Drax Power Limited: Ofgem Investigation

Lord Watts Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

I remind the noble Lord that policy costs on bills have increased from £115 on average in 2010 to an estimated £309 in 2024, so a lot of this increase occurred under his Government and the previous Conservative and Lib Dem Administrations. If we are serious about going towards clean power and net zero then we have to accept that we must finance the development of new energy-generating structures, and that is the case for biomass. Equally, that has to be done under sustainability criteria regulations that will ensure it happens. As for the OBR, its analysis has highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts.

[Lord Watts (Lab)]

My Lords, is this not a case of the regulators letting down the public again? Do we not need to have more accountability for our regulators? I suggest that each regulator has to produce an annual report that goes to a committee of the House of Commons, so that we can review what they are doing. At the moment, they are badly letting us down.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I think that, by implication, my noble friend is being critical of Ofgem, but I must say that that is not my experience. Ofgem is actually a rigorous regulator. It produces an annual report, and of course it would appear before a Select Committee if required.

Electricity: Cost-competitiveness

Lord Watts Excerpts

Thursday 16th May 2024 Lords Chamber

[Lord Callanan (Con)]

I certainly agree that the Opposition’s policy is fantasy politics. However, I will give the noble Lord the costs in the latest published analysis, which show that electricity from offshore wind is 60% cheaper to build and operate than gas-fired power. The levelised costs are £44 per megawatt hour for offshore wind, versus £114 per megawatt hour for closed-cycle gas turbines. The other key point is energy security. As the noble Lord is well aware, the amount of gas coming from the North Sea is declining year on year, and therefore we have to import increasing amounts of gas. It makes no sense to make us dependent on imported gas for the years to come. We can see the effects of the Russian invasion of Ukraine on gas prices. With the current turmoil in the Middle East, it makes even less sense.

[Lord Watts (Lab)]

My Lords, is it not the case that the only way we will address this is by building new nuclear plants? The last Labour Government identified sites and were developing a planning system that would have pushed them through. Over nearly 14 years, what have the Government been doing to create opportunities for more nuclear power?

[Lord Callanan (Con)]

The noble Lord is right and wrong at the same time. Of course, it makes absolute sense to build more nuclear power, and we are doing that. However, his reference to the last Labour Government gives me the opportunity to state that, when they came to power in 1997, they cancelled all our new nuclear generation.

Prepayment Meters

Lord Watts Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Callanan (Con)]

My Lords, energy suppliers are not marking their own homework. Ofgem very closely monitors them. Not all suppliers have been given permission to restart involuntary installations. They have to put in place a strict code of conduct and make at least 10 attempts to contact the relevant customer. They have to put in place relevant prepayment plans and credit payment plans, if necessary, taking into account the customer’s ability to pay, and some prepayment forcible installs are banned completely in the case of vulnerable customers.

[Lord Watts (Lab)]

My Lords, all the regulators seem to be failing the public. Is it because the Government do not want them to do the job properly, or are all our regulators incompetent?

[Lord Callanan (Con)]

I think that is a bit of broad generalisation, if the noble Lord will forgive me for that. The principle of independent regulators was established a number of years ago throughout many Governments. I think all of us will have our opinions on how good or bad independent regulators are—they sometimes absolve the political system from some blame; that is my personal criticism—but we put in place through legislation the system of independent regulators, and of course we need to keep an eye on how they are doing their job.

Surplus Carbon Emissions

Lord Watts Excerpts

Wednesday 27th March 2024 Lords Chamber

[Lord Callanan (Con)]

My noble friend is relentless in his pursuit of tidal. He is right; it is an important component. It is not yet at scale; it is at a relatively small scale of development, but we supported it under the previous CfD round, and I am sure that tidal has a bright future ahead of it as part of our wide energy mix.

[Lord Watts (Lab)]

My Lords, does the Minister agree that we are missing a trick with wind power on land? Does he think the Government should change their policy on that? If so, does he think they should change the planning process to make it quicker to get those schemes up and running?

[Lord Callanan (Con)]

The noble Lord makes a good point. We are considering that at the moment. It is important that if we roll out wind power on land, we do it with the consent of local communities. We want to make sure that we take people who live next to the turbines with us. We are consulting on an appropriate way of doing that.

Hydrogen Heating

Lord Watts Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Callanan (Con)]

Well, I did not say that we necessarily welcomed the NIC’s report; I said that we were studying it, and of course it will provide a useful backdrop to and illustration of the decisions that we will make. To go back to the point of the noble Baroness, Lady Sheehan, we will announce a decision on the trial in Redcar very shortly. I think the noble Lord makes a good point; where does all the extra electricity come from? Of course, there is detailed scenario mapping done on that; we have very exciting and ambitious plans for lots more offshore wind, lots of solar development and lots of nuclear development—so there will be ample supplies of electricity available.

