Oil and Gas
Caroline Nokes Excerpts(2 days, 4 hours ago)
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Madam Deputy Speaker (Caroline Nokes)
I inform the House that the Speaker has selected the amendment tabled in the name of the Prime Minister.
I call the shadow Secretary of State for Energy and Net Zero.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I alert Members to the fact that there will be a four-minute time limit on speeches, which of course does not apply to the Front Benchers.
I call the Liberal Democrat spokesperson.
Grahame Morris (Easington) (Lab)
I welcome this debate. As we have heard, oil and gas are likely to remain part of our energy mix for years to come, but recent global instability underscores a fundamental point: true energy security comes from reliable domestic and renewable sources, not from continued exposure to volatile international fossil fuel markets. Even if production were to increase, it would not shield the UK from global price fluctuations. Oil and gas extracted from the North sea is sold on international markets at global prices. While that may increase profits for fossil fuel companies—no doubt welcomed by the Opposition—it does little to reduce bills for our constituents. Moreover, new licences do not translate into immediate supply, and it can take many years, often well over a decade, from licensing to production. In reality, UK oil and gas production represents only a small share of the global market, and even a significant increase in output would not meaningfully influence global prices or reduce domestic energy bills.
Private companies operating in the North sea are under no obligation to prioritise UK consumers—the Norwegian example is interesting—so I return to the central question of how additional North sea production will reduce bills today. The only way that could plausibly happen would be through significant market interventions, such as restricting exports or imposing below-market price caps on domestically produced energy. Some Labour Members may agree with that, but I am not sure Opposition Members would. Such measures would represent a profound shift in policy, so if that is what the Opposition are proposing, they should be clear about it. If not, they should be honest with the public: expanding North sea oil extraction is unlikely to have a meaningful impact on energy bills in the short, medium, or even long term.
There is, however, an alternative that is not tied to global fossil fuel markets: renewable energy. I will take solar power as an example, but geothermal energy also has great potential. I recognise the criticism raised about the use of critical minerals, including in the remarks by the right hon. Member for East Surrey (Claire Coutinho), as well as concerns about reliance on the supply chain in China and labour standards in global supply chains. Those are legitimate issues, but there is also a significant opportunity for domestic innovation and manufacturing.
In my constituency, Power Roll is pioneering the next generation of solar technology. Its lightweight, flexible solar films use microgroove structures, and it does not rely on rare earth minerals. It has the potential for low-cost, scalable production here in the United Kingdom. The Government have already engaged with this technology, but it is now time to go further and support commercialisation, scale up production and invest in the infrastructure needed to bring British-made solar to market at scale.
By diversifying our energy mix and reducing reliance on volatile international fossil fuel markets, we can strengthen energy security and reduce exposure to external shocks. I say to the Government that this is the time to back British business, back innovation, and back domestic manufacturing, because that is how we will deliver energy security, economic growth, jobs—
Graham Leadbitter
No, I will not give way again because I do not have much time.
There are many reasons why we need to support oil and gas, not least protecting the workforce and not losing the skills. There are also numerous other areas where the Government are not making decisions quickly enough. On the transmission network’s use of system charges, Government policy has taken 18 to 20 months to come through, and it will be several more months before it is in place. That will be after the start of allocation round 8, which is being accelerated, and many companies in the North sea are saying that they will hold on and wait for AR9 before making an investment decision, because they want certainty. That lack of certainty, pace and pragmatism is preventing those jobs from being created and preventing a just transition.
I can apply the same point to Ardersier, which is in my constituency, and the proposal by a Chinese company, Ming Yang, which wants to invest there. I understand that the Government have reasons and things that they need to consider in this matter, but it has been on their desk for 18 months. A decision is needed to either move on to other investors or decide that there is a risk, so that we can mitigate the risk, let them get on with it, create supply chain jobs and have serious, high-skilled, high-paid jobs that will provide a just transition and a serious opportunity for North sea workers. That decision needs to be made sooner rather than later. We experienced an excessive delay in the run-up to decisions on carbon capture, usage and storage; it took forever to get there, and jobs have been lost because of that lost time.
Let me turn very quickly to consumer pricing. The Government have been waxing lyrical about price gouging by energy companies at the moment. The Government and previous Governments have been responsible for state-sponsored price gouging in the energy market, with the highest prices for electricity in Scotland. With that, I urge Members to—
Madam Deputy Speaker (Caroline Nokes)
Order.
There was a particularly unedifying exchange between Members in which the use of “you” and “your” was very liberal indeed; I assume that it was addressed directly to me. Can we all try to do a little better? While I am on my feet, I will say that after the next speaker, the time limit will have to be reduced to three minutes in order to get all Members in.
Climate Change
Caroline Nokes Excerpts(1 week ago)
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Madam Deput y Speaker (Caroline Nokes)
I call Luke Murphy, who will speak for up to 15 minutes.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I am going to impose an immediate six-minute time limit, because there is a second debate to follow.
Claire Young (Thornbury and Yate) (LD)
I thank the hon. Member for Basingstoke (Luke Murphy) for securing the debate. Climate change is the defining challenge of our time and, as others have mentioned, some are pushing a false dichotomy between tackling climate change and other important things, such as saving jobs, growing the economy and cutting bills. I firmly believe that we can meet climate change targets, deliver growth, create good jobs and ease the cost of living, and that the west of England—my region—has the potential to lead the way.
In my constituency, the Severn estuary growth zone alone could deliver 15,000 jobs, including 3,000 supporting new nuclear at Oldbury. We are in the unusual position of having another former nuclear power station just up the road at Berkeley. The late and—at least by me —lamented Western Gateway partnership put together the Severn Edge proposal, which talked about having a low-carbon energy campus, which would do more than just nuclear and would link the two sites. Training would be delivered at Berkeley, and there could be a small modular reactor there directly connected to an off-taker, such as a data centre, and then Oldbury would deliver power to the grid. It is that sort of strategic vision that we need and which I am concerned that we are not getting from this Government at the moment. Having recently attended the south-west nuclear showcase at the University of Bristol, I know that the universities in our region are also supporting this through their research.
It is not just about nuclear; the Severn estuary commission last year published its report pointing the way to how we can deliver tidal power from the Severn. There is amazing hydrogen expertise in our region. At the science park just outside my constituency and possibly expanding into it, there is the Institute for Advanced Automotive Propulsion Systems, which looks at alternatives to the traditional fossil fuels that we use to power automotive and aerospace. There is also the National Composites Centre, which, among many other things, looks at how to deliver materials that can contain hydrogen successfully. People might not think of the west of England as a former coalmining area, because it is not as recently a coalmining area as others, but it is, and there is the potential for geothermal with heat from mine workings.
There are many opportunities in a small area, but they are not being realised because we are not getting the investment and recognition we need. I do not think our area gets the recognition that other areas, perhaps in the north or in Wales, get.
There are many smaller firms delivering things, such as Fellten, a small firm that refits classic cars with electric motors, and I could mention many other examples. Our area also has a lot of demand for retrofitting. Twenty per cent of homes in my constituency are off gas, so if we trained the workforce, we could have local people delivering cleaner, cheaper energy solutions for people to heat their homes—all the more important in the wake of the oil and liquefied petroleum gas price crisis that we have seen this week.
There is a chance to employ locally and deliver great things, but it will not happen without the skilled workforce to do it. There is a willingness for further education colleges to work together—I know because I have been talking to them—but they need seed funding to support that, which is something I raised with the Skills Minister last January. There is also an identified need for a construction skills college in my area. We need to inspire the next generation. Why do we not encourage firms to sponsor trips to the science park and to local firms? When we are expanding the park, it would be fantastic if there was a space there to support that. This generation, which faces the highest unemployment in 10 years, needs to be empowered to take control of the climate change revolution, and we need to supply them with good skills and well paid jobs locally.
Another barrier to all this happening is the fact that in a rural area like ours, transport is a huge problem. There is no further education provision in my constituency, and even from a town like Thornbury, there is not a direct bus to the nearest further education college, let alone from any of the smaller villages.
