Energy Bill [Lords]

Alex Cunningham Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

I will give way in a few moments; let me just make a few lines of progress.

All of this is why, earlier this year, I was appointed to lead the new Department for Energy Security and Net Zero. It is why, just 50 days later, we published our ambitious “Powering Up Britain” blueprint for the future of energy security in this country. We are bringing all that work together in the Bill before the House.

[Alex Cunningham (Stockton North) (Lab)]

We all celebrated the Government’s decision to move the Teesside carbon capture, usage and storage and power project to the next stage. Today in a written ministerial statement, a Government Minister, the hon. Member for Derby North (Amanda Solloway), said that she was delaying by another four months a decision on whether those plans will get planning permission. Can the Secretary of State understand why this delay will set alarm bells ringing on Teesside and how it will impact the project, and can he explain why the delay is necessary?

[Grant Shapps]

As the hon. Gentleman will know, Ministers must be quite careful when commenting on the quasi-judicial planning decisions that his question goes into, but he should not mistake—nor should anyone in this House—this Government’s determination to get on with things like CCUS and hydrogen. That is why we have announced a £20 billion programme for CCUS, the largest of any country in Europe. As I say, though, and as he well knows, specific planning decisions are matters that the planning inspector advises Ministers on.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

Let me begin by drawing attention to my roles as chair of both the chemical industry all-party parliamentary group and the all-party parliamentary group on carbon capture, utilisation and storage.

I welcome the Bill’s progress. It is long overdue and essential, although I feel that it lacks the necessary ambition to deliver all the Government’s stated aims of making the energy system fit for the future, ensuring the safety, security and resilience of the UK’s energy system, and leveraging private investment in clean technologies.

Ministers have said that there is no way for us to achieve net zero without carbon capture and storage. The target set by the Government is to capture and store 20 to 30 million metric tonnes of carbon dioxide a year—including removals—by 2030, but while that is welcome, I personally believe that there could be an even higher target to benefit our country. The Carbon Capture and Storage Association says that the UK’s CCUS project pipeline would be able to store some 70 million tonnes of CO. The industry is ready to deliver, and we need to let the industry get on with it.

I have been banging the drum for CCUS deployment for quite some time now. Support from the Government has been shaky in the past, with several false dawns—funding whisked away, or not provided at all—so I am pleased to see what looks like real progress, although today’s delay in planning permission for our Teesside project is a worry. Teesside is a vital area for the net zero agenda. Its proximity to offshore wind sources and its cluster of energy-intensive industries that require decarbonisation make it a good location for hydrogen production and carbon capture. I was certainly pleased when the Department selected a handful of carbon capture projects on Teesside to progress to the next stage of development, but I was very disappointed that of the 40 longlisted projects only eight are going forward. and that many in the east coast cluster, including one in the Humber, are missing out. What, I ask the Minister, will happen to them next? That said, I welcome the Government’s statement that the Bill

“will introduce state of the art business models for carbon capture usage and storage…and hydrogen”.

Now they must prove it, and prove it quick.

I know from speaking to industry representatives, especially those in the Teesside cluster, that investors see the timely passage of this legislation as critical to maintaining confidence and momentum in the sector after a decade of those false dawns and U-turns. Representatives of the Chemical Industries Association tell me that their sector also wants the Bill to be passed, pointing out that, while it is imperfect, it contains some fundamental provisions. They say that it will give the sector certainty, including the provisions relating to hydrogen and CCS business models, network charges and Ofgem's remit to include net zero, and they like it. Essentially, however, they are asking for a net zero energy transition at the lowest possible cost, creating competition in the energy market to minimise the risk of domestic and non-domestic consumers’ picking up the cost. How, I ask the Minister, will that be delivered?

Of course, the quickest, cheapest and best answer for our national energy security is a clean energy sprint. New renewables are nine times cheaper than gas. They would not only fight the climate crisis but increase our energy security and sovereignty, bring down bills, and create jobs. However, at this crucial moment for our country and our planet, the Bill does not provide the clean energy sprint that we need, so perhaps the Minister could tell us why the ban on onshore wind—the cheapest, cleanest, quickest energy available—remains. Furthermore, the Bill does not deliver the “green plumbing” measures that are necessary to accelerate the deployment of low-carbon power and grid management, failing to solve the grid connection problems, leaving our planning system unreformed, and failing to add a net zero duty to relevant regulators such as Ofgem. It is certainly not the complete answer to all our needs.

We do not just need renewables; we need renewables done well, and, as the Campaign to Protect Rural England suggests, that can be achieved by empowering communities to decide what is appropriate for their local area, and guaranteeing that they benefit from these schemes. The Countryside Charity has long highlighted community energy projects as the gold standard for renewables done well.

The Bill provides a real opportunity to put financial structures and a programme in place to secure for the 19 million homes in our country that are below EPC band C the upgrades that they need. That is what Labour would do, but there is no plan in the Bill to insulate the homes that need it, which is costing each of those households up to £1,000 a year. Disappointingly, there is no plan to remove the windfall tax loophole or de-link electricity and gas prices so that the cheap power promised by renewables can be passed on to families and businesses rather than being paid out in windfall profits. We should be providing public support to develop our hydrogen industry, but the Government’s preference is to load the cost of subsidy on to household bills.

