(2 weeks, 1 day ago)
Lords ChamberMy Lords, at this late stage of the debate, I am bound to be repeating much of what has already been said. I beg your Lordships’ indulgence for this. My speech may therefore be regarded as a summary as much as a commentary.
Today, we depend largely on renewable sources of energy for generating our electricity. Wind power is the largest component in the mixture of renewable power, and its highest share was achieved on 19 November 2023—between, I believe, 4.30 am and 5 am—when it reached 69%. Such widely proclaimed facts tend to divert our attention from the unreliability and intermittency of renewable sources of power. They are in short supply in periods when the wind does not blow and the sun does not shine.
In such circumstances, our present recourse is to rely on gas-fired power stations to fill the gap in the supply of electricity. These stations are a legacy of a previous era of electricity supply, when North Sea gas was plentiful and cheap. The gas-fired power stations rapidly replaced the coal-fired power stations. However, gas is not cheap and, moreover, burning it releases carbon dioxide, which is the principal agent of global warming. If we are to continue to rely on these power stations, the carbon dioxide that they release must be captured and sequestered underground.
In the absence of gas-powered electricity generation, additional sources of power must be found. Also, a means of storing energy must be found that is available for generating electricity at times when the renewable energy is in short supply. Two leading questions arise. The first concerns the urgency with which these recourses should be pursued, and the second concerns the proportions in which the storage and the additional power should be provided.
The report of the Science and Technology Committee that is the subject of today’s debate emphasises the urgency with which long-term energy storage must be provided, and makes it abundantly clear that the necessary actions to avert an energy crisis are not being taken in good time. To substantiate this aspersion, one needs only to read the recent documents published by NESO—the National Energy System Operator—which is the agency responsible for advising the Government. A simple way of assessing its outlook is to search for “storage” throughout its documents. One will discover that it is to be found mainly within the phrases “carbon capture and storage” and “storage heaters”. There are few instances of the phrase “long-term energy storage”, nor is there any assessment of the available capacity for such storage.
A truth that is revealed by the report of the Science and Technology Committee is that there is only a limited capacity in the UK for storing gas. The current capacity is devoted to storing natural gas. We are told that the UK stores 10 terawatt hours of natural gas, compared with 217 terawatt hours in Germany, 122 in France and 162 in Italy. This startling disparity is explained by our tendency in the past to treat natural gas from the North Sea as if it were on tap. It is no longer readily available to us in this manner.
We must envisage a greatly enlarged future demand for gas storage in underground locations. It will have three aspects. In the short term, there will be a continued and, indeed, increased demand for the storage of natural gas. An enlarged store should partly protect the UK from the volatility of gas prices. There would also be a requirement for the underground storage of captured carbon dioxide, which would permanently pre-empt some of the storage capacity. There should also be a requirement for storing the hydrogen that would be required to alleviate the intermittent scarcity of renewable energy.
The committee report tells of a lack of concern on the part of officials in the face of these circumstances. They are unable accurately to assess what the future requirements for gas storage might be. In the absence of certainty, they are disinclined to take action. The report suggests that action must be taken immediately despite this uncertainty.
The report also suggests that long-duration storage facilities can take seven to 10 years to build and require considerable upfront investment. The problem in providing this gas storage is due in part to the difficulty in devising appropriate incentives to encourage the private sector to undertake the task. A so-called strategic reserve of gas, to be called upon in the rare event of a prolonged dearth of renewable energy, does not offer an attractive investment prospect for private enterprise. This has been demonstrated by the partial closure by Centrica of the Rough offshore gas storage facility on the grounds that it was uneconomic to maintain it. I would suggest that the appropriate word here should be “unprofitable” rather than “uneconomic”.
Neoclassical economic doctrines have come to dominate the thinking of politicians and civil servants, which has made it difficult for them to accept that there is no viable market solution to this conundrum. They hesitate to accept that such a strategic reserve should be in public ownership.
The next matter concerns the sources of our energy. A report from the Royal Society proposes that we should rely almost exclusively on renewable sources of energy—on the wind and the sun. It is proposed that surpluses of electricity from these sources should be used to generate hydrogen by the electrolysis of water. Then, in times of a dearth of renewable energy, the hydrogen should power turbines and reciprocating engines, driving electricity generators. The proposal would involve a major investment in energy infrastructure. Facilities for generating hydrogen and using it to generate electricity are also required. Additionally, a network for piped hydrogen would be required. The electricity network would need to be updated to transfer the power from the remote places where it is generated to places where it might be used. Alternative recommendations involve various amounts of electricity generated by nuclear power.
