market remains competitive and attracts investment in both low-carbon and reliable generation technologies?

These regulations raise a couple of critical questions. First, how will the Government ensure that the removal of the 10-year reapproval requirement does not result in stagnation, particularly as energy generation technologies evolve rapidly? Secondly, given the emphasis on low-carbon technologies, what measures are being taken to ensure that infrastructure is in place to integrate these technologies into the grid without compromising system reliability?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Lord, Lord Offord, for his general support for what is proposed in these regulations and for his specific questions in relation to the implications for long-term energy security and whether there is a risk of stagnating the market. He also asked whether we are going to keep this under regular review.

I should start by saying that the capacity market has been operating since 2014 and has worked pretty well. I acknowledge that. We see no reason why we cannot continue with it. In a sense, the permanent nature of the system that the noble Lord referred to is a perfectly reasonable response to the fact that the system is tried and tested. I should also say that it has supported investment in just under 19 gigawatts of new-build flexible capacity, including low-carbon technologies, since its introduction. That is solid evidence to suggest that the system can deliver the capacity needed to meet future peak demand and respond to the kind of challenge that he raised about introducing low-carbon technology into the frame as older capacity starts to be replaced.

I take the noble Lord’s point about keeping this under review. We absolutely are going to keep this under regular review. We have to do so. That is so important. We are committed to ensuring that the right policy tools are in place for delivering the secure and affordable energy system we need. I can confirm to the noble Lord that we regularly assess the performance of the capacity market and explore improvements to the scheme. We do not hesitate to bring to your Lordships’ House and the other place further changes in relation to further statutory instruments.

This is all intended to improve security of supply. We believe that accelerating investment in low-carbon technologies can increase the role they play in the capacity market. Our evidence since 2014 suggests that the mechanism that we have put in place is going to work. I am quite confident that we are right to say that this should be a permanent feature. Having said that, I thank the noble Lord for his constructive response to this SI.

Energy Bill Relief Scheme and Energy Bills Discount Scheme (Amendment) Regulations 2024

Lord Offord of Garvel Excerpts

Wednesday 12th February 2025 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Minister on the stamina he has shown over the last 48 hours. I welcome these regulations; had we remained in Government, I am sure that we would have done exactly the same—as was also said in the debate in the House of Commons.

The Minister alluded to the fact that energy prices are still quite high. I understand that within one of these regulations there is provision for an off-grid payment of £150. If that is the case, will his department look favourably on charities, public sector bodies such as schools and hospitals and, as he rightly mentioned, micro-businesses of under 15 employees—or even 50—so that they might remain eligible for that?

The noble Lord referred to unfair, and what I would call sharp, practices that are perhaps still going on. This is only anecdotal, and I cannot prove it, but there was a restaurant not too far from this building which I think partly closed and changed hands because they had an unbelievably high electricity bill in January last year, so I am delighted to hear that the Government have launched this consultation with a third party. It would be interesting to hear more about how those brokers might operate. What provision will be made to ensure that the brokers are reliable and able to operate within this sphere?

With that, I pay tribute to the previous Government for their work and the protection that was given to non-domestic customers, which was very welcome at the time. I recognise that we are still in a period of high energy prices and, with those few questions, I wish the SI a safe passage.

[Lord Offord of Garvel (Con)]

My Lords, I commend the Minister for a pretty spectacular explanation of what is quite a complicated and technical exercise. These schemes were introduced, as was said, between October 2022 and March 2024 and, as we know, they gave much-needed assistance to non-domestic customers. We are dealing now with a small yet significant minority of consumers who have not received their finalised bills, due to ongoing delays in the actualisation process. My understanding is that these delays arise mostly from the use of estimated rather than actual meter readings, but they have created significant complexities for both suppliers and consumers, especially when one of the issues around this is the concept that the supplier can become “off-boarded” when they hit the actualisation thresholds, as mentioned by the Minister, of 95% for billed gas and 97% for billed electricity, which means they are no longer required to apply further discounts.

We agree that this is a legacy issue that needs to be dealt with. Our only issue—I am sure that the department is working on this—is the need to deal with unintended consequences, such as where a supplier is off-boarded but still has unbilled energy due to these administrative delays. The amendment allows for discounts to continue only in cases where a billing failure has occurred, but does that provide sufficient protection to the consumer if the errors are on the supplier’s part, for example?

Further issues might be that the amendment extends the rule limiting discounts on variable price contracts. Discounts can only be reduced, not increased, post off-boarding. Does that sufficiently accommodate fluctuations in wholesale energy prices that suppliers may face? Does it risk creating an imbalance in terms of supplier and consumer rights? Then there is the issue of disputes. While the original scheme allowed for disputes to be referred to the Secretary of State—a horrendous concept—the amendment seeks to close that avenue. I am sure that the department is all over this, but we need to ensure that, in the technicalities of actually making this happen, we get a fair balance between supplier and consumer rights. Otherwise, we support the passage of this SI.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Baroness, Lady McIntosh, and the noble Lord, Lord Offord, for the welcome that they gave to the statutory instruments. I say to the noble Lord that we think the statutory instrument will be sufficient. The carve-outs, which are relevant to the points he raised, are aimed at ensuring that consumers will be well protected from poor operational practice by suppliers.

