Renewables Sector

Claire Coutinho Excerpts

Thursday 16th November 2023 Written Statements

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

The Government have today published key details of next year’s contracts for difference allocation round, Great Britain’s flagship renewables auction scheme. This announcement cements the UK as a world leader in renewables, particularly against the backdrop of recent economic challenges for the sector globally.

In the first quarter of this year, 48% of our power came from renewables, up from just 6% in the first quarter of 2010. Our contracts for difference allocation rounds are a British success story and since 2014, contracts have been awarded totalling around 30 GW of new renewable capacity across all technologies, including onshore wind, offshore wind, solar, geothermal, and tidal energy. This has improved, and continues to improve, our energy security by moving away from imported fossil fuels. And it is protecting consumers by ensuring they do not pay higher support costs during periods of high electricity prices, which are driven by volatility in international fossil fuel markets.

The UK is home to the world’s largest operational offshore wind farm project, Hornsea Two (1.4 GW) which became fully operational in August 2022. As of October 2023, the UK is also home to the second, third, fourth and fifth largest operational offshore wind farm projects in the world, all thanks to our leading contracts for difference model.

Today’s announcement

Allocation round 5 was a success for many technologies, including marine energy and, for the first time, three geothermal projects. But we recognise the shortfall in fixed and floating offshore wind. We have reviewed the design of allocation round 6 to ensure the scheme continues to encourage competitive and sustainable outcomes, driving benefits for industry and consumers.

We have seen global challenges over the last year, posed by inflation in production costs across the economy, impacting technologies from renewables to gas to nuclear. The Government have today published key details of the sixth contracts for difference allocation round, opening in March next year. In light of the global volatility for the offshore wind sector, we have comprehensively reviewed our evidence base, which has informed today’s announcement, and also engaged with industry to benchmark our analysis. Today’s updates, therefore, set out an uplift to the administrative strike prices and that allocation round 6 will feature three pots.

The administrative strike prices are the auction ceiling prices for each technology. Reflecting on last year’s auction and in light of inflationary pressures in the supply chains, these have been increased, and are intended to balance participation in the auction with ensuring good value to bill payers. The actual price projects will receive will be set by the competitive auction. We recognise this will also be an important round for supply chain companies, and the new administrative strike prices reflect the need to support a sustainable supply chain, including companies who have recently made investments in new manufacturing facilities here in the UK.

Considering the strength of the offshore wind pipeline, we are announcing that allocation round 6 will feature three auction pots, with offshore wind in its own auction pot. A three-pot structure will drive support across Britain’s diverse portfolio of renewable technologies and help the UK deliver on its ambition of up to 50 GW of offshore wind by 2030, including up to 5 GW of floating offshore wind. Other documents related to allocation round 6 published today include the draft “Allocation Framework”—the rules and eligibility requirements for the 2024 round—and the “Administrative Strike Price Methodology”, a document explaining how the administrative strike prices are determined.

A route to lower bills

Macroeconomic conditions are placing upward pressure on costs for all electricity generating technologies. The Department will be publishing updated analysis comparing the cost of electricity generation across renewable and non-renewable technologies by the end of March 2024, reflecting the latest evidence, including on global market shifts. Existing analysis shows that renewables form the bedrock of a low-cost energy electricity system. This is in line with the conclusions from the Office for Budget Responsibility’s “enhanced levelised cost” analysis from 2023.¹

Last year, volatile global gas prices drove electricity prices to record highs many times greater than the administrative strike prices set out today. This led to the Government stepping in and paying around half of people’s energy bills last year. It also saw renewable generation paying back hundreds of millions into the contracts for difference, reducing the amount needed to deliver our energy support schemes. Going forward, we agree with the Climate Change Committee that oil and gas will remain an important part of our overall energy mix when we reach net zero by 2050. However, 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. We must therefore continue to reduce our reliance on gas for electricity production in a way that maintains energy security. Moving to home-based, clean power mitigates risks to bill payers, now and in the future.

Driving our renewable energy manufacturing industry

The contracts for difference scheme has been successful in driving down the price of renewable energy deployment, but this has presented challenges for sustainable renewable energy supply chains in competing for business, particularly as they have been struggling under difficult market conditions since the covid-19 pandemic and Russia’s invasion of Ukraine. I am therefore also publishing a consultation today on the introduction of new sustainable industry rewards into the allocation round from 2025, which will provide additional funding through the contracts for difference to support projects that invest in more sustainable supply chains.

The core parameters published today demonstrate we are investing in our booming renewables sector. We are backing our world-leading offshore wind sector, delivering enough offshore wind to power the equivalent of every home in Britain by 2030. I am committed to a successful allocation round 6, which drives value for money for consumers. This will also be important in helping achieve energy security, decarbonising our power system by 2035, and hitting our net zero targets by 2050.

