Oral Answers to Questions
Debate between Alan Whitehead and Amanda Solloway(7 months ago)
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Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister and her colleagues have repeatedly said today that they care about cutting bills for families, but a recent report by the Resolution Foundation found that the onshore wind ban has hit the poorest households’ income six times harder than that of the richest. Such households have been forced to pay additional electricity bills as a result of the total failure to build onshore wind in England. How on earth can Ministers continue to sit there and claim that they stand up for working families when they continue to block the cheapest form of clean energy there is, which could cut bills for families who desperately need help? Before she leaves office, will the Secretary of State pledge to put this right so that onshore wind can be built again and customers can save money on their future bills?
Amanda Solloway
That is absolutely not the case. We stand here incredibly proudly as Ministers in the Department for Energy Security and Net Zero, and we have made a commitment. We are doing more than has ever been done on renewables and offshore wind, and we have done more to help people with the affordability of their bills.
Draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024
Debate between Alan Whitehead and Amanda Solloway(7 months, 3 weeks ago)
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Amanda Solloway
I thank the hon. Members for Southampton, Test and for Angus for their contributions. I will endeavour to answer the questions as fully as possible, but if I fail to answer them all, I am incredibly happy to have further meetings on the subject, as suggested, although this issue is not in my portfolio.
All companies need to meet a minimum standard of investment before they bid into the CfD, so there is a level playing field for everybody. Companies will know if they have been allocated an SIR before they bid in. If they fail to get a CfD, their budget will be reallocated to those who were successful. As I have indicated, however, if I have not fully understood the question, I am happy to clarify further.
On the point raised by the hon. Member for Angus, the UK does not manufacture all the components required to build a wind farm. We do not expect to make everything, and it would not be legal to mandate UK content. Where investment goes beyond the UK, we want that to go to cleaner, net zero-consistent firms that support our net zero commitments.
The contracts for difference are a key pillar for our energy security, but they need to adapt to changing market conditions. We are determined to make offshore wind deployment a success story and we are willing to take innovative steps to make that happen. Sustainable industry rewards have been deployed with industry input. They will provide much-needed support to an industry that has faced a tough economic environment and supply chain disruptions.
That support should trigger significant investment in expanding the supply chain’s capacity and capability in many deprived coastal areas around the UK and in new, cleaner manufacturing processes. The investment will help to deliver our levelling-up agenda and will positively impact communities that host large infrastructure projects by providing new, well-paid, high-tech manufacturing jobs, as well as by maintaining existing jobs. New offshore wind manufacturers from Britain and overseas are already looking at the UK, thanks to our package of supportive measures. It is true that the measures will have an impact on consumer bills, and we are talking to the Treasury to get the balance right between what realistic sustainable industry rewards can achieve, through targeted revenue support to get investment in the supply chain back on track, and the cost to the consumers.
These measures will also put us on an equal footing with our direct competitors in the EU and the US, who are investing heavily in their offshore wind supply chains. Considering how much deployment and potential we have, it is only right to try to attract and support as much of the supply chain as possible. It is key, though, that we provide the support in a targeted, proportionate way.
As many hon. Members will know, allocation round 6 of the CfDs is now live. The budget for allocation round 6 was announced as part of the Chancellor’s spring Budget. At over £1 billion, it is four times larger than for the previous round.
Dr Whitehead
The Minister is giving a good response to this afternoon’s debate, but I do not think that she addressed the detail of the particular point that I raised. It is not a question of reallocating CfDs but of how we go about a competitive allocation round if we have people in different circumstances, albeit with an SIR, leading up to that allocation round. I would appreciate an opportunity—outside this Committee, if possible— to get to the bottom of that particular problem.
Amanda Solloway
I would, of course, be delighted to facilitate that, either with me or the relevant Minister.
Although that budget does not include the SIRs, it is none the less a crucial step in our renewable energy deployment plans and demonstrates the Government’s commitment to ensuring that the UK remains one of the world’s leaders in renewables. The Secretary of State will decide in due course whether to increase the budget later this year. I commend the regulations to the House.
Draft Hydrogen Production Revenue Support (Directions, Eligibility and Counterparty) Regulations 2023
Debate between Alan Whitehead and Amanda Solloway(1 year ago)
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Amanda Solloway
I thank right hon. and hon. Members for their valuable contributions. I will try to answer the questions succinctly and appropriately. If anything remains outstanding, I will write, as usual, with further information.
The hon. Member for Southampton, Test talked about the low-carbon hydrogen standard. Projects that seek support under the hydrogen production business model are required to show, as part of their application for revenue support, evidence that they are capable of meeting the UK low-carbon hydrogen standard.
The hon. Gentleman asked about the standard evolving over time. Regulation 2(6) makes clear that once a producer is deemed eligible under the regulations, they will not be subsequently rendered ineligible merely because of the publication of a new version of the low-carbon hydrogen standard. However, a direction issued by the Secretary of State pursuant to section 66(1) of the 2023 Act—
Amanda Solloway
Yes! The direction may require a hydrogen production revenue support contract to be offered on terms that require compliance with the later version of the standard.
