Draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024
Amanda Solloway Excerpts(2 days, 17 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I beg to move,
That the Committee has considered the draft Contracts for Difference (Sustainable Industry Rewards) Regulations 2024.
I apologise in advance for my loss of voice, which is a result of being rather enthusiastic at a Derby County football match on Saturday. The draft instrument was laid on 21 March 2024, and I acknowledge the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, which have provided a helpful review of the regulations and have not drawn them to the special attention of this House or the other place.
The instrument amends regulations underpinning the contracts for difference scheme, which is the Government’s main mechanism for supporting new low-carbon electricity generation projects in Great Britain, and which has been hugely successful in driving down deployment costs. The amendments are about providing extra funding support through the CfD scheme so that we can better support offshore and floating offshore wind supply chains. This critical industrial sector has been hit hard by inflationary pressures and supply chain disruption resulting from the Russian invasion of Ukraine. Consequently, necessary investments in manufacturing and infrastructure have been delayed or abandoned altogether.
The CfD scheme currently focuses on only the price of deployment and no other factors, so offshore wind developers are incentivised to use the cheapest supply chain options available, regardless of where in the world they are or how dirty their means of production. We are therefore introducing sustainable industry rewards, or SIRs, to rebalance the CfD scheme so that it may help to address some of the supply chain challenges already causing bottlenecks in the supply chain, further increasing costs and slowing down deployment.
This policy intervention has been welcomed by supply chain companies and is intended to take effect for the seventh CfD allocation round, which should take place in 2025. So how does it work? The regulations require all offshore wind and floating offshore wind CfD applicants, as a condition of entry to the CfD, to obtain an SIR statement from the Secretary of State. Applicants who obtain an SIR statement will obtain additional revenue support through the CfD—a top-up, as it were—for investing in the economic, social and environmental sustainability of their supply chains.
SIR statements are obtained if the applicants make successful SIR proposals that fulfil one of two sustainability criteria:
“Investment in shorter supply chains in UK deprived areas”,
which means investing in manufacturing in the most disadvantaged places in the United Kingdom, or
“Investment in more sustainable means of production”,
which means investment in manufacturers that have signed up to the science-based targets initiative for the reduction of carbon emissions. The mechanism to allocate SIR funding will be a competitive auction just before the main CfD auction. An applicant who obtains SIR funding will then be contractually obliged to deliver their commitments. Undelivered commitments will be subject to a system of performance adjustments.
The Government are conscious that the extra support for offshore wind will have an impact on consumers’ electricity bills as SIRs—like the rest of the CfD scheme —will be funded through the existing electricity supplier obligation levy, which electricity suppliers pay. The actual budget for SIRs is still being discussed with the Treasury, but we estimate that it will be in the region of £150 million to £300 million a year for no more than three years, subject to the number of applicants. The impact on the consumer will be small, in the region of about £2 a year per consumer. Hopefully, hon. Members will agree that that is a small price to pay for the benefit that sustainable industry rewards could bring to UK communities by creating new and cleaner manufacturing facilities and highly skilled jobs in deprived areas and carving out opportunities for businesses to become part of the offshore wind supply chain.
To further ensure that the policy does not become a permanent burden on consumer bills, the intervention is time-limited for three years—it is there to address a specific market failure. CfD SIRs also complement other Government support for renewable supply chains, such as the £1 billion green industries growth accelerator, which runs to a similar timeframe. The explicit, detailed rules of the allocation are set out in the draft SIR allocation framework released in parallel with the regulations, which replace the current supply chain plan process for offshore wind and floating offshore wind. I commend the regulations to the Committee.
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.
Household Energy Debt
Amanda Solloway Excerpts(1 week, 1 day ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
It is a great pleasure to serve under your chairmanship, Sir George.
I thank the hon. Member for East Lothian (Kenny MacAskill) for securing this debate on such an important issue, which I care deeply about. He mentioned what it is like to live in fuel poverty. I assure him that I personally understand exactly what that is like, having known the difficulty as a child of using something as simple as a washing machine, and latterly having a mother with chronic obstructive pulmonary disease and having to make decisions about using oxygen. I reiterate that I fully understand the situation that we are talking about, which is why I take this matter incredibly seriously as the Minister for Affordability.
As the hon. Member for East Lothian pointed out, levels of consumer energy debt have risen in recent years, which the Government recognise as an important and growing problem. Energy debt can harm consumers in several ways. It can encourage them to self-ration energy, leading to cold or damp homes, or cause households to cut back in other ways. The Government expect suppliers to do all they can to support customers in debt, particularly vulnerable customers. I encourage anyone who is concerned about keeping up with bills to contact their supplier. They should also contact organisations such as Citizens Advice, which may be able to provide support.
Last year, I met energy suppliers to outline our expectation that they do all they can to support those in debt and to help other consumers avoid falling into debt. I also meet regularly with stakeholders such as Citizens Advice to discuss how we can work together to best support consumers. I welcome Ofgem’s ongoing call for input on affordability and debt. For the reasons that the hon. Member for East Lothian set out, it is right that Ofgem takes a detailed look at the issue. I look forward to understanding its next steps to ensure that consumers can be better protected and that the debt burden does not leave us in an unsustainable position.
Despite high levels of consumer debt, energy prices have fallen significantly since last year. The price cap has fallen by nearly 60% since it peaked last year, including by £238 in April. Over the last two years, the Government have demonstrated a commitment to supporting vulnerable people with one of the largest support packages in Europe. Taken together, the total support provided between 2022 and 2025 to help house- holds with the cost of living will be worth more than £108 billion—an average of £3,800 per UK household.
Millions of vulnerable households have received up to £900 in further cost of living payments, with an extra £150 to those eligible for disability benefits. These payments are in addition to the established financial support available to low-income and vulnerable households through the winter fuel payment and the cold weather payment, which provides £25 during very cold weather. An extra cost of living payment of up to £300 was paid to pensioners’ households through the winter fuel payment, while the Government continue to provide support through the warm home discount, which provides low-income households with a £150 rebate off their energy bill every winter.
Although the Government are doing a lot to help households, I am concerned that some customers remain in energy debt. Suppliers should do all they can to support these households and ensure that consumers do not fall into debt. Last year, Energy UK announced a voluntary debt commitment with 14 energy suppliers, which collectively committed to go above and beyond current licensing conditions to help households with energy bill debt over winter. Those energy suppliers committed to providing immediate assistance to those in debt, as well as arming people with knowledge and resources to empower them to manage bills more efficiently. However, this is an ongoing issue, and it is also important that suppliers provide quality customer service to support consumers before they fall into debt, and quickly help those who are already in debt.
The hon. Member for East Lothian raised the issue of prepayment meters, which, of course, can be a useful tool for some consumers and their energy suppliers to manage their debt. It is important, however, that the rules around their use are sufficient to protect consumers and are enforced properly. Involuntary installations should be used only as a very last resort. Ofgem has strengthened its licensing conditions for suppliers to conduct involuntary prepayment meter installations, with exemptions in place for households with vulnerable individuals, such as people who are 75 or older.
The hon. Gentleman’s constituents will also have been in contact about standing charges, which, as he will know, remain a matter for Ofgem. Ofgem launched a call for input on standing charges, which ended in January and received just over 30,000 individual responses. It looks at how standing charges are applied to energy bills, and at the alternatives that can be considered. Ofgem is currently analysing those responses and will publish its response in due course. In March, the Secretary of State and I wrote to Ofgem to outline the Government’s expectation that standing charges should be kept as low as possible, or reformed if necessary, to make them fairer for consumers.
The Government have already committed to further support for households. In the autumn statement, we announced the biggest increase in the national living wage, which is worth around £1,800 for a full-time worker and will benefit around 2.7 million workers. We also announced the next generation of welfare reforms, with benefit payments increasing by 6.7% and pensions by 8.5%. In the spring Budget, we also cut national insurance by a further 2%, meaning that someone on an average wage has the lowest personal effective tax rate since 1975. We have also extended the household support fund until September 2024, with an additional £500 million in funding, and we have been working across Government and with Ofgem and suppliers to better identify customers who are getting into problem debt and to ensure that households are properly supported. I understand that this is a complex matter, and one that is very important to the hon. Gentleman.
