Energy Bill [ Lords ] (Fourteenth sitting)

Debate between Alan Brown and Mark Jenkinson

Committee stage
Thursday 22nd June 2023 Public Bill Committees

[Alan Brown]

The Minister can shake his head but that is a fact.

[Mark Jenkinson (Workington) (Con)]

Does the hon. Member agree with the former Labour leader of one of the Aberdeen councils, Barney Crockett, that Labour’s energy policy will wreak more harm on industrial communities than anything that Margaret Thatcher ever did?

[The Chair]

Order. Before we allow ourselves to get into what might be an amusing, if controversial, area, I remind the Committee that we are dealing specifically with clause 270, which prohibits new coalmines in the six months after the Bill is passed. Perhaps we could restrict ourselves to that, rather than getting into more exciting rabbit holes.

--- Later in debate ---

[Alan Brown]

I am happy to comment on energy security, but I remind the right hon. Gentleman that those were not my words but the words of the former COP26 President. He said that the proposed new mine will not deliver energy security. I am sure that, like me, the right hon. Gentleman respects the President of COP26 and believes that he did a good job.

This argument about supplying coke and coal to the steel industry has already been debunked: 85% of the coal from the new coalmine will go abroad, so it will not provide energy security by supporting the steel industry in the UK. That is a bogus argument.

[Mark Jenkinson]

The hon. Gentleman says that that point has been debunked, but I actually debunked the debunking in the previous sitting. I am sure he heard those comments. On the issue of 85% being for export, that all depends on whether we want a UK steel industry and whether we want to grow it. Does he agree that we should be growing the UK steel industry and using 100% of that coal here?

[Alan Brown]

I want to debunk the hon. Gentleman’s debunking of the debunking. Let me come to the comments of the chair of the Climate Change Committee, Lord Deben, who the last time I checked is a Tory and was a Tory Minister.

--- Later in debate ---

[Alan Brown]

The whole point is that coal is not being used to support baseload. Even if we believe in the concept of electricity baseload, it is not coal that is doing that. Coal is being used as a back up to the back up for when peak demand is hit, so that argument is wrong. Coal is not used for baseload.

The hon. Member for Workington stated:

“We are far too parochial on the subject of net zero and emissions.”

He seemed to be saying that if we do not do it, somebody else will, which is not showing international leadership. He went on to say:

“if we can export to Germany or somewhere else where people make large quantities of steel using coking coal, that is a reduction in total global emissions that we should champion.”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 373.]

The hon. Member has still not explained how the UK shipping coal to Germany is going to reduce global emissions—I still do not see how that follows—but I do share his concern that a lot of emission reductions have come from that offshoring manufacturing and industry. That is something we have to stop, so I fully agree with him on that, but opening a coalmine to export coal to Germany is not the way to re-shore industry.

[Mark Jenkinson]

The hon. Member is being incredibly generous with his time. On the point on how shipping coal from the UK to Germany lowers emissions, if that happens instead of coal being shipped from the US, Russia or somewhere further afield, then the shipping emissions are greatly reduced. As my right hon. Friend the Member for Elmet and Rothwell points out, it is also much cleaner coal to start with.

[Alan Brown]

I understand the point that Government Members are trying to make but, at the end of the day, if we are shipping coal to Germany, we are still increasing UK shipping emissions. We are increasing emissions from the UK to about 400,000 tonnes of CO₂. In the global context, there is no saying whether those coal emissions are getting displaced if the coal is going to Germany, so we cannot guarantee a reduction in global emissions. We would be putting more coal on the market, which is coal somebody else will snap up elsewhere. The likelihood is that we would actually increase emissions.

I should have said in my opening remarks that I represent a former coalmining area, so I recognise the devastation caused by pit closures. My area recovered some jobs through open-cast coalmining, but even that industry collapsed a few years ago, leaving us with devastating blights on the landscape and huge craters that needed filling. Unfortunately, again, there was no help from the UK Government when we needed it. I understand the legacy of coalmining and I want support for these areas, but opening new coalmines is not the way to do it.

We cannot turn back the clock. What we need to do is create jobs for the future. We need green-based jobs in coalmining areas such as mine, using geothermal energy and making use of the closed mines. Let us make them an asset for the future, providing clean energy and reducing energy bills at a local level.

The Committee will be pleased that I am bringing my monologue to an end. I hope that my comments are going to convince the Government and Conservative Committee members that there is no need for new coalmines going forward. I would be delighted to hear the Minister, in his summing up, say that he is not going to move against clause 270, but is going to retain it and listen to those of us who want it.