I visited the university technical college at Berkeley, which could form part of that low-carbon energy campus that I talked about. Trying to access the college is also hugely difficult from my constituency. This change cannot be delivered without the skills provision and without enabling people to access the college and the jobs afterwards.
We need to get in the infrastructure, and if we are not to rely entirely on our increasingly decrepit strategic road network, we also need to be looking at rail. If we are to have any increase in line capacity and station capacity, we need Westerleigh junction to be upgraded. That is something else I have raised with the Government, but again we are not seeing the investment. Alternatively, in the short term at least, we could look at electrifying more lines, which would also increase capacity because electric trains can accelerate and decelerate faster, so there are opportunities—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady will know that she was on a time limit. I call the Liberal Democrat spokesperson.
Wera Hobhouse (Bath) (LD)
The UK has a lot to be proud of in our record on climate change, such as halving our greenhouse gas emissions since 1990, being the first EU nation to phase out coal, and massively scaling up renewable energy. It is no coincidence that many of these accomplishments came against a background of cross-party consensus on the need to reach net zero.
The parties used to compete to have the most ambitious environmental programme, but since the last election the Conservatives have abandoned our ambitious climate commitments. Instead, they have kowtowed to the politics of fear, and seized on net zero in a culture war of trying to out-Reform Reform—and where are the Reform Members? Even while still in government, the Conservatives squandered some of the huge economic, social and environmental opportunities of net zero, and now they are falling even further behind the curve. Their recent decision to call for the Climate Change Act to be scrapped would critically endanger future generations, who deserve a safer planet, energy security and a stronger economy. The Climate Change Committee frequently warned that the last Government were not moving fast enough. Let us not forget that they were defeated twice in the High Court due to their inadequate climate plans.
We Liberal Democrats recognise the urgent need to go further and faster on climate change. This generation should be the first to leave the country and the world in a better condition than we found them in. We also recognise the huge opportunities that new renewable energy brings to support skilled jobs and economic growth. Previous failure to invest sufficiently in renewable energy and insulate our homes has led directly to the energy crisis, pushing up energy bills for everyone and squeezing family finances. The situation in Iran has laid bare the state of UK energy security as prices have shot up because we are so reliant on oil and gas. Home-grown, renewable energy does not have to pass through the strait of Hormuz, and its price is not set on the rollercoaster of international markets.
Conservative and Reform Members have their heads in the sand in adopting anti-renewable, anti-environmental policies that would leave us vulnerable to more energy crises in the future. The Climate Change Committee has found that the cost of net zero by 2050 is less than the impact of one fuel crisis. Conservative and Reform Members would have us believe that we cannot afford net zero. In reality, the truth is that we cannot afford not to get to net zero.
We cannot escape the fact that our electricity prices are among the highest in Europe, but that is not inevitable; it is the result of a pricing imbalance. Right now, the cost of electricity is set by the price of gas 97% of the time, even though half of our electricity comes from renewables, which are much cheaper. That disconnect is driving up bills unnecessarily, and we must break that link. We Liberal Democrats propose the practical solution of moving older renewable projects off expensive renewable obligation certificates and on to cheaper contracts for difference. The UK Energy Research Centre estimates that that change alone would save a typical household about £200 a year.
At the same time, the Energy Security and Net Zero Committee’s inquiry into the cost of energy has uncovered serious concerns about transparency. We have heard evidence that profits can be obscured within network charges on energy bills. Energy companies must be transparent, so consumers can clearly see what they are paying for and where profits are being made. Our constituents deserve energy bills to be fair, affordable and easy to understand.
In Bath, the majority of my constituents are firmly behind climate action, and so is my Liberal Democrat council. I was delighted to hold a pop-up surgery at Bath climate hub last week. The hub supports people to reduce their carbon footprint through diet, energy use or transportation changes. It also facilitates the meaningful conversation that we must keep having on climate issues. From action to rewild nature-depleted land to community owned energy initiatives, local areas in Bath are making changes that together make a big difference.
In Bath, like the rest of the country, retrofitting our homes through a national insulation programme is crucial to lowering carbon emissions and reducing bills. The Government’s warm homes plan unfortunately falls short of the scale, ambition and long-term certainty we need. An emergency home upgrade programme should have been implemented in the first 100 days of this Government. We Liberal Democrats would upgrade our homes, making them cheaper to heat with a 10-year emergency home upgrade programme, starting with free insulation for those on low incomes and ensuring that all new homes are zero-carbon. We would also provide further incentives for installing heat pumps that cover the real cost. That would reduce emissions and bills, combating both climate change and fuel poverty.
Climate change is, after all, a global issue. We must bring others with us. The UK and European partners must lead the global effort to tackle climate change together, even more so given that the US has abandoned the multilateral approach to international climate policy. One choice the Government could take immediately to help global efforts towards net zero would be to reverse the cut to the aid budget and set out a road map for restoring official development assistance to 0.7% of gross national income. UK aid provides vital support for the most vulnerable people in the world and is a key tool in meeting our climate commitments.
We Liberal Democrats have also pushed for a long time for stronger marine environmental targets, both internationally and domestically. We welcome the Government’s decision to ratify the global oceans treaty through legislation. However, much more needs to be done to work with our coastal and fishing communities to ensure a sustainable future for fishing and our marine environment.
Public support for climate action remains strong across the UK, but we cannot take it for granted. We must continue to bring the public with us throughout the energy transition. A part of that is ensuring that misinformation and disinformation is effectively challenged. That means tackling myths about renewable energy head-on, and making sure that households right across the country actually feel the benefits through lower bills, warmer homes and secure jobs in their communities.
The Conservatives and Reform are all too often happy to talk down Britain’s renewable industries. They would have us scraping the bottom of the North sea oil barrel. In doing so, they overlook the remarkable innovation happening right here in the UK: home-grown green technology companies driving growth, creating skilled jobs and shaping a more sustainable future. Even if more oil was extracted from the North sea, it would be sold on the international market at international prices. That would not lower energy bills. The Conservatives know that, so it is particularly callous to ask for something that would leave our constituents less safe and secure economically.
Our constituents want to tackle climate change. They want lower fuel bills. They want their wildlife and landscapes to be protected. They want a strong economy that supports British jobs. That is what the energy transition must give them. We Liberal Democrats will keep making the case for the urgent transition away from fossil fuels.
Luke Murphy
I, too, celebrate the achievements under the previous Government. Why, then, given that those achievements came about under the framework of the Climate Change Act, which was then recognised internationally and led to progress elsewhere, are you now going to throw that framework in the bin?
Madam Deputy Speaker (Caroline Nokes)
Order. It has been over 18 months and Members are still using “you” as if it were confetti. Please, can we all be a bit better?
Luke Murphy
Apologies, Madam Deputy Speaker. Why is the hon. Member and her party proposing to throw out the framework that underpinned all the achievements that she is listing?
Heating Oil Support
Caroline Nokes Excerpts(1 week, 3 days ago)
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Martin McCluskey
Dear, oh dear! Where to begin? I will do my best to wade through the many points that hon. Gentleman raised.
First, the energy price cap is reducing on 1 April because of actions that this Government took to take £150 out of energy costs. That will see every bill in this country reduced. People listening should hear that their bill will go down in April, and that is protected to the end of June. The hon. Gentleman appears to be criticising us for a lack of speed. If he would like to volunteer how many days it took for the last Conservative Government to provide support for people on heating oil, I am all ears. How long did it take his party in government? It took them nearly 200 days. We are around three weeks into this conflict in the middle east, and we have come forward with support today.
LPG will be eligible in so far as the English schemes that we have funded additionally today through these actions, and we are making that clear to local authorities in a letter that has been sent from Ministry of Housing, Communities and Local Government Ministers today. It will be for the devolved Administrations—Wales, Scotland and Northern Ireland—to determine how they distribute the funds. I hope that they will work at the same speed as this Government to ensure that they are available on 1 April, but all nations already have crisis funds available that they could be deploying for this purpose, just as we will be deploying them for this purpose in England from today; if there are people in crisis now applying to the existing household support fund, they will be eligible for support from today, and the additional funding will come after 1 April.