¹ Office for Budget Responsibility, Fiscal Risks and Sustainability, July 2023, pp.82-3: https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023

[HCWS40]

Making Britain a Clean Energy Superpower

Claire Coutinho Excerpts

Thursday 9th November 2023 Commons Chamber

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

It is a pleasure to open today’s King’s Speech debate on behalf of His Majesty’s Government. Throughout history, economies have succeeded when they can source enough cheap and secure energy. Now, as we face a new challenge—the global challenge of climate change—it is important that we source enough clean energy too. We have been a coal superpower and an oil superpower; if the Opposition are looking for a clean energy superpower, they should look no further. Britain today is a clean energy superpower, and our plans will enable us to go much further.

While the Labour party never ceases to talk this country down, I am proud that we are leading the world in this great energy challenge. In the first quarter of this year, 48% of our power came from renewables, up from just 7% in 2010. We are a world leader in offshore wind. We have increased our country’s renewable energy capacity fivefold since 2010—more than any other comparable Government. We are building new nuclear for the first time since Margaret Thatcher’s Government, and this brilliant innovation nation is leading the world in new technologies like small modular nuclear reactors and fusion energy. As recently as 2012, coal was generating 40% of UK electricity, but we are now on course to be one of the first major economies with power that is coal-free.

This work led by the Conservatives is dramatically reducing our greenhouse gas emissions. We have had the fastest reduction in emissions of any major economy, down almost 50% since 1990. Meanwhile France is down 23%, the US has not changed at all, and China has increased its emissions by 300%. And we are not stopping here. Which is the major economy with the most ambitious target to cut emissions by 2030? Is it the US, at 40%? Is it the EU, at 55%? No, it is the United Kingdom at 68%.

[Jim Shannon (Strangford) (DUP)]

I am very conscious that the net zero targets are set for the United Kingdom, but unfortunately Northern Ireland cannot participate nor can we add our physical support to achieving those targets, because the contracts for difference scheme is not in place in Northern Ireland. I have spoken to our Ministers about this. Will the Secretary of State also look at this on behalf of all the constituents in Northern Ireland who want to contribute to achieving the net zero targets and be part of the contracts for difference scheme?

[Claire Coutinho]

I will happily look at that.

The UK was the first major economy to set a legally binding date for net zero. Our ambitions for 2030 are ahead of those of our peers and we have the plans in place to meet them. In fact, we have met every single one of our stretching targets to reduce carbon emissions, thanks in no small part to our clean energy success. Labour seems to have conveniently forgotten about the shameful state of our renewables sector when it left office. Just 7% of our power came from renewables in 2010; today, thanks to the actions of the Conservatives, that figure stands at near 50%. Never forget that it was the right hon. Member for Doncaster North (Edward Miliband) who described the idea of the UK getting to 40% renewables as “pie in the sky”.

[Edward Miliband (Doncaster North) (Lab)]

I had to correct the right hon. Lady’s predecessor on the point she has just repeated. Her mistake is quite basic, confusing electricity and energy. The Guido Fawkes blog—not an institution I often praise—pointed this out when her predecessor made this mistake. What I actually said—it comes from David Laws’ memoirs—was that it was pie in the sky to say we could have 40% of our energy provided by renewables. Currently, the figure is 18%. The Secy of State’s remark is inaccurate and wrong, and I would be grateful if she withdrew it.

[Claire Coutinho]

I will happily go and look at that, and take that point on board, but I will say that it sticks with the trend of the right hon. Gentleman talking our energy and power down.

[Edward Miliband]

I will read from David Laws’ memoirs. During the coalition talks, I said,

“all this stuff about getting 40% of energy production”—

energy production—

“from renewables by 2020 is just pie in the sky.”

Energy production from renewables is currently just 18%. I would be grateful if the right hon. Lady corrected the record.

[Claire Coutinho]

As I said, I will happily look at that, but the right hon. Gentleman has made comments about nuclear—

[Edward Miliband]

I ask the Secretary of State for the third time. She claims that I said that it was “pie in the sky” that 40% of our electricity could come from renewables. I did not say that, and I have pointed out to her the exact quote, where I talk about 40% of energy coming from renewables. When one has said something inaccurate about another hon. Member in the House, the right thing to do is not to just keep reading the Conservative campaign headquarters lines, but to correct the record.

[Claire Coutinho]

As I said, I am happy to do the right hon. Gentleman the courtesy of withdrawing on this occasion, but I would also suggest that he correct the record himself about the fact that he said we needed no new nuclear in the past.

Now that I am allowed to move on, let me say that energy security means national security, and that means powering Britain from Britain and making sure we never have to worry again about generating enough power to keep the lights on or heat our homes. We saw what happened last year when Putin weaponised energy, and the full impact his illegal war in Ukraine had on energy bills for households around the world. I am proud that the Government stepped in with an unprecedented level of support, paying around half of people’s energy bills. With continued global instability, I know that households are anxious about the coming winter. That is why we have the energy price guarantee until April 2024 and why we will always protect the most vulnerable in society with targeted support such as the winter fuel payment, cost of living payments and the warm home discount.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

The Secretary of State is talking about energy bills, and thousands of my constituents are really struggling to pay their energy bills and are petrified about what the winter holds. On the media round on Monday, the Secretary of State said there was nothing in this King’s Speech to help people with their energy bills. What will she to say to those thousands of my constituents and indeed other constituents?