A number of amendments to the Bill were introduced by the Lords: moving the hydrogen levy away from customer bills; establishing a net zero duty for Ofgem; banning new coalmines; introducing a local electricity Bill; and mandating reporting on EPC standards for homes. I trust the Government will welcome those amendments. I will also support further changes, such as ending the onshore wind ban, banning fracking, expanding targets on the energy efficiency of homes and dealing with grid connection delays.

It is exam season and the Government are facing big tests—I would give them about six out of 10 for now. The Bill has come some way, but we know that in its current state it does not go far enough. Our industry and people depend on us getting this right.

Energy Bill [Lords]

Alex Cunningham Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

Our amendment 67 deals with a Henry VIII clause to try to stop legislation being changed by fiat. Most importantly, on amendment 66, can it possibly be right to criminalise people, and potentially put them in jail for a year, for muddling their energy efficiency certificate? No, it cannot, and we should not do it.

[Alex Cunningham (Stockton North) (Lab)]

The issue of flaring and venting emissions highlighted in new clause 12 is an extremely important one. Any unplanned hydrocarbon releases must be done safely. I know the tremendous concerns of the trade unions, including the National Union of Rail, Maritime and Transport Workers, and of the 49,000 offshore workers, about the Bill’s failure to address safety-critical maintenance work on oil and gas installations. I very much agree with the sentiments in the new clause and welcome the fact that flaring and venting emissions have been reduced, but according to industry body Offshore Energies UK, the average safety-critical maintenance backlog on UK offshore oil and gas installations increased by 50% during the pandemic. I hope that the Minister will reflect on that and perhaps meet the unions.

Turning to new clause 22, I see tremendous merit in and need for timely and cost-effective connections to the grid, and for an acceleration of the development of an offshore wind energy grid, both of which are critical for Teesside and the Teesworks site. Given the promise of many more jobs in the industry, connectivity to the electricity grid for the Teesworks site could not be more important. I would be obliged if the Minister updated me on power supplies, which I understand do not currently exist for the site, and on how he will use the new legislation to ensure that Teesside gets the power it needs.

The Government say that the purpose of new clause 52 is to give greater certainty to producers of sustainable aviation fuel. That is undoubtedly necessary, but I take issue with the long lead time. The new clause specifies that

“The Secretary of State must open the consultation within the period of 6 months”

and report to Parliament on progress

“within the period of 18 months”.

The industry needs certainty now. I know from talks that I have had with industrialists that the Government’s dilly-dallying is already impacting on investment decisions, and not in a positive way.

New clause 34 calls for a price stability mechanism to support the development of a UK sustainable aviation fuel industry. That is what those in the industry want, and they want it now. Alfanar is developing a £1.5 billion waste-to-sustainable aviation fuel facility on Teesside—the largest in the world and the most advanced in Europe. It also plans two more SAF plants in the UK, but—and this is a big but—it needs certainty from the UK Government that they are serious about the industry and will take the brakes off and get on with creating a business environment that will instil confidence.

I very much welcome new clause 56. It beggars belief that the existing linking of renewable and gas prices in the retail market has delivered billions’ worth of extra cash to energy companies while our hard-pressed constituents pick up the bill. I hope that Ministers will accept that that is unfair on consumers, and that the new clause will help them to correct that. I would have loved to have talked at length about carbon capture and storage, but suffice it to say that the Government should take on board the amendments tabled by others.

[Chris Grayling]

I have pushed my new clause 34 to a point where the Government have responded in a sensible way and started what I hope and believe will be a process. It was not for no reason that around 70 Members of Parliament signed that new clause; it was because of a recognition that this transition is going to happen in one of our most important industries, and it is going to happen around the world.

The migration to sustainable aviation fuel is vital as the world decarbonises, not only because it is an essential first step towards decarbonisation, but in the long term—not for short-haul flights, which I think will be powered by hydrogen; by the 2030s, we will start to see short-haul hydrogen planes in operation. However, there is no technological approach yet that will take us to Australia or North America using anything other than sustainable aviation fuel, so it is a vital industry for the future of this country.

There are investors out there waiting to invest in developing plants here, but they need the confidence to know that there is a Government committed to creating a framework that will enable that investment to take place and be sustained. One of the reasons I intervened on the Opposition spokesman, the hon. Member for Southampton, Test (Dr Whitehead), is that over the next 12 months, as we prepare for a general election, investors are looking for confidence on both sides of the House. It is not about a lack of confidence in our ability to win the next general election; it is about delivering confidence to investors right now.

That is why it is important that both the Government and the Labour party are committed to the development of sustainable aviation fuel in the United Kingdom. We want investors to be taking decisions about the deployment of their capital in this country now, preparing to invest and preparing for the end of the process that the Government have started through their new clauses, so that by 2026 they are ready to build plants, develop sustainable aviation fuel and provide an important part of the future of the aviation industry in this country.

I am grateful to the Minister for what he has done and the assurances he has given today, but I say to him and his colleagues in Government that I and others will be holding their feet to the fire in the next 12 months, to ensure that the consultation starts as quickly as possible and that the response to it comes as quickly as possible. By the time we get to the general election, I want there to be a clear route map forward for the development of SAF in this country that has given investors confidence, so that they know as we go into the election campaign that both sides will take this forward and that we have an industry that will be vital to the future of aviation in Britain, which is a crucial industry for all of us.