The hon. Gentleman talked about the funds being Barnettised, but the funds are not being Barnettised; Scotland is not being, in his words, short-changed. The funds are being allocated based on census data on how many heating oil-fuelled households there are in each individual nation. That is why Northern Ireland comes out with £17 million, Scotland with £4.6 million and Wales with less. It is not a Barnett share; it is based on the number of households that use heating oil.
Finally, I do wish that the hon. Gentleman would stop coming to this Chamber and talking down the UK’s oil and gas sector. [Interruption.] No, I do wish that he would stop talking it down. He has implied from his Dispatch Box that the taps are being turned off in the North sea; they are not. The North sea is working today at full capacity and has been for some time. On Thursday, I was in Aberdeen, speaking to workers in that sector and to workers in floating offshore wind, who will benefit from our decision to invest in clean energy. If we take our eyes off the opportunities that will be available in future, it is a road to ruin. The hon. Gentleman will also know that more extraction from the North sea will not reduce the price of energy. We are a price taker, not a price maker. That is not our road to cheaper energy for households.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Energy Security and Net Zero Committee.
Bill Esterson (Sefton Central) (Lab)
Unlike the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), I give an unqualified welcome to today’s announcement, which will support some of the most vulnerable people in the United Kingdom—some of those in greatest fuel poverty. I have to say to the Minister, though, that we invited him to join us at our Committee session tomorrow afternoon to discuss the warm homes plan, following last week’s excellent evidence session. So far he has not been available. It is not too late for him to change his mind if he wants to, but for now I will ask him one question. Given that people on heating oil are at the sharp end of the impact of the spike in oil and gas prices, will he consider giving them preferential treatment when it comes to the warm homes plan so they can benefit from the range of measures, including on energy efficiency, and the reduced costs that it can deliver for them?
Martin McCluskey
I am always happy to come to the Committee; I understand that discussions are ongoing about a longer evidence session just on the warm homes plan to give it the attention that I am sure my hon. Friend agrees it is due. I agree that the warm homes plan should target some of the lowest-income people in our country. That is why we have allocated well over £1 billion for some of the low-income schemes in the warm homes plan, and why we have also focused on how we target rural households, many of whom will be affected by the heating oil situation.
Pippa Heylings (South Cambridgeshire) (LD)
We welcome the Government finally taking action to protect households from soaring energy costs due to the middle east crisis, following calls from those on the Liberal Democrat Benches and MPs of all parties. However, today’s intervention is a sticking-plaster solution, with too many households potentially falling through the cracks and not receiving support. We have heard that those families who must use oil for heating are the most exposed and defenceless, caught in the crossfire of Russia’s war in Ukraine and now the volatility in the middle east.
The heating oil market needs regulating. The Liberal Democrats are calling for the immediate introduction of a three-month VAT holiday on heating oil, as well as a proper price cap, because these households deserve the same protection as those that use gas and electricity. The real way to protect households and businesses is not by parroting Trump’s “Drill, baby, drill” mantra and buckling in for more roller-coaster rides that burn a hole in people’s pockets but by accelerating the transition to secure, home-grown clean energy that we control and extending preferential treatment to the warm homes plan, to help those homes that use heating oil to electrify and get off volatile fuel that we do not control.
Will the Government agree with the Liberal Democrats and set a price cap for heating oil to shield off-grid households? Also, if the Government want to provide targeted support, will they learn the lessons from the covid pandemic and the 2022 energy crisis and immediately enact a data-sharing scheme between Departments, including the Department for Work and Pensions and the NHS, and devolve this to local authorities to enable them to deliver targeted support to those who need it the most through, right now, the crisis and resilience fund that they want to be adopted on 1 April?
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I plan to run the statement only until 7.30 pm. May I encourage short questions from Members and perhaps shorter answers from the Minister?
Ben Lake (Ceredigion Preseli) (PC)
I welcome today’s announcement and the proposals. They potentially offer a relief of 20% or so to the households in Wales that are off-grid, including 72% of households in my constituency. The Minister will appreciate that households will be anxious to understand what level of support they stand to receive. Was there a per-household level of payment in mind when the Government came up with these calculations? Given that LPG households will be entitled to support, can I also ask why heating oil data was used to calculate the £3.8 million allocation for Wales?
Jim Allister
Would the fairer approach not have been to suspend the 5% VAT on home heating oil? Would that not have been fairer to everyone?
Martin McCluskey
The additional top-up funds will be available through the crisis and resilience fund from 1 April. What I say to my hon. Friend’s constituents and those of all other hon. Members is that they should contact their local authorities today if there is an issue so that, either now or after 1 April, they will be able to take advantage of that support.
Madam Deputy Speaker (Caroline Nokes)
I thank the Minister for his answers this evening.
Local Power Plan
Caroline Nokes Excerpts(1 month, 2 weeks ago)
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The Secretary of State for Energy Security and Net Zero (Ed Miliband)
With permission, I will make a statement about the local power plan and allocation round 7 solar and onshore wind auction results, both of which have been published today.
Britain’s drive for clean energy is about helping to answer the call for a different kind of economy that works for the many, not just the wealthy and powerful in our society. In the last few weeks, our warm homes plan has delivered the biggest public investment in upgrading homes in British history to cut bills for millions of people and to tackle fuel poverty. We have secured the largest offshore wind auction in European history, with a clean industry bonus to drive investment into our industrial communities, and we have agreed a fair work charter with business and trade unions as a first step to improving workers’ rights in renewables.
Today, I can report to the House the results of the AR7 auction for onshore wind and solar. In onshore wind, we secured 1.3 GW of power at a price of £72 per megawatt-hour. In solar, we secured nearly 5 GW at a price of £65 per megawatt-hour. I can inform the House that, together, this onshore wind and solar will provide enough power for the equivalent of more than 3 million homes, further reducing our dependence on international fossil fuel markets. It represents the largest solar and onshore wind auction in UK history.
I have had representations that we should have cancelled the auction and built new gas instead. I can tell the House that the price of this onshore wind and solar is less than half the price of building and operating new gas stations. Indeed, onshore wind and solar are by far the cheapest power sources available to build and operate, so I have rejected those representations. Instead, we have record-breaking results that will cut bills for families across Britain.
As we get off the rollercoaster of fossil fuel markets controlled by petrostates and dictators, we do not want this clean energy simply to be owned by big companies and multinationals. We want every community in this country to have the chance to own our energy future. We know that community ownership is a transformative tool to build the wealth and pride of local areas and give people a stake in the places in which they live. We already see this in pioneering community energy projects across Britain, and I pay tribute to them, including Lawrence Weston in Bristol, where England’s tallest onshore wind turbine, which I have visited, is 100% community-owned and generates tens of thousands of pounds a year to reinvest in the local community; the Geraint Thomas velodrome in Newport, which hosts nearly 2,000 solar panels and is one of the largest rooftop solar projects in Wales, cutting bills in Wales dramatically; and the Huntly Development Trust in Aberdeenshire, where community wind projects generate income that helps fund local charities.
We know that community energy not only spreads wealth and power, but contributes to the resilience of our energy system by generating and storing power closer to where people live, yet despite the individual success stories, Britain has never decisively seized the opportunities of community energy. Around half of wind capacity in Denmark is owned by its citizens, as is almost half of solar in Germany, yet in Britain currently less than 1% of our renewables are community owned. With our local power plan, we will change that.
Today, we announce the biggest public investment in community-owned energy in British history. During the previous Parliament, less than £60 million was spent on Government community energy schemes. Today, we set aside up to £1 billion of funding from Great British Energy to invest. This will offer grants to local authorities and community groups to support projects in their early stages, loans and project finance to support construction and operation, and funding to help communities buy a stake in larger renewable projects in their areas.
