Great British Energy Bill (First sitting)

Andrew Bowie Excerpts

Committee stage
Tuesday 8th October 2024 Public Bill Committees

[Josh MacAlister (Whitehaven and Workington) (Lab)]

I am also a member of the GMB.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I am not!

[The Chair]

For full transparency, I am a member of Unison.

Examination of Witness

Juergen Maier gave evidence.

[The Chair]

We will begin by hearing oral evidence from Mr Juergen Maier, chair of Great British Energy and of Digital Catapult. Before I call the first Member to ask a question, I remind Members that all questions should be limited to matters within the scope of the Bill. It is a short and quite a narrow Bill, and if you stray I will tell you off, so do not stray in the first place. We must stick to the timings; for the first evidence session we have until 9.50 am.

Will the witness introduce himself for the record?

Juergen Maier: Good morning, everybody. It is a pleasure to be here. I am the start-up chair of Great British Energy. I am in the process of stepping down from Digital Catapult; we are just looking for the new chair to replace me, so that I can focus on this role.

[Andrew Bowie]

Q Good morning, Mr Maier, and thank you for joining us this morning. Congratulations on your appointment as chair of Great British Energy.

It was announced with great fanfare at the Labour party conference that the new headquarters of Great British Energy would be in Aberdeen. What does that actually mean? What will the HQ actually do? How many people will be employed at the HQ?

Juergen Maier: The HQ is where we will centre all our operations. That means that all the key staff will be there, including the chief executive when we get around to appointing one. We will probably start with an interim chief executive who might not be located there, but eventually that is our plan.

There will be other locations. We would also like a location in Edinburgh and one in Glasgow, in particular to help on innovation and maybe financial services. I see the main role in Aberdeen as being particularly around operational engineering jobs. Ultimately, those are the jobs that are in abundance in Aberdeen; they are the well-paid jobs and the ones that are in greater quantity.

[Andrew Bowie]

Q The overarching aim of GB Energy is to speed up the transition to invest in new and emerging technologies. When your time as chair has ended and you look back, what will you judge as success?

Juergen Maier: There are two very simple answers. The first is how many renewable energy and clean energy projects Great British Energy has been a part of, as a co-investor, an investor or an enabler, and how much more renewable energy we have thereby managed to get on the grid. The second is how many jobs and how much prosperity we have created as a result, making sure that as much of the supply chain is Scottish/British, rather than overseas.

[Catherine Fookes (Monmouthshire) (Lab)]

Q Welcome, Mr Maier. It is great to meet you—thank you for coming before the Committee. In Monmouthshire, we have seen the benefit of a lot of community energy projects, such as solar power on the Bridges community centre in Monmouth. In Wales, we have also seen lots of hydro projects in community energy, such as Ynni Ogwen in Bangor. Can you share how you think the Bill’s provisions will support community energy projects in the whole of Britain and Wales?

Juergen Maier: Community energy is definitely a priority for Great British Energy. If you want to point specifically to the Bill, clause 3, “Objects”, refers in subsection (2)(a) to

“the production, distribution, storage and supply of clean energy”.

I see community energy as a core part of that. As Great British Energy, we definitely want to support the schemes that you have been talking about, whether those are in Wales, Scotland, England or Northern Ireland. We will definitely be doing that.

--- Later in debate ---

[The Chair]

I call the shadow Minister to ask the first question.

[Andrew Bowie]

Q I think it is fair to say that at the recent TUC congress some scepticism was expressed about the current Government’s plans for the energy sector, not least in respect of fears about the tens of thousands of jobs that are currently under threat in the oil and gas sector. How do you see GB Energy fitting into the overall piece when it comes to seeking to protect those jobs through the transition?

Mika Minio-Paluello: It is true that trade unions want to see good-quality jobs going forward, and that there are concerns about how we deliver a just transition, because we see the reality that transitions are not easy. To make that happen, we need some levers—some tools that can help to ensure that workers either have their existing jobs future-proofed or have transfers to new places. GB Energy is a tool that can help to make that possible that we currently do not really have in the UK. In France, Norway, Denmark and Germany there are a lot more institutions—the public sector effectively has a bigger stake—and we do not have that.