The noble Lord also asked about disputes. The fact is that, if a supplier cannot resolve an issue with a customer satisfactorily, the customer can either directly refer the matter to the ombudsman, if eligible, or to Ofgem, or get in touch with the department, which will then refer the matter to Ofgem. Ofgem will then review the customer’s complaint and decide whether a formal investigation into the supplier is required. If the customer has exhausted other routes, they are obviously also able to seek civil restitution through the courts, but I hope that that would not normally be necessary.

On the non-domestic alternative fuel payment, it was indeed part of the support programme. Obviously, it served its purpose, and I accept the point the noble Baroness raised.

I have mentioned the carve-outs. I understand the issue about energy bills, and we know the pressure that this causes. We debated some of these matters extensively —I was going to say last night but it was actually this morning. I might leave it there. I am most grateful to noble Lords.

Biomass Generation

Lord Offord of Garvel Excerpts

Wednesday 12th February 2025 Lords Chamber

[Lord Offord of Garvel (Con)]

My Lords, I begin by welcoming a more limited role for Drax in our energy power system. However, we must acknowledge that because of the Government’s ideological energy policy—which prioritises naturally unreliable renewable technologies —more biomass subsidies are required. This would not be the case if the Government focused their attention on flexible and reliable baseload power. We must look for a more pragmatic approach: one which prioritises cheap, stable and reliable energy. It goes without saying that Drax’s biomass plant is not clean nor is it cheap. In fact, according to non-profit think tank Ember, burning wood at Drax produces a staggering four times the emissions of our last coal power plant. It is the UK’s biggest polluter, producing double the emissions of our largest gas station, operated by RWE at Pembroke.

As a result, the Government have to make difficult decisions which result in high levels of subsidy, burdening the taxpayer further. Will the Minister confirm what estimates have been made as to how much CO₂ will be released by burning trees at Drax for another four years, and how that compares to using gas to generate the same power?

Ultimately, we must consider the cost of the new agreement. At £160 per megawatt hour in today’s money, the new deal for Drax is 15% higher than its existing agreement of £138 per megawatt hour. Indeed, Baringa’s analysis has shown that bill payers will continue to pay over £450 million a year in subsidies to burn trees. Will the Minister confirm that the Government intend to carry out an independent analysis of how much the increased strike price will cost the British taxpayer? Will he give his word that Drax will not be allowed to burn wood from primary forests during its generation? Finally, while we welcome the new sustainability criteria, will he explain what steps will be taken to make this enforceable in practice?

[Earl Russell (LD)]

I thank the Government for their Statement on short-term support for large-scale biomass generation as part of the UK’s energy generation mix. The Government inherited from the Conservatives a system where large-scale state subsidies are provided for the burning of biomass. This form of energy generation currently plays an important role in our energy system, providing some 5% of our national energy needs. These subsidies are worth some £2 million a day. Over time, Drax has received billions of pounds in government subsidies and from bill payers because wood pellets are classed as a source of renewable energy. Lucrative government subsidies are due to come to an end in 2027, hence the Statement before us today. The new agreement reached with Drax will run from 2027 to 2031 and will see the power station used only as a back-up to cheaper renewable sources of power such as wind and solar.

We can have lots of arguments about the sustainability calculations used to justify Drax. I listened with interest to the noble Lord, Lord Krebs, speaking on the Great British Energy Bill on Report last night, and I am not a scientist and do not have the exact answers. What I will say is that shipping wood across the Atlantic has a carbon footprint. Repeated incidence of old-growth forest being felled and burned undermines credibility and must stop.

Finally, the very fact that the Government are looking at carbon capture and storage to prolong the life of Drax is telling. Labour’s new plan will allow for four more years of unabated wood burning, which produces 18% more CO₂ than burning coal, according to the IPCC data. It takes nearly 100 years for this carbon to be pulled back from the atmosphere. Climate change driven by CO₂ emissions is clearly the greatest threat to humanity’s survival. Even a 100-year, long-term carbon-neutral Drax is hardly beneficial to anything we need to achieve to effect any real change in the race for humanity’s survival.

The Liberal Democrats see biomass as a fundamentally inefficient method of producing electricity, and we strongly believe that it should not qualify as a form of renewable energy. The Government’s plan to continue to subsidise the Drax power plant causes environmental harm and is not beneficial compared to investment in renewable energy. It does not provide good value for money for our bill payers. We are concerned that, although this plan would cut the amount of wood Drax is burning by 50%, the price is still lucrative—indeed, I see in the news that Drax’s share price has risen by 11% this week.

We are deeply concerned about the destruction of primary forests. The new agreement states that the wood must be 100% sustainably sourced. How will the Government verify that this is the case, when it has not been in the past? Further, I ask the Minister to publish the 2022 KPMG report into Drax’s record on claiming subsidies on a false basis. Are the Government prepared to publish that report?

The new proposals will see a halving in the use of Drax and a saving on subsidies of £147 million. Will those savings be redirected into other renewable projects? Under this proposal, Drax can step in to increase energy generation and provide flexibility where it is needed. Is this not just an energy marriage of convenience? Will the Government consider reclassifying Drax as being not a renewable source? It is time to stop calling it such; if the Government need that power generation for flexibility, clearer labels should be given.