Kenny MacAskill
Would the Minister clarify whether there is an element in an individual’s bill that is factored in by Ofgem that relates to the debt servicing of suppliers?
Amanda Solloway
The hon. Gentleman makes a good point. He will know that there was an announcement of a one-off price cap adjustment of £28 per household for direct debit and standard credit customers. As I mentioned earlier, we are looking at the standard charges system as a whole and whether it should be reformed.
I am happy to meet the hon. Gentleman. I am always very keen to meet hon. Members across parties, to work across Departments—for example, with the Department for Work and Pensions—and to meet stakeholders, because we can only really tackle this issue together. To reiterate, we must remember that we are talking about individual people and their individual lives, so I am incredibly happy to meet and discuss it further.
This is a complex matter, which is important to the hon. Member for East Lothian and other hon. Members. I hope that I have provided some reassurance about the action that is being taken by the Government, Ofgem and suppliers to help all consumers. I give my assurance that, as the Minister for Energy Consumers and Affordability, it is uppermost in my mind that we should never be making vulnerable people more vulnerable. I thank the hon. Member for East Lothian again for bringing forward this debate.
Question put and agreed to.
Oral Answers to Questions
Amanda Solloway Excerpts(2 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
As previously stated, fuel poverty is devolved. Statistics for England estimate that there were 3.17 million households in fuel poverty in 2023, over 1.5 million fewer than in 2010.
Mary Glindon
April’s new price cap will see 6 million households across the UK in fuel poverty and National Energy Action estimates this figure will include 8,800 households in North Tyneside alone. The Government promised their household upgrading scheme would help 100,000 households but in nine months it has helped fewer than 5,000 and only 15 in my constituency. Can the Minister account for the abysmal failure of the flagship policy?
Amanda Solloway
I stand by the Government’s record of support on fuel poverty: we have helped with affordability and with insulation and energy efficiency. We have given unprecedented support to 350,000 households, who were kept out of fuel poverty at the energy peak in 2022.
Ian Lavery
Electricity standing charges for people in the north-east are 71.2p per day while those in the south pay 40.79p per day. Can the Minister explain why the people in the north-east, the area experiencing the highest levels of fuel poverty in the country, are paying 75% more than those in other regions simply for the privilege of being connected to the grid?
Amanda Solloway
The hon. Gentleman makes a reasonable point on standing charges, which is one reason why we have urged Ofgem to gather information on them. We have had over 30,000 responses and will be looking at this in due course.
Dominic Raab (Esher and Walton) (Con)
In the Office for National Statistics and House of Commons data, fuel poverty in England was 13.5% back in 1996. It rose to 22% by 2010 and, as has already been mentioned, it fell back to 13% in 2023. Does the Minister agree that that shows that Conservatives deliver energy policy with environmental and economic good sense and have done a lot better than the last Labour Government?
Amanda Solloway
As I said, we are incredibly proud of our record on heading towards net zero and ensuring energy security so that never to have to go through the cost of living crisis that we have recently gone through.
Richard Fuller (North East Bedfordshire) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
The Government offer grants of £7,500 to those wanting to install a heat pump, or £5,000 to install a biomass boiler, under the boiler upgrade scheme. Support for energy efficiency upgrades and low-carbon heat is also available through our help to heat schemes.
Steve Double
Cornwall has a very large number of off-grid properties. One way they can decarbonise their heating is through the use of renewable liquid heating fuel. Last year, the Government said there would be a consultation on promoting and supporting the use of that fuel in the coming months. However, in response to a recent written question it was suggested that it would not be launched until at least September this year. Will the Government bring forward the consultation as soon as possible, so we can help people to decarbonise through the use of renewable fuels?
Amanda Solloway
The Government recognise the potential for renewable liquid fuels to play a role in decarbonising heat where heat pumps are unsuitable, and we are working at pace to develop a consultation that will explore that role in more detail. We will be issuing a consultation in September, in line with commitments made by Ministers during parliamentary debates on the Energy Act 2023.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I support the cause of the hon. Member for St Austell and Newquay (Steve Double). The transition to hydrotreated vegetable oil is far cheaper than heat pumps; we are talking about a conversion that be done in an hour for about £500. I urge the Government to proceed on that with haste.
Amanda Solloway
It is important to note that we are taking this matter incredibly seriously. We are also providing funding to tackle fuel poverty and reduce carbon emissions through the energy company obligation, the home upgrade grant and the social housing decarbonisation fund.
Chris Clarkson (Heywood and Middleton) (Con)
Dr Luke Evans (Bosworth) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
We will publish the Government’s response to the recent Pumpwatch consultation as soon as possible, and we continue to work closely with the Competition and Markets Authority, and the sector technology companies, to launch Pumpwatch this year. Of course, my hon. Friend makes an incredibly important point that, when we launch this, we will of course make sure that everybody knows about this valuable resource.
Simon Jupp (East Devon) (Con)
Amanda Solloway
The initial phase of heat network regulation, including transparency rules, will come into force in 2025. Some requirements, such as pricing regulation and guaranteed performance standards, require more market data and will be introduced in the second-phase regulation in 2026.
Helen Morgan (North Shropshire) (LD)
Amanda Solloway
I could not agree more that these pubs are at the heart of our communities, which is one reason why I have regular meetings with UKHospitality to think about how we can look at bills, including things such as blend and extend.
Virginia Crosbie (Ynys Môn) (Con)
On Ynys Môn, companies such as Mona Lifting in Llangefni, supported by the Green Digital Academy, which has been funded by £2.7 million from the community renewal fund, are working hard to use their businesses to help to deliver net zero with the installation of solar panels and charging points. Does the Minister agree that it is thanks to the UK Government that innovative, forward-thinking companies such as Mona Lifting are leading the way so we can deliver net zero?
Stephen Morgan (Portsmouth South) (Lab)
Amanda Solloway
Clearly this is an issue that concerns us in the Government, which is why we are striving to do everything that we can to make sure that we are solving the issue.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Forty per cent. of properties in this country do not even have an energy performance certificate, and of those that do in the private rented sector, and in the private ownership sector, only 30% are EPC C rated. Last year, we made an improvement of only 1% on this. EPC C is the standard, so when does the Minister expect that we will ever get to 100% EPC C in our housing stock, and what are the Government doing to increase the speed of the process?
Amanda Solloway
The pace of delivery of the Great British insulation scheme is accelerating quickly, with the rate of delivery doubling over the past three months. We have a proud record on energy efficiency. In 2010, we inherited a situation in which only 14% of homes were well insulated, but now we have that figure up to nearly 50%.
Cavity Wall Insulation
Amanda Solloway Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
It is the greatest of pleasures to be here under your Chairmanship, Mrs Latham. I thank the hon. Member for Halifax (Holly Lynch) for raising this incredibly important debate, and all hon. Members who have partaken in it and shared some heart-moving stories. It is dreadful for consumers to be in the situation described in those stories and I have every sympathy for the people affected. All Members who have spoken have made their points incredibly well. We need to remember the impact this situation has on people’s lives, which has been portrayed very clearly.
As the hon. Members for Tiverton and Honiton (Richard Foord) and for Southampton, Test (Dr Whitehead) have stated, insulating homes properly is one of the most impactful and cost-effective things we can do, which is why we have a number of schemes ongoing to install cavity wall insulation.
As the hon. Member for Halifax has said, the Solicitors Regulation Authority is already working with the Financial Conduct Authority and the Royal Institution of Chartered Surveyors to look into the conduct of the firm in question, but these bodies are independent of Government and it would be inappropriate for my Department or the Ministry of Justice to intervene.
