Energy Bill [Lords]

Alok Sharma Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

I am pleased to report that on what is, I think, a largely uncontroversial Bill, we are working very closely with the devolved Administrations and trying to learn lessons from each other, in order to support the whole country in this energy security move. This Bill is the longest and most significant piece of energy legislation to ever come before the House; it is a critical part of making Britain an energy-secure nation. On that point, I thank colleagues across the House for their positive engagement with me and with the Bill Minister, my hon. Friend the Member for West Aberdeenshire and Kincardine, in the lead-up to this debate. I know there is much in the Bill that already has cross-party support.

[Sir Alok Sharma (Reading West) (Con)]

I commend the Secretary of State for the Bill, and I welcome its key objectives, as I think everyone in this House does. However, a number of amendments were made in the other place, particularly one relating to a net zero duty for Ofgem. Those amendments are now in the Bill. Could the Secretary of State clarify whether the Government will support all of them, particularly the one on Ofgem?

[Grant Shapps]

I thank my right hon. Friend for his intervention. We will be looking very closely at the proposed amendments—the Bill Minister himself will be addressing those in detail, which is the right way to do it—and of course, the regulator is already very largely focused in that direction. As I often point out, of everybody in this place I have a particular interest in making sure we achieve what we have set out to do, because this House has kindly legislated to send the Secretary of State for Energy to prison if they do not meet the net zero commitments, potentially through contempt of court. We take these things seriously, but my right hon. Friend will wish to hear more on that issue from my hon. Friend the Energy Minister.

Energy Bill [Lords]

Alok Sharma Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As Members can see, there are many people who wish to take part in this debate. I know that Alok Sharma will show self-restraint, but we will be imposing a time limit to ensure that we get in as many people as we can. The debate is very time limited. The multiple votes will come at 6 o’clock, so I ask people to show restraint even on the time limit that I impose.

[Sir Alok Sharma (Reading West) (Con)]

Thank you, Mr Deputy Speaker.

I do support the overall aim of the Bill, but, in the interests of brevity, I will limit my comments to new clause 43 on onshore wind. I thank all colleagues who have co-signed this new clause, which of course builds on the excellent work that my right hon. Friend the Member for Middlesbrough South and East Cleveland (Sir Simon Clarke) led last year when trying to put in place a more permissive planning regime for onshore wind.

Onshore wind is one of the cheapest sources of energy available. It is also one of the quickest to deploy. Getting more home-grown clean energy deployed is about enhancing our energy security, our climate security and our national security, all of which are totally interlinked. It is also ultimately about bringing down bills. That is why onshore wind needs to be a meaningful part of a diversified energy mix.

We currently have 14 GW of installed onshore wind capacity across the UK with the ability to power around 12 million homes. However, as we all know, due to planning rule changes, since 2015 we have had a de facto ban on onshore wind. Just one objection is able to defeat a planning application. Frankly, that is not a sensible way for a planning process to operate. As a result, in England planning permissions have been granted for just 15 wind turbines over the past five years. It is also worth pointing out that, had onshore wind annual build-out rates stayed at the average pre-ban level, an extra 1.7 GW would have been added by last winter. That is the equivalent of powering 1.5 million homes for the entire winter, and it would have avoided between 2% and 3% of the UK’s annual net gas imports being burned in our power stations.

[John Redwood]

Does my right hon. Friend accept, on the cost argument, that we also need to build a new gas turbine station as back-up for when the wind does not blow?

[Sir Alok Sharma]

We do need a diversified energy system, and I think the Minister set out all the work that is going on on nuclear, for example. However, as we drive forward for greater energy security, we need to change the planning rules to allow more onshore wind. The objectives of new clause 43 are to ensure a more permissive planning regime. The new clause seeks to lift the current planning restriction that in effect means that a single objection can block a development. It also seeks to ensure that local communities willing to take onshore wind developments will receive direct community benefits.

The Government have today responded to new clause 43 by bringing forward a written ministerial statement on onshore wind. I thank the Government for the constructive dialogue we have had over the past days on this issue. I acknowledge that that written ministerial statement, and indeed the accompanying changes to the national planning policy framework, move things forward and will help to deliver a more permissive planning regime for onshore wind.

The de facto ban is lifted. The statement clarifies that the policy intent is not to allow very limited objections or even a single objection to ban a planning application, and it is explicit that local communities willing to host onshore wind farms should directly benefit, including potentially through energy discounts. That is positive, but we do need to see the Government’s formal response to their consultation on this issue to understand the detail of the precise mechanism by which the benefits regime will work.

I also welcome the fact that local plans will not be the only route to delivering more onshore wind, with more agile and targeted routes available. Of course it is now a requirement for local planning authorities to support community-led initiatives for renewable and low-carbon energy. Vitally, those policy changes are effective today.