The Liberal Democrats are clear that we would ensure that 90% of the UK’s electricity is generated from renewables by 2030—and that would not include biomass. When will the statutory instrument be published? I am pleased that the Government have halved the subsidies for Drax, but I hope that further progress is possible.

Finally, I wish to challenge the Minister. This Government should agree to ask NESO to write an independent report, to be produced relatively quickly, examining: the impacts of ending all subsidies to Drax; how those funds could be replaced and used for alternative renewables technologies; and what the resulting impact would be on our energy security and journey to net zero.

Great British Energy Bill

Lord Offord of Garvel Excerpts

Report stage
Tuesday 11th February 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the Minister and his Bill team for listening and constructively engaging with the many discussions that we have had on the issue of Great British Energy’s statement of strategic priorities and for bringing forward this helpful amendment.

I will be brief, as we have had a lot of discussion on this, particularly in Committee. Our position is that we support the intentions of the Bill and recognise that the Government are acting at speed to establish Great British Energy. However, we have always said that the Bill is too short for its own good. We recognise the difficult position that the Minister finds himself in. It is for Great British Energy, as an independent organisation, to write its own strategic priorities, as long as they are consistent with the objects set out in Clause 3. Great British Energy obviously needs to be established in order to write the strategic priorities, and discussions are required with the devolved Administrations.

Against these needs, we as parliamentarians were being asked to approve the Bill with no sight of the strategic priorities prior to the Bill being passed, or even after it is passed and the strategic priorities have been finalised. This was an issue that the Constitution Committee rightly highlighted as an area of concern. To us, it felt a little like we were being asked to sign a blank check, and your Lordships were rightly nervous about the implicit ask in the Bill as it was drafted.

From these Benches, we have consistently argued for progress on these matters and for the reaching of constructive compromise. Compromise needs to rightly balance the actions and operational independence of Great British Energy and, at the same time, the justified right of parliamentary scrutiny and oversight of the strategic priorities. Is this amendment absolutely perfect? No. Does it do a good and worthwhile job of balancing these competing needs and moving the issue forward? Yes, it very much does. I welcome the words the Minister has spoken from the Dispatch Box about a Written Ministerial Statement. This is an essential compromise, and I thank the Minister for this good progress.

[Lord Offord of Garvel (Con)]

My Lords, I will speak in support of the amendment in my name and that in the name of my noble friend Lord Trenchard. They represent an important step in ensuring that the development and operation of Great British Energy are aligned with the national interests and strategic needs of our energy sector.

Amendment 21, put forward by the Minister, ensures that the Secretary of State must prepare the statement of strategic priorities for GBE within six months of the passing of the Bill. This timely approach is crucial, as it establishes an early foundation for the strategic direction of Great British Energy, permitting the organisation to operate with clarity and purpose from the outset.

The inclusion of Amendment 26 in my name is equally important. It requires that the statement of strategic priorities must specifically address the development of supply chains in the United Kingdom. This is vital to ensure that the Great British Energy objectives are not only met but integrated into the broader goal of strengthening domestic industries and fostering economic resilience within our own borders. The definition of supply chains in this amendment reinforces the need for a comprehensive and interconnected approach to the creation and sale of commodities relating to Great British Energy’s work.

Finally, Amendment 33, proposed by my noble friend Lord Trenchard, brings an added layer of scrutiny and collaboration by mandating consultation with Great British Nuclear and the National Wealth Fund before the publication of the statement of strategic priorities. This amendment will ensure that Great British Energy’s strategies are developed in consultation with relevant stakeholders, thereby promoting a more cohesive and informed approach to energy policy.

These amendments collectively reflect our commitment to a strong, secure and sustainable energy future. I support them, and I encourage the Minister to do the same.

[Viscount Hanworth (Lab)]

My Lords, I wish to speak to Amendment 33, which is somewhat misplaced in this group. I have been asked by the noble Viscount, Lord Trenchard—

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Moved by

[Lord Offord of Garvel]

23: Clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the reduction of household energy bills by £300 in real terms by 1 January 2030.”Member's explanatory statement
This ensures that the statement of strategic priorities includes the reduction of household energy bills by £300 by 1 January 2030.

[Lord Offord of Garvel (Con)]

My Lords, I shall speak to Amendments 23 and 24 in my name. These amendments would require the statement of strategic priorities to include the reduction of household energy bills by £300 per household by 2030 and the creation of 650,000 jobs in the UK by 2030. As noble Lords will recall from our debates in Committee, throughout the election campaign, the Government repeatedly promised that GB Energy would cut household energy bills by an average of £300 per household. In fact, a similar claim was made by at least 50 MPs, and the Science Secretary said:

“I can tell you directly … by the end of this Parliament that … energy bills will fall by up to £300”.


On 19 June last year, the Chancellor said:

“GB Energy, a publicly owned company, will cut energy bills by up to £300”.


Finally, in an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. Considering that the Government had no qualms about repeating this promise time and again and appeared proud to do so, it is strange that they do not commit to this promise by including it in the drafting of this legislation.

