Great British Energy Bill

Debate between Viscount Trenchard and Lord Fuller

Committee stage
Wednesday 22nd January 2025 Grand Committee

[Lord Fuller (Con)]

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

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

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

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

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

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

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

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

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

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

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

[Viscount Trenchard (Con)]

My Lords, I rise to support my noble friend Lord Offord’s Amendments 111 and 112, to which I have added my name. It has become increasingly apparent, from many points of view, that impact assessments are necessary. In particular, in exercising its functions, GBE should be required to consider the environmental impact and the effect on sea-birds and marine life of its installation of offshore wind facilities, as well as of its decommissioning of oil and gas structures.

I also support my noble friend Lord Fuller’s Amendment 113, which seeks to place the same obligation on GBE with reference to tidal energy projects. I have looked for information on both the Sound of Islay project and the Bristol Channel project, both of which I was reasonably familiar with some years ago but about which I have heard nothing in recent years. I am heartened by my noble friend’s enthusiasm for the sector and look forward to hearing whether the Minister expects that GBE will be encouraged to make investments in it. As my noble friend Lord Fuller said, this is a slim Bill with fat consequences. We have to make sure that GBE will act in the public interest.

Great British Energy Bill

Debate between Viscount Trenchard and Lord Fuller

Committee stage
Monday 13th January 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, I will speak to Amendments 85G and 85H in my name.

In this week of all weeks, when temperatures have dropped to minus 20 in parts of our nation and we are down to less than a week’s-worth of gas, it is time for the rhetoric on renewables to collide with the reality of what it takes to power our economy and protect the comfort and well-being of our citizens. There could not be a better moment to have this debate, with Mother Nature dialling a wake-up call to us all.

We need to be more realistic about the practicality of heating and lighting our homes, grounded in the world as it is rather than how we want it to be. The purpose of these amendments is to ensure that GB Energy takes a structured and quantitative approach to investing in energy production from renewable and wind energy assets. These investment plans would be evidence on an annualised basis, but broken down into monthly segments to reflect the seasonality that we all experience, with mandatory monitoring on a monthly basis. At its heart, my amendment seeks to force GB Energy to use a data-driven approach to address the structural energy gap we get every winter and, inter alia, to use that data to prioritise investments in energy assets that give energy security above the desirability of decarbonisation.

Energy security and decarbonisation are not necessarily mutually exclusive, but when the UK’s energy balance is published monthly, as these amendments would require, it will act as an obvious spur on investments to keep the lights on every month as a first and primary duty. These amendments do not dilute the ambition of GB Energy or abandon the obvious desirability of reducing our reliance on fossil fuels. However, requiring GBE to publish its plans for renewables and to address the predictable gaps that come each year will bring some reality to the rhetoric.

This country is bumping on empty this week—it is a serious matter. We are too reliant on the kindness of strangers to heat our homes. As the noble Baroness, Lady Brown of Cambridge, head of your Lordships’ Science and Technology Committee says, the crux of the matter is the robustness of our plans for

“the doldrums of winter when the sun doesn’t shine and the wind doesn’t blow”.

I am not rubbishing renewables but we need to be less starry-eyed about their ability to make the contribution some have thought they can, especially in winter. The amendments would therefore require GB Energy to be specific about how its investments in renewable and wind energy assets, and the planned additional investments over its existing ones, will contribute to the aggregate energy demand in monthly slices. There is a purpose to this, which is to ensure that when we flick the switch, the light comes on; when we press the button, the motor whirrs into action; and when you open the bill, you should not have to fall over in shock.

I am not interested in adding bureaucracy; NESO has a responsibility to produce these aggregate demands and I do not intend to interfere with those. But we know that there are seasonal variations in sunshine, and as with solar, also with wind; we all know the wind tends to blow harder in the winter as storms barrel across the Atlantic. My amendment will require GBE to take this predictable seasonality into account in its investment plans, to ensure that those investments in renewables can realistically contribute to meeting the energy requirement on a monthly basis, especially in winter. It is also about holding GBE accountable for the hard-nosed business of addressing these predictable structural energy gaps in the way that the noble Baroness, Lady Brown, highlighted, working hand in glove with NESO to address the market failure.