The Ministry of Justice, as the Department responsible for legal services regulation, will continue to closely engage with the SRA and Legal Services Board to understand the action being taken and the timeframes for investigation. However, I am concerned to hear from the hon. Member for Halifax and the hon. Member for Blackburn (Kate Hollern) about how companies such as SSB Law may have targeted people. We will ask the SRA, as part of their ongoing investigation, to consider how SSB Law were able to do that. I also acknowledge the points raised by the hon. Members for Bradford East (Imran Hussain) and for Southampton, Test on this subject.
I do not want to see this issue passed around like a football, because this is an urgent matter for the households impacted. I therefore guarantee that I will be writing to the Ministry of Justice, asking them to encourage the SRA to accelerate the investigation for affected homeowners, as they deserve to have this matter addressed swiftly.
Imran Hussain
While the Minister is writing to the Ministry of Justice, can she please kindly request that her colleagues there respond to the letters from MPs and organise an urgent meeting?
Amanda Solloway
I thank the hon. Member for the intervention. Of course, I will pass on those remarks.
I encourage Members to write to the Department for Energy Security and Net Zero about specific cases. If there is a guarantee in place, my officials will engage with the guarantee agency to see if there is anything that we can do about that particular situation.
The range of Government-backed schemes to install cavity wall insulation are ongoing and lessons have been learned from the complaints that we are discussing today. These complaints, thankfully, are not representative of the experiences of thousands who have used our existing schemes. As I said earlier, in certain circumstances in suitable properties, cavity wall insulation is one of the most cost-effective measures for energy saving. For a relatively small outlay in costs, we know that cavity wall insulation, which costs between £1,000 and £3,000, can save homeowners up to £300 a year.
The hon. Member for Halifax is aware that the Government have made improvements to installation standards as a result of earlier findings. I will summarise the changes we have made, because any response to the problem must include preventing it from happening again. That is why the energy efficiency measures installed under all current Government schemes must be in line with industry best standards established by the British Standards Institution. All installers must be certified to the publicly available specification 2030 standards for any energy efficiency measure that they carry out, including cavity wall insulation, and must demonstrate a high level of competence. The latest revision to the standards was published at the end of September 2023, so I can assure hon. Members that this is a live issue for us and that we continue to refine and improve.
The Department published guidance in October 2019 for consumers who suspect they may have had faulty cavity wall insulation installed in their homes. We urge consumers to follow the guidance to help them avoid becoming victims of fraudulent cavity wall insulation claims.
Outside of Government-funded schemes, I urge all consumers to check the certifications claimed by their installer and what protections or warranties installers can offer before going ahead with work. TrustMark is the Government-endorsed quality mark for retrofit, so its “find an installer” web search will be a good place to start for any consumer, whether the work is Government-funded or not.
As the Minister for Affordability and Skills, I am glad we are discussing this matter today because I think there is a double injustice. People who did the right thing by wanting to install insulation to lower their energy use have suffered from insulation that has failed. That emphasises why we are now required to use the PAS certificate and TrustMark-registered businesses in Government schemes.
A legal firm that was recovering the costs has now collapsed, leaving affected households wondering how this will finally be resolved. That is why I am grateful to the hon. Member for Halifax for bringing the cases in her constituency to my attention, as have other hon. Members. I encourage Members who were unable to attend today to write to the Department about specific cases. My officials will follow up with the relevant guarantee agency to ensure that all due process has been followed.
Draft Strategy and Policy Statement for Energy Policy in Great Britain
Amanda Solloway Excerpts(1 month, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I beg to move,
That the Committee has considered the draft Strategy and Policy Statement for Energy Policy in Great Britain.
The past few years have brought unprecedented changes and uncertainty to Great Britain’s energy system, but we have remained resilient. Last year, we laid the foundations for an energy system fit for the future with the landmark Energy Act 2023, the largest piece of energy legislation in the United Kingdom in a generation, which is world-leading in legally mandating net zero. The changes in that Act, including the powers to establish a National Energy System Operator—NESO—and new duties for Ofgem, mean that now is the right time to reaffirm the Government’s strategic priorities and policy outcomes in this strategy and policy statement.
The Strategy and Policy Statement for Energy Policy in Great Britain is developed according to part of the Energy Act 2013. The SPS sets out in clear terms the Government’s strategic priorities and other main considerations for energy policy, the policy outcomes to be achieved, and the roles and responsibilities of persons involved in implementing that policy. The Secretary of State, Ofgem and the National Energy System Operator —a new independent public corporation responsible for planning Britain’s electricity and gas networks and operating the electricity system—will be required to have regard to the strategic priorities set out in the SPS.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Can the Minister give us a timescale for when NESO will be operational as an independent body, in the way envisaged by the Government?
Amanda Solloway
I will come on to that in a moment.
The Secretary of State and Ofgem must also have regard for the policy outcomes contained within the SPS, and both parties must carry out their respective regulatory functions in the manner which they consider best calculated to further the delivery of the policy outcomes.
NESO is expected to be established this year. The SPS serves an additional purpose of setting out and clarifying the roles and responsibilities of NESO alongside Ofgem and the Government. The SPS is intended to provide guidance to the energy sector on the actions and decisions that are needed to deliver the Government’s policy goals, and places emphasis on where the Government expect a shift in the energy industry’s strategic direction.
As the independent energy regulator for Great Britain, Ofgem cannot be directed by the Government on how it should make decisions. Similarly, NESO is being set out to be operationally independent and free from day-to-day Government control. However, the SPS will provide guiding principles for Ofgem and NESO when it is established. The strategic priorities and policy outcomes within the SPS do not include the creation of any new policies or duties.
Theresa Villiers (Chipping Barnet) (Con)
I would be very interested to hear how the SPS will focus on the switch to renewables. That seems to have been one of the big successes under the current Government, with the proportion of our electricity generated from renewables somewhere near 40%. Obviously, we want that progress to continue.
Amanda Solloway
Absolutely. That is the very reason we are doing this—to make sure that we achieve our net zero targets.
The statement will support strategic alignment between the Government, Ofgem, NESO and the industry, by making clear what the Government want to achieve in the energy sector. The legal framework of the Energy Act 2013 requires that Ofgem, NESO and the Secretary of State all have a duty to have regard to the strategic priorities within the SPS.
Ofgem must publish a strategy showing how it will further deliver the policy outcomes and its annual report must assess its contribution to deliver those outcomes. The SPS also acts as a tool to promote alignment between Government, Ofgem, NESO and industry. As per the Energy Act 2013, the SPS has completed two consultations. The first was undertaken with Ofgem and the Welsh and Scottish Governments, and the Government worked with all parties to make sure views were correctly captured before moving on to the second public consultation, which was held last summer.
Alan Brown
I refer the Minister to the 16th report of the Secondary Legislation Scrutiny Committee, which was published earlier this month on 7 March. It details the fact that there was consultation with Scottish and Welsh Ministers, as the Minister said. However, additional information provided by her Department makes it clear that the Welsh Government asked for the Welsh net zero targets to be included in the SPS, and that the Scottish Government asked for the same for the Scottish net zero targets and also for the networks section to be strengthened. According to her Department, information was added to the introduction for the Welsh and Scottish net zero targets, but I cannot find it in the introduction. I wonder if the Minister could provide clarity on where that was included in the documents.
Amanda Solloway
I will have a look at that information and see if we can get that to the hon. Member if it is not included.
The feedback throughout both consultations was generally positive, and stakeholders were keen to see the SPS implemented to give guidance to the sector on the roles of Ofgem, NESO and the Secretary of State in delivering the Government’s priorities for the energy sector. Since the consultation was concluded, officials have worked through feedback and, where appropriate, used that to inform the current iteration of the SPS before us. The Government are confident that this SPS reflects the right strategic priorities and policy outcomes for energy policy for the whole of Great Britain. The SPS reaffirms the Government’s commitments and priorities for the energy sector and, in doing so, acts as a tool to support strategic alignment between Government, Ofgem, NESO and industry. I commend this draft statutory statement to the Committee.