As Juergen said earlier, GB Energy can be part and parcel of enabling the supply chain growth that we have not seen in recent years, because CfDs have not delivered that as they are. It can also deliver the co-ordinated collective pathways for workforce, as well as upskilling, which does not really happen given the piecemeal way it is working at the moment. It can also play a role by ensuring that renewable jobs will be good jobs, both through procurement and through, in effect, ensuring a race to the top. That is all part of a plan, and what came out of our congress recently was that we need to see a plan. To have that plan, we need institutions like GB Energy.

[Andrew Bowie]

Q Do you have enough clarity thus far, through this Bill and the creation of GB Energy, to give confidence to those people in the sector who are worried about their jobs—

[The Chair]

Order. I do not think there is anything in the Bill about jobs, shadow Minister, so I am being steered by the Clerk to get you off the subject. Let us go to Olivia Blake.

--- Later in debate ---

[The Chair]

Order. Just a reminder again that we are talking about what is in the Bill—not blue-sky thinking about what GB Energy might do and that kind of stuff.

[Andrew Bowie]

Q I think we are all agreed that

“the production, distribution, storage and supply of clean energy”

should include nuclear energy—very important to your members, Mr Clancy. But to build on the point from the hon. Member for Whitehaven and Workington, I think there is a lack of clarity in the Bill at the minute over the operational independence and the autonomy of Great British Nuclear. Are you seeking that from the Government? Is it something that we should seek to have in the Bill as it moves through Committee?

Mike Clancy: That is not just in terms of the Bill, I think; the actual future of Great British Nuclear has a degree of uncertainty around it, per se, because, again—I am in danger of repeating myself—we have been here before. I used to be a member of the Nuclear Industry Council some moons ago, and we are rightly evangelists for our members, who deliver nuclear energy. We recognise that there are lots of controversies down the back end, in terms of decommissioning, but nuclear is an essential part of the future energy mix and the achievement of our climate goals. Therefore, there has to be a range of certainties in response—that is not a glib remark at all—and, in the GB Energy area, it is about companies knowing that they can invest and get the return. The Bill needs to be consistent with that.

[Stephen Flynn]

Q You have spoken eloquently and rightly about the energy transition, jobs, skills and STEM, but I have double checked and the Bill contains absolutely no detail about any of those things. Is that correct?

Mika Minio-Paluello: My understanding is that it is not currently in there, but it will be contained in the statement of strategic priorities. There are questions about how much should be added in. We understand that the logic is that the Bill will create an enabling vehicle—it will enable GB Energy to act and do things—so is it useful to put in many, many limitations? Probably not, because adding in too much detail will slow it down. Is it, on the other hand, useful to put in a clause that says that the statement of strategic priorities should have regard to a just transition and job creation? That could be a consideration.

--- Later in debate ---

[The Chair]

A few of us have. Okay, if we finish early, we have more time to leg it over there. Please could the witnesses introduce themselves.

Dan McGrail: Good morning everybody, my name is Dan McGrail, I am the chief executive of RenewableUK, which is a trade association representing the wind industry predominantly, but also the tidal energy sector and crucially, the supply chain that sits within that. We have about 500 member companies across the UK and we work closely with devolved Administrations and national Government.

Adam Berman: Good morning. My name is Adam Berman, I am director of policy and advocacy at Energy UK, which represents the whole of the energy sector really, short of upstream oil and gas extraction—everything from all the forms of generation, right through the networks and into household level. We represent the retail energy suppliers as well.

[Andrew Bowie]

Q For the record, can I say how nice it is to see Dan again? And also to thank you, Adam, and Emma for the support and, indeed, challenge you posed when I was sitting on the other side, talking through the Energy Bill last year. I ask of both the panellists: the strategic policies and plans are set out in the Bill—are they adequate for GB Energy and indeed the aims and ambitions of your organisations as you seek to see them progress?