This funding will also be targeted at underserved areas of the country where it can make the biggest difference. Great British Energy estimates that this funding will support an initial 1,000 community and local energy projects, but this is just the start. Today, we send out the message to community groups, sports clubs, miners’ welfare institutes and village halls across the country that, in every community of Britain, we want to give people the chance to own their own energy, to transfer money from the pockets of energy companies to their community, and to generate income for the benefit of local people for decades to come. This is a Labour Government enabling every community of our country to own and build wealth for local people.
However, we know that making that happen is not just about providing capital funding, because communities need help to plan and develop their projects. So alongside this funding, Great British Energy will establish a one-stop shop to provide support and advice about local and community energy, with a team of expert advisers to help communities get their projects off the ground. This is Britain’s publicly owned energy company working hand in hand with our brilliant mayors, local authorities and community groups to turn the ambitions of local communities into reality.
Alongside the funding and support, we also know we must confront the reality that for years the rules of our energy system have held back the growth of community energy. Local and community schemes face hurdles that may be straightforward for large developers to overcome, but are too high for voluntary groups with limited time and resources. We are determined to break down these barriers, so we will also work with Ofgem to reform market codes and supply licences to help communities sell the power they generate, and we will ensure community energy projects benefit from our reforms to planning and the grid.
We also want to make it much easier for communities to take a stake in larger projects through shared ownership, building on examples such as the Isle of Skye co-operative in the Hebrides, which owns a share of a local onshore wind farm and has generated over £1.5 million for the local community. We think there is huge potential for many more projects like that, so we will consult on how we could use existing powers in the Infrastructure Act 2015 to mandate an offer of shared ownership. Those powers were passed more than a decade ago, but were never implemented. It would mean that, when companies built big projects, local people and communities would be offered a stake in them. As my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) has said, we need to move from a situation where communities can only aspire to be passive beneficiaries of projects owned by large companies to their being owners themselves with benefits in perpetuity. We are moving from community benefit to community share and community stake.
Taken together, this is the most comprehensive package of support to grow local and community energy that our country has ever seen. It builds on the Pride in Place programme, the community right to buy and our world-leading commitment to double the size of the co-operative sector. We know that the local power plan will be delivered not from Whitehall, but place by place and community by community. Today, I issue an invitation to local and community groups: if they come forward with proposals, we will support those groups to help make them happen. This statement is about a stake for the British people in our energy system, generating returns for local communities and local people, with power, wealth and opportunity in the hands of the many not the few, and I commend it to the House.
Ed Miliband
Well, there were no questions, but I will reply none the less. Let me start with the AR7 auction, because this is very interesting and it will give the House a picture of what has actually changed. What has changed is the Conservative party, not the reality. We had the AR5 auction a couple of years ago, when the Conservatives were in power. In that auction, the price of solar was higher than it was in this auction. The then Secretary of State, the right hon. Member for East Surrey (Claire Coutinho) stated:
“our reliance on gas for electricity production today risks making power prices higher than they would be in a system with a greater share of generation from wind and solar…Moving to home-based, clean power mitigates risks to billpayers—now and in the future.”
What has changed? What has changed is that the Conservative party has gone full MAGA. Let us just be honest about this. It has decided to chase Reform into a ludicrous position, doubling down on fossil fuels and rejecting even solar and onshore wind, the cheapest, cleanest form of power you can possibly have. I guess the hon. Member for Mid Buckinghamshire (Greg Smith) was just reading out the script.
On community energy, I have to congratulate the hon. Gentleman, because he has given a brilliant example of why the previous Government were so hopeless on community energy. He obviously thinks it is a terrible idea. He is very welcome to do so, but he is sending a message to every Member of Parliament and all their constituents that the Conservative party is against community energy projects and against the things that will cut bills for local community groups. To every sports club, community centre and library that will benefit from this funding, there is a very clear answer: the Conservative party says, “No, you don’t deserve it. We don’t want you to have those lower bills. We don’t want you to have that cheap clean power. We don’t want you to have the income and resources to reinvest in our local community.” If the Conservatives want that as a dividing line, bring it on, I say. This Government are on the side of local communities, on the side of cutting bills and on the side of reinvesting money into communities. The Conservative party, in its new incarnation, is against it.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Energy Security and Net Zero Committee.
Bill Esterson (Sefton Central) (Lab)
Select Committees look at the evidence. The evidence we have heard is that community energy is a great way of bringing down bills and giving people the confidence to take part in the energy transition. The Secretary of State talked about solar in his statement. We heard that golf courses use 10 times as much land as solar farms. Even if the Committee on Climate Change recommendations are adopted, twice as much land will still be used for golf courses. The Country Land and Business Association told us that concerns about land use are a myth: that the planning system protects the best and most versatile land for crop production, and that the roll-out of solar should be encouraged as a way of diversifying for farmers, delivering cheap electricity for both neighbouring businesses and domestic use. Will the Secretary of State say how he intends to ensure as many people as possible in rural areas understand the benefits of community energy and solar more widely? Will he ensure that those myths are finally busted?
Ed Miliband
My hon. Friend did a very good job of busting those myths in his question and he is absolutely right. The truth is that you cannot, at one and the same time, complain about bills being too high and then reject the cheapest cleanest form of power, but I am afraid that that is the position of the Conservative party. There is no hiding the fact. Nobody can disagree—you can disagree about other things—that solar is the cheapest form of power, but the Conservatives are against it.
My hon. Friend makes a really important point about community energy. Let us be honest, we are in the foothills of what we need to achieve as a country. Germany and Denmark are miles ahead of us. This is about a different conception of energy and who owns it: not just big multinational companies, not just the big companies that the Conservatives seem to want to just leave it all to. We want local people to be able to have a stake in the system. That is what this plan is about.
Pippa Heylings (South Cambridgeshire) (LD)
The Liberal Democrats welcome the Government recognising what communities across the country have been saying for years: community energy is one of the most powerful ways to cut bills, rebuild trust in the energy system, rebuild local resilience and take people with us on the journey to net zero. We campaigned hard to see community energy written into the Great British Energy Act 2025, alongside many people—although not everybody here today it seems—in this House and the other place, and alongside community groups such as the South Cambridgeshire Climate and Nature Group and other community organisations across the country.
We believe in localism, empowerment and giving communities a real stake and ownership in our clean energy future. I thank the Minister for working with us to make sure that we did get that into the 2025 Act. As we rightly move away from volatile fossil fuel costs controlled by foreign powers, we must ensure that our new clean energy system puts communities first. It must mean giving people the power to generate, own, and, crucially, sell their own clean energy locally, with profits reinvested in the places where the energy is produced.
We welcome the local power plan in principle, but the devil is in the detail. First, what happened to the Government’s pledge of £3.3 billion for community-owned energy, when today we are hearing about £1 billion of investment? We do not want to follow the Conservative Government’s retreat from ambition on local clean power. It is not the time to scale back ambition.
Secondly, on the crucial issue of local empowerment, regulation is needed. Organisations such as Power for People constantly told us that there are, as the Secretary of State said, barriers to access fair local markets. They welcome this plan, too, echoing the Minister’s promise that the Government will establish local energy supply models. The local power plan—I have looked through it very quickly—talks about the regulatory changes necessary, but when will they come through? The energy transition has to happen not to communities, but with them—
Ed Miliband
I thank the hon. Lady—I say this genuinely—for her advocacy on this issue ever since we came into government and before. She is a powerful advocate for community energy. I congratulate the group in South Cambridgeshire, too. Let me deal with the points she raised.
On investment, I think that in anyone’s view the scale of the investment we are making is very significant. As I said, it is £1 billion, compared with £60 million in the previous Parliament under the previous Government. This is a massive scaling up and a realist assessment of what can be spent over this Parliament, but obviously this is just the start of our ambitions.
The hon. Lady made a point, I think, on working with local community groups, which is very important. She will know that one of the challenges local groups face is in getting to the stage of having a project that is ready to go. Part of this issue is about working with those groups to make sure that can happen.
On Ofgem and some of the regulatory changes, absolutely we are going to work as quickly as we can to unblock some of the barriers and ensure that can happen as swiftly as possible.