That was not the only promise made by the Government. They also said that GB Energy would create 650,000 new jobs. Despite this, in the other place, the Government voted against Conservative amendments to make cutting energy bills by £300 and creating 650,000 new jobs a strategic priority for GB Energy. In so doing, they were voting against amendments that would hold them to their word.

Only last week, in a rather unconvincing interview on Sky News, the chair of GB Energy admitted that the Government’s pledge that GB Energy would create 1,000 jobs at its headquarters could take 20 years to deliver. In the same interview, he repeatedly refused to say when household bills would be cut, although the Prime Minister promised that GB Energy would save consumers £300 each. These promises are important to the British people, and the Government have already put at risk 200,000 existing jobs in North Sea oil and gas. They impact on people’s energy bills, their business and their jobs.

It is essential that the Government are held to account. We know there is a transition; we know that those 200,000 jobs can transition to the direction of travel in renewables and nuclear, but by accelerating unilaterally, there is going to be a gap, and the problem is that we are going to lose skills in the middle.

With that said, I look to the Minister to confirm exactly by how much consumers can expect their energy bills to fall—by £300, or pick another number. Will he give a commitment that GB Energy will reduce household energy bills, and how many jobs exactly will GB Energy create in the UK by 2030? I look forward to receiving a clear and positive reply, and I intend to test the opinion of the House on these matters.

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[Baroness Hayman (CB)]

Yes.

[Lord Offord of Garvel (Con)]

My Lords, I remind you all of what the Prime Minister said:

“I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government”.


The number of £300 is not our number. The number comes from the Labour manifesto and a commitment to the British people.

The great British people think that GB Energy is a new electricity company that is going to deliver them cheaper energy; what we have discovered is that it is actually an investment plan employing 200 people in Aberdeen. It is a big delta: 650,000 jobs compared to 200 jobs rising to 1,000. These are not our numbers; these are the Government’s numbers. All these amendments are trying to do is hold the Government to account on commitments made in the election campaign, and I wish to test the opinion of the House.

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Moved by

[Lord Offord of Garvel]

24: Clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the creation of 650,000 new jobs in the United Kingdom by 1 January 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objects under section 3.”Member’s explanatory statement
This ensures that the statement of strategic priorities includes the creation of 650,000 new jobs in the UK by 1 January 2030.

[Lord Offord of Garvel (Con)]

My Lords, I beg to move.

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[Lord Wigley (PC)]

My Lords, I welcome the progress that has been made on these issues. There will be times when there may be differences of opinion, but on devolved matters it is right that the devolved authorities should have the proper say. I welcome the change being proposed by the Government.

[Lord Offord of Garvel (Con)]

My Lords, I thank the Minister for tabling these amendments on devolution, which I welcome. They follow concerns that we raised in Committee. I emphasise that it is important that consultations on devolution are published. Amendment 27 proposes a significant change to the current wording of Clause 5, and we agree that we need to move away from “consult” to “consent”.

The key tenet here is the Sewel convention, which we know well in this House. It is not a trivial matter of semantics; it reflects the principle that the devolved Administrations must have a genuine say in matters that affect their legislative domain. At the end of the day, the Scottish Parliament in particular has responsibility for significant aspects of energy policy, including renewable energy, energy efficiency and environmental protection. We have mirrored that in Amendment 29 for the Welsh Government.

All in all, we think that by requiring consent from the Scottish and Welsh Governments we can ensure that the energy priorities are developed in a way that respects the distinct needs and perspectives of each nation. I urge the Government to monitor those relationships carefully.

[Lord Hunt of Kings Heath (Lab)]

I am grateful to the noble Lords, Lord Offord and Lord Wigley. I commend the amendment to the House.

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[Lord Fuller (Con)]

My Lords, I will speak to my Amendment 51. Before I get into the substance of what I want to say, I want to say how proud I am that the Conservative Government passed the Environment Act that resulted in cleaner water, purer air, less waste and lower emissions. Only the Conservatives could have done that, and I know my noble friend Lady Coffey had a hand in that.

At an earlier stage of this Bill, I probed the Minister on the environment protections for tidal energy. Upon reflection, the amendment was too tightly drawn around tidal and insufficiently drawn for protections for other types, such as wave and barrage energy. Further, I do not think that sufficient attention was paid in my earlier remarks to coastal and estuarine environments, which are all part of the offshore scene. I have altered my approach to ensure that all marine proposals must consider the environmental impacts of their introduction. I welcome the Government’s late acceptance of some of these principles and their belated tabling of Amendment 38. On this side, we are grateful for it, but, as my noble friends have said, it does not go quite far enough.

My amendment would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal, barrage and wave energy, together with its associated cabling. Amendment 38 talks generally about sustainability in its widest sense. My amendment seeks to define what sustainability means. It is not just carbon; it is about the wider impacts on flora and fauna. I noted and listened carefully to what the Minister said about the framework documents that have come forward, but they are in the future and we are in the now. It is certainty that we crave.

I will not detain your Lordships, because it is late, with my tale of my visit in November to the Saint-Malo tidal barrage—the world’s first, opened nearly 60 years ago. However, I want for a moment to consider the environmental costs of that valuable piece of infrastructure in France. There are lessons from history to be learned as we look forward to a post-carbon world. While saving the environment by reducing carbon emissions on the one hand, the French have damaged it on the other. My amendment seeks to direct Great British Energy to strike the appropriate balance between the desirability of reducing emissions and the essentiality of protecting flora and fauna in these places.

