Energy Bill [HL]

Baroness Altmann Excerpts

Committee stage
Monday 16th January 2023 Grand Committee

[Baroness Altmann (Con)]

I thank my noble friend for giving way. I have listened carefully to his arguments and would like to ask him whether he is excluding the other risks associated with fracking. Whether or not there are earthquake risks, surely we have the pollution of the groundwater, the toxic chemicals being released, the ground level ozone, air pollution and the use of large volumes of water in a country which had water shortages not that long ago and indeed where the geography seems to be rather different from that in other countries where fracking has been so successful.

[Lord Lilley (Con)]

I have good news for the noble Baroness, because those issues were covered in Shale Gas Extraction in the UK: A Review of Hydraulic Fracturing, produced by the Royal Society and the Royal Academy of Engineering. We are all constantly urged to follow the science, so let us follow the science in that review. She discussed water, and according to the review:

“Overall water use is important. Estimates indicate that the amount needed to operate a hydraulically fractured shale gas well for a decade may be equivalent to the amount needed to water a golf course for a month”.


That seems something with which we can probably cope. She then discussed the possible results leading to the pollution of aquifers. The review says:

“Concerns have been raised about the risk of fractures propagating from shale formations to reach overlying aquifers. The available evidence indicates that this risk is very low provided that shale gas extraction takes place at depths of many hundreds of metres or several kilometres.”


In the UK’s Bowland shale, it would be kilometres deep. The review continues:

“Geological mechanisms constrain the distances that fractures may propagate vertically. Even if communication with overlying aquifers were possible, suitable pressure conditions would still be necessary for contaminants to flow through fractures.”


When you have a kilometre or more of stone—impermeable rock—bearing down, you could not get a better seal.

Nevertheless, we do not have to worry about scientific analysis and theory, because we have practical experience. Over a million wells have been fracked in North America; not a single one has resulted in a building falling down from tremors or in a single person being poisoned by contaminated aquifers. So we are bound to conclude that lots of people have been spreading the sort of scaremongering that would make anti-vaxxers blush—even Andrew Bridgen would probably blush if he heard some of the stuff that has been put out by the friends of the noble Baroness, Lady Bennett, at their various camps around every conceivable attempt to get fracking going. We should rely on the science and the scientific reports and regulate the industry well, as we have done in the past.

Energy Bill [HL]

Baroness Altmann Excerpts

Report stage
Tuesday 28th March 2023 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet. I will speak to my Amendment 133. I am grateful for the support of my co-signatories: the noble Lords, Lord Hollick and Lord Teverson, and the noble Baroness, Lady Altmann.

I also very much support the case for Amendment 1 made by the noble Lord, Lord Ravensdale. One phrase stuck out for me: his advocation of a “coherent, system- level plan”. In so many of the areas around energy efficiency that we will deal with later in the Bill, this is what we have been missing—not individual initiatives but a strategic approach, with time limits, timescales and targets to be met, so that we can see delivery.

I also support Amendment 130 from the noble Lord, Lord Teverson—which is a different approach to achieving the same goal as my Amendment 133—and Amendment 132 in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake of Leeds, which would finally ensure that the long-awaited strategy and policy statement setting out the Government’s priorities would be published within six months. I very much hope that the Minister can respond positively to that and say that that statement is imminent.

Ofgem’s current remit pre-dates the 2050 net-zero target set by Parliament in 2019. Amendment 133 gives Ofgem a specific statutory net-zero objective linked to our climate change targets, in so doing mirroring the remit that the Government are giving the future systems operator. In Committee, the Minister said of similar amendments updating Ofgem’s remit that the Government “agreed with their intent” but did not consider them necessary because of the existing decarbonisation objective, referring to the 2010 change to Ofgem’s remit, which included a non-specific greenhouse gas reduction objective.