To provide certainty for investors, we intend any review and updates to the standard to occur in advance of allocation rounds rather than during them. Where it is considered necessary to introduce updates during an allocation round—that is, in the period between the launch of the application window and contracts being awarded—we would aim, as part of the allocation or negotiation process, to provide projects with plenty of notice about any potential changes.
We propose that the review points for the low-carbon hydrogen standard should coincide with future contract awards through the hydrogen production business model. We would not expect any changes to be applied retrospectively to contracts that have already been awarded through these schemes. That means that the hydrogen production business model contract will not require producers to comply with any amendments made to the low-carbon hydrogen standard after the date on which the contract was signed. That will give producers confidence that the rules with which they will need to comply to receive support under the contract will not be changed retrospectively. Subject to the final contract terms and conditions, we expect that producers will be able to follow, where relevant, future changes to the LCHS, should they choose to.
Our ambition for the United Kingdom to have up to 10 GW of low-carbon hydrogen is both stretching and credible, and positions us at the front of the pack internationally. It will help us to realise a hydrogen economy that could potentially support over 12,000 jobs and result in up to £11 billion in private investment in the UK by 2030. Low-carbon hydrogen is considered to be an essential part of our future energy mix, and the hydrogen production business model seeks to address one of the key barriers to deploying low-carbon hydrogen: the higher cost of low-carbon hydrogen relative to high-carbon counterfactual fuels. We intend to launch the second hydrogen allocation round this year, following the announcement of the projects that were successful in the first hydrogen electrolytic allocation round.
The regulations are vital in enabling contracts to be awarded, so that projects can take investment decisions that will kick-start the deployment of low-carbon hydrogen production in the UK. I commend them to the Committee.
Question put and agreed to.
Energy Bills Discount Scheme Regulations 2023
Energy Bills Discount Scheme (Northern Ireland) Regulations 2023
Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023
Energy Bills Discount Scheme Pass-Through Requirement Regulations 2023
Energy Bills Discount Scheme Pass-Through Requirement (Heat Suppliers] Regulations 2023
Debate between Alan Whitehead and Amanda Solloway(1 year, 7 months ago)
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Amanda Solloway
I thank hon. Members for their contributions to this debate. First, I address the question of whether these instruments are the end of the legislation in this area. I sincerely hope so. However, if there is anything to add when we meet tomorrow, I will of course let the hon. Member for Southampton, Test know, but it is very much my clear understanding that they are the end.
I turn to the point made by the hon. Member for Cardiff West about the music industry. I understand his great passion. He indicated very clearly why the industry is so important to the whole United Kingdom. He mentioned that he is very proud of our music industry—I am as well. I will attempt to explain the reason why we have these schemes. If I am unable to give a full enough explanation, as always I will be happy to offer a further meeting. Within the discount scheme, there is the universal level, which I believe is the level originally mentioned by the Department for Digital, Culture, Media and Sport Minister, my hon. Friend the Member for Hornchurch and Upminster. On that level, support will be given across all of the non-domestic industry. That is my understanding of the support that the music industry will be receiving.
Clearly, the energy-intensive industries needed more support based on the energy that they use, and the fact that a lot of the work is international was also taken into account. The list that the hon. Member for Cardiff West referred to was the standard industrial classification list, known as the SIC list. That is the standard that we used to define the energy-intensive industries that were to have the additional discount. If I have not explained that fully, I am happy to have a meeting with the hon. Member at a later date.
Dr Whitehead
The Minister mentions the so-called SIC list. That is an interesting list in so much as it provides, as my hon. Friend the Member for Cardiff West said, a number of categories of energy-intensive industries. Some of those categories are very narrowly drawn, and some are very widely drawn. His point, at least in part, was that some of the categories within the energy-intensive classification for the higher level of funding are very tightly drawn, and therefore they come into that level, whereas others are very widely drawn.
I mentioned the discrepancy between ornamental or leisure gardens and horticulture, which is often very intensive, and between horticulture and agriculture. Clearly, agriculture is outside the energy-intensive industry classification, but because horticulture is classified within agriculture it does not get in, even though it has similarities with things in the energy-intensive list. I wonder whether the Minister will find time, at some stage, to look at the SIC list to see whether it does the job that we think it does when it comes to ensuring that people get the assistance. Energy-intensive industries should be well enough drawn to ensure that we do not have the sort of anomalies that my hon. Friend the Member for Cardiff West thinks we have.
Amanda Solloway
The hon. Gentleman makes an interesting point about the SIC list. That is obviously the list we are using at the moment. We have taken a consistent approach to identifying the most energy and trade-intensive sectors with all the sectors that meet the agreed threshold to be eligible for this support. The Government are committed to continuing to provide essential energy bill support to eligible UK businesses, charities and public sector organisations until April 2024, to help avoid unnecessary financial pressures and job losses resulting from the ongoing situation in the wholesale market.