Amanda Solloway
I thank all right hon. and hon. Members for what have been, in all cases, heartfelt contributions. I also thank them for their scrutiny of the draft of the document. Some of the issues in hand fall outside my portfolio but within the Department. If there is anything I am unable to answer in this speech, I will respond in more detail to right hon. and hon. Members in writing.
I am confident that the strategic prices and policy outcomes in the SPS clearly establish what the Government are trying to achieve in the sector and why that is important. It demonstrates how smaller policy outcomes contribute to broader priorities, so stakeholders can be reassured about how their role fits into the bigger picture. I also hope the SPS sets out a clear description of the roles, responsibilities and remit of Government, Ofgem and particularly NESO in delivering the objectives. We have tried to provide enough information on NESO’s remit to give confidence in its role when established, while also recognising that its responsibilities will evolve over time.
As well as reaffirming our ambitions, the SPS will give encouragement to Ofgem to utilise the full range of its powers to ensure that those ambitions are realised, and that stability and confidence are restored across the sector. I am pleased that most right hon. and hon. Members welcome the SPS. I want to go into further detail in response to some of the questions posed today.
The hon. Member for Kilmarnock and Loudoun asked when NESO would be operational. Our aim is for it to be operational later this year, depending on a few factors, including agreeing timelines with key parties. We continue to work closely with National Grid plc, National Gas and other stakeholders to enable efficient transition while maintaining the safety and ability of the operation of the energy systems.
In response to the hon. Member’s question on Scotland’s net zero targets, I should say that the SPS notes that Scotland and Wales have established their own net zero targets. Then, on a further point, Ofgem is established as a non-ministerial Government Department so, like other Government Departments, it is accountable to Parliament. I will write to the hon. Member if I have failed to address any other queries.
Alan Brown
I would just like a wee bit more detail on what “accountable to Parliament” really means and what that looks like overall, in terms of Ofgem and its responsibilities.
Amanda Solloway
The hon. Member will understand the parliamentary protocol around how regulatory bodies operate. Ofgem is set up as a Government body. On the scrutiny, he will know that a Select Committee, for example, would be able to talk to Ofgem.
My right hon. Friend the Member for Chipping Barnet asked how the SPS will focus on the switch to renewables. The SPS is clear that driving a net zero transition by achieving Government targets for renewable and low-carbon deployment is a strategic priority for Government.
I turn to the questions from the hon. Member for Southampton, Test. NESO will take time to reach full maturity as a new organisation, so we have kept references to NESO at a high level in the SPS. NESO is being brought into existence and its roles are still in development, including spatial energy and regional system planning. We instead plan to reflect how best to cover NESO in its substantive role once it is established. The Government have the power to review and revise the SPS in preparation for or in connection with NESO’s designation and will therefore consider the future when it is appropriate to do so.
I thank my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) for our previous conversations on what I know is an important issue. The SPS does not create new policy, but reaffirms Government’s existing priorities and sets out the roles of Government, Ofgem and NESO in delivering them. It is Ofgem’s role as the independent regulator, and NESO’s role as an independent system operator and planner, to decide how to go about achieving strategic priorities contained within the SPS. Their approach should be balanced in line with their duties.
In total, we received 140 unique responses to the SPS public consultation. The document summarising the responses, which was laid in the House alongside the SPS, details how we responded to that feedback. The SPS was cleared by the Home Affairs Committee and the parliamentary business committee before it was laid in Parliament on 21 February, and it is not a national policy statement for energy. The national policy statement for energy was published on 22 November 2023 and came into force on 17 January 2024.
With regard to the strategic spatial energy plan, we believe NESO has a key role to play in strategic planning for the energy system. The expertise of an independent NESO will be invaluable in creating the SSEP, but it is important that the plan is underpinned by proper democratic accountability. It will be produced through close working between the UK Government, the ESO, NESO—once established—and Ofgem. We will set out the full and clear expectations on governance and arrangements for each stage of the process in our commission to NESO.
Ultimately, we anticipate that the SSEP will cover the whole energy system, land and sea, across Great Britain. However, producing a comprehensive, multi-vector plan that effectively meets our future energy needs will naturally take time to get right. We are therefore commissioning the ESO, ahead of becoming NESO, to produce the first iteration of the SSEP, covering infrastructure for electricity generation and storage, including relevant hydrogen assets. That will foster a more efficient electric system design, promoting anticipatory network investments to enable the reduction of the waiting times for generation and storage projects to connect to the grid.
We also recognise the importance of protecting our environment and will ensure that any decisions on scale and location of infrastructure consider possible effects on the environment. The SSEP will go through an onshore and offshore strategic environmental assessment or an equivalent assessment under the environment outcomes report system, once it is in force. We also intend the SSEP to carry out a plan-level habitats regulations assessment. Planning policy will continue to take full account of legislation to protect the environment and habitats. As I said earlier, I will write to my right hon. Friend on other points she has raised.
In response to my hon. Friend the Member for Kettering, given Ofgem’s new roles, legislated for in the Energy Act 2023, and the establishment of NESO, now is the right time to publish the SPS. The SPS will give further guidance to the energy sector and support strategic alignment between Government, Ofgem, NESO and industry by reaffirming our priorities and commitments. Ofgem and NESO have a statutory duty to have regard for strategic priorities set out in the SPS, which makes it different from previous Government strategies.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Strategy and Policy Statement for Energy Policy in Great Britain.
North Lincolnshire Green Energy Park: Development Consent Application
Amanda Solloway Excerpts(1 month, 2 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
This statement concerns an application for development consent made under the Planning Act 2008 by North Lincolnshire Green Energy Park Ltd for development consent for the construction and operation of a combined heat and power-enabled energy generating development, with an electrical output of up to 95 megawatts (MWe), incorporating carbon capture, associated district heat and private wire networks, hydrogen production, ash treatment, and other associated developments on land at Flixborough Industrial Estate, Scunthorpe.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it. The current statutory deadline for the decision on the North Lincolnshire Green Energy Park application is 15 March 2024.
I have decided to set a new deadline of no later than 10 May 2024 for deciding this application. This is to ensure there is sufficient time for the Department to conclude its assessment of the additional information that has been supplied through consultation.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS337]
Energy Rebates: Highlands and Islands
Amanda Solloway Excerpts(1 month, 3 weeks ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
It is a great pleasure to serve under your chairmanship, Mr Paisley. I thank the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for securing this incredibly important debate, and I thank other hon. Members for attending. Although we are a small group, they have made their cases very powerfully.
I will go through the main issues one by one. Standing charges have been the thread running through the debate. The hon. Member made a powerful point about how standing charges for residents of the highlands and islands are too high. As hon. Members will probably know, the setting of standing charges associated with each tariff is a commercial matter for suppliers, which have flexibility to structure tariffs. However, Ofgem has launched a call for input on standing charges, which closed in January and has so far received more than 40,000 responses. We are looking at how standing charges are applied to energy bills and at what alternatives should be considered. Ofgem is currently analysing the responses and will publish in due course.
It should be noted that suppliers can offer low or no standing charges. As wholesale energy prices are coming down, competition is coming back to the market and consumers are able to access different tariffs.
Once the findings have all been put together, I am very happy to get together to further discuss how we can use them. I recognise that the price of standing charges for highland and island households is an important issue for all hon. Members, and it would be useful to discuss that in more depth on an ongoing basis. The importance of discussing these matters with Ofgem was mentioned earlier; I assure all hon. Members that I have been putting pressure on Ofgem to address all these important issues.
Drew Hendry
The Minister is always very thoughtful and considerate about these issues, and she wants feedback, but people in the highlands and islands need action. I think I am hearing from her that she agrees with the principle that it is fundamentally wrong that people in the highlands and islands are paying more in this way. Is that indeed what she is saying? Is she determined to address that injustice and to get something done about it with Ofgem?
Amanda Solloway
The point I am making is that we are looking at the standing charges, which are the one thread that has run through everybody’s speeches and comments today. We need to ensure that the standing charges are fair. We do not know what the findings will be, but I suspect that among the 40,000 responses— I think it is probably nearer to 44,000—there will be a lot to take into account, including looking at how we adjust the standing charges.