[Claire Coutinho]

The Bill we are bringing forward will unlock billions of pounds in tax, which will go towards helping with the programmes I have just talked about—for example, the cost of living payments we are putting in place. It will also unlock billions of pounds of investment, which will go towards a greener transition, and I am sure the hon. Lady will agree that having more renewable energy in the future will contribute to lower bills for her constituents.

Our leadership is bringing wealth to our economy and to British workers. Since 2010, we have secured £200 billion in low-carbon investments, with potentially up to £375 billion on the way. Carbon capture will see 50,000 high-skilled British jobs in places such as Teesside and the Humber. Our world-leading offshore wind farms will see 90,000 jobs from Aberdeen to Cornwall by 2030. That is the difference between a Conservative Government, focused on attracting businesses, investment and jobs and creating livelihoods, and Labour, with its same old plans to borrow, borrow, borrow, intent on racking up billions of pounds of debt and then just leaving hard-working families to pick up the bill.

Let us look at the record and the Government’s plans to go further. We are a leader in offshore wind power. We do not just have the world’s largest offshore wind farm; we have the second, the third and the fourth largest, and we are now home to the fifth largest too. We expect growth in offshore wind to deliver enough energy to power the equivalent of every home in Britain by 2030 and to support 90,000 jobs. And it is not just offshore wind; it is floating offshore wind too.

We will generate enough solar energy to power 10 million electric vehicles by 2030.

[Richard Thomson (Gordon) (SNP)]

Will the Secretary of State tell us how much the UK’s offshore floating energy capacity will increase by as a result of the licensing round that has just closed?

--- Later in debate ---

[Claire Coutinho]

I would happily answer that point. The point the hon. Gentleman should understand is that a thriving oil and gas sector unlocks investment in other renewables. There are people interested in floating offshore wind who are part of the oil and gas sector now—the same subsea technology, the same people and the same skills will power our offshore wind and floating offshore wind sectors in the future.

We are also funding eight groundbreaking projects through our £1 billion net zero innovation portfolio to help us harvest the power of the sun from space. Space-based solar could provide clean energy day and night in all weathers and send it wirelessly to the Earth. Madam Deputy Speaker, I think you would agree that that is a superpower in itself.

Meanwhile, hydrogen hubs in places such as Teesside are not only creating the green hydrogen energy of the future, but bringing investment back to areas Labour left behind. By 2030, the sector could support up to 12,000 jobs and unlock up to £11 billion in private investment. However, hydrogen is not the only new technology we are supporting. In the last CfD allocation round, I was delighted to see that we had an unprecedented number of projects supporting emerging technologies such as tidal and, for the first time, geothermal energy.

So our green transition means up to £375 billion of investment and nearly half a million jobs across the UK. Of course, our plans also mean that by 2050 we could see our demand for electricity double, fuelled by our clean energy revolution, so we need to power up our electricity grid. I have made that my priority, and that is why I am ending the first come, first served approach to grid connections by raising the bar to enter the queue and ensuring that those who are ready first will connect first.

We will set out the UK’s first ever spatial plan to give industry certainty and every community a say, and we will speed up planning for the most nationally significant projects coming forward with our response to electricity networks commissioner Nick Winser’s review coming shortly. Those plans alone could unlock £240 billion of investment and support 130,000 jobs.

I turn to carbon capture and storage. We are investing £20 billion to make the most of our natural advantages in skills and geology. We have announced the first eight carbon capture networks that we will take forward, which are in the north-east, the north-west and Wales, and the next two carbon capture clusters, which are in north-east Scotland and Humberside. Those announcements put us on track to achieve between 20 million and 30 million tonnes of captured and stored carbon dioxide a year, which is equivalent to taking 4 million to 6 million cars off the road each year from 2030. Our plans will support 50,000 jobs by 2030 and add £5 billion to the economy by 2050. What is more, with 78 billion tonnes of potential storage in the continental shelf, the UK has the potential to become one of the greatest carbon storage bases in the world, thanks to the geological goldmine we are lucky to have on our doorstep.

Renewables are not always predictable, as they rely on the British weather—and, sadly, we have yet to develop a technology that can harness all of Labour’s hot air. That is why we are ramping up nuclear to help us become a clean energy superpower. The right hon. Member for Doncaster North, who for years sat at Gordon Brown’s side, did nothing to boost British nuclear, and other Labour Front-Bench Members have been naive enough to say that we do not need nuclear. We on the Government Benches are righting their wrongs. Earlier this year, we set up Great British Nuclear to spearhead our nuclear revival. We are building two new large-scale nuclear power stations. In fact, each and every operational nuclear power plant in Britain began its life under a Conservative Government. We are accelerating the development of small modular reactors, we are accelerating advanced modular reactors and we are leading the world in fusion energy. We are backing this vision with £700 million. The House may not realise it, but we have the hottest place in the solar system here in the UK, just under 50 miles away at the Culham Centre.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My right hon. Friend is making an amazing speech, showing how much the Government have done for our environment. Could she give us an idea of the timetable for the small nuclear reactors and when the first one is likely to be licensed?