However, this existing duty is limited and related to the reduction of electricity and gas supply emissions of targeted greenhouse gases only—in other words, to reduce greenhouse gas emissions by an unspecified amount over an unspecified timescale. It does not link to our net-zero targets and as a result is less specific and ambitious than what the Government are legislating for the future systems operator.

The change advocated in Amendment 133 has broad support, as was recognised by the Government in their consultation on the future systems operator. The Government themselves noted that

“there were several strong calls for Ofgem’s remit to be reformed to focus on enabling net zero”.

The change was recommended in a report by your Lordships’ Industry and Regulators Committee, chaired by the noble Lord, Lord Hollick, and was also recommended this year by the Skidmore review and the Climate Change Committee. The latter argued that:

“Giving Ofgem a net zero responsibility”


will help it to

“think … strategically about the changes that lie ahead so that we can minimise the cost to the consumer in the long run.”

Just yesterday, the National Infrastructure Commission, in a fairly coruscating report on the Government’s progress towards reaching net zero, recommended the change in its Infrastructure Progress Review.

Support does not end there. The new duty is strongly endorsed by the main industry trade bodies: Energy UK, whose 100 members deliver nearly 80% of the UK’s power generation and over 95% of the energy supply; RenewableUK, which represents 1,000 businesses employing 250,000 people in the UK; and the Energy Networks Association, whose members include every major electricity and gas network operator in the UK and which employs 40,000 people in Great Britain.

This is not just a matter of semantics. The reason all these organisations and bodies support this change is that they believe it essential for increasing the pace and scale of investment in the UK’s electricity grid, which we were hearing about earlier, in order to deliver net zero and ensure that long-term planning happens at the pace needed. As the noble Lord, Lord Hollick, who cannot be with us today, said when we were debating a similar amendment in Committee:

“Many of our witnesses”


at the Select Committee

“told us that the net zero target should be included explicitly within Ofgem’s strategic duties … If there is no explicit reference to net zero, there is a danger that the decisions will be very short-term in nature, focusing on short-term costs for consumers and not the long-term costs of failing to achieve net zero and invest in the infrastructure necessary to achieve that.”—[Official Report, 16/1/23; col. GC 418.]

The trade bodies that represent the industry have been clear that they consider the lack of a clear duty that specifically refers to our net-zero targets as a reason why there has been historic underinvestment in the grid. Ofgem is not currently empowered to consider the benefit of long-term investments with sufficient weight, meaning that new renewable infrastructure is having to wait years to connect to the grid in some cases. This is not a case of it saving the consumer money, as it will cost more in the long term if we continually, but only slowly and incrementally, improve localised energy grid infrastructure. To put it colloquially, it will mean repeatedly digging up the road many times over, rather than digging it up once and for ever.

As RenewableUK has commented to us, at present

“grid development only takes place when there is overwhelming demand for it”,

rather than in future anticipation. That would make sense in a situation where there were uncertainties, but we are certain that we are going to have vastly increased demand for electricity in the near future and that the grid will be decarbonised. We know that every street in every town is going to need to be able to install EV charging points, and we hope that new developments will need to install solar panels and heat pumps, which will all need to connect to the grid. This is something we all know we need to do, but as things stand, by the time there is what is seen as overwhelming demand for grid expansion, it is very hard for grid development to catch up.

Responding to this amendment in Committee, the Minster also said that Ofgem would be keen to avoid any confusion over the need to balance decarbonisation, affordability and security of supply. I agree: Ofgem has repeatedly made it clear that it would welcome such clarification. My amendment does not alter those other aspects of Ofgem’s remit or weaken them in any way. It is for the Government to clarify to Ofgem how those various trade-offs can be balanced.

As I said, Amendment 132 in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake of Leeds, would ensure that the long-awaited strategy and policy statement setting out the Government’s priorities is published within six months—something that is overdue and badly needed. But as all the committees and trade bodies I have cited make clear, doing this does not detract from the need for legislative change to reflect our 2050 targets.