Ian Blackford
I say respectfully to the Minister that this is about fairness, and it is about what should be a universal market. We cannot have people being penalised to this extent. It is simply a matter of the Government saying to Ofgem that this is not right. There should be a universal market; people should not be penalised on the basis of where they live. It is a simple question, and the Government ought to provide leadership.
Amanda Solloway
To give assurance again, that is exactly what I am saying: I have been tasking Ofgem with looking at the issue. We are waiting for the consultation results to come through.
Amanda Solloway
Once we have all the responses and have looked at them, I will be very happy to welcome views on the findings.
I turn to transmission and distribution charges. Electricity network charges are the costs that users pay to connect to and use the electricity network. These are charged to suppliers and generators, so eventually the costs are passed on to consumers in their energy bills, some of which is reflected in their standing charges.
As an independent regulator, Ofgem is responsible for setting the electricity network charging methodology. Government officials are working closely with the regulator to understand these charges. Electricity network charges must be cost-reflective, so that those who pay them are charged in a way that reflects the cost that they are placing on the network.
Transmission charges are based on the costs that different users impose on transmission by connecting in different locations. That means that there are higher charges for those whose use of the network results in longer distances of electricity transmission. As hon. Members will know, Scotland is a net exporter of electricity, so transmission costs for Scottish consumers are lower than those for their counterparts in England and Wales.
Mr Carmichael
The Minister describes locational charging. That made a degree of sense in the days of generating electricity from hydrocarbons, because there was an element of transmission loss, so we wanted to encourage transmission closer to the point of consumption. As we move to renewables, that argument simply no longer stands, because we are not wasting a non-renewable resource in order to generate and then transmit electricity. Why has the approach not been changed?
Amanda Solloway
I thank the right hon. Member for his intervention. These are the kinds of things that we are working through as we respond to the net zero challenge.
Hon. Members have quite rightly talked about the geographical challenges of electricity supply in northern Scotland, such as the area’s size, poor weather conditions, sparse population, mountainous terrain and the need to supply multiple islands. Inevitably, these challenges mean that the costs of distribution are much higher than for other regions in Great Britain. Hon. Members have made that point very clearly.
I also acknowledge that the highlands and islands produce high levels of renewable electricity, although that does not remove the challenges of distribution. We will be looking at that issue.
The hydro benefit replacement scheme provides annual assistance of about £112 million to reduce distribution charges for domestic and non-domestic consumers in the region. That equates to a reduction of about £60 annually per household.
Drew Hendry
The Minister knows what I am going to say: with the bills that we are talking about, the £60 that she is talking about does not touch the sides for the people affected. I know she knows that, because I have said it to her before. What we need is an overhaul. We need a rebate that actually makes sense to people and has an impact on their bills. That is exactly what this debate is about: getting a highland energy rebate. If the Government want to use the scheme as a basis for doing so, that may be workable. I hope that the Minister will take that point away. Every little helps in a way, but the scheme really does not touch the sides for the people who are suffering this injustice.
Amanda Solloway
The hon. Gentleman is right. He has made that point clearly on several occasions, and I am prepared to discuss more fully the highland energy rebate paper that I have been sent.
I turn to energy prices and support. Despite the rise in standing charges, energy prices have fallen significantly since the winter of 2022-23. The 2024 quarter 2 price cap of £1,690 is 60% lower than the 2023 quarter 1 price cap peak. It is important to note that the Government reacted quickly to support households last winter. About £40 billion was delivered to support households and businesses, an average of £1,500 per household between October 2022 and June 2023. We delivered £40 billion to support households and businesses last winter, with a typical household receiving £1,500 in support between October 2022 and June 2023. Many highlands and islands households off the gas grid also benefited from the £200 alternative fuel payment schemes.
Despite the fall in energy prices since the winter of 2022-23, the Government have continued to support households. We are delivering a package of support worth £104 billion—an average of £3,700 per household—between 2022 and 2025.
Debt is an incredibly important challenge at the moment. Although we are doing a lot to help households, we know that some have fallen into energy debt. We want to support them to ensure that consumers do not fall into further debt. Last year, Energy UK announced a voluntary debt commitment: 14 energy suppliers announced their collective commitment to go above and beyond the current licensing conditions to help households with their energy bill debt. Those energy suppliers will aim to provide immediate assistance to those in debt and will arm people with knowledge and resources to empower them to manage their bills more effectively. For assurance, I regularly meet stakeholders such as Citizens Advice to discuss what can be done to address consumer debt. I welcome further input from hon. Members on the issue.
Kerry McCarthy
This week, I met some academics who are doing some research into debt levels. As I understand it, the average is about £1,000 per household, but I do not know the extent to which some people are in only £100 or £200 of debt and others are in five-figure debt. Do the Government have analysis of that? Does the Minister have figures she could share with me or put in the House of Commons Library?
Amanda Solloway
It is important that we consider the different levels of debt. It is quite complicated to get those figures because the suppliers have them, but I have pushed to see whether we can get a flavour of them. One of the things that I would advise households struggling with their bills to do is to speak to their supplier before going into debt, to receive help and support as soon as possible.
We have talked about prepayment metres, which can be a useful tool for consumers to manage their budgets and for energy suppliers to manage debt. However, it is important that the rules around their use are sufficient to protect consumers and are properly enforced. Involuntary installations should be used only as a last resort. Ofgem has strengthened its licence conditions for suppliers to conduct involuntary prepayment metre installations with exemptions in place for households with vulnerable individuals, such as those with people over 75 or children under the age of two.
The Government have already committed to supporting households past April 2024. Though I obviously cannot comment on today’s Budget, in the autumn statement we announced the biggest increase to the living wage and an increase to benefits of 6.7%. Earlier this year, we also cut national insurance for 27 million people, worth £450 for the average worker. As hon. Members have noted, in the autumn statement we also committed to giving communities living nearest to electricity transmission infrastructure up to £1,000 off their electricity bills for the next 10 years. That will apply across England, Wales and Scotland, including the highlands and islands, and they may be able to benefit from the scheme. We will also publish guidance this year on the wider benefits for local projects and provide an update on the electricity bill discount scheme.
As hon. Members have mentioned, many households in the highlands and islands are off the gas grid, which means they rely more on electricity. I also understand that many highlands and islands residents will use more energy and subsequently pay more for their energy bills due to the inclement weather, colder temperatures and poor insulation, but also due to having older and larger properties, which are harder to heat. To address that, the Government have already introduced several domestic energy efficiency schemes for all households in Great Britain to help lower bills and reach net zero targets. As an example, the Great British insulation scheme is delivering low-cost and free insulation to the least efficient homes in lower council tax bands, including many vulnerable households. The scheme will run until March 2026 with a value of £1 billion.
Since it was launched in January 2013, the energy company obligation has delivered around 3.8 million measures in approximately 2.5 million homes. Across ECO schemes, around 31,600 measures have been delivered to 23,100 households in local authority areas in the Scottish highlands and islands since 2013. As hon. Members will know, fuel poverty is devolved, with the Scottish Government responsible for the matter in Scotland. However, the ECO and the Great British insulation scheme are delivering energy-efficient measures to the least efficient low-income homes in Scotland. We are currently reviewing the fuel poverty strategy for England and will engage with the devolved Administrations as part of the process.
I understand this is a complex matter and one that is important to all hon. Members here. I thank them for bringing it to the debate. I would be happy to meet people further to today’s discussion. Finally, I want to touch on lived experiences and the impact on health. Having been brought up in a household that was fuel-poor, I know what it is like. I know the impact that that can have on someone’s health, especially as my mum suffered with chronic obstructive pulmonary disease and we found it incredibly difficult to manage all those challenges. My commitment is therefore to do the very best I can to support all those energy-poor households.
Draft Energy Bills Discount Scheme (Amendment) Regulations 2024
Amanda Solloway Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I beg to move,
That the Committee has considered the draft Energy Bills Discount Scheme (Amendment) Regulations 2024.