[Claire Coutinho]

I thank my hon. Friend. We are working at pace to have the fastest competition possible. We have just moved past the first part of the process and will be setting out more details in the new year.

As the Government continue to consider our long-term energy security of the future, it is only right that we support our British oil and gas communities. Even the Climate Change Committee acknowledges that oil and gas will be part of our energy mix when we reach net zero in 2050. So if we will need it, it is common sense that we produce as much of our own of it here.

[Charlotte Nichols (Warrington North) (Lab)]

As chair of the all-party parliamentary group on nuclear energy, I hear that one of the biggest barriers to nuclear is not the investment that the Secretary of State talks about but planning and people. What will she do on that? I have not heard anything so far in what has been proposed to stop things such as judicial reviews going in to stop nuclear power stations being built.

[Claire Coutinho]

The hon. Lady is right to raise skills, people and planning. We have been looking at ways to speed all of that up and will be setting out more details by the end of the year.

The King’s Speech included legislation for awarding oil and gas licences each year, giving industry the certainty it needs to invest in jobs here in the UK.

[Nadia Whittome (Nottingham East) (Lab)]

Will the Secretary of State give way?

[Claire Coutinho]

I will make some progress.

Oil and gas is an industry that supports 200,000 jobs and is expected to provide £50 billion of tax revenue in the next five years. That is the people and the money that the Labour party would send abroad, because it is not against oil and gas jobs, just against British oil and gas jobs—and for what? To increase our reliance on imports from foreign regimes with higher emissions and to send away billions of pounds of investment in carbon capture and hydrogen schemes. Opposition Members support those technologies but would rather the taxpayer footed the bill for them.

With our ambitions on net zero and for our energy security, it is critical that we make the most of our own home-grown advantages, but Labour and the SNP’s policy means jobs abroad, investment lost and energy security sabotaged. You do not have to take my word for it, Madam Deputy Speaker—the unions are sounding the alarm. It has been said that Labour “does not… understand energy”, is self-harming and “naive”, and that its policies would leave our oil and gas communities decimated, turning our oil and gas workers into the “coalminers of our generation”. Those are not my words but those of the GMB and Unite. We want to keep jobs and manufacturing here, but Labour has not understood that we needs natural gas supplies. Those are the words of industry. The important truth is that we know we need to transition to clean energy, but it is the same people, communities and expertise that will unlock the green transition. The skills of those working on oil and gas rigs today are the same skills that we will need for the offshore wind jobs of tomorrow.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am losing track of the number of times I have pointed out in this Chamber that just because we extract oil and gas from the North sea does not mean that it gets used here. It gets sold on global markets to the highest bidders, as we have said 100 times.

When it comes to annual licensing rounds, which the Secretary of State is flagging up, is it not the case that the North Sea Transition Authority was already licensing in 2016, 2017, 2018 and 2019? It only stopped because of the climate compatibility checkpoint. The tests that she sets out are not worth the paper that they are written on; she knows as well as we do that they are impossible not to meet, because they are set so low. Will she stop pretending that the Bill is serious, and just admit that it is nothing more than a gimmick?

[Claire Coutinho]

It is not a gimmick to protect 200,000 jobs. It is not a gimmick to protect the investment that will go into the cleaner energies of the future. On the hon. Lady’s first point, 50% for the gas supply that we use here comes from domestic production.

[David Duguid (Banff and Buchan) (Con)]

My right hon. Friend is being generous in allowing interventions. On the GMB leader’s quote about oil and gas jobs becoming the coal jobs of the future, is it not the case that the people with oil and gas skills, who we really need to deliver the energy transition, will not be left on the unemployment line, but will go and do their jobs overseas and deliver other countries’ energy security and energy transition?

[Claire Coutinho]

My hon. Friend makes an important point. We are lucky to have the skills, expertise and equipment in this country, which are the same skills that we need for a future in renewable energy. It is vital that we protect them and keep those skills here. To unnecessarily cut off those workers’ livelihoods in this country would wreck our clean energy ambitions. We remain resolutely committed to our ambitious net zero targets. More renewable energy; a nuclear revival; exciting new technologies such as hydrogen, carbon capture and fusion; and, where we need oil and gas, jobs for British workers—that is our vision for the future.

[Nadia Whittome]

A moment ago the Secretary of State quoted the Climate Change Committee, which also said that expanding fossil fuel production is not in line with net zero. By the Secretary of State’s own admission on Monday, not a single Bill in the King’s Speech will help families struggling with energy bills. How can the Government justify turbocharging new oil and gas, when that does nothing for the cost of living crisis and blows a hole in our climate ambitions?

[Claire Coutinho]

I am afraid the hon. Lady is quite mistaken. The Climate Change Committee’s own data shows that when we reach net zero in 2050, oil and gas will account for about 25% of our energy mix. That is why it is important to ensure that if we need it, it comes from here.

