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.