The Government responded decisively to the unprecedented rise in energy prices by delivering critical support to households and non-domestic energy consumers facing significant increases in their bills. More than £35 billion has been spent on supporting households via the energy price guarantee and the energy bill support scheme, and £8 billion is expected to be spent on non-domestic customers via the energy bill relief scheme and the energy bills discount scheme.
The energy bills discount scheme provides a discount on energy bills between 1 April 2023 and 31 March 2024 for those on non-domestic tariffs. It includes a higher level of support for heat suppliers with domestic customers, which reflects the fact that heat networks typically purchase their energy through commercial contracts and then sell it on to their domestic customers. That meant that heat network customers were not supported by the energy price guarantee as other domestic customers were.
The Energy Bills Discount Scheme Regulations 2023 require all heat suppliers that have eligible heat networks with domestic customers to apply for the higher EBDS heat network rate and then pass on to their customers the benefit that they receive. Without that support, domestic customers on heat networks would have been exposed to the full impact of high wholesale market prices. The support that we have provided through the EBDS regulations is estimated to be worth £180 million in total, and £1,200 for the average supported heat network customer.
Our intention in amending the EBDS regulations is to provide a finite window within which heat network operators can apply for EBDS support. The EBDS regulations allow rules to be made about the scheme, including rules about the time within which a heat supplier must comply with the duty to apply for the scheme. However, the duty to apply does not come to an end if heat suppliers fail to apply within the deadline imposed through the rules. The regulations and rules do not currently impose any end date to the requirement to make an application. The result is that a qualifying heat supplier that has failed to comply with the rules must still apply for support even after the end of the scheme, which means that the Government would retain a legal obligation to process applications indefinitely and would therefore need to maintain and pay for the administration of applications indefinitely.
The Department’s policy is to provide for an end date after which further applications cannot be made. The final date on which an application can be made is to be specified in rules, which will be made and published if the draft regulations are approved. The intention is for the deadline to be 31 March 2024, to align with the end of the period covered by the EBDS. The 31 March end date has been widely publicised to the sector.
There will be a limited exception to the 31 March deadline: a two-week limited extension for cases in which the duty to apply arises so close to the deadline that it would be unreasonable to expect a heat supplier to be capable of applying. Those heat suppliers would have until 14 April to apply.
The most important aspect is the impact of the scheme on the individuals and families who are facing pressures on their bills right now. It is right that we introduce the deadline to ensure that consumers receive the benefits of the scheme in a timely manner. It is also essential that support reaches as many people as possible, so my Department has conducted extensive engagement to encourage all eligible networks to apply.
It is important to note that the creation of the deadline via the rules will not close down routes for consumers to seek redress. Dispute resolution through the energy ombudsman remains open to customers beyond the deadline imposed by the amending regulations. Further-more, customers can pursue their claim in the civil courts if necessary.
In conclusion, the draft statutory instrument will amend the EBDS regulations so that the duty to apply for the support is a duty to apply before a deadline. It is an essential step towards ensuring that we support customers while taking measures to draw in public spending as pressures from energy prices ease. I commend it to the Committee.
Amanda Solloway
I thank the hon. Members for Southampton, Test and for Glasgow South West for their valuable contributions. As has been stated, this was an incredibly complex matter to work through. I give an assurance that customers have been at the heart of all that we endeavour to do.
The non-domestic point is not particularly related to this instrument, which is quite narrow. I can give an assurance that we are working with UKHospitality and other organisations to think about how we talk to suppliers about blend-and-extend contracts and about third-party intermediaries, but that is probably a matter for a different debate.
Through the EBDS, the Government have provided essential energy bill support to heat network customers to help to avoid unnecessary financial pressures during the energy crisis. To date, we have paid out £50 million in support and have approved nearly 12,000 applications to ensure that those who are exposed to volatile energy prices are supported.
The hon. Member for Southampton, Test asked whether we are considering support for customers on heat networks. He also raised an important point about customers getting a pass-through discount. Customers on heat networks are not protected by the same regulations as other domestic customers, so the Government are introducing a new regulation for heat networks. Alongside protections around service quality, it will give Ofgem powers to investigate and intervene on networks where prices for consumers appear to be unfair.
A scheme developed in haste, in response to the energy crisis, was never going to be perfect, but we have tried to ensure that as many people as possible have been reached. I am glad that through the scheme we have helped hundreds of thousands of people when they needed it most. We continue to target communications towards heat suppliers with vulnerable customers, including housing associations and local authorities. I have been keen to ensure that we use all available methods to reach out to as many consumers and customers as possible.
The Government are also helping with £6 billion of investment in energy efficiency improvements. It is expected that regulations will introduce back-billing rules for heat network providers, like those that already exist to protect gas and electricity customers. Our ambition is that consumer protections will be regulated from next year, with price regulation beginning in 2026.
The amendment that the draft regulations make to the EBDS regulations is necessary to ensure that the Government are not legally obliged to accept applications to the scheme indefinitely. It also balances our responsibility to limit the fiscal burden on the taxpayer.
From next year, we will have new consumer protections in place, provided through the Energy Act 2023. Regulations created via the Energy Act will give Ofgem powers to investigate and intervene on networks if prices for consumers appear to be unfair, or if prices are significantly higher than for comparable heating systems.
Once again, I commend the draft regulations to the Committee.
Question put and agreed to.
Byers Gill Solar Farm
Amanda Solloway Excerpts(1 month, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
indicated assent.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I thank my hon. Friend the Member for Stockton South (Matt Vickers) for securing this debate relating to the development consent order for Byers Gill solar farm. I also acknowledge the contribution of my hon. Friend the Member for Sedgefield (Paul Howell). They have both shown incredible commitment today and previously in raising awareness of this case within the House.
I must say from the outset that for propriety reasons, I am unable to comment on the specifics of the proposal. Byers Gill is considered a nationally significant infrastructure project, as defined in the Planning Act 2008, and any application would be determined by the Secretary of State. I understand that an application for the Byers Gill solar farm was received by the Planning Inspectorate on 9 February 2024. The Planning Inspectorate is responsible for considering whether the application should be accepted for examination and, if accepted, will carry out the examination on behalf of the Secretary of State, who will review the report and make the final decision. Given the quasi-judicial role of the Secretary of State in determining applications, I hope the House will appreciate that I cannot comment on the specifics of Byers Gill solar farm or any other proposed infrastructure project, as that could be seen as prejudging the outcome of any proposal subsequently submitted for decision through the planning process. I can, however, set out in general terms how planning works for large solar projects.
There are established routes in the planning system to consider the impacts of solar projects and to enable communities to raise concerns about developments in their areas. Developers taking projects through the nationally significant infrastructure projects regime must complete considerable community engagement before any approval is granted, giving communities and local authorities ample opportunity to feed in their views.
When a developer submits an application to the Planning Inspectorate, it must be accompanied by a consultation report. In that document, the developer must demonstrate that it has complied with the statutory pre-application consultation requirements and that it has had regard to the responses it has received. Among other things, the report must provide a description of how the intended application was informed and influenced by those responses, outlining any changes made as a result, and provide an explanation as to why responses advising on major changes to a project were not followed, including advice from statutory consultees on impacts. If an applicant has not followed the advice of the local authority or not complied with guidance published by the Planning Inspectorate, it must provide an explanation for the action taken or not taken.
On submission of an application, the Planning Inspectorate will write to relevant local authorities and ask for their views on whether the consultation has been adequate. The Planning Inspectorate will consider the consultation report alongside any representation made by a local authority on the adequacy of the developer’s consultation and the other application documents before deciding whether to accept the application for examination.
The planning system sets out how applicants and decision makers should consider the impact of solar projects on land use, the local environment, wildlife, biodiversity and, of course, landscapes. That should also include consideration of cumulative impacts: for example, where several solar projects are deployed in close proximity.