In commenting on the Saint-Malo barrage, Thomas Adcock, an associate professor in the department of engineering science at Oxford University, said there has been a “major environmental impact” on La Rance estuary as a result of that tidal barrage, and 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 due to the altering of sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. Sand-eels and plaice have disappeared, while silting has reduced the number and variation of other fauna. It is in the public interest that this is considered, so that mitigations can be put in place. My amendment seeks to ensure that, when the Government’s tilted sustainability balance is engaged, it must give sufficient weight to flora and fauna under the environmental pillar, not just pull the decarbonisation trump card out of the top pocket. This is why my amendment is needed and why it goes beyond Amendment 38.

I am not starry-eyed about the practicality of building big machines that can survive in the most hostile environments, pounded by seas and eaten by saltwater corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to engineer these things in tough, salt-aggressive places, but that does not mean that we should not try. It is hard to engineer reliability in some of these unforgiving places, so the installations will be larger and more environmentally intrusive, and require more maintenance than is needed on land.

That is why this amendment is serious. It will require GB Energy to take into account a number of factors and to continuously monitor these when assessing offshore energy proposals—for example, the cumulative impact of installations when considered alongside nearby projects; the transboundary impacts, when activities in other countries may be impacted, such as commercial fishing; any interrelationships where one receptor, such as noise, can have a knock-on impact on others to disturb species, and in particular subsea noise, which impacts on marine mammals; physical processes, which include changes to the sedimentary flow; and navigational risk assessments, because sometimes vessels can be deflected into the path of others.

Taken together, consideration of these factors would ensure that some of the most delicate marine and coastal habitats, such as that introduced by my noble friend Lady Coffey—the 321 square kilometre Cromer Shoal Chalk Beds marine conservation zone, one of 91 such zones established by the last Government—would be protected.

I am not against harnessing this most inexhaustible supply of offshore energy, including tidal. The energy is there, it is year-round, it is predictable and reliable, and it deserves to be won and should be won. It is just remarkable that the Secretary of State is not required to give the appropriate directions to GB Energy to balance not just the carbon environmental benefits but environmental safeguards in the widest sense.

This evening, we sat on the water Bill. That Bill is the consequence of not thinking ahead about what might happen when a public utility gets carried away. Let us put the protections in the Bill now to constrain Great British Energy, and require the Secretary of State to ensure that a private body established for a public purpose acts in the wider public interest, not its private self-interest, and sets an example to others.

In summary, I agree with the sentiment of Amendment 38, but it does not go far enough. We must not allow carbon alone to trump all other environmental considerations. I will listen carefully to the debate, but I feel that, because of the inadequacy of government Amendment 38, if adjustments are not made then I may seek to divide the House accordingly.

[Lord Offord of Garvel (Con)]

My Lords, I will speak to Amendments 47 and 48 in my name and in support of Amendment 51 in the name of my noble friend Lord Fuller.

The threat posed to the environment by the rapid installation of renewable energy technologies is familiar to this House, as it was discussed extensively in Committee and during debates on the Crown Estate Bill. We know that the UK is the second-largest offshore wind market in the world, and that allocation round 6 under this Government has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream. Indeed, the Government have committed to quadruple offshore wind by 2030 as part of their wind revolution.

The speed and scale of the Government’s offshore wind developments raise significant concerns about the impact on our ecosystem. While offshore wind farms may have the potential to have positive impacts on natural habitats, we must not neglect the potential harm that wind or tidal technologies may have on our natural environment. On that note, I support Amendment 51 in the name of my noble friend Lord Fuller, which follows a similar line to Amendments 47 and 48 in my name.

Through their so-called unprecedented relationship, the Crown Estate and GB Energy have a duty to assess and mitigate the impact of their activities on the environment. By law, GB Energy must assess, report on and minimise the impact of its activities on our environment in seeking to ramp up renewables and phase out fossil fuels.

I welcome Amendment 38 in the name of the Minister. We stand by to support the noble Baroness, Lady McIntosh, if she pushes her Amendment 40 to a Division. Meanwhile, I remain to be satisfied by the Minister’s response to my Amendments 47 and 48, and will consider testing the opinion of the House.

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Amendments 41 and 42 not moved.

[Lord Offord of Garvel (Con)]

My Lords, I wish to speak to Amendment 42.

[The Deputy Speaker (Baroness Finlay of Llandaff) (CB)]

I have already called it. We have finished that group.

[Lord Offord of Garvel (Con)]

My Lords—

[Noble Lords]

Order!

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Moved by

[Lord Offord of Garvel]

46: After Clause 7, insert the following new Clause—
“Impact assessment on erection of pylons(1) Great British Energy must assess the potential impact of the erection of pylons which occurs under or in support of its functions on—(a) local communities, and(b) the environment.(2) If the assessment under subsection (1) determines that the erection of pylons—(a) will cause significant harm to local communities, or(b) will cause significant environmental damageGreat British Energy must not facilitate, encourage or participate in the relevant activity.(3) Within 12 months of the day on which this Act is passed and annually thereafter, Great British Energy must produce an annual report on the impact of the erection of pylons used to support its activities on local communities and the environment, and lay all such reports before Parliament.”Member's explanatory statement
This would require Great British Energy to assess and report on the impact on local communities and the environment of the erection of pylons used to support its activities.