I shall be fairly brief. One recommendation, which I strongly support, proposes that small advanced modular reactors should be deployed to provide heat and power for both domestic and industrial users. The inherent safety of fourth-generation nuclear technologies will allow the reactors to be located near the industrial users, thereby reducing demands.
Please let me encapsulate this final point. The time is advisory, not mandatory. I have a major point to make.
The small size of the reactors would be an advantage in this connection in comparison to the so-called small modular reactors which typically have a power output of 300 megawatts, which is more than an industrial user might require. Batteries of advanced modular reactors could be used to create large electricity-generating power stations. A sad fact to which I must testify is that Britain is losing its projects for developing such reactors—they are closing though lack of funds or finding sponsors in other countries.
(2 months, 1 week ago)
Lords ChamberMy Lords, the economic nostrums of the Thatcher era still dominate the minds of many politicians and civil servants. The Conservative ideology of the time proposed that public enterprise was everywhere economically inefficient, and it was remarked that it was primarily devoted to protecting lame-duck industries and protecting the interests of the workers at the expense of the industries.
Private enterprise was expected to respond to incentives offered by the markets, and it was believed that it could be relied on to maintain the economic infrastructure of the nation. This was the rationale for the privatisation of public enterprises. The public utilities of power and transport were privatised, and inroads were eventually made into the health service and public education. The present Government are devoting their attention to the restoration of the health service and public education, but, for the present, they have set aside the task of reviving the nation’s industries, which also suffered grievously under the previous Government.
It ought to be more widely acknowledged that, when private enterprise fails to generate sufficient investment, the Government must undertake to do so, either directly or by some other means. A litany of examples can be provided to show how Conservative Governments failed to sustain our industrial enterprises, but only the most prominent examples need to be offered. Their greatest failure affects the electricity generating industry, which once operated under the Central Electricity Generating Board. The privatisation of the industry plays into the hands of large foreign multinational corporations, and it was expected that these could be relied on to maintain the electricity generating capacity. In consequence of the plentiful and cheap supplies of North Sea gas, they reacted with alacrity by investing in combined-cycle gas turbine generating plant, which rapidly replaced the previous coal-fired power stations that they had inherited. On the basis of this experience, it was expected that they could be relied on to invest in nuclear power stations—but they failed to do so, and we are left with a dearth of generating capacity.
If the nation is to achieve its targets for reducing the emissions of carbon dioxide, gas-fired power stations must be replaced. But the privatised industry lacks the means to do so, or is unwilling to find the means. The Government persist in believing that nuclear power can be provided by drawing on private investors. It is expected that this can be achieved under a regime of a regulated asset base, which will allow the costs to be imposed on consumers during the time it takes to construct the power stations. However, it appears that the investors are not responding sufficiently to this inducement, and a final investment decision for the Sizewell C power station has had to be postponed. The Government must emulate the Governments of the early post-war years by using public funds to re-establish the nuclear power industry, and they must also use public funds to sustain the necessary research and development into nuclear technology, as happened in those early years.
The second example concerns the failure of the previous Government to provide sufficient support for the nascent industry for manufacturing the lithium-ion batteries that power electric vehicles. They allowed the collapse of the Britishvolt enterprise, which aimed at establishing a so-called gigafactory for producing the batteries. The fact that the enterprise failed to raise sufficient capital from private investors was seen by the Conservative Government as proof of the non-viability of the project. The absence of the proposed gigafactory, and of others to accompany it, almost certainly spells the demise of our native automobile industry.
I conclude by addressing the notion that the lack of investment in our industries can be redressed by encouraging inward financial investment. A report by the noble Lord, Lord Harrington, which was commissioned by the previous Government, strongly advocated inward investment as a cure for our ills. Our present Government, who recently hosted an international investment summit, appear to have adopted this nostrum. Inward investment entails the sale of our industrial and other assets to foreign owners. The dividends and interest payments that are remitted abroad are an almost incalculable drain on our economy. Our lax system of corporate government facilitates the acquisition by foreign parties of many of our small high-tech industries which offer the prospect of our economic revival. It allows foreign enterprises to purchase and control British companies that would otherwise be their economic competitors. The depredations of foreign financial conglomerates that have ownership of British assets have been amply illustrated in recent weeks during our consideration of the water companies and rolling stock leasing companies that have paid vast dividends to their foreign owners.