We should not miss the opportunity given by the Bill to update the consumer interests that must be protected when Ofgem carries out its functions to include our statutory responsibilities to achieve net zero by 2050. I end by reminding the House of the contribution from the noble Lord, Lord Hollick, in Committee. He said that it would be ironic if the regulator most responsible for regulating the journey to net zero is one of the only regulators which does not have a specific responsibility in its remit. I hope we can persuade the Minister to agree.

[Baroness Altmann (Con)]

My Lords, I declare my interest as a member of Peers for the Planet. I am speaking specifically to Amendment 133—so excellently spoken to by the noble Baroness, Lady Hayman—to which I have added my name. I also support the other amendments in this group.

As the noble Baroness, Lady Hayman, has made clear, the future systems operator, which will regulate under the terms of the Bill in future, will have a statutory net-zero objective linked specifically to our climate change targets. Currently, Ofgem does not have that, and this amendment simply seeks to bring it into line. The consequences of an ill-defined and time-limited free objective to reduce greenhouse gas emissions is that Ofgem is not giving sufficient weight to net zero and focusing instead on near-term energy costs, which do not properly recognise the cost impacts for future consumers of delaying specific action to achieve net zero.

The network companies are therefore currently incentivised not to plan ahead. Instead, they are encouraged to defer investment to the last possible moment, and not to anticipate the increases in long-term demand that we are all aware are coming. This has discouraged future-proofing of our energy infrastructure and left us with an ageing network infrastructure that is not really fit for purpose now, let alone for 2050, with constraints and delayed reinforcements being a barrier to connections for housing developments and to the connection of low-carbon power, transport and heating. The reality is that we will need much more grid infrastructure due to the decarbonisation of heat—which is commendably legislated for in the Bill—and of transport through the increased take-up of electric vehicles.

The Financial Times reported last year that renewable energy developers are being told that they will have to wait six to 10 years to connect to regional distribution networks. RenewableUK has highlighted that, in Scotland, a significant number of offshore wind farms that were granted leases last year by the Crown Estate Scotland will not be able to get a grid connection until the mid-2030s. Clearly, there is not a sufficient sense of urgency. Indeed, part of this is likely to be due to the non-specificity of the timescale for achieving net zero that Ofgem currently has.

There is a specific example of a 3-gigawatt east coast offshore wind farm being developed by RWE. This will be instrumental in meeting the Government’s 2030 net-zero target, but it has a grid connection date of 2032.

--- Later in debate ---

[Lord Callanan (Con)]

I think it is very easy for other people who are not directly engaged in the business of regulation to think that adding a statutory duty will be the magical cause of all the different elements of the energy system that they want to contribute to. But, of course, what we should also remember is that placing a duty in primary legislation also makes it justiciable.

I am sure there are plenty of lawyers in this House, and lots of litigation is already flying around on net-zero duties—the Government, indeed, need to respond to further litigation by the end of the week. If the House wants to give yet more work to their learned friends—of course, all the costs of that are ultimately borne by consumers—then the House is free to do that. We continue to keep the matter under review, but we are very clear, as is Ofgem, that Ofgem feels as though it already has this responsibility. I hope that Peers will think again.

[Baroness Altmann (Con)]

Before my noble friend sits down, is there any chance that the Government might reconsider this? Will he consider that the future system operator will have this remit? The FCA, the PRA under the current Financial Services and Markets Bill, the NHS, and the Advanced Research and Invention Agency will all have this specific remit written in. Why do the Government so reject putting it in the Bill for Ofgem?

[Lord Callanan (Con)]

Because the other bodies do not have the responsibility for regulating the energy system. I do not see why that is so difficult for my noble friend to understand.

Energy Bill [HL]

Baroness Altmann Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I am glad to follow the noble Lord, Lord Deben; in the way he has spelled it out, it is clear that there is a huge gap in the energy strategy being presented by the Government. You would not believe that from the size of the Bill and the details within it, but the fact is that, unless we have a strand of policy, properly delivered and enforced, that deals with energy efficiency, we are missing the easiest target: to stop households and businesses spending money on energy when relatively simple adjustments to their homes or to the regulations that cover buildings could change that.