There are two futures here. One is the future I have just described, where we cut our emissions faster than any other major economy in the world; we drive hundreds of billions of pounds of private investment in wind, nuclear and hydrogen; we support UK industry with carbon capture; we create a world-class export opportunity in our continental shelf; we secure nearly half a million jobs, with our young people renowned globally for their expertise; we bring supply chains and manufacturing capability to our industry heartlands such as the Humber and Teesside; our coastal communities are renewed; and we protect our energy security and support families and businesses with the cost of energy. That is the future for Britain as a clean energy superpower.

There is another future: a bleak world. Imagine it is a grey day; the last private investor has just pulled out of the North sea. Those communities without the jobs to support them have disbanded. The right hon. Member for Doncaster North is explaining yet again why the Labour party has laden the country with debt. His mothballing of British oil and gas is seen as the worst handling of our natural resources since his old boss sold the gold. Norway, with its ongoing oil and gas licences, is forging ahead with its greener future. Meanwhile, jobs in Russia are booming. Our energy security has been jeopardised, as imports from unstable regions rise. That is the future we can expect from a party reliant on Just Stop Oil and Extinction Rebellion for ideas. With an awful predictableness, this parallel world has once again proven the law of British politics: every single Labour Government in the past left unemployment higher.

Of course, that future is not a surprise to anyone. The right hon. Gentleman said, after all, that we should sacrifice economic growth to cut emissions. [Interruption.] He would like to borrow £28 billion in his blind ambition for 2030, no matter the cost to ordinary people. Just three days ago he said that protecting the British oil and gas industry, 200,000 jobs and £50 billion of tax revenue was a stunt. But it is not a stunt to want to keep jobs in the UK, it is not a stunt to want to protect billions of pounds of taxes and investment in this country, and it is certainly not a stunt to prioritise domestic security over the threat of dictators such as Putin.

The British people have rejected the right hon. Gentleman’s arguments before, and they will do so again. I am sure that he will today mention Great British Energy, a new Labour entity about which we know only one thing for sure: it will be run badly, funded by the shadow Chancellor who, when she is not borrowing other people’s words, is recklessly borrowing to fund Labour’s policy and leaving the British people to pick up the bill.

What will GB Energy really look like? Will it be like Labour Nottingham Council’s version, Robin Hood Energy, which collapsed in 2020 leaving local taxpayers with £38 million of debt? Will it be like Labour-run Bristol’s version, Bristol Energy, which also collapsed, leaving local people with losses of £43 million? Or will it be like Labour’s 50% stake in Warrington’s Together Energy—people will get the pattern by this point—which also collapsed, with a £37 million bill this time for local residents to pick up? Not content with bankrupting Birmingham and Croydon or skewering local taxpayers in Nottingham, Bristol and Warrington, Labour now wants to bankrupt Britain. One thing is for sure: when Labour is in charge of your energy you will pay the price.

Energy transitions do not happen very often and now we are on the brink of the most important one of all to reverse centuries of global warming and reach net zero and secure energy resilience by powering Britain from Britain. It is only the Conservatives who have the plans to protect this country’s energy security, to deliver the most ambitious 2030 emission cuts of any major economy, to promote jobs and investment in the UK, and to help this country stand tall on the global stage. We will do that all without forcing families to choose between protecting their family finances and protecting the planet.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

--- Later in debate ---

[Claire Coutinho]

Will the right hon. Gentleman give way?

[Edward Miliband]

Oh, I will, definitely, yes!

[Claire Coutinho]

Does the right hon. Gentleman acknowledge that I said it would also help fund renewable energy? Does he disagree with the view that a future with renewable energy would help to bring bills down?

[Edward Miliband]

I think that that is what we call wriggling.

As I was saying, I commend the Energy Secretary on her outburst of candour. She is right—she is telling it like it is—and, by the way, she is in good company. Let me read this to the House:

“MYTH Extracting more North Sea gas lowers prices. FACT UK production isn't large enough to…impact the global price of gas.”

Who said that? Not somebody on this side of the House. [Interruption.] No, not a former Chancellor. It was the current chairman of the Conservative party, the right hon. Member for Chelsea and Fulham (Greg Hands), when he was the Energy Minister.

So here they are, they really are going to the country and saying with a straight face, after all the pain and anguish that the British people have faced, “Here is our grand offer to you: the ‘we won’t cut your bills’ Bill.” That is the offer from the Secretary of State: “Vote Conservative, and we promise we won’t cut your energy bills.” No wonder the Back Benchers are despairing. The Government could have done so much. They could have lifted the onshore wind ban to cut energy bills, but they did not. They could have legislated for a proper programme of energy efficiency to cut bills, but they did not. [Interruption.] I will happily give way to the Energy Secretary’s Parliamentary Private Secretary if he would like to intervene.

Net Zero by 2050

Claire Coutinho Excerpts

Monday 16th October 2023 Commons Chamber

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

With permission, I would like to make a statement on the Prime Minister’s announcement on net zero.