Ed Miliband
I thank my hon. Friend for his invitation, and I look forward to doing that. He makes the important point that we can look back at our history, as my hon. Friend the Member for Rochdale (Paul Waugh) also pointed out, and draw inspiration from some of the pioneers who had a vision that is not the same as today’s but that has similar principles. I congratulate his constituents who are working on these issues and look forward to meeting them.
Madam Deputy Speaker (Caroline Nokes)
I thank the Secretary of State for making his statement—and for not doing so in Lycra.
Oil Refining Sector
Caroline Nokes Excerpts(2 months, 1 week ago)
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Brian Leishman (Alloa and Grangemouth) (Lab)
I thank the hon. Member for securing this debate and for his Westminster Hall debate. We sit on opposite sides of the Chamber, but I thoroughly respect how much he has stood up for his constituents and the wider oil refining industry in the United Kingdom, and I thank him for that.
I will speak about Grangemouth and specifically the jobs that have been lost there—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Gentleman will not speak about Grangemouth. The debate is about the Lindsey oil refinery, and interventions must be brief.
Brian Leishman
Thank you, Madam Deputy Speaker. I was under the impression that the debate was on the wider UK refining sector. On that note, we talk about just transition—it is often mentioned in this Chamber—but job losses and no future jobs are the definition of a very unjust transition.
Martin McCluskey
I will write to my hon. Friend on that point about the carbon border adjustment mechanism and the ETS.
As was set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces. I will briefly go through the steps that we have already taken to help the downstream sector adapt and stay competitive. First, through the renewable transport fuel obligation and the new sustainable aviation fuel mandate, we are backing the production and use of cleaner fuels. The Humber refinery is already delivering sustainable aviation fuels at scale, and refineries at Fawley and Stanlow are benefiting from Government support through the advanced fuels fund to bring next-generation fuels to market. We are also working to de-risk investment in sustainable aviation fuel production through the revenue certainty mechanism.
Secondly, we are working closely with industry on major decarbonisation efforts, including carbon capture and hydrogen projects, within industrial clusters such as Viking and HyNet, which will be central to keeping UK manufacturing competitive as global markets tighten emissions standards. The UK ETS Authority’s decision to maintain current benchmarks for the 2027 scheme year provides the consistency and breathing room that energy-intensive industries need to plan investments and manage costs effectively.
In the autumn Budget, we committed to assessing the feasibility of including refined products in the carbon border adjustment mechanism. That is a key priority for industry, and it would help ensure that UK refineries were not undercut by imports produced to lower environmental standards. Collectively, these measures signal our determination to create the conditions for continued investment, innovation and long-term competitiveness as we transition to a low-carbon economy.
Looking ahead, the Government are deepening their engagement with the sector to ensure a smooth and secure transition in the coming years. It is important to note that Minister Shanks led the first ministerial—
Madam Deputy Speaker (Caroline Nokes)
Order. The Minister will know that we do not refer to our colleagues by their names.
Budget Resolutions
Caroline Nokes Excerpts(3 months, 3 weeks ago)
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Harpreet Uppal (Huddersfield) (Lab)
Poverty wastes potential and harms our country’s success and prosperity. The two-child limit has been the single biggest driver of increasing child poverty in this country, and by finally making the decision to remove that one policy, Labour will lift 4,560 children in Huddersfield out of poverty, which is something I am proud of.
I know that that matters to many of us in the Chamber and to many outside it. When I visited the Welcome Centre, which is the largest food bank in my constituency, Ellie the manager told me how she has seen more families coming through its doors, and this one policy has been one of the biggest drivers of that. When I visit schools, teachers tell me how child poverty impacts school readiness. When I attended a “Poverty Matters” event in my constituency, many of those working on the frontline spoke about why removing the two-child limit would be one of the most significant steps the Government could take.
That step, alongside other policies announced by the Government, means that this Parliament is set to see the largest fall in child poverty on record. This Labour Government will therefore ensure that every child—no matter where they are born, their background or their circumstances—is given the best possible start in life. There would be a cost in not doing so from the impact of children not meeting their potential, as well as in ill health, unequal economic growth across our regions and a reduction in productivity. We saw a significant slowdown in average annual productivity between 2010 and 2022 compared with the time of the last Labour Government.
Let us not forget that the Tory and coalition Governments saw the closure of over 1,000 Sure Start centres and 300 children’s centres in England. Between 2010 and 2018, overall Sure Start funding fell by two thirds in real terms; it was left to local people and local communities to pick up the mess.
The social contract in this country is important. Through our contribution, we all play a part in ensuring that this country—our country—thrives. It should not be about pitting one citizen against another or setting up a false dichotomy; it is about ensuring that we all do better through good, secure jobs. I know from my conversations with constituents that many continue to face financial struggles and that those who have not seen enough improvement in their living standards and pay since the financial crisis of 2008 continue to face an affordability crisis.
I therefore welcome the steps that the Government have taken on energy bills as well as freezing rail fares, boosting the national living wage and the minimum wage, delivering a rise in the state pension and freezing prescription charges. I also strongly welcome the fact that apprenticeships for the under-25s will now be free and that 18 to 21-year-olds will receive a guaranteed six-month work placement when they have been out of work or learning for 18 months. Those are significant steps in the right direction.
It is important that we support our local businesses, many of which are family-run in Huddersfield. Our manufacturing sector and textiles play a special part in our town, and it is good to see that UK manufacturing output across the sector rose last month and that business optimism has hit a nine-month high. We must continue to back those firms through our industrial strategy, investment in local infrastructure and Government procurement and by tackling high energy costs.
While the Transport Secretary is in the Chamber, I must mention that the Government are backing major transport projects, including Northern Powerhouse Rail and the trans-Pennine route upgrade. That is important for my constituency and provides much needed stability for supply chains and the sector.
There has been a bit of a hysterical response to the Budget from the Tories, but it has been well received by the markets, and we have seen UK borrowing costs come down—
Iqbal Mohamed
I will come to that in the short time I have remaining.
It is not true that we do not have enough money to fix these problems. If the Chancellor was serious about rebuilding Britain, she would adopt straightforward, fairer tax reforms. As many Members across have said, we could raise tens of billions of pounds by closing loopholes that allow foreign multinationals to shift profits offshore and avoid paying UK corporation tax while onshoring expenses and taking advantage of subsidies and tax relief. We could implement the digital services tax that was originally promised, ensuring that big tech finally pays its fair share of its record profits. We could end the preferential treatment of income from wealth over income from work by taxing capital gains at closer parity with earnings. We could introduce a genuine windfall tax on excessive profits, particularly in energy, finance and banking, and reform tax reliefs that disproportionately benefit the wealthy, and instead redirect revenue to public services.
These are not radical ideas; they are basic principles of fiscal fairness. The Budget is a moral statement, and today’s Budget shows us a Government who still choose war over welfare, profits over people, and short-term headlines over long-term stability. To borrow a phrase, they are choosing the few over the many.
State of Climate and Nature
Caroline Nokes Excerpts(8 months, 1 week ago)
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Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I want to get all Members in, so can we please have shorter questions and answers?
Jacob Collier (Burton and Uttoxeter) (Lab)
I welcome the Secretary of State’s statement and the fact that my local hospital will have solar panels on it thanks to this Labour Government, saving thousands of pounds that can go directly back into frontline services. What more can he do to ensure that public buildings like hospitals and prisons have solar panels fitted so that we can lower costs and contribute to our climate goals?
Ed Miliband
I congratulate my hon. Friend’s school on what it is doing and on its green flag status, which is really important. It shows that local action can really make a difference. Globally, I can give him the assurance that he seeks. What is so important—I say this to Members across the House—is that people look to Britain and say, “Are you going to lead? Are you going to show the power of example?” That is what we have done over 20 years, under Governments of both parties, and we need to keep doing it.