Clause 271 is to be replaced by new clause 52. I welcome the Government’s change on that and their making reaching net zero a statutory duty of Ofgem. Will the Minister tell us whether new clause 52 and Ofgem’s new statutory duties will make it much easier for Ofgem to allow anticipatory investment? That has been one of the issues, so we want to make sure that it can do that and do that forward plan-ahead, rather than building more constraints into the grid while upgrading it at the same time.

Turning to clauses 272 and 273, it seems like for ages Energy Ministers have stated their support for the principle of the Local Electricity Bill—community electricity generation and the sale of electricity locally—but they have always said that the Bill was not the right solution to facilitate that. The original drafters and MPs who have tried to bring forward private Members’ Bills have changed the Bill to try to address the concerns of Ministers, but that still was not enough.

The cross-party group of peers who drafted clauses 272 and 273 to mimic the effect of the Local Electricity Bill again tried to address the Government’s concerns. I fail to understand why the Government are still against the two clauses. It is worth pointing out that 323 MPs overall, including 128 Tory MPs—let alone myriad local authorities, environmental groups and individuals—have supported the Bill. The feet-dragging makes no sense. I commend the hon. Member for Bristol East for pointing out that the Minister himself was a signatory to the Local Electricity Bill. I wonder what about a ministerial car made him change his mind about supporting it.

Nuclear Energy (Financing) Bill (Second sitting)

Debate between Alan Brown and Mark Jenkinson

Committee stage
Tuesday 16th November 2021 Public Bill Committees

[Alan Brown]

Q We also heard this morning that disposal of radioactive waste is built into the up-front cost and becomes part of the 60-year payback. Is there any way of ensuring that the risk stays with the developer? Might the risk transfer to the consumer? If a company became insolvent, who would be responsible for decommissioning and disposal of the waste?

Richard Hall: That is a good question. If the special administration regime were to be used, I understand that effectively it would mean that the special administrator would be taking on that risk. That may mean that it became a public liability. I do not know how a special administrator would sell on that risk to others.

In terms of where it would be borne if the special administration regime were never used, I think that would come down to the terms of the contract agreed between the Government and the developer. In its current form, the Bill basically enables the Government to enter into negotiations with a developer to agree a contract based around the RAB model, but the details of that contract are not contained in the Bill. Earlier, I said that I thought it very important that an independent third-party impact assessment be laid before Parliament after a deal is struck but before it becomes contractually binding. That would provide the opportunity to understand where the liabilities would sit in that type of situation.

[Mark Jenkinson]

Q Obviously, I have heard what you just said about nuclear. Since Hinkley, we have taken an annualised payment from operators to deal with waste and decommissioning. It is not something that we have to deal with later in the special administration regime. I gather you have an anti-nuclear stance. Does the CAB have a preferred route to providing consumers with electricity? You have spoken a lot about renewables and the cost of renewables, but when we factor in constraint payments and various other issues, such as back-up, it becomes a very expensive way of delivering energy to the most vulnerable in society. Does the CAB have a view on a preferred electricity generation route, and if we are to build nuclear, do you have an alternative preferred model to RAB?

Richard Hall: We do not have an anti-nuclear stance; we are technology neutral. In terms of the options between bringing forward new nuclear or leaving catastrophic climate change unchecked, there is no question that nuclear is an option that can help us to reduce our emissions and tackle the climate change crisis. We do not have concerns on the technology itself, and whether it can be done safely and so on. Our concerns are simply around cost. It looks like a costly option compared with others.

On whether we have a preferred approach, because we are technology neutral we do not have a preference for any particular technology over others. I would simply highlight such things as the analysis of the Committee on Climate Change, which showed a range of possible pathways to 2050 that it considered to be affordable. Some of them involved nuclear and some of them did not. It appears that there is a choice to be made.

Nuclear Energy (Financing) Bill

Debate between Alan Brown and Mark Jenkinson

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Alan Brown]

It will be no surprise to hear that I have no confidence that the true costs of nuclear waste disposal are actually included. We hear that this is rolled up in the strike rate for Hinkley, but if something happens and EDF goes out of operation, who will pick up the additional costs? It will clearly be the bill payers or the taxpayer. We hear about the fact that nuclear is supposed to be clean energy, but how can it be classed as clean energy when we are burying radioactive waste and having to store it for up to 1,000 years? That, to me, does not mean clean energy.

Taishan in China was held up as an exemplar EPR project when it was commissioned, but it has been offline since June this year due to safety concerns and rod damage. It is clear that the design and construction of EPR nuclear stations has still not been bottomed out properly. As the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), said, a reliance on French state-owned EDF and the Chinese state company China General Nuclear kind of undermines the argument about having sovereign energy security. It makes no sense.