The Infrastructure Planning (Environmental Impact Assessment) Regulations 2017 require all large solar developers to complete an environmental statement as part of any application. The environmental statement requires developers to consider all potential impacts during a project’s life from pre-development to construction, operation and decommissioning. The environmental statement must be conducted by a “competent expert”, which means that all surveys and studies, including soil surveys, must be conducted and overseen by experienced members of their relevant professional field, such as ecology or geology, and comply with relevant codes of conduct.
As set out in the recently designated national policy statement for renewable energy infrastructure, while land type should not be a predominating factor in determining the suitability of a solar site location, applicants should where possible utilise suitable previously developed land, brownfield land, contaminated land and industrial land. Where the proposed use of agricultural land has been shown to be necessary, poorer quality land should be preferred to higher quality land, avoiding the use of “best and most versatile” agricultural land where possible.
In terms of the safety of battery storage, it is a priority of the Government to ensure that an appropriate, robust and future-proofed health and safety programme is sustained as the industry develops and storage deployment increases. The framework is kept under review to respond to changing circumstances. Recent reviews have considered both the planning system and the environmental permitting regulations.
The United Kingdom was the first major economy in the world to introduce legally binding net zero legislation. We cut emissions by half between 1990 and 2022 while growing the economy by two thirds, decarbonising faster than any other G7 country. In 2021, the Government adopted their sixth carbon budget for the period of 2033 to 2037, to reduce emissions by circa 78% by 2035 compared with 1990 levels.
The Government have also committed to decarbonising the electricity system by 2035, subject to security of supply. That will require deployment across a range of homegrown green technologies at an unprecedented scale and pace. Renewables such as solar and wind, alongside other low-carbon technologies such as nuclear, will underpin the UK’s transition from reliance on fossil fuels to the new secure clean energy system. Solar deployment is a key part of the Government’s net zero strategy, energy independence and clean growth. We are aiming for up to 70 GW of solar capacity by 2035, which would be more than quadruple our current installed capacity. We need to maximise the deployment of both ground mounted and rooftop solar to achieve that ambition.
I again thank my hon. Friends the Members for Stockton South and for Sedgefield for raising this issue and for championing their constituencies. I will ensure that the points they have raised are brought to the attention of the Ministers who cover solar and planning within the Government. Although I have not been able to discuss the specifics of this case, I assure them when taking a decision on any development consent application, the Secretary of State will follow the relevant requirements in the Planning Act 2008 and have regard to a wide range of matters that are important and relevant to her decision.
Question put and agreed to.
Oral Answers to Questions
Amanda Solloway Excerpts(2 months ago)
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Afzal Khan (Manchester, Gorton) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
Fuel poverty is a devolved matter. The latest figures, published on 15 February 2024, showed that 3.17 million households were in fuel poverty in 2023. The Government continue to deliver financial support to low-income homes and vulnerable households through the warm home discount scheme and cost of living payments.
Kate Hollern
As I am sure you are aware, Mr Speaker, the cost of living crisis is far from over for constituents in our area. The Government’s latest energy efficiency policy, the Great British insulation scheme, was supposed to insulate 100,000 homes a year, but so far just 3,000 families have been helped in eight months, including only 35 homes in Lancashire and just six in Blackburn. Will the Minister explain why currently it will take 60 years to meet their three-year target?
Amanda Solloway
Energy efficiency is incredibly important to this Government and we have many schemes available. The Great British insulation scheme alone has committed £592 million.
Paul Blomfield
I hear what the Minister says about the Great British insulation scheme. It comes after the green deal and the green homes grant, but frankly it looks like another failure. There are 1.4 million people living in South Yorkshire, but just 137 of their homes have been upgraded under the GBIS. My constituents want their bills cut, emissions reduced and their homes insulated, but Government incompetence is standing in the way. When will the Minister get a grip?
Amanda Solloway
We are spending £6 billion in this Parliament and a further £6 billion up to 2028 to make buildings, including private rented properties, cleaner and warmer. That is in addition to the estimated £5 billion that will be delivered for ECO4—the energy company obligation—and the Great British insulation scheme up to March 2026.
Marion Fellows
Over the past two years, my constituents in Motherwell and Wishaw, as well as the disability groups that I engage with, have told me harrowing tales of dire fuel poverty and energy debt, while the energy giants post record profits. Even with the new price cap, National Energy Action estimates that there will be 6 million UK households in fuel poverty, with energy debt sitting at £6 billion. After April, the only support available will be the £150 warm home discount, which has barely been increased in a decade. When will the Government take meaningful action and finally consult on an energy social tariff?
Amanda Solloway
Last winter, this Government delivered £40 billion for households and businesses. We also have the warm home discount, the winter fuel payment and the disability cost of living payment. We are committed to ensuring that affordability is top of our list in relation to energy security.
Liz Twist
We have had 14 years of fiasco after fiasco with energy saving schemes from this Government. Frankly, my constituents are fed up with it. In Gateshead, just seven homes have been upgraded under the Government’s latest energy efficiency scheme. Can the Minister say why this is such a disaster and why progress is so slow?
Amanda Solloway
We continue to drive energy efficiency improvements for lower-income and fuel-poor households, through schemes including the energy company obligation, the social housing decarbonisation scheme and the homes upgrade grant.
Afzal Khan
A recent report from the Energy and Climate Intelligence Unit exposes the Government’s record on insulation and says that the Government’s false claims about their success mostly involved taking credit for schemes that were a legacy of the last Labour Government. A record low of around 80,000 measures were installed in total under the Government’s programmes in 2022. Is not the truth that this Government are failing millions of people in fuel poverty?
Amanda Solloway
This Government have provided unprecedented support for people in this country. I have regular meetings with stakeholders, charities and different organisations. Undoubtedly, we are making sure that people have support through, as I have mentioned, the warm home discount, the energy price cap and lots of other payments, such as the cost of living payment of £900 per annum.
Dame Andrea Jenkyns (Morley and Outwood) (Con)
Talking of fuel poverty, the boiler tax results in consumers paying an extra £150 when they purchase a new boiler. Does the Minister agree that it is now time to ditch these unworkable and unaffordable net zero policies and let the British people decide how to heat their homes and what cars to drive so that they can keep more of their own money?
Amanda Solloway
No decision has yet been taken on that, but we have a commitment to ensure that we get the very best deal for all our constituents.
Kerry McCarthy (Bristol East) (Lab)
A year ago, the then Energy Secretary said that if suppliers had wrongly installed prepayment meters in any home, they would have to recompense their customers for the way they had behaved. One year later, can the Minister tell the House how many individuals who had a prepayment meter wrongly installed have had compensation, how many are yet to receive it and, of those still waiting, when they will get the compensation?
Amanda Solloway
One thing on which we can all agree across the House is that it was absolutely abhorrent that people had prepayment meters forced on them. We are working our way through the compensation, but I can assure Members that we are doing everything we can to ensure that, when prepayment meters are installed, we are doing exactly the right thing to make sure that everybody is kept safe.
Kerry McCarthy
I asked the Minister three questions but did not get an answer to any of them. Perhaps she can put the figures in the House of Commons Library, because she clearly does not have a clue what they are.
More than 3 million households are in debt to their energy suppliers and almost 10 million households are living in cold, damp and poorly insulated homes. The Great British insulation scheme is proving to be a great Tory insulation fiasco. Will the Minister tell me why the insulation scheme is proving to be such a disaster?
Amanda Solloway
We have taken great steps to support people. For example, last winter we gave unprecedented support to households and businesses. Of course, debt is a major concern, and I have regular meetings with stakeholders to ensure that we are doing the very best not only to get people out of debt, but to prevent them getting into debt in the first place.
Kevin Foster (Torbay) (Con)
Grahame Morris (Easington) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
The setting of tariffs, including standing charges, in the non-domestic market is a commercial matter for suppliers. The Secretary of State and I have met suppliers and Ofgem multiple times over the past year to urge them to support businesses and keep bills down, and Ofgem has recently called for input and views on standing charges.