Llinos Medi (Ynys Môn) (PC)
Diolch, Madam Ddirprwy Lefarydd. Climate change is a huge threat to food security. In 2018, losses in the Welsh livestock sector due to extreme weather reached £175 million, which is equivalent to 9% of the total Welsh agricultural output. Farmers need support to protect their livestock and crops. Will the Secretary of State listen to the concerns of the farming unions about the removal of the ringfence for Welsh agricultural funding? It could mean less money for climate adaptations, at a time when they are most needed to safeguard food security.
Electricity Market Review
Caroline Nokes Excerpts(8 months, 2 weeks ago)
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The Secretary of State for Energy Security and Net Zero (Ed Miliband)
With permission, Madam Deputy Speaker, I shall make a statement about the review of electricity market arrangements.
The central challenge that we face is the urgent need to get off expensive, insecure fossil fuels and to deliver an energy system that meets at least double the level of current electricity demand by 2050. In doing so, we need to design the electricity network to ensure that infrastructure is built in the right places, so that we can effectively provide power where it is required. As a result of previous failures to do so, power now goes to waste, costing consumers in higher bills. That is one reason why reform is needed.
The task of this review is to help deliver a fair, affordable, secure, and efficient clean power system. The key question has been whether to proceed with zonal pricing or a reformed national system. Under zonal pricing, we would split the country into different zones relying on price differentials to guide investment decisions. Under a reformed national price system, we would rely on more deliberate strategic co-ordination in advance of investment—planning our network and areas of intended generation more closely and then delivering.
I have applied three tests to this choice in the time since the Government took office: first, what is the fairest approach for families and businesses, both now and in the long term; secondly, which reform can deliver energy security and will best protect consumers and ensure bills savings as soon as possible; and, thirdly, what will do most to ensure the investment, jobs, and growth that we need across the economy? On the basis of these tests, I have concluded that the right approach is reformed national pricing. Let me set out why.
On the fairness test, under reformed national pricing, there would be one national wholesale price, as now. As I have said, under zonal pricing there would be different wholesale prices in different zones. Lower prices will tend to occur in zones with more renewable energy and a smaller population, and higher prices in those with less power and more people.
This would be a significant departure from the current system, which, while it has some differences in network costs, means that wherever a person lives, they pay the same wholesale price for each unit of electricity. The challenge will be obvious to the House. People and businesses could find themselves disadvantaged through no fault of their own and many would see that as unfair. Such a postcode lottery is, in my view, difficult to defend.
The Government have considered whether it would be possible to mitigate these effects under zonal pricing. We have concluded that, while it might, it would be a very complex and uncertain process. And it would be even more challenging to do so for large businesses, given the way that they purchase electricity. Therefore, firms in higher priced zones, such as the midlands, Wales, and the south of England, would therefore face damage to their competitiveness. That is why we have seen so many business groups express such concern about zonal pricing. Indeed, today’s decision has already been welcomed by UK Steel, Make UK, the British chambers of commerce, Ceramics UK and others.
The next test that I applied is which system can best help deliver energy security, protect consumers and ease the cost of living crisis as soon as possible. Long-term reform is essential to cut costs and save money for consumers compared with the status quo, but there is a key question as to what happens in the meantime. The clear advice of my Department is that moving towards zonal pricing would take around seven years to complete in full—assuming no delays. Over that seven-year period, the costs of financing essential investment in our energy system would be likely to rise to accommodate investor uncertainty, at a moment when we urgently need to replace retiring assets and build a clean energy system to boost our energy security. This risk premium would be paid for by consumers in higher bills in the coming years. There is also a danger that it would leave us stuck on fossil fuels for longer by deterring investors from bringing forward the investment that we need for our energy security.
By contrast, reformed national pricing could be delivered more quickly and at lower risk. Indeed, some elements of a reformed national pricing system are already under way, including building network infrastructure, and we intend to proceed with other measures, such as reform of transmission charges, as soon as possible in this Parliament. Having studied this in detail over months, I see real risks that zonal pricing would deter the investment we need and that bills would rise in the transitional period.
The third test is the investment and growth we need as a country. Many businesses make decisions to invest based on the energy costs that they face. The industrial strategy took a crucial step forward in lowering the costs faced by businesses, and clean power will help get us off the fossil fuel rollercoaster, which has so damaged our country’s businesses.
We know that the biggest enemy of business investment is uncertainty, and the risk of zonal pricing is that it would create very significant uncertainty. Imagine a business seeking to invest not knowing for a number of years what zone it would be in and what price it would pay. This would harm investment not just in the energy sector but well beyond it, and it would inevitably risk reducing investment in our country precisely when we need it and undermining the tens of thousands of good jobs in constituencies across the country that our clean energy mission will support.
On the basis of those three tests, I believe that the best choice is to proceed with reformed national pricing. The key elements will include: effective planning through the strategic spatial energy plan to be published next year; national pricing reforms, such as making transmission charges more effective and predictable and taking relevant powers through Parliament to do so; and making changes working with the National Energy System Operator and Ofgem to improve the operation of flexibility and the balancing of markets.
Under reformed national pricing, we will build the transmission network we need to the benefit of all consumers, and we will be more directive and co-ordinated in how we plan our energy system. Each upgrade that we deliver will reduce constraint costs and ensure that consumers benefit from clean power. My Department will set out a reformed national pricing delivery plan later this year. Taken together, I believe that these steps can help to deliver a more affordable, fair, secure and efficient energy system and will address the problems that the REMA process set out to solve without the unacceptable risks I have outlined.
These steps build on what we have done over the past year to turbocharge our drive to home-grown clean power. We have consented three times more solar in 12 months than in the previous 14 years. We have lifted the onshore wind ban and consented enough offshore wind to power the equivalent of 2 million homes. We have backed the biggest expansion of new nuclear in half a century. We are kick-starting new industries in carbon capture and hydrogen. We are giving nearly 3 million extra families £150 off their energy bills next winter and upgrading up to 5 million homes to help cut bills.
Every energy decision that this Government make is in pursuit of protecting the British people from fossil fuel markets controlled by petrostates and dictators by delivering clean, home-grown power that we control. It is in that spirit that we have chosen reformed national pricing. We are doing everything we can to ensure energy security, protect consumers and get bills down, and to ensure that businesses can invest for the future. This is underpinned by a commitment to fairness across the country. I commend this statement to the House.
Ed Miliband
This is the first time I am at the Dispatch Box opposite the shadow Secretary of State; I congratulate her on her new baby boy and welcome her back to the House of Commons. I know from my own personal experience that crying at night is challenging, but who is surprised, given the state of the Conservative party?
I think the shadow Secretary of State and I have a number of differences. The fundamental difference is this: she wants to gamble in the fossil fuel casino—she wants to gamble on fossil fuel prices. That is what the Conservatives did when they were in office, and it led to the worst cost of living crisis in generations. [Interruption.] The shadow Secretary of State says from a sedentary position that it is not true. It absolutely is true, and I think she needs to get out there more and hear what people have to say to her. It ruined family finances, it ruined business finances and it ruined the public finances. And what do they do? Do the Conservatives come along, after their worst election defeat in 200 years, and think, “Well, maybe we got it a bit wrong. Maybe we should think again”? No, they double down on a failed strategy. That is the first point.
The second point is this. The shadow Secretary of State says that we have a problem of constraint costs—that it is really a problem that we do not have the infrastructure that the country needs. She is absolutely right, but who was in charge for 14 years? Don’t just take my word for it, by the way. I notice that her colleague the shadow Energy Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), is not in his place, but he said that it is absurd that, after 14 years of Conservative Government, we are now in a situation where it is more difficult to build critical national infrastructure than it was before they came into power and that it costs more. That is what we have got: the grid system was massively backed up, the planning system was in disrepute, and the network and transmission infrastructure was not built.
The third point is that the shadow Secretary of State now says, “Okay, well let’s forget about the past. Ignore my record—airbrush it out. Let’s build the grid.” Too right we should build the grid, but she is opposing new clean energy infrastructure all around the country. She is going around saying, “Oh, it’s terrible. We shouldn’t be having this happening.” So at the level of strategy and what is the right thing for the country, at the level of her record and why we are in this position, and at the level of what she is doing now, I am afraid she is in the wrong place.