It sounds obvious that this should be the case, but my sense is that the Government are primarily focused on decarbonisation, even if it just ramps up surpluses in the summer that require these constraint payments to pay wind turbines to be switched off. If we are chasing carbon alone, we are missing the point. We need to balance renewables and wind investments in a way that also balances energy markets every month so that we do not run out of juice when it is cold.

This is important, because the total amount of standby generation capacity that we need is scaled by the months with the greatest deficit. It is on not an annual basis but a monthly basis. Because we have these predictable gaps, we pay standby gas power stations millions to keep ticking over, ready to jump into action when needed. Control rooms up and down the country are staffed by people playing patience and waiting for that call. That is expensive. It also underpins the entire speculative subculture in energy markets, in a process that the Daily Telegraph last week called the “gasino”, whereby speculators make a fortune while householders pick up the tab.

My colleagues have noted that the Guardian reported this week that two gas-fired power stations were paid £12 million for just three hours of electricity. We should not be surprised. Running a power station is expensive—there are staff, there is capital and maintenance, with people sitting around waiting for that call—and it is expensive to provide this insurance. The truth is that we are having to pay twice for much of our electricity, once for the renewable capacity, which we hope will boil that kettle, then again to have non-renewables on standby, ready to leap into action so that we can ensure that we can boil that kettle when the mercury falls. The consequence is that we are paying for some of the most expensive electricity in the world. Our costs rose 124% in five years, according to government figures. The UK’s energy price per kilowatt hour was 25.85p per kilowatt hour in 2023—significantly higher than in Germany, France and the US. We are becoming structurally uncompetitive as a result.

If enacted, my proposals would mean that the company’s objectives and functions would be forced by the market and public opinion to rank energy security above the decarbonisation function. That way, our £8 billion investment in GBE will keep the lights on. That is how we get best value from those investments, and we have energy markets that work more efficiently and at lower costs, which is a good thing. I expect the Minister to say, “Well, this is all rather burdensome”, and give ifs and buts and ask why would we need to publish this stuff. However, nobody questions when the OBR on a monthly basis publishes the forecast for the Bank of England. I do not see why, if it is good enough for the Bank of England, the GBE should not be forced to publish its investments as well.

I mentioned in the earlier debate how GB Energy is a private company, but it is established for public benefit. Publicising its plans and monitoring them is for the benefit of the public. It should not be entitled to cloak its activities in secrecy, as a private company established under the Companies Act 2006 would normally be expected to do. Mandating a monthly look at the markets, with a view to reducing the amount of back-up generation that we need, would avoid the perverse incentive to invest in renewables that make the surplus even greater. We do not want to overprovide standby back-up, so we end up paying excessive compensation payments, and we pay people more than is necessary to play solitaire in those control rooms. We do not want to underprovide, so that speculators hold us over a barrel in the short squeeze.

It follows that the requirement to publish the plan, to invest with the purpose of reducing the monthly or the predictable energy gaps, ensures that it brings a dose of reality to the complicated job of not only calculating the gap but doing something about it. That is where GB Energy can have a good, effective and ambitious role. Success looks like GBE publishing the plans and data so that we can see how effective it has been in needing fewer people in the control rooms by minding that gap, seeing fewer people falling over when they open their bill and a realistic, data-driven, balanced energy market that is not held hostage by ideology so much, so that we can move our economy forward—to keep the lights on and keep those motors whirring.

[Viscount Trenchard (Con)]

My Lords, I support Amendment 85F, tabled by my noble friend Lord Murray and Amendments 85G and 85H tabled by my noble friend Lord Fuller. As I explained in an earlier group, it is very clear that the price of electricity is presently adversely affected by the pricing mechanism applied by NESO, which is the price being determined by the last price of gas as used. If you are using gas only as a balancing item—that is, when the wind is not blowing and the sun is not shining, you fire up a gas power station to make sure the lights do not go out—it is much more expensive. The electricity generated by that last switch on of a gas power station determines the price of electricity, and that has a huge negative effect on the consumer, obviously. That is why these amendments are so necessary.

I would like to ask the Minister if he thinks that it is right that the electricity price is determined by the last firing up of a gas power station, which is being used simply as a balancing item when the wind does not blow and the sun does not shine. As we have seen over the last few days, there have been many days when the proportion of our electricity generated from wind is under 10% and that generated by gas goes above 50%, which means that power stations that are used only occasionally are being fired up, and that is very expensive.