In addition to the baseline discount for all non-domestic consumers, the new scheme also provides, as we have discussed at length, much-needed targeted support for energy and trade-intensive industries and consumers on heat networks. That additional support will ensure that those most exposed to volatile energy prices and international trade are supported while limiting the fiscal burden on the taxpayer. The methodology ensures that the scheme captures those industries that have been identified as being less able to pass through their increased energy costs to customers because of international competition, as demonstrated by the level of trade intensity, and require an additional level of support. The pass-through requirement sets out how the benefit is passed on to end users in a reasonable and just way. The delivery of this calculation has been designed to ensure that it is not prescriptive but supports all scenarios.
By replicating existing civil enforcement mechanisms, we hope to avoid any complications for end users and provide clarity on how disputes can be raised. My Department has published clear guidance on gov.uk, both for intermediaries and for end users, that provides detailed information to help those affected. We are keen to ensure that all end users, including those who are vulnerable, receive the benefits of the schemes to which they are entitled. We will continue to review our pass-through requirement communication strategy, including reviewing guidance on gov.uk and offering engagement sessions to ensure that intermediaries understand their obligations and that customers receive the benefits to which they are entitled. I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the Energy Bills Discount Scheme Regulations 2023 (S.I. 2023, No. 453).
ENERGY BILLS DISCOUNT SCHEME (NORTHERN IRELAND) REGULATIONS 2023
Resolved,
That the Committee has considered the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023 (S.I., 2023, No. 454).—(Amanda Solloway.)
ENERGY BILLS DISCOUNT SCHEME (NON-STANDARD CASES) REGULATIONS 2023
Resolved,
That the Committee has considered the Energy Bills Discount Scheme (Non-Standard Cases) Regulations 2023 (S.I., 2023, No. 464).—(Amanda Solloway.)
ENERGY BILLS DISCOUNT SCHEME PASS-THROUGH REQUIREMENT REGULATIONS 2023
Resolved,
That the Committee has considered the Energy Bills Discount Scheme Pass-through Requirement Regulations 2023 (S.I., 2023, No. 463).—(Amanda Solloway.)
ENERGY BILLS DISCOUNT SCHEME PASS-THROUGH REQUIREMENT (HEAT SUPPLIERS) REGULATIONS 2023
Resolved,
That the Committee has considered the Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations 2023 (S.I., 2023, No. 455).—(Amanda Solloway.)
Draft Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2023
Debate between Alan Whitehead and Amanda Solloway(1 year, 9 months ago)
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Amanda Solloway
I thank the hon. Member, as ever, for his valuable and well thought out contribution.
The exemption provides relief for key foundation industries, including companies operating in the steel, paper, chemicals, cement, and glass sectors. The scheme also supports emerging sectors, such as battery manufacturers and companies making semiconductors. The companies that the scheme supports are located across the country and provide high-paid, good-quality jobs, both directly and in the supply chain.
The hon. Member asked about communication. Communication is key in all that we do, and we will endeavour to ensure that we keep on communicating all we are doing to support the industry. The regulations are necessary to improve the operation of the scheme. They will make it easier for start-ups and businesses to apply. They will also allow businesses to account for the impact of covid-19 when applying for relief. We will update and publish our guidance on gov.uk in April 2023 to ensure that business is aware of the relief, and we will proactively engage with stakeholders to ensure that they are aware of the changes. All 320 companies have received a discount, and we know that other companies have already applied. The list of eligible sectors is based on the most electricity and trade-intensive businesses. We continue to engage with industry and other stakeholders to ensure that support is targeted at those sectors most exposed to high electricity costs.
The hon. Member asked about the 100% exemption. On 23 February 2023, the Government announced their intention to move to 100% as part of the British industry supercharger. The delivery mechanisms and timelines for the implementation of the supercharger will be consulted on this spring.
Dr Whitehead
What the Minister says appears to be a reannouncement of what was announced in August and not proceeded with. Is the Minister now saying that the 100% discount is being proceeded with, and will be in place, say, this spring or later on? When does she think that might happen?
Amanda Solloway
To reiterate, the Government announced their intention to move 100% as part of the British industry supercharger on 23 February 2023.
Oral Answers to Questions
Debate between Alan Whitehead and Amanda Solloway(3 years, 5 months ago)
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Amanda Solloway
Local communities have had the opportunity to raise concerns during the examination undertaken by the Planning Inspectorate. The Secretary of State will consider all relevant matters—I will ensure that I pass on the hon. Gentleman’s message—when he takes a decision, but as it is a live planning application I cannot comment further.
Dr Alan Whitehead (Southampton, Test) (Lab)
Is the Minister aware that we are talking about a company that, as its sole activity, is proposing to build an interconnector with France, that has attempted to get itself exempted from all the rules governing interconnectors, and that is now extraordinarily seeking Government backing to trash parts of Portsmouth to land its cable? Throughout all of this, it has never traded and is completely reliant for its existence on loans from unnamed overseas companies. But it has been active as a company in one other area: giving huge donations to the Conservative party and a number of its MPs to the tune of £1.1 million, either from the company itself or through the good offices of its part-owner. Now, perhaps in return, it wants the Government to support its rackety scheme through the Secretary of State’s personally approving its planning application. This whole thing stinks. I ask Ministers to call a halt to this seedy enterprise and certainly not endorse its wild and inappropriate planning proposals.