Britain has led the world on tackling climate change. We have cut our carbon emissions in half over the past 30 years. We have boosted our share of renewables from just 7% in 2010 to almost half today. We have delivered the second highest amount of recorded low-carbon investment cumulatively across Europe over the past five years. Of all the major economies, we have set the toughest targets, and we have exceeded every carbon budget target so far.

As we look forward to becoming a net zero economy by 2050, we must ensure that our ambitions are practical and achievable—achievable by industry, which is investing billions to decarbonise; achievable technologically, as much of the green tech we will need to hit our 2050 target needs to be scaled up; and achievable for consumers, in particular for the millions of households that are currently struggling to make ends meet.

We will not reach net zero over the next three decades unless our plans for the future are pragmatic and viable. Only 7% of people in the UK currently think that net zero is going to be good for them and their family’s finances in the near term. In Europe, we are seeing people push back at clumsy policy that is negatively affecting our lives. It is clear that if we do not bring people with us, we risk sacrificing the whole climate change agenda. That is why the Prime Minister set out his plans last month for a fairer approach to ease the burdens on hard-working people and keep people feeling optimistic about net zero.

The Prime Minister’s approach includes giving people the flexibility to choose a new petrol or diesel car until 2035; removing the requirement that would have seen property owners forced to spend up to £10,000 or more on energy upgrades; easing the transition to clean heating; and raising grants under the boiler upgrade scheme by 50%, to £7,500—that scheme is now one of the most generous of its kind in Europe. The changes will allow us to meet our international net zero targets while avoiding disproportionate costs at a time when global inflation pressures are challenging the finances of many households.

We are responsible for less than 1% of annual greenhouse gas emissions. While our emissions are down 48%, America’s remain unchanged and China’s are up by 300%. It cannot be right that our citizens face punitive costs here when emissions are rising abroad. As the Prime Minister said, the fear is that if we continue to impose extra costs on people, we risk losing their consent for net zero. I want people to feel optimistic about net zero and connect that with jobs, investment and a sense of pride in playing our part in a global challenge. By taking a more measured approach, we will achieve our ambitious targets with the public’s consent.

Meanwhile, we are spending tens of billions to transform our energy security, and to boost renewables and clean nuclear power. We are investing £20 billion to get our carbon capture and storage industry up and running, with jobs supported in places such as Humberside, Scotland and the north-east and north-west of England. We will take carbon dioxide from polluting industries and store it under the North sea. The UK can lead the world in the provision of carbon transport and storage services, with an estimated 78 billion tonnes of theoretical carbon storage capacity in the UK continental shelf—one of the largest potential carbon storage capacities in Europe.

We also have the largest operational offshore wind farm in the world, and the second largest, the third largest, the fourth largest and now the fifth largest, too—all delivered under a Conservative Government. We will have enough wind to power the equivalent of every home in Britain by 2030. We will generate enough solar energy to power the equivalent of over 25 million electric vehicle miles every hour by 2035. We are world leading in our fusion technology and space-based solar projects.

Britain’s nuclear revival is well under way. Hinkley Point C in Somerset will provide enough secure, low-carbon electricity to power around 6 million homes. Sizewell C in Suffolk features the most powerful electricity generators in the world, to power another 6 million homes. We have launched Great British Nuclear to deliver our programme and we have accelerated the development of small modular reactors. Bringing all our work together is the Energy Bill—the vehicle for delivering the energy strategy to turbocharge British technology. It will liberate £100 billion-worth of private investment, scaling up green jobs and growth, and make Britain the best place in the world to invest in clean energy.

The most important announcement made during my tenure has been about the grid. We must make sure that the grid infrastructure is in place to bring new clean, secure and low-cost power to homes and businesses. Four times as much new transmission network will be needed in the next seven years as was built since 1990, so we are bringing forward comprehensive new reforms to help green energy expand faster. We will speed up planning for the most nationally significant projects and accelerate grid connections so that those who are ready can connect first.

Later this autumn we will set out our response to the work of electricity networks commissioner Nick Winser, demonstrating how we are going further and faster on grid, informed by his recommendations on reducing the time taken to develop this critical infrastructure for lower bills, energy security, decarbonisation and economic growth. We will also set out our plans to reform the connections process so that new electricity generators and electricity users can be connected faster, bringing more low-cost, low-carbon energy into the system and connecting up new economic investment quicker. We will set out the UK’s first ever spatial plan for energy infrastructure, to give industry certainty and every community a say.

We have so much to be proud of in what we have achieved so far, particularly the international leadership that we have shown in reducing greenhouse gas emissions. The Climate Change Committee has assessed that there is no material difference in our progress to cut emissions by 2030 since its last report in June, yet the changes we have made will make a real difference to the finances of many households up and down the country. The Prime Minister’s intervention means that we are now on a more secure path, because it can command public support, taking the people of Britain with us and delivering net zero in a practical, proportionate and pragmatic way. I commend this statement to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for advanced sight of her statement. My only disappointment was that she did not read out the multiple paragraphs defending the Prime Minister’s claim about seven bins, which was in the copy sent to me. Obviously, she was too embarrassed to defend it, because it was made-up nonsense.