Now, what are we doing? We are actually changing all of this. In the period that the shadow Secretary of State has been away, we have seen a whole set of decisions made that the Conservatives talked about but never delivered. On nuclear power, they talked a lot about Sizewell and small modular reactors and all that, but they did not actually deliver it. We are—with over £40 billion of private investment in clean power unblocked and a record-breaking renewables auction.
By the way, the shadow Secretary of State says that I am somehow on the side of the wind developers. No, Madam Deputy Speaker; I am on the side of UK Steel, Make UK, the British Chambers of Commerce, Ceramics UK and businesses across the country who have said that this is the right decision for the country. [Interruption.] She mentions bills. Let me address that directly. My strategy and my belief is that a clean power system can bring down bills for good, because that is that way that we lower wholesale prices and get off the rollercoaster. Home-grown clean power is the answer for Britain, and I suggest that, now she is back in her post, she does some hard thinking about the past, about strategy and about what is right for Britain.
Bill Esterson (Sefton Central) (Lab)
I am sure the Secretary of State will not be surprised to hear me say that I very much welcome what he has announced. He set out three priorities: fairness, lower bills—including and especially in industry and business, where my Committee heard as recently as yesterday that energy bills are causing real concerns and something of a crisis in certain industries—and attracting investment, not least ahead of auction round 7.
I was saddened that the shadow Secretary of State was so critical of wind generation. I have her letter of 12 March 2024 to my predecessor as the Chair of the Select Committee setting out her terms of reference for the consultation that the Secretary of State has responded to. She placed great emphasis on the importance of investing in renewables, so it is a great shame to see her change of heart.
Under the reformed national system, does the Secretary of State envisage increasing opportunities to use demand flexibility, and to use it as fast as possible, as a key way of bringing down energy costs for domestic and industrial consumers?
Ed Miliband
My hon. Friend speaks with great expertise on these matters. I will come to his question, but let me say first that I like to talk about issues on which both parties have been enthusiastic. We have the second largest offshore wind generation in the world. It was started when I was Secretary of State with Gordon Brown as Prime Minister, and it was continued under the last Government. It is extraordinary that the shadow Secretary of State is now abandoning that and saying that offshore wind is somehow the problem. It is not the problem; it is the solution.
My hon. Friend is right about consumer-led flexibility. The key point about that is that it is voluntary, and it is a way for consumers to save money. The shadow Secretary of State mentioned Octopus Energy, which is one of the pioneers of this. We are in the foothills of what we can achieve here, whereby consumers are empowered, through things like batteries, solar panels, heat pumps and smart meters, to control when they use energy much more easily, to their benefit and the benefit of the system.
Pippa Heylings (South Cambridgeshire) (LD)
I thank the Secretary of State for sharing his statement in advance. He is right: making the UK a clean energy superpower is the smartest and most strategic way to free ourselves from our dependence on expensive, volatile fossil fuels. However, as we have heard, accelerating the transition to renewables alone is not enough. The Government have to ensure that the clean power mission ultimately brings down customers’ bills and creates a fairer system for households and businesses.
Energy bills in the UK are among the highest in Europe. Our high costs exacerbate cost of living pressures and increase fuel poverty. They also undermine our international competitiveness for industrial and commercial consumers and risk driving some businesses overseas. The Liberal Democrats have long called for electricity prices to be decoupled from the wholesale price of gas so that families in the UK are not left paying over the odds for clean, British-generated electricity just because of volatile global gas prices. We will be looking closely at the details of the Government’s plan following the review of electricity market arrangements.
The Secretary of State outlined his three tests. To ensure that British consumers are not exposed to an unknown level of risk, will he publish his cost-benefit analysis and set out what impact the changes will have on customers’ bills? We will also be looking keenly for the much-needed joined-up approach between planning for renewable energy infrastructure through the strategic spatial energy plan, and the land use framework and local area energy plans, which, worryingly, are a bit out of sync.
Renewable energy can be the cheapest, most secure source of power, but for many people, seeing—and feeling it in their pocket—is believing, and under the current system, many are struggling to see it. Alongside the changes announced today, I hope the Secretary of State will consider other Liberal Democrat proposals, just as they did when putting into practice our proposals for rooftop solar on all roofs. We would like to see free insulation and heat pumps for people on low incomes and the introduction of a social tariff for energy to protect the most vulnerable.
Prax Lindsey Oil Refinery
Caroline Nokes Excerpts(8 months, 3 weeks ago)
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Bill Esterson (Sefton Central) (Lab)
My hon. Friend the Minister recognises the importance to our energy security of securing the fuel supply at Lindsey. He also recognises the importance of engaging with the trade unions to attempt, at least, to reassure the workforce. I thank him for those actions and congratulate him on them, and indeed on the engagement that the Government have had with the sector since the election.
Refinery operations are increasingly challenging, not least because of the volatility and uncertainty in international fossil fuel markets that the Minister just mentioned, but also because of the competition across the world. Phillips 66 and Stanlow, which he mentioned in his statement, are adapting to the changes in our energy system, taking advantage of carbon capture and the production of sustainable aviation fuel and biofuels. Will the Minister ensure that the UK refinery sector is part of the energy transition and a key part of our energy and industrial strategies, so that refineries play a key part in the future for the communities and workers that depend on those jobs at the moment, and so that we do not see a cliff edge?
Michael Shanks
I thank my hon. Friend for his question. First, he is right to restate what I said in the statement—when I brought in the refinery industry for a roundtable, it was frankly extraordinary to be told that it was the first time in 13 years that that had happened. That is an extraordinary state of affairs. I am glad that we have now held that roundtable, but what it has highlighted is just how much engagement with the sector is now necessary. I am determined to drive that engagement forward.
My hon. Friend is also right about the nature of the transition. Refineries will be important at all stages of the transition. Clearly, they are critical to delivering our fuel security today, and they will play a really important role in that area in the future—in sustainable aviation fuel, biofuels, and the wider work we need that sector to do. We will support refineries to transition into some of those future technologies.
The bottom line in this case is that we seem to have had a business that was far from doing that—it was not driving forward the investment that was necessary. We will now, at pace, try to get to the bottom of what the directors were doing with this company. It is a shocking state of affairs and a sad day for the workers, but I genuinely believe that there will be a strong refining sector in the future.
Pippa Heylings (South Cambridgeshire) (LD)
I, too, thank the Minister for advance notice of the statement today. Our thoughts are with the workers at the Prax Lindsey refinery who have heard this last-minute, shocking news today, which has put their futures and jobs on hold.
We understand that this is just one refinery within the Prax Group, but the threatened closure will send shockwaves across its wider operations, with its newly acquired oilfields to the west of Shetland and roughly 200 petrol stations in the UK under the Breeze and Harvest Energy brands. While those facilities are outside the insolvency process as things stand, workers in those upstream businesses and the wider community will understandably be worried about the impact of the insolvency on their jobs.
There are questions to be asked of the company bosses in both State Oil and the Prax Group, and it is good to hear the Secretary of State’s announcement of an investigation into how the company bosses have let workers down. We welcome the Minister’s words that the company should bear some responsibility and accountability for jobs and skills for those workers, if it turns out that the company closes.
We welcome the Government’s proposals to consider adding refineries to the network charging compensation scheme for energy-intensive industries. Once again, as we have heard, we see UK industry buckling under soaring energy costs—some of the highest in Europe—with workers left to pay the price. Many in this House will feel a troubling sense of déjà vu following the Grangemouth job losses. We have heard from the Minister about the state of the refining industry and how the industry had not met the Government for 13 years. Such situations make it yet clearer that the Government must set out a comprehensive and strategic plan for workers in the oil and gas industry to support the redeployment of skills and training as part of a just transition.