[Lord Offord of Garvel (Con)]

My Lords, I shall speak to Amendment 46 in my name and that of my noble friend Lord Effingham. This seeks to place a duty on Great British Energy to produce an assessment on the impact that the erection of pylons will have on local communities and the environment. Following such an assessment, if the erection of pylons will cause significant harm and damage to the above-listed categories, GB Energy must not continue to build them. The amendment also seeks to include an annual report on the impact of the construction of these pylons that must be laid before Parliament so that the proper accountability measures are in place.

To achieve the Government’s rushed and ideological target for clean energy by 2030, it has been proposed that nearly 1,000 kilometres of new power lines will have to be built. It is the undeniable truth that the infrastructure of the electricity network will need to be built at a far faster rate than it has been in the past decade if the Government are to meet this pledge.

The reality is this: it would be possible to find a way of distributing and transmitting electricity that will not permanently damage the countryside if the Government were to uphold our 2035 target. We understood this; we committed to exploring the use of undergrounding, because the energy system operator said that in the long term that can save costs and it will avoid irreparable damage to our countryside. It is strange that the Government have dismissed this advice, choosing to base their energy policy on ideology. This is particularly true, given that an official report into the East Anglia network has discovered that in the longer term it is cheaper to bury the cables underground. The evidence suggests that, if the Government stick to our original target, they may save £600 million through the use of underground cables rather than pylons.

However, if the Government insist on achieving a decarbonised grid by 2030 at the expense of the British countryside, it is essential that GB Energy assesses and reports on the impact of their use of pylons and ceases activity if it is causing significant environmental damage.

I am minded to test the opinion of the House. I urge all noble Lords to support this amendment.

[Lord Ashcombe (Con)]

My Lords, I understand that transporting electricity will continue to be a challenge; much of it is generated offshore in Scotland, but the need is far greater in the south. Pylons are not loved infrastructures by most but are a necessary evil. There is therefore an absolute need to assess their effect on not only those communities that live nearby but the environment, as pylons march across the countryside, often through much of our most scenic areas, not to mention the flora and fauna.

I suggest that pylons are not the only method of transport; my noble friend Lord Offord mentioned underground cables, and sea cables are also an option. There remain environmental factors, but power still has to come ashore to the areas of demand. The onshore issues therefore still remain.

The spend to achieve this, according to NESO, is some £40 billion a year for six years until 2030. I suggest two items of practicality: can the infrastructure be built on time, and do we actually have the workforce to complete this massive task? Local communities deserve nothing less than an assessment of the potential impact for the years to come.

[Lord Hunt of Kings Heath (Lab)]

My Lords, we come to the issue of pylons. This is of course an interesting issue; I well understand that pylons are not necessarily popular with the public. They are, I am afraid, just a consequence of what we need to do to expand the grid.

The projects that Great British Energy is involved in may require the erection of pylons, but the assurance I can give is that they will be subject to existing rigorous planning processes and the relevant regulations, as with any similar projects, including environmental impact assessments and statutory stakeholder engagement. We recognise that poorly sited pylon projects can have an impact on the local area, as has been mentioned, such as in relation to wildlife, heritage or sense of place. That is why we are retaining the checks and balances in the planning system and why we want to ensure that all developers continue to engage with communities.

Noble Lords have mentioned offshore solutions. We are already building an extensive offshore network. Indeed, the latest network design from NESO means that, by 2035, three times as much undersea cabling could be laid than pylons across Britain, so we are not ignoring the potential but we will need pylons. We are not reducing the planning regime in any way at all; we want to speed it up, but we will have the protections in place and environmental considerations will come to the fore.

We do not need this amendment. I am quite satisfied that the provisions in statute at the moment are sufficient.

[Lord Offord of Garvel (Con)]

My Lords, I believe that the Government’s tunnel-visioned focus on renewable energies means that the grid will have to be developed at a far greater rate than if we turned our attention to gas and nuclear. Renewables are by nature less dense in energy and require more infrastructure to connect their assets to areas of high demand. It is striking that, as reported by NESO, we will need twice as much grid to be built in the next five years as we have built in the last 10 years combined.

Under this Government, communities are being overridden and their concerns ignored. This is not the way to undergo a successful clean energy transition. By choosing to bring forward unilaterally their clean energy target by five years to 2030, the Government have shown that it is ideological dogma. Where is the community benefit scheme that we set out when in government?

NESO has also said that all grid projects need to be met on time and that three will have to be fast-tracked ahead of schedule. If that does not happen, the Government will not meet their target and families will pay billions of pounds in extra curtailment costs. This is the cost of these accelerated power plans. We must balance carefully the necessity of enhancing our energy infrastructure with the preservation of the landscape and the communities that rely on it.

This is not simply about building pylons; it is about ensuring that the energy transition does not come at the expense of the environment or local economies. That being said, I hope that noble Lords will look to support the amendment in my name. I wish to test the opinion of the House.