Dan McGrail: It is good to see you too, shadow Minister. First, I think there is a trade-off in legislation like this, between the focus you want to provide, and the guard rails put into the Bill, and giving the entrepreneurial freedom to the organisation to invest where opportunities arise. We believe, and the report we wrote prior to the release of this was quite clear, that focus is important, but is legislation the place to put the focus? Our view is that the business plan that is set up and put in place by the chief executive and their team, once appointed, is the place to put that focus. It will be much more predictable if it is developed by experts in the sector who have conducted a thorough analysis of where the opportunities are for investment, and where the real additionality is.

One additional point that is important to detail in the statement, when it comes, is how the investment priorities of GB Energy would be different from those of the private sector. Would GB Energy take a longer view on returns on investment? Would it have a different rate of return? That would help to clarify the role of GB Energy within the ecosystem of the sector and with other private investors so that there is understanding of where real partnership opportunities lie.

In short, the answer to your question is that it is important to have a focus, but do the focus in the plan rather than in the legislation.

Adam Berman: I certainly agree with Dan. My one reservation with the legislation is that GB Energy will face two distinct competing priorities: the first is making money, which would probably primarily come from established mature renewables, and the second is solving distinct problems within the energy system that are a result of market failures. There is some overlap—although not complete overlap— between those two priorities. The question is whether there should be more clarity in the legislation over which strategic objective GB Energy should be solving. That is not an issue for industry to resolve, but it is something that, without stronger guidance in the legislation, GB Energy may struggle to reconcile once it is formed.

[Andrew Bowie]

Q Do you think there is enough provision in the Bill to allow for the Secretary of State to be publicly accountable for the decisions that he or she may take in the future, in regard to the concerns you have just raised?

Adam Berman: I do not think there is a deficit in terms of accountability, and I do not think there are 500 bodies that should be consulted before any decision is made by GB Energy; if you look at things like the planning system and statutory consultees, you can see how that is an issue. That being said, there is a list of organisations that any Secretary of State should consult, through their due diligence, which is everyone from the National Energy System Operator to the Climate Change Committee to industry to devolved Administrations. We would very much assume that the Secretary of State and the Department would do that due diligence themselves. However, I do not think shackling GB Energy through the legislation to having to do that to make every decision is necessarily the right approach.

Dan McGrail: I fully agree with that.

[Olivia Blake]

Q I wanted to ask about the definition in the Bill on clean energy. Do either of you have any thoughts on whether that definition is clear enough?

Dan McGrail: From my perspective, the definition is probably good enough. It is quite tricky to go too narrow and say renewable energy only, because there are certain areas, such as long duration storage, where the sector would like GB Energy to participate in, or at least to have the freedom to participate in, which, if it is too narrowly constrained or defined, may prove problematic later down the line.

One thing I think would be advantageous in the definition, or in the objects, is to clearly set out the guard rails, such as ensuring the carbon budgets are referenced. If we reference the carbon budgets, future Secretaries of State would need to make sure that any investments that were made were in line with the delivery of the carbon budgets. That is comparable to what was done with the set-up of the Green Investment Bank, where there were specific references to what the Secretary of State would need to go back to primary legislation to change, and what would be foreseeable within secondary legislation—not directing the Green Investment Bank to invest in fossil fuels, for example, would have required a complete change of mandate. I think some similar thinking, therefore, would be helpful here.

Adam Berman: I do not completely agree. I do not think there is a big problem of definition, but I would say that we need to ensure it is consistent with the CCC’s existing language and with the technologies that it thinks are consistent with the sixth carbon budget. Clean energy may encapsulate all of them, but I think we would have to make sure that it includes established mature renewables, nuclear, carbon capture, utilisation and storage and hydrogen, just to leave those options on the table. I do not disagree with Dan that there needs to be a focus, but GB Energy needs to at least be given the option to engage in the technologies where it thinks there may be additionality in terms of bringing in GBE’s involvement.