A recent report by Robert Gordon University warned that the UK risks losing tens of thousands of offshore energy jobs by 2030 unless urgent and co-ordinated action is taken immediately. Rather than the irresponsible and reckless race backwards to volatile fossil fuel dependency that the Conservatives have put forward today, the report calls for honest dialogue to settle on a common UK policy framework—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady will know that the time limit for responses to statements is two minutes for the Liberal Democrats. I am sure she has finished her comments.
Battery Energy Storage Sites: Safety Regulations
Caroline Nokes Excerpts(9 months, 3 weeks ago)
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Madam Deputy Speaker (Caroline Nokes)
This is a subject in which I might have more than a passing interest.
John Milne (Horsham) (LD)
I beg to move,
That this House recognises the unique challenges posed by lithium-ion fires in battery energy storage sites; and calls on the Government to bring forward enforceable national regulations for their design and construction.
I have asked for this debate in order to highlight important issues associated with lithium-ion batteries when deployed at grid scale. These installations are known as battery energy storage systems, or BESSs. In particular, I am calling for clear national regulations that could be applied in the same way in every part of the UK. We need legislation, and I hope that this debate will push the Government further along the road to passing it.
The UK has set a target to achieve net zero emissions by 2050. To achieve that, many wind and solar farms have been constructed and permissions are being sought for many more. I fully support the drive towards renewable energy; the enhanced regulation that I am suggesting today is intended to secure the industry’s future, not to create more obstacles. I think it is perfectly possible to draw up regulations that will not stand in the way of BESS roll-out, and which in the long term could actually save the industry from a wholly avoidable setback in the event of an accident.
BESSs solve the classic question of what to do when the sun don’t shine and the wind don’t blow. They provide a number of highly useful functions, including load balancing, peak shaving and energy arbitrage. Above all, they make it practical to meet a much larger percentage of our national energy needs from renewables. However, every energy system carries some kind of risk, and most BESSs currently use lithium-ion battery technology. In the event of an accident—and sooner or later there are always accidents—lithium-ion batteries catch fire in a different way from other materials, in a process known as thermal runaway. It is important to note that most BESSs now rely on lithium iron phosphate or LFP batteries. This chemistry is much more stable than lithium nickel manganese cobalt oxide or NMC cells, which are common in consumer uses. That means fewer incidents, but those incidents can still be dangerous. In the future, there will undoubtedly be other chemistries, so we need to leave space for innovation.
Thermal runaway generates very high temperatures and requires different firefighting methods. It is usually best not to try to put out the fire, but rather to control the spread. Firefighters also have to contend with severely toxic gas emissions, the risk of an explosion, soil contamination and damage to watercourses. To repeat, I am in no way suggesting that battery energy storage systems are inherently unsafe. The risks they entail may be different from those of traditional systems, but they are perfectly controllable.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Members will be able to see how many are standing. I do not intend to put a formal time limit on, but if Members can keep their contributions below five minutes, everybody will just about squeeze in.
Mike Wood
My right hon. Friend is completely right. Part of the problem is that the planning applications that come in are often very vague about exactly what lithium ion-type chemical and technology will be used, because they are often made years in advance, and therefore before the products that will be on a site have been acquired. In those circumstances, it is impossible to assess the risk properly.
When these fires run for 24 or 48 hours and millions of gallons of water are used to bring them under control, the chemical run-off has to go somewhere, and sadly many of these applications—including those in my constituency—are for sites near to our rivers and our canals. For example, in Wombourne and Lower Penn there are plans for two battery energy storage sites to be erected close to the Staffordshire and Worcestershire canal and the South Staffordshire railway walk.
Not only is the canal a green corridor through our beautiful countryside—an area of outstanding local beauty—but it is close to the historical Bratch locks and Bratch pumping station. It is a popular site for canal users and anglers alike. The consequences of a major fire and the chemical run-off would be devastating for fish stock and other wildlife.
The planning and regulatory systems must catch up with the realities before all the applications are approved and in use, by which time it may be too late. We need the National Fire Chiefs Council to update the guidelines, as well as their assessment of battery energy storage systems. Before that is done, however, we clearly need a minimum distance between battery sites and residential properties. We need the fire service to be made statutory consultees on planning applications for battery energy storage systems. Furthermore, the Government really must go back and make the changes needed to the Planning and Infrastructure Bill to ensure that local authorities and communities have a real and meaningful say on where such systems are and are not installed.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as I am an unpaid director for Reach Community Solar Farm. I congratulate my hon. Friend the Member for Horsham (John Milne) on securing this important debate, and on his strong and comprehensive speech supporting the need for regulation. I have been impressed by all the speeches from across the House, as well as by the fact that every single one supported the motion. I hope the Minister has heard that and will urgently take the actions required.
I am proud of the Liberal Democrats’ consistent support for green energy and recognise the need for battery energy storage sites, so I am deeply worried that current practices cause concerns about safety, anger at lack of community involvement and little or no share of the profits coming back to the communities affected. A prime example of those problems is the vast Sunnica solar farm planned in my constituency, stretching through into West Suffolk. Community groups and parish, district and county councils all opposed the development. Their evidence convinced the planning inspector to recommend refusal, but within two weeks of joining the Government, the Secretary of State for Energy Security and Net Zero granted permission. Now it is down to the local authorities to decide on final details, including the battery energy storage sites for up to 500 MW.
The councils will have 14 working days from receiving details from the developer to consider whether they need further information, to share the application with consultees, to collate any requests for further information and then to return the questions to the developer. They must do that without any clear guidance or regulation on battery safety. They are advised to consult the fire service, and the fire service in turn has no battery safety regulations to refer to, just the guidance issued by the national fire chiefs. It will also be difficult, if not impossible, for meaningful public consultation to be fitted into that timetable.
The Liberal Democrats are calling for local fire services and the Environment Agency to be statutory consultees for BESSs so that they can advise on making the sites safe and on how to manage a fire should one break out. Local communities also need to be consulted, as they know best how the area is used, where the water courses run and what wildlife is present.
Fortunately, as we have heard, BESS fires are rare, but where they occur, they can last for several days. The water used by the firefighters in the Liverpool case combined with the chemicals given off by the batteries to create hydrofluoric acid. Ely and East Cambridgeshire has many interconnected water courses, from drainage ditches through to the River Great Ouse, as well as the internationally important Wicken Fen wetland site and other vital wetland sites. If those became contaminated with hydrofluoric acid, the damage to wildlife, especially in our rare chalk grasslands, would be enormous. We are also the breadbasket of England. Imagine the impact on our farmers and therefore our food supplies, not to mention the impact on the horse racing and horse breeding industries.
Our planning departments need clear regulation and relevant statutory consultees, so that they can ensure that BESSs are installed in the right locations and have the necessary boundaries, run-off catchments and so on to ensure that the fire risk is minimised and that, in the event of fire, people, crops, soils and nature are protected. DEFRA has stated that it will consult in June on integrating BESSs into existing environmental regulations. I would be grateful if the Minister could let us know when we can expect the consultation to open. Many BESSs are already operating, more have permission and yet more are applying for permission. Proper regulation and guidance are therefore urgent.
The Liberal Democrats want green energy to replace fossil fuels. Green energy reduces fuel poverty, gives the UK fuel security and is better for the environment. To be successful and reliable, green energy needs battery energy storage sites, but those storage sites must be safe, and that requires Government regulation and guidance and making local fire services and the Environment Agency statutory consultees.
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Member for Ipswich (Jack Abbott) might like to read the handbook on how Parliamentary Private Secretaries should behave. It is not their job to be heard. If he wishes to contribute to a debate on a policy area, perhaps he should resign his position and return to the Back Benches.
Nick Timothy
Thank you, Madam Deputy Speaker. If the hon. Member for Ipswich were more confident in his arguments, he might want to stand up and take part.
As I was saying, it is bad energy policy, reducing our energy security while increasing the cost of energy for families and businesses. It is bad farming policy because it puts some of our best agricultural land beyond use, and as this debate has shown, it is bad for public safety, because the Government, in their haste and zeal, want to ignore the very serious dangers these batteries bring.