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[Lord Offord of Garvel (Con)]

My Lords, I rise to speak in support of my noble friend Lord Fuller’s amendment. In tabling it, he raises a matter of utmost importance: our nation’s food security and the agriculture industry, which has been subjected to punitive tax measures by the Government.

This debate is not about whether we should install renewable energy technologies; it is about where we should develop renewable energy. At best, we can hope that, indirectly, GB Energy will help to power and heat British homes in a bid to achieve clean power by 2030. However, it is imperative that the Government’s race to renewables does not come at the expense of British agriculture and food production. It should be known that, when land is used for solar farms, it does not see agricultural use for decades. We must look to protect the most versatile and fruitful land to feed the nation. This is not to say that there will not be land that can be used for renewable energy production. Ultimately, we cannot find ourselves in a position where we have warm homes but no food on our plates. Our energy security trumps food security.

My noble friend raised his concerns in Committee but, regretfully, the Minister’s response was rather unsatisfactory. It is essential that the protection of agricultural land for renewable energy development is embedded in law. With that in mind, I urge all noble Lords to support my noble friend. The amendment in his name presents us and the Government with an opportunity to take decisive action to reserve agricultural land for food production. I will support my noble friend Lord Fuller if he wishes to test the opinion of the House.

[Lord Cryer (Lab)]

My Lords, I turn to Amendments 50 and 52 in the name of the noble Lord, Lord Fuller, and spoken to in his prose poem of a speech. The importance of maintaining our natural resources to support UK agriculture and of supporting local stakeholder consultation in affairs that affect their surroundings and quality of environment are values that we share with the noble Lord. However, for the reasons that I will now set out, I must resist these amendments.

Great British Energy will be subject to the same rigorous planning processes that currently exist to protect agricultural land and minimise the effects on food security. The National Planning Policy Framework includes the preservation of agricultural land for food production as a key consideration in its legal framework governing renewable energy products. It emphasises the need to protect the best and most versatile agricultural land—namely, as the noble Lord, Lord Fuller, said, grades 1, 2 and 3A.

More broadly, looking beyond these specific amendments, the Government recognise that food security is national security—again, as the noble Lord, Lord Fuller, said. The Government do not believe that the accelerated rollout of solar generation poses a threat to food security; I will come on to that in a minute. The total area used by solar farms is very small: even in the most ambitious scenarios, less than 1% of the UK’s agricultural land would be occupied by solar farms. Furthermore, solar generation can be co-located with agriculture, and many projects are designed to enable continued livestock grazing alongside energy generation. Innovation may also reduce the impact of solar farms on agriculture. The emerging science of agrivoltaics is developing innovative ways in which solar can be integrated with arable farming

On statistics, it has often been argued that the land use framework says that 9% of land will be used for energy development. The noble Lord, Lord Fuller, mentioned the 9% figure; although he did not actually say that that would cover energy generation entirely, it was implied. This is not actually correct. The 9% figure covers agricultural land that would be used for the creation and restoration of habitats—I emphasise “restoration of habitats”—such as woodland, heathland, grassland and peatland. It does not cover generation alone. Defra will publish in the near future a land use consultation as an important first step in starting a national conversation on land use. There is also evidence that solar can improve biodiversity in certain areas and under certain circumstances when it is installed on agricultural land.

For these reasons, I hope that the noble Lord is assured that Great British Energy will always consider the effects on our agricultural land as a necessary element of its regulatory approvals and will, therefore, withdraw his amendment—although I am not holding my breath.

--- Later in debate ---

[Lord Hamilton of Epsom (Con)]

My Lords, the reason why I am degrouping this amendment, and indeed Amendment 55, is because there have been developments that affect both these amendments.

Amendment 54 asks the Government to publish an assessment of the expected impact of the Bill on the number of jobs in Aberdeen. Since tabling the amendment, we have had a very remarkable interview with the new chairman of Great British Energy, who goes by the name of Jürgen Maier. For some reason, he did not seem even to know that the Government were committed to lowering people’s energy bills by £300. When he was asked about this, he just sort of waved the whole thing away. He also was asked about the number of jobs that were going to be brought to Aberdeen, and he said 300, which I think is a sort of top whack for the number of people he is going to employ in Great British Energy in Aberdeen. I think there was some hope that there would be rather more jobs than that in Aberdeen, but he did not seem to think that that was very important at all and, indeed, was something that stretched out to the next 10 or 20 years. He did not seem to want to be committed to any of this at all.

I think the Government have a slight problem if that is going to be the spokesman for renewable energy via Great British Energy, and I am not absolutely certain that they have the right man for the job. It seems to me important that you have somebody who stands up for the whole business of renewable energy and the ambitions—indeed, some of the things we voted on this evening—and objectives of Great British Energy. I think he should have a rather clearer idea of what he is trying to do because, if he does not, he will do nothing but bring embarrassment to the Government and everybody who believes in renewable energy.

The other thing, of course, that we must look for when it comes to jobs in Aberdeen is the renewal of the licences for the Jackdaw and Rosebank fields. I gather the Government are looking at this quite closely. It does seem to me to be absolute madness—which can only really be entertained by the Energy Secretary, Mr Ed Miliband—that, at the end of the day, we envisage a future where, inevitably, we are going to need oil and, for some extraordinary reason, that oil cannot come from our oil fields; the oil and gas will have to be imported from other countries, with, of course, a greater carbon footprint than there would otherwise be. That does not seem to be anything other than complete insanity.