We profoundly disagree with the Secretary of State and the Prime Minister when they suggest that the answer to the cost of living crisis in our country is dither and delay on building a clean energy future for Britain. It will not work and their approach will make it worse. If you want the evidence, Madam Deputy Speaker, just look at their previous failures. The ban on onshore wind did not cut bills; it raised them. The slashing of home energy efficiency—cutting the “green crap”, as they called it—did not cut bills; it raised them. The fiasco of the offshore wind auction last month did not cut bills; it will raise them. It is not going too fast on climate that has caused the cost of living crisis; it is the Conservatives’ failures that have left us exposed to the worst energy bills crisis in generations. Rather than learning the lessons, they are doubling down.

The definitive analysis of the recent announcements came last Thursday from the Government’s own watchdog, the Climate Change Committee. It said this:

“The cancellation of some Net Zero measures is likely to increase both energy bills and motoring costs for households”.

Why did it say that? Let me explain. The Government now say that landlords will not have to insulate homes, but as the CCC points out, these regulations

“would have reduced renters’ energy bills significantly.”

Moreover, the cost savings would have outweighed any changes in rent. Therefore, they are not lowering costs; they are raising them.

On electric vehicles, the CCC says that

“any undermining of their roll-out will ultimately increase costs.”

That is because the lifetime costs of EVs are already cheaper than those of petrol and diesel vehicles. By 2030, the up-front costs of EVs are forecast to be at parity with petrol or diesel cars. Again, the Government are not lowering costs for families; they are raising them.

When the Secretary of State dumps other targets, I have to ask: who set these targets and then failed to take the action to meet them? The Government did. Laughably, they say that this is about long-term decisions. The biggest long-term cost that the British people face is failure to act at the scale required to tackle the climate crisis. The Secretary of State says again that the Government are on track to meet their 2030 target, but their own watchdog said in June that they were “significantly off track”. It says—this is from last Thursday—that the Government have not offered evidence to back their assurance

“that the UK’s targets will still be met.”

There is no evidence that they are on track to meet their targets.

Perhaps worst of all, imagine being a business trying to make decisions and invest in our country when they literally do not know from one day to the next what the Government policy is. Since the Prime Minister’s announcements, businesses from around the world have said that, by backing off climate action, the Prime Minister is turning his back on the greatest economic opportunity of the 21st century. Meanwhile, the UK heads into yet another winter where people cannot afford their energy bills. There are still no proper plans for a roll-out of energy efficiency, no plans to properly lift the onshore wind ban, and no proper plan to get the offshore wind market back on track.

Finally, let me say to the Secretary of State that the consensus on net zero has been hard-won over two decades. We have a duty to debate it on the basis of facts, not falsehoods. I have to say to her that it is deeply regrettable that she used her first major public appearance—two weeks ago at her conference—literally to make up complete nonsense about meat taxes, which I notice she did not defend today, and for which frankly she was exposed on national television. I say to her that it demeans her, it demeans her office and it demeans public debate. The Government said that they were going to move on from the premiership of Boris Johnson, but people will be deeply disturbed to find that that appears to mean dumping commitments to net zero and keeping his peculiar relationship to the truth.

[Claire Coutinho]

I thank the right hon. Gentleman for his response to my statement. He raises a number of questions that I wish to address. He mentions the prospect of the seven bins policy. He has forgotten that he voted for it. The Conservatives, by contrast, came to the good sense to course correct. He has taken leave of his senses and forgotten what he has voted for in the past.

On the question of dietary changes, the right hon. Gentleman might like to speak to his shadow climate change Minister and shadow Chief Secretary to the Treasury, who both have pushed to treat meat like tobacco in the past. The substantial point that I would make is that we need to be practical about our net zero policy and to make sure that we are having honest debates. We on the Conservative Benches stand by our record. We are proud to be the party that has decarbonised faster than any G7 country, and it is regrettable that the Opposition cannot acknowledge that achievement. We are proud that we have secured almost £200 billion of investment in low-carbon energy projects since 2010 and that we have helped to secure this country’s energy independence by backing North sea oil and gas, protecting 200,000 jobs.

Can the right hon. Gentleman be proud of his record? He said that we should sacrifice our growth to cut emissions and that we should borrow £28 billion in his blind ambition for 2030. He supported coal, before he changed his mind and is now against it. He also said that growing our renewables sector to 40% was pie in the sky, but in the first quarter of 2023, 48% of our power came from renewable energy. He spent years at Gordon Brown’s side and as Energy Secretary but did nothing to boost British nuclear in his time in government, whereas we are forging a new path, with every operational nuclear power station in this country having started life under a Conservative Government. Members do not need to take my word for it that our energy security is safer with us, because just this weekend the owners of Grangemouth made it clear that the threat Labour’s plans pose to the future of the refinery, potentially putting thousands of jobs at risk, would be a danger for energy security. Furthermore, we cannot allow oil and gas workers to become the coalminers of our generation. It has been said that Labour

“does not properly understand energy”,

with it being “self-defeating” and “naive”. Those are not my words but those of the general secretary of the Unite union and the head of the GMB.