[Lord Watts (Lab)]

Does the Minister agree that it is pointless improving heating systems if many houses are badly insulated? What will the Government do to step up the programme to make sure that people can live in decent homes?

[Lord Callanan (Con)]

I agree with the noble Lord that energy efficiency and insulation are extremely important. That is why we are spending £6.5 billion over this Parliament on insulation, energy efficiency and clean heat measures; but, of course, there is always a lot more to do and we will have more to say on that shortly.

Climate Financing

Lord Watts Excerpts

Tuesday 17th October 2023 Lords Chamber

[Lord Callanan (Con)]

I know that my noble friend is a powerful advocate for women and girls, both in this House and in the work she did in government. She is of course absolutely right. The FCDO’s international women and girls strategy sets out our commitment to increase the proportion of our international climate finance that will be gender-marked and to integrate gender and social inclusion objectives into our climate finance programmes and strategies.

[Lord Watts (Lab)]

My Lords, all these measures will come to nothing unless we control the population of the world. What are the Government doing to help achieve that aim? Will they publish figures on their successes or failures?

[Lord Callanan (Con)]

The noble Lord asks a good question, which is slightly beyond the remit of the original Question. I point him to the answer that I just gave to my noble friend: empowering women and girls, giving them more control over their own reproductive rights, is very important in this area.

SMEs: Net-zero Targets

Lord Watts Excerpts

Wednesday 7th June 2023 Lords Chamber

[Lord Callanan (Con)]

I agree. Carbon leakage is an important problem, and one of the reasons why a number of the larger industries are subject to international competition, as the noble Lord mentioned. We give them free permit allocations under the emissions trading system.

[Lord Watts (Lab)]

My Lords, are the Government looking at the efficiency of heat pumps? Have they monitored them, and will they produce a report on their cost and effectiveness?

[Lord Callanan (Con)]

Indeed, we have already done so. There have been a number of reports on the efficiency of heat pumps. Efficiency varies depending on the quality of the installation. We must ensure that they are installed properly in the appropriate properties with the right number of emitters. I am happy to send copies of the reports that we have done to the noble Lord.

COP 28

Lord Watts Excerpts

Wednesday 17th May 2023 Lords Chamber

[Lord Callanan (Con)]

I am not going to get into the debate about Minister Stuart. He does an excellent job and is well respected across the international community for his work, building on the work that we did at COP 26. We are committed to the Powering Past Coal Alliance. I think the noble Lord is being slightly disingenuous; he knows that the coal mine in Cumbria is nothing to do with power generation.

[Lord Watts (Lab)]

Do noble Lords share my concern that the Minister has just said that what France is doing does not concern him? Does he not understand that, if we are to deal with climate change, we all need to work together?

[Lord Callanan (Con)]

I think I said that what negotiations go on between France and the EU are not our concern any more because we are not a member of the EU. Of course we work collaboratively with many countries across the world, not just in the EU. This is a worldwide problem and we need to negotiate on a worldwide basis, which of course we do. Carbon emissions do not respect international borders.

Climate Change: Net Zero Strategy

Lord Watts Excerpts

Wednesday 3rd May 2023 Lords Chamber

[Lord Callanan (Con)]

Again, I am afraid I do not agree with the noble Baroness. There are some exciting prospects and we are supporting early-stage tidal projects. It depends whether she means wave-powered projects or the various barrage schemes, which are extremely expensive and have a lot of environmental implications. The approach that we take through the CfD system is to pick the most effective, cheapest means of decarbonisation, because of course it all feeds back into consumer bills. If we adopted the approach she is suggesting, these technologies are relatively unproven and would add to consumer bills.

[Lord Watts (Lab)]

My Lords, the Minister claims that we are making more progress than other European countries, but is it not because we started at such a low point? Let me give an example: we have the worst-insulated homes in Europe. Is it not the case that it is a very low level of improvement?

[Lord Callanan (Con)]

No, it is not. The figures I quoted started from a baseline of 1990, so it actually includes some of the progress made under previous Labour Governments. There is no question that of course we have a challenge: we have the oldest housing stock in Europe, a consequence of the Industrial Revolution. Six million homes were built before the First World War, so it is a challenge, but the figures still stand: we are making faster progress than any other G7 country.

Green Investment

Lord Watts Excerpts

Tuesday 7th March 2023 Lords Chamber

[Lord Callanan (Con)]

I am afraid I do not have that information to hand. I will need to write to my noble friend.

[Lord Watts (Lab)]

My Lords, is it not the case that the American policy is being driven by the fact that living standards in America—and in Europe and here—have been dropping? The gap between rich and poor is getting wider, and Governments have so far failed to address that problem.

[Lord Callanan (Con)]

I do not agree with the noble Lord. There are reasons why the US adopted its policy —investment, which we welcome, into green renewable energy, et cetera. Of course, the US is starting from an awfully long way behind the UK. One of the reasons it has to put in such large subsidies is that it has not provided the long-term legislative certainty that we have.