I think the world is coming to realise that, although there have been these very ambitious goals of reaching net zero, the fact is that we are going to need fossil fuels for much longer than most people think. If that is the case, we might as well use our own sources of oil and gas and employ our own people, rather than employ Americans and people in the Gulf and import it from there. As I say, there will be a larger footprint if the whole thing is imported into this country from abroad.

So it strikes me that we have our priorities very seriously mixed up on this, and the Government will have to change their attitude on all of this, because otherwise we are going to make ourselves look absolutely ridiculous and do nothing to lower global emissions, which is the objective we are all trying to get.

My Amendment 55 deals with the viability of the Government reaching their net zero target. This, for me, has been very much affected by the breakfast I had this morning with people at JCB, who are very keen that we move to a much greater production of liquid hydrogen, because they believe that that is the one fuel that can actually drive heavy vehicles such as theirs, and that that fuel has a great future there. The good news about liquid hydrogen is that they think it could be very effectively used not only in heavy vehicles such as lorries and so forth but also in trains. They were not so happy that this was an answer for aviation—but aviation is a big and growing business, as the Government recognise, with their dedication to building a fourth runway at Heathrow. Obviously, aviation is going to be a growth business as more people fly around the world, and if we are not going to have a constant source of CO₂ emissions from that, we have to move to a better fuel.

So there are many reasons why hydrogen ticks many boxes, but the problem about it is that it is not actually a silver bullet but a golden bullet. It is extremely expensive to produce and uses very large amounts of electricity. So I hope that what we will be looking at is using small modular reactors dedicated to actually producing hydrogen. Perhaps—and I am not saying this will happen—this will be able to bring the price down to a level that is bearable and something we can live with, because, if we could get the price of liquid hydrogen down, it would make a massive difference to the ability to run heavy vehicles and aircraft and other forms of transport without polluting the atmosphere and increasing the CO₂ footprint, which is one of the problems that we have today. I look forward to what the Minister has to say about both my amendments and I beg to move.

[Lord Offord of Garvel (Con)]

My Lords, I rise to speak briefly in support of my noble friend Lord Hamilton of Epsom’s Amendments 54 and 55. My noble friend referenced an interview given on 3 February 2025, in which the chair of Great British Energy, Jürgen Maier, admitted that only 200 to 300 jobs would be created in Aberdeen by Great British Energy and it could take up to 20 years for the 1,000 promised jobs to materialise. Yet in January, the Energy Minister, the Member for Rutherglen in the other place, confirmed that the Government’s plan for Great British Energy to create 1,000 jobs in Aberdeen “has not changed”. It seems that we are told one thing by Ministers and another by Great British Energy’s chair.

It seems that the Government have given Great British Energy the responsibility for delivering on their commitments, but Great British Energy does not agree that Ministers’ ambitions are its responsibility. While Ministers and Great British Energy executives can disagree, the British people will be left without the tangible benefits they were promised. It strikes me that this should be of great concern to Ministers, who will be ultimately accountable for Great British Energy’s failure to deliver on the promises they themselves made.

Turning to Amendment 55 in the name of my noble friend Lord Hamilton, I supported his decision to probe the costs and viability of the Government’s net-zero targets. We have already had discussions around this question, most notably when we discussed pylons in an earlier group. We agree that the Government’s net-zero targets are driven by ideology and need to be reviewed to ensure that they are practically and affordably achievable. I hope that the Minister will look kindly on my noble friend’s amendment in his reply.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I always look kindly on the contributions made by the noble Lord, Lord Hamilton, and enjoy debating these with him. However, sadly, I am not going to respond sympathetically to either of his amendments, perhaps to his disappointment and surprise.

The amendments would delay the designation of Great British Energy under Clause 1 and the ability of the Secretary of State to provide financial assistance under Clause 4. I must object to that. It is essential that Great British Energy starts its operations as soon as possible.

On Amendment 54, I will just say this: anyone who has met Juergen Maier will have been impressed with the quality and energy, and breadth of knowledge, experience and wisdom, that he brings to the job. He certainly has the backing of His Majesty’s Government.

We need to put to rest this nonsense around Aberdeen. I have stated very clearly already this evening that we expect Great British Energy to employ 200 to 300 people, initially at its Aberdeen headquarters. The substantial issue is that GBE’s activities will create and support thousands of jobs across the country.

As far as the continental shelf is concerned, I readily acknowledge the great contribution that it has made to the United Kingdom and the work of the skilled people who work in the North Sea. However, it is a declining asset. We have said that it will continue to play an important role in the future, but the future of energy in this country is to move to clean power as soon as we possibly can. We want to see continued extraction from the North Sea while that is necessary. We want to ensure a just transition for people working in the industry to other sectors, because they have a huge contribution to make.

In respect of the 200 or 300 people, the fact is that we are talking about this Parliament. As the years go by, there will be more jobs in Aberdeen and the GBE contribution will be enhanced.

I hope that the noble Lord, Lord Hamilton, will recognise that the Government are fully on top of these issues, and that we have a consistent, coherent policy to lead us to energy security, and will not press his amendment.