Debates between Lord Ravensdale and Lord Donoughue

There have been 1 exchanges between Lord Ravensdale and Lord Donoughue

1 Wed 26th June 2019 Climate Change Act 2008 (2050 Target Amendment) Order 2019
Department for Business, Energy and Industrial Strategy
2 interactions (1,987 words)

Climate Change Act 2008 (2050 Target Amendment) Order 2019

Debate between Lord Ravensdale and Lord Donoughue
Wednesday 26th June 2019

(1 year, 8 months ago)

Lords Chamber

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Department for Business, Energy and Industrial Strategy
Lord Ravensdale Portrait Lord Ravensdale (CB)
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My Lords, I declare my interests as an engineer working in the energy industry.

I welcome the Government’s commitment to net zero carbon emissions by 2050. However, as noble Lords have already said, this target will involve significant technical challenges. I want to introduce a different slant to the debate today by talking about some of the technical challenges that will be need to be met, the key areas of uncertainty and the options for mitigating them. A comprehensive review of how this target will be met is critical and I hope to see more detail of this in the forthcoming energy White Paper.

The key risk areas we need to consider within the scope of the amendment are on-demand power generation and hydrogen. It is widely accepted that a 100% renewables power generation system is impracticable barring any unforeseen technical advances. This is partly due to the technological limitations of energy storage and the implications of grid stability with a variable power supply. A large amount of on-demand power will be required to counter the variability of renewables and there are two options for that at a high level—gas turbines with carbon capture and storage, or nuclear.

Gas turbines with carbon capture and storage are an attractive option to meet our commitments, but there are several uncertainties with large-scale carbon capture and storage. One uncertainty is the capture rates that are feasible with the technology—whether it can capture the amount of carbon that we need it to—and another is that the economic viability of the technology is still unknown. If capture rates are lower or the technology is more expensive than anticipated, alternatives will have to be sought to large-scale use of carbon capture and storage. It is critical that there is a pilot project from the Government to consider scaling up this technology and the viability of it in more detail.

The concerns are well known about the economic viability of nuclear compared with renewables. It is worth noting that the costs of large nuclear are currently less than the existing offshore wind capacity that has been built. However, the future offshore wind capacity will be cheaper than current large nuclear. It is difficult to make the comparison between nuclear and renewables because of the different characteristics of these technologies in terms of costs.

It is critical that the industry responds to the cost challenge set out in the nuclear sector deal and brings down the costs of nuclear from the £90 per megawatt hour we have seen with Hinkley to around £60 per megawatt hour. Given the doubts over whether large nuclear can deliver, we need to focus on several things to meet that cost challenge: first, small modular reactors, as a fallback and to complement large nuclear, are critical; and, secondly, advanced nuclear technology.

How will these technologies solve the cost issue with nuclear? The first way is through modularisation, which is inherent in small modular reactor design and is already used in other high safety integrity industries such as shipping and air transport. We need to look at moving the production of reactor modules to factories off-site to reduce the cost of reactor technology and to bring down the capital costs of nuclear plants. Secondly, with advanced nuclear, there are several designs out there which are passively safe, simpler and of a much higher thermal efficiency than existing plants and will help in that regard.

Government investment is required to see these promising designs through to fruition and to get them off the ground. On the point made by the noble Lord, Lord Deben, on what happened with offshore wind, we can replicate that with nuclear and use it to bring down the cost of the technology and help us meet our 2050 targets.

Hydrogen also has a key role to play in a net zero economy, whether through heating buildings, energy storage or fuel for heavy vehicles. However, there are many uncertainties about the best means of producing, distributing and storing hydrogen. For example, as has been pointed out by other noble Lords, the preferred means of production—steam methane reforming—will involve large-scale carbon capture and storage and the issues with that that I have pointed out.

Can the Minister say how the Government intend to de-risk these key areas of uncertainty—hydrogen, carbon capture and storage and nuclear—to ensure that the UK can meet the 2050 target as planned? The timing for large investments could not be more fortuitous in many ways, with the Government able to borrow for 50 years at less than 1.5%.

Lord Donoughue Portrait Lord Donoughue
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My Lords, I declare my interests as in the register. This massive proposal, which is imaginative and exciting in many ways, is being rushed through Parliament, partly because the departing Prime Minister has a desire for a legacy and partly because of the claimed emergency over climate change or global warming. I am in the minority as I was rather sympathetic to the Prime Minister on many things—but not on this issue.

On the latter issue, warming, we have certainly experienced a mild warming cycle for some 140 years, with carbon emissions playing a significant role in it. I have never questioned that. I listened carefully to the noble Lord, Lord Turner, but I cannot find any sudden acceleration. According to Met Office figures, the past 20 years show a rise of 0.3%, which is broadly in line with the whole cycle. It is slightly slower than the further warming in the last quarter of the 20th century, so it is of concern, but it is not a sudden emergency.