Grahame Morris
Mr Speaker, I associate myself with your earlier remarks about the sad passing of my dear friend Ronnie Campbell, and indeed Lord Cormack.
For months now, East Durham Trust in my constituency has been in dispute with its supplier, TotalEnergies, after TotalEnergies raised its standing charge from 40p a day to £20 a day—an increase of over 4,000%. Remarkably, after making complaints to the Department, Ofgem, Northern Powergrid and TotalEnergies, I found out just yesterday that TotalEnergies has agreed to remotely reconfigure the meter in question. Can the Minister explain why energy companies and distributors do not seek to address customer issues sooner, and does she agree that we have a failing regulator and an energy system that seeks to maximise profits?
Amanda Solloway
I am pleased to hear from the hon. Gentleman that the situation has been resolved, and I suggest that exactly the right recourse is to contact the relevant parties. We are now launching the ability of the ombudsman to help small businesses as well, which reassures me that such cases will be seen to more quickly and resolved sooner.
Dave Doogan (Angus) (SNP)
In the UK, electricity standing charges will balloon by 12%, meaning that people in Scotland who were paying £90 a year in 2021-22 will soon need to find £216 a year—a 138% increase under this Tory Government. That removes the incentive to curb excessive use, and presents a disincentive to economise on energy usage. If costs and charges were redistributed to the unit price, consumers would be empowered to pursue reduced usage, knowing that that would translate into lower bills. What assessment has the Minister made of the savings that would be made, in terms of both carbon emissions and the need for vast pieces of new energy infrastructure, if the standing charges were rolled into unit prices?
Amanda Solloway
Standing charges, as I mentioned, are a matter for Ofgem. However, Ofgem has listened to public sentiment, and it has recently launched a call for input on standing charges. My understanding is that to date, it has had over 40,000 responses. The call for input closed on 19 January, and Ofgem’s paper aims to ensure a greater understanding of how standing charges are applied to energy bills and what alternatives should be considered.
Andrew Jones (Harrogate and Knaresborough) (Con)
Theo Clarke (Stafford) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
Last week, we launched a consultation, closing on 12 March, on requiring petrol stations to report a change in price within 30 minutes. Pumpwatch will enable drivers to make informed decisions on where to buy fuel and will reignite competition.
Theo Clarke
I thank the Minister for her answer, but my constituents in Stafford remain concerned about the price of fuel, particularly given the pressures on their household budgets. I welcome the fact that the price of a tank of fuel is lower than it was when prices were at their peak, but what is she doing to ensure that my constituents get the best price for their fuel?
Amanda Solloway
We are committed to making sure that consumers get a fair deal. That is why fuel retailers must remain transparent and not overcharge drivers. The Pumpwatch consultation will require all petrol stations to report prices within 30 minutes of their changing. That will enable tech companies to develop new ways for UK drivers to search for the cheapest fuel.
Richard Foord (Tiverton and Honiton) (LD)
In rural communities across Devon, people feel the pressure of high fuel costs. The cost of fuel in towns such as Honiton is almost 20p a litre higher than at petrol stations just 30 miles away. What steps will the Government take to ensure fairness, and to introduce rural fuel duty relief of the sort that we already have in some parts of north Devon?
Amanda Solloway
Pumpwatch will help with those things, but it is unacceptable for any fuel retailer to overcharge drivers. That is why the Secretary of State held a roundtable in December with fuel retailers to make it clear that we expect them to pass on savings to consumers when prices fall.
Helen Morgan (North Shropshire) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I pay tribute to the hon. Member for her committed work to support her constituents living in rural areas. We have a proud record of energy efficiency. We are encouraging, rather than forcing, people to make the right choices, and we pushed back the ban on gas boilers while increasing the boiler upgrade scheme to £7,500, which is one of the most generous grants in Europe.
Helen Morgan
There are 1,858 listed properties in North Shropshire, according to the Listed Property Owners Club, and 24 conservation areas across our historical market towns and villages. That means that there is a large number of buildings that owners find it difficult to upgrade to make them energy-efficient. What conversations has the Minister had with her colleagues in the Department for Levelling Up, Housing and Communities and the Department for Culture, Media and Sport on enabling people to bring those homes into the 21st century and make them energy-efficient?
Amanda Solloway
The hon. Member makes a good point. We have those consultations across Departments, and local authorities in rural areas in England are eligible for grants. I can give my assurance that we have those cross-government meetings.
Steve Double (St Austell and Newquay) (Con)
Many off-grid homes across Cornwall cannot convert to energy-efficient heating schemes without incurring huge costs. One option for them is to use hydro-treated vegetable oil. Can the Minister lay out what plans the Government have to support those using renewable liquid heating fuels, and will she back the campaign by our excellent candidate for Camborne and Redruth, Connor Donnithorne, to axe the tax on HVOs?
Amanda Solloway
I thank my hon. Friend for raising that point. We have begun developing a consultation on the role of renewable liquid fuels in heat. We expect Department for Energy Security and Net Zero Ministers to receive detailed information on the shape of the consultation in the coming weeks, and aim to publish in the summer of 2024.
Andrew Selous (South West Bedfordshire) (Con)
Kevin Foster (Torbay) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)
I thank my hon. Friend for that important question. Wholesale energy prices have fallen compared with last year. The Government have been supporting eligible businesses locked into high contracts through the energy bills discount scheme, until they can take advantage of lower fixed-price rates. My hon. Friend will be interested to hear that the Government delivered more than £7.4 billion to non-domestic energy users last winter, covering around half of many businesses’ energy bills.
Mr Toby Perkins (Chesterfield) (Lab)
Amanda Solloway
I could not agree more that we should not be paying different prices at different petrol stations. That is one of the reasons why we have launched a consultation on Pumpwatch, and why we have very regular meetings with the suppliers to make sure that they are not doing this. They should not be doing it and we are very clear about that.
Peter Aldous (Waveney) (Con)
Sir Mark Hendrick (Preston) (Lab/Co-op)
Amanda Solloway
The Government are already committed to ensuring that households have the necessary energy efficiency. We have introduced the social housing decarbonisation boiler upgrade scheme, the home upgrade grant and many other initiatives, and we are of course helping all our constituents with affordability.
Trudy Harrison (Copeland) (Con)
We have made huge progress in decarbonising our electricity sector, but decarbonising transport and heat is much more tricky. Will the Minister encourage our plans in Copeland to harness any power that can be obtained from new nuclear for that purpose, and will he meet us so that we can discuss those plans?
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Every single winter, the village of Altnaharra in Sutherland is the coldest community in the whole of the United Kingdom. Some parts of the United Kingdom are colder than others—that is geography. May I ask that this fact be taken into consideration when the Government look at schemes to help people with the cost of paying their electricity bills?
Amanda Solloway
I thank the hon. Gentleman for his question. As he will know, the Government delivered over £40 billion in support last winter. We expect the warm home discount to support around 3 million households this winter, with the final figures to be published later. Since 2011, the warm home discount has delivered over £3.5 billion in support for eligible low-income households.
Dr Luke Evans (Bosworth) (Con)
I welcome the news that Ofgem has put the price cap down by 12%, which represents a discount of about £20 for every average home. There is one problem, though: the standing charge is still relatively high. I know there is an open consultation, but would the Government consider transparency about the standing charge on bills so that the public understand exactly what it does?
Amanda Solloway
I thank my hon. Friend for his question. Clearly, it is vital that we had the call for input on the standing charges, and we await with anticipation how we will react to the over 40,000 responses that we have had so far.
Imran Hussain (Bradford East) (Lab)
I have recently been inundated with correspondence following the collapse of SSB Law, a legal firm that took thousands of defective cavity wall insulation cases to court. It has left constituents with tens of thousands of pounds in costs that they cannot afford during an unprecedented cost of living crisis. Can the Minister assure me that the Government have a plan to address this scandal? What compensation will my constituents be offered to remove faulty cavity wall insulation so that they can finally be free of its devastating consequences?
Amanda Solloway
It is always awful to hear of these cases. I will write to the hon. Gentleman on the issue.