Despite the cost and programme issues at Hinkley, we are told that Sizewell C will somehow be different. There will be cost savings from learning on Hinkley. The design will be replicated, saving more money, but the reality is that the site at Sizewell C is bound to have different ground conditions, different environmental considerations and different logistics and site constraints, which affects methods of working, and that means that we cannot build an exact duplicate station the same way.

Even if savings are realised on Sizewell C compared with Hinkley, what does that mean cost-wise? If Sizewell C saves 25% compared with Hinkley, that is still a capital cost outlay of £18 billion. Surely there are better ways to spend £18 billion. We heard from the right hon. Member for Kingswood (Chris Skidmore) about the number of jobs being created. If I was given £18 billion to £20 billion, I am sure that I could create 30,000 jobs —by the way, that is £730,000-odd a job in capital costs alone. That is not a good return.

On costs, we are told that a new deal signed under the proposed new funding model in the Bill will cost consumers only £1 a month during construction, but if we look at a 10-year construction period for Sizewell C, we see that that means that bill payers in 28 million households will pay £3.4 billion before it is operational. That is a further £3.4 billion in expenditure when that money could be better invested elsewhere.

We still do not know with this Bill what the long-term pay-back options will be. Will there be a further agreement on the strike rate or a minimum floor price on the sale of energy? What length of contract will bill payers be tied into once a RAB model for an agreement is signed off?

What else could we do with that amount of money? We could upgrade all homes to energy performance certificate band C. We could have wave and tidal generation. The UK Government are willing to introduce the Bill and commit hundreds of millions of pounds to nuclear—the Budget has £1.7 billion just for developing nuclear to a negotiation stage—but they will not even ringfence £24 million for wave and tidal in pot 2 of the forthcoming contracts for difference auction. The disparity is clear.

It is time the Government took their blinkers off. It will be a real disgrace if they do not provide a pathway for wave and tidal projects to scale up. Scotland is currently leading the world on the issue; the O2 tidal generator is operational and grid-connected in Orkney. I hope that the Minister will reconsider the request to ringfence a small amount of money in pot 2 of the forthcoming contracts for difference auction.

[Mark Jenkinson]

I am a huge supporter of tidal energy, but is it not the case that nuclear, given its energy density, is the most environmentally friendly and low-carbon technology that we have, while tidal has the potential to significantly damage marine ecosystems? I am a big supporter of tidal energy, but we have to be really careful about where we deploy such things. We have a ready-built, proven technology here—the most environmentally friendly and low-carbon technology that there is.

[Alan Brown]

I completely agree with the hon. Gentleman about nuclear being clean—oh, wait, apart from the radioactive waste that we still do not know what to do with. We will ignore that point, but he has a valid point about the need for clear environmental considerations with respect to where we site any marine project. That should be part of a robust, up-front planning process, working with the likes of Marine Scotland. There are regulatory bodies that have oversight of these projects, so it is important that they be involved in the planning process. I agree with the hon. Gentleman that there is still a huge future for wave and tidal.

[Alan Brown]

I completely agree. I was happy to co-sign the cross-party letter from the all-party parliamentary group on marine energy, which I fully support. I hope that the Minister is listening, because this is a matter that we agree on across parties.

Looking at other technologies that we should be spending money on, I compliment the UK Government on seeing the opportunities that floating offshore wind can bring, but let us start deploying it much more quickly and investing more money, because that is where the real future is. Clearly, the further out to sea the turbines are, the greater the reliability of wind and subsequent generation.

There needs to be much greater investment in carbon capture and storage. The Government need to reverse their disgraceful decision not to have a Scottish cluster as part of their track 1 CCS projects. A Scottish cluster would also deliver hydrogen production, which is vital on the pathway to net zero.

We heard earlier, as we always do, the argument that nuclear is required for when the sun does not shine and the wind does not blow, but as I have tried to point out to the Minister, there is an existing technology that can address that issue: pumped storage hydro, a renewable energy source that utilises surplus grid energy to fill the reservoirs and can then dispatch electricity when required. Pumped storage hydro is the perfect foil for intermittent renewables, rather than big, inflexible nuclear power stations that invariably pump energy to the grid when it is not required. An Imperial College report suggests that there could be system savings of £700 million a year from using pumped storage hydro technology instead of nuclear.