I am lost in admiration for the noble Baroness, Lady Hayman, who raises this issue on every piece of legislation going through the House. I am astounded that the Government have not taken it up.

There is something odd about this. More than 20 years ago, I was sitting where the Minister sits, and I was responsible for policies against fuel poverty and for energy efficiency. At the end of the Labour Government, we were doing roughly four times the number of interventions that the Government have done. So when the Minister turns around, as he did in Committee, and says that they are already doing a very substantial amount of stuff—they are doing some stuff; there is a social housing fund for energy efficiency and the ECO scheme, which is not a particularly efficient way of delivering it but does deliver something—at the end of the day, it does not amount to what we were doing 20 years ago. Had we continued doing that for the last 20 years—maybe we would have had to alter it and to update the interventions—then the energy efficiency of our buildings would be substantially greater. The Minister is required to explain to the House why this glaring omission is not in this or any other Bill.

There are relatively simple things you can do which make a dramatic difference, though it is slightly difficult to do it. Why, for example, do regulations on new builds not universally require new-build houses to approximate to a net-zero position? Why, for example, does the planning system tend to favour demolition of buildings, which itself is carbon-releasing and carbon-inefficient, rather than effective retrofitting? Why, in effect, have the schemes that the Government have come forward with in the owner-occupier sector—the green homes grant and the Green Deal—not worked, despite the fact that industry and campaigners have been very much in support of them? The answer is that they have not been made sufficiently attractive and the delivery has not been made sufficiently attractive to businesses—installers and the workforce—to ensure that we have a massive effort on this front.

I am glad that the Government have established a more effective Energy Efficiency Taskforce, but that task force needs to come up rapidly with a strategy which will address all of these issues and deliver for us a contribution to solving the energy-induced part of the cost of living crisis, and at the same time begin to reduce our dependence on energy use and enhance our contribution towards meeting net zero. It is so obvious that I am astounded, as the noble Lord, Lord Deben is, that the Government have not seized this opportunity.

I hope that, before the Bill finishes its turn in this House, we will see a rectification of that and a real commitment to an energy efficiency strategy which makes sense, is attractive and works.

[Baroness Altmann (Con)]

My Lords, I support these amendments and the concept of improving energy efficiency. I probably cannot express the rationale for that better than the noble Baroness, Lady Hayman, and my noble friend Lord Deben.

I would like to ask my noble friend the Minister if there are particular issues in the wording of these amendments that the Government have a problem with. Is it the EPC ratings or the six months? If there are such issues, would the Government consider coming back at Third Reading with their own version of what seems, universally across the House and across the country, to be so sensible? Given the Government’s excellent record and excellent intentions in improving the energy performance and net-zero performance of the British economy and our country, would they consider these measures?

[Lord Lennie (Lab)]

My Lords, these welcome amendments in the names of the noble Baroness, Lady Hayman, and the noble Lord, Lord Foster, are concerned with energy efficiency in homes and non-domestic premises. As the noble Lord, Lord Deben said, the Government have set statutory targets aimed at reducing carbon emissions, achieving net zero and improving energy efficiency in homes.

There is consideration under way in the Minimum Energy Performance of Buildings Bill to move EPC ratings for rental properties from band E to C by 2025. The original plan was to ensure that all tenancies were in that band by 2025, but after much lobbying by landlords and others, DESNZ decided to scrap the 2025 target and now have until 2028 to achieve that target.

I want briefly to set out some facts: energy-efficiency measures are now 20 times lower than under the last Labour Government; the UK has the least energy-efficient homes in Europe; domestic energy-efficiency measures have fallen 95% since 2012; and the Resolution Foundation estimates that 9 million households are paying an extra £170 a year as a result of these failings. So we support these amendments, and should the noble Baroness, Lady Hayman, test the opinion of the House, we will support her in that vote.