[Angus Brendan MacNeil]

The right hon. Gentleman talks about bill payers, but for the previous wind that was built under renewables obligation certificates, there were big profits because the prices were denominated in gas. Under the CfDs, money is not going to the bill payers, but to the Government—it was creamed off the top. The mechanism has to change; I applaud what he is trying to say and do, but there is a missing link on how the bill payer will see a benefit, as they should.

[Sir Alok Sharma]

The hon. Gentleman will know that onshore wind has been back as part of the CfD process in the last couple of years. I am very happy at a future date to have a detailed discussion on that but, in the interest of time, I will move on.

I understand that some people would like the planning regime for onshore wind to be even more permissive and for onshore wind to be treated like any other infrastructure. I get that, but we also have to recognise that it has been a contentious issue in the past, and it is important that we take communities with us on this journey. That is why the community benefits mechanism will be so vital. Frankly, people respond better to a carrot than to a stick.

[Dame Maria Miller (Basingstoke) (Con)]

My right hon. Friend talks about the importance of taking people with us. More wind power will need more energy storage so that we can smooth out for the times when the wind is not blowing. Does he agree that the sort of lithium ion battery storage plants that are proliferating in our country are in need of proper permitting? My new clause 37, which I have been discussing with my hon. Friend the Minister, will help to bring in that sort of permitting and ensure that lithium ion battery storage facilities are sited in the right places.

[Sir Alok Sharma]

I certainly agree with my right hon. Friend that we need more battery storage. That is being rolled out and I am pleased that she has had a discussion with the Minister.

In conclusion, I welcome the written ministerial statement because it moves us forward. It is for that reason that we will not seek to press new clause 43 to a Division.

[Dave Doogan (Angus) (SNP)]

I start by paying tribute to my predecessor in this role, my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), whose work on energy, particularly on access to clean and affordable energy, was exceptional. I base my ambitions in this role on his record. I also note the Minister’s kind remarks about my hon. Friend and thank him for them.

I want to highlight the abject abandonment of community-owned energy projects in this Bill. It is patently obvious that any just transition to net zero is simply not possible if local communities cannot sell the energy they produce to local customers. Local energy trading provides manifold improvements, including lower prices, protections against price shocks, enhanced energy security, network redundancy and a return on investment back to communities.

The UK Government kicking this can down the road is a hammer blow to efforts to achieve a just transition, and they are doing so without even trying to disguise the fact. Worse still, they have instead provided a paltry £10 million over two years—the Minister left out the “over two years” bit—to fund feasibility studies in England. That is not seedcorn funding; it is chicken feed served up with extra disdain for Scotland and Wales, as the UK Government have steadfastly refused to apply Barnett consequential to this admittedly pitiful sum.

Fundamentally, this sop to Tory Back Benchers does not—as one of the Minister’s Back Benchers said—remove the barriers preventing community energy schemes from selling their power locally. The Local Electricity Bill would have done that, as would amendments made to the Energy Bill had they not been removed by Ministers in Committee in July. Why is this Tory Government so loth to put power in the hands of the people?

Turning to nuclear, English MPs maintain an enduring obsession with nuclear. Their total failure to concede or even rationally acknowledge the catastrophic decommissioning and clean-up costs of that energy source is, by any measure, incredible. As they drag Scotland and Wales along with them for the ride, it is almost as if those English MPs, and indeed the Government, can foresee a time in the not-too-distant future when they will need to buy Scotland’s energy rather than just taking it, as they have got used to doing over recent decades. Nuclear is their insurance policy against Scotland’s independent future.

New nuclear is a millstone around the neck of our net zero future, consuming disproportionate costs per megawatt-hour. If we contrast nuclear with offshore wind, we see that although construction costs for nuclear continue to spiral out of control, and SMR nuclear continues not to get off the ground, the cost of offshore wind has fallen by 80% in a decade. New offshore wind projects coming online within the next two years will be paid about £45 per MWh, which is half the wholesale power price of £90 per MWh forecast until at least the end of the decade, and 60% less than the £115 per MWh of electricity from Hinkley C nuclear power plant.

Tories and Labour Members alike will cry, “This is all about baseload for when the wind does not blow”—I am surprised they have not done so already. Of course, that is correct; we do need baseload, but it does not have to be nuclear. If successive Westminster Governments had invested nearly as much rhetoric and taxpayers’ money creating a renewable energy mix as they have done for nuclear, we would be in a very different place. It would be a place where tidal flow and barrage schemes complement widespread impoundment, pump storage and run-of-river hydro schemes, together with green hydrogen production, battery storage, solar on every appropriate elevation of a domestic or commercial property, and timely delivery of carbon capture, usage and storage.