The excitement occurring now may arise from the forecasts by models of a boiling planet later this century. That may happen—anything may happen—and I understand people who want assurance, but so far there is no observational scientific evidence for it. Nearly all those models—there are more than 100 of them—have been deeply inaccurate so far and have been seriously biased towards overheating, sometimes by up to 300%. Interestingly, only the Russian model has been accurate for this syndrome, so these models should be treated with care.

There has quite rightly been much discussion of costs. The climate change committee’s prediction of a net benefit cost of £50 billion per annum by 2050 may be optimistic. Other outside estimates reject it; the Department for Business, Energy and Industrial Strategy puts the cost 40% higher, at £70 billion per annum. That was quoted by the Chancellor in his letter to the Prime Minister. All seem to agree that the total expenditure by 2050 will be more than £1 trillion. That seems testing. The committee’s figures seem to omit carbon taxes and renewable subsidies, amounting to around £1 trillion, and the decarbonising of heat by refurbishing all houses. I should point out that that figure was from a respectable sectoral energy institute, which is why it was quoted. I find the total financial liability falling on consumers and taxpayers very complex to account for, but it is likely to be huge and perhaps larger. Equally, it could perhaps be smaller. We do not know, as the climate committee admits.

As an infrastructure project, this revolutionary programme involves greater public expenditure than any done by this country since we committed to fighting the Second World War. It inevitably involves massive disruption to our existing economy. There will certainly be benefits—I accept that—but it will create a new and potentially more expensive energy base, and worsen our export competitiveness by raising costs. It would probably close, or export, our existing high-energy consuming industries—steel, engineering, cement et cetera—and if it does, it will hit jobs and living standards. The idea of a cleaner environment is commendable, and I have always supported it, but these are huge costs.

We have to ask, as the Chancellor did in his letter to the Prime Minister, which areas of public expenditure may have to suffer the costs to pay for it. Will health, social care, schools or defence be cut to shoulder that burden? My Labour colleagues, in particular, may wish to consider that. Will it be, as is the case with the £15 billion in current climate costs, that the working people of this country carry the main burden, relative to their incomes, through paying significantly higher energy costs and green taxes to subside renewables? I note that the committee seems to appreciate that problem and I will be interested in the Government’s response to it.

The climate change revolution is predominantly a professional-class religion where the main cost is paid by working people who often do not share the faith. The noble Lord, Lord Deben, claimed that most people are on his side. There is no evidence for that. Polls have long shown that working people do not massively support this project, and they have not yet heard of these proposed new burdens. Whatever noble Lords’ feelings about decarbonisation—I sense that most people probably like the general idea because they rightly, like me, dislike pollution and want a better environment—they must surely agree that it is irresponsible of the Government to push through this massive and not fully-considered project in a statutory instrument without serious assessment of the practicality of its proposed details or costs, and where those costs will fall. Surely with such a massive project we can wait until the Treasury—or perhaps, as I would like to see, an independent inquiry chaired by the Treasury followed by full parliamentary scrutiny—reports to us. This project must be properly handled by the Government, positively, with concern for our future environment but also with responsible concern for its technological and financial practicality, and the livelihoods of our working people.

My final, and even more worrying, point is about the cavalier way in which this costly adventure has been launched. It is being proposed on a single-nation basis—not that that is its ideal, but it is there. The UK is apparently to be prepared to do this with no guarantees of the global environmental benefits, thus offering virtue-signalling moral leadership to the whole world. That is dangerous. Our share of global emissions is just over 1%. If we alone decarbonise tomorrow, that is the amount by which global carbon emissions will diminish, yet in the next few years China and India alone—the great carbon emitters—will increase their carbon emissions by more than double that share. Our contribution will be swamped and carbon emissions will still rise, but at what economic cost to the working people of this country?

Pursuing zero carbon in Britain alone while the big emitters continue to pollute the atmosphere on a massive scale is a futile gesture of moral imperialism. No doubt the virtue signallers have good intentions—I have never questioned that—but, as an earlier politician wisely said, the road to hell is paved with good intentions. We should mobilise the present environmental energy to encourage the great economies of the world to look seriously at the scientific facts on climate change, not at the alarmist propaganda, and then, in a measured way in conjunction with the observational evidence, move towards a time when carbon emissions are more limited. However, that world discipline and its benefits must be guaranteed and not based on delusional hopes. There should be no false paper promises based on ill-supported forecasts, like the Paris agreement.

Until then, our Government must take their national duties responsibly, scrutinising any climate venture with care, checking the observational facts of the science and allowing into the process sensible sceptics asking questions—as was traditionally done under Enlightenment science—and not behaving, as the BBC now sadly does, like a Stalinist censor, excluding any informed sceptic who questions wilder climate fantasies. I say to the BBC that working people will not have much extra revenue to buy their licences if all these proposals go through. Above all, the Government must scrutinise properly. We may eventually wish to enter this revolution but must first agree on whether it will pragmatically achieve its shared purpose, what it will cost and who will pay for it.