SSE has all the necessary permissions in place, right now, to progress a new pumped storage hydro scheme at Coire Glas in the Highlands. It is progressing the design at its financial risk, and all that it needs is agreement with the Government and a minimum floor price for electricity—not a strike rate and not direct funding, just a minimum guarantee on the sale price of electricity. Then the development can reach the construction stage, and can be commissioned in the same timeframe as Hinkley. I ask the Government to reconsider, and to get round the table with SSE and other developers.

[Mark Jenkinson]

I thank the hon. Gentleman for allowing me to intervene again. I am a big supporter of pumped hydro, which is great for storage, but we cannot neglect the fact that we require a surplus of electricity to pump the water in the first place, up to the point of that storage. It is great to be in control of when we release the water and use the energy, but we have to think about how we get it up there in the first place.

[Alan Brown]

Absolutely. That is my point. This is about utilising spare energy and then filling the reservoirs. That is much more productive than, with nuclear, putting additional electricity into the grid and then making constraint payments to wind farm developers to turn the turbines off. Those turbines could be used to much greater effect for the likes of pumped storage hydro, or generating green hydrogen.

It is clear that there are alternatives to nuclear. The Government have rightly pointed out that the existing nuclear fleet is coming to an end, but they have wrongly concluded that that means we need new nuclear. Dungeness went offline earlier this year, seven years early, because of safety concerns. Hunterston B is about to go offline, and Hinkley Point B will close next summer. Hartlepool and Heysham will follow in 2024. That means that Hinkley Point C will not even replace the lost capacity, and by 2024, 5.3 GW of nuclear capacity will have been lost to the grid.

If the grid can operate successfully without that 5.3 GW of nuclear for three or four years until Hinkley’s 3.3 GW comes on line, that in itself confirms that new nuclear power is not required. In all likelihood, Torness and Heysham 2 will not last until 2030, so all but one of the existing stations will be offline before Hinkley comes online. By not replacing the existing nuclear fleet as it comes to the end of its life, the UK Government are themselves proving that we do not need a nuclear baseload, because the grid can operate without it, unless an energy security crisis arises when all the other stations go offline. The Minister can address that later if he wants.

Although here in the Chamber it is just me saying that we do not need new nuclear, plenty of experts agree. Back in 2015, the then chief executive officer of National Grid, Steve Holliday, said:

“The idea of large power stations for baseload is outdated”.

In the 2019 World Nuclear Industry Status Report, Mycle Schneider, who was the lead author of the report, said that nuclear power

“meets no technical or operational need that low-carbon competitors cannot meet better, cheaper and faster.”

A recent study by Good Energy and the Energy System Catapult demonstrated that carbon emissions from the power sector could be eliminated as early as 2030 without the need to develop new nuclear power. Sarah Darby, associate professor of the energy programme at Oxford University’s Environmental Change Institute, has said:

“Nuclear stations are particularly unsuited to meeting peak demand: they are so expensive to build that it makes no sense to use them only for short periods of time. Even if it were easy to adjust their output flexibly—which it isn’t—there doesn’t appear to be any business case for nuclear, whether large, small, ‘advanced’ or otherwise.”

It is clear that there is not a case for new nuclear—and, as my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) pointed out earlier, we have yet to address the nuclear waste issue. It will cost £132 billion to deal with the existing nuclear waste legacy. Why do we want to create another waste legacy for future generations to deal with?

So we do not need nuclear, and we do not need this Bill. Even if we consider what it aims to achieve, the fact remains that there is market failure, given that Hitachi has walked away from Wylfa and Oldbury and Toshiba has walked away from Moorside. So there is no competition to drive down cost, and EDF and China General Nuclear are still the only show in town. As the hon. Member for Southampton, Test (Dr Whitehead) asked, while the RAB model may might bring down costs, what protections are there in the event of project overruns?

Clause 2 puts all the powers of negotiation and contract award into the hands of the Secretary of State, and allows the Secretary of State to determine what is value for money. We all know how good the Government are at direct negotiations, so how can they guarantee value for money in a transparent manner?

As I touched on earlier, we have been told for five years that Hinkley is good value for money, but now the Government have come back to the House to say that actually that is not the case and they have a new plan for how to deliver nuclear. I therefore cannot possibly support this Bill, especially as the electorate of Scotland have consistently voted to elect a Government on a “no new nuclear” manifesto. Why should Scottish bill payers be forced to pay for nuclear energy that they do not want or require? This is another democratic deficit for Scotland, especially when so much of our renewable energy is not being supported at the moment and we are stuck with the highest grid charges in Europe. It really is time that Scotland had control of its own energy decisions, but in the meantime I will be proud and pleased to vote against this Bill.