Furthermore, the right hon. Gentleman talks about uncertainty. If he would like to give the business and industry certainty, he and the shadow Chancellor need to sit down and agree how much money they will actually spend—is it £28 billion or £8 billion? Is it no new money, or is it what we heard over the weekend, which is as much as £100 billion of new borrowing for GB Energy? Conservatives will prioritise energy security. We are set on delivering the most ambitious net zero targets of any major economy, and we will do this all without forcing families to choose between protecting their family finances and protecting the planet.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Environmental Audit Committee.

[Philip Dunne (Ludlow) (Con)]

I warmly welcome what my right hon. Friend has just said about the focus on the grid and accelerating grid access. I hope she will be able to pick up on the report that my Committee is undertaking on that subject and that we can contribute to her deliberations. As she will be aware, I wrote to the Prime Minister on behalf of the Committee in the week following his speech, offering him an opportunity to put some flesh on the bones of what his more pragmatic approach to achieving net zero ambitions actually means. Will she confirm when my Committee can expect to receive a reply to that letter? Will it include an analysis of the impact of the trajectory of delivering net zero on the five-yearly carbon budgets and, in particular, how the announcement we have just had confirmed by the Transport Secretary, who is sitting next to her, on maintaining the zero-emission vehicle mandate will impact on that trajectory?

[Claire Coutinho]

I thank my right hon. Friend and commend his long-standing work on environmentalism; I have been privileged to work with him on this before. I will be responding to him and I look forward to coming to speak to his Committee in due course. We set out unprecedented levels of detail in the analysis of how we are going to meet the targets earlier this year. I also accept the Climate Change Committee’s analysis, which is that the changes we have made are not materially different in terms of achieving our targets—we are absolutely committed to making sure that we do so. As he rightly points out, the biggest announcement we have made on achieving those targets is the one relating to the grid, which will allow for much greater and quicker electrification of society when it comes to the impacts of other proposals.

[Madam Deputy Speaker]

I call the Scottish National party spokesperson.

--- Later in debate ---

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

There seems to be no level to which this Prime Minister will not stoop in his pursuit of a culture war. Apart from the reactionary brigade on his own Benches and the flat earthers, he has angered many across the UK, from environmental groups to Tory donors and even Boris Johnson. These legal targets and deadlines have been in place for some time and, accordingly, businesses active in all these sectors will have had investment and disinvestment plans in place for years. Reducing the UK’s energy use by 15% by 2030 was a tough target, but we need tough targets if we are to rise to the situation the planet faces.

What does the Prime Minister do when faced with difficulty? He scraps the energy efficiency taskforce after just six months—it is utterly embarrassing. If this Government were so worried about the affordability of climate measures, why were they offering less support than the Scottish Government for heat pump installation, and why do they keep cancelling successive home insulation schemes? Of course, all this follows the Tories permitting a new coal mine, along with the Cambo and Rosebank oilfields. Is the Secretary of State at all surprised that two thirds of UK voters say that the Tories cannot be trusted on climate change?

Scotland’s ambitions in this area are far greater and faster. Scotland’s Net Zero Secretary, Màiri McAllan, said that the Scottish Government had been

“blindsided by these announcements, with zero consultation in advance”

and that it was an

“unforgivable betrayal of current and future generations”.

The Prime Minister’s reckless decision, combined with the United Kingdom Internal Market Act 2020, makes it extremely difficult for Scotland to hit our targets. Last week, Scotland transferred—it would be an export, post-independence—more than 400 GWh of renewable electricity to England. Many other wind power schemes are in development, including the world’s biggest at Berwick Bank, which will ensure that Scotland is one of the world’s biggest exporters of clean green energy. We also have two hydro schemes ready to go, if the Government were to put the contractual agreements in place.

Scots often ask about the costs and benefits of this unequal Union of ours. Many will now wonder if watering down our climate ambitions or the obligations we committed to at COP26 is too high a price to pay.

[Claire Coutinho]

I thank the hon. Gentleman for his questions. Let me be clear: there has been no watering down of our targets. We have the most ambitious decarbonising targets of any major economy, and we have not changed those at all. We are resolutely committed to them. By 2030, we will have cut emissions by 68%; the US is planning to cut its emissions by 40% and the EU its emissions by 55%. The people of Scotland will be very proud that we are the most ambitious major economy in the world, and we will work towards that together.

We have worked with the devolved Administrations since the announcement, and I am due to speak to my counterpart in due course—I have been in correspondence with him. One of the biggest things that we will do that will be helpful for the Scottish people particularly, and that will bring benefits to the renewable energy sector, is to improve the grid. Having spoken to more than 100 investors, I know it is their biggest ask, and it will be very positive, not just for Scotland but for the whole of the UK.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Environment, Food and Rural Affairs Committee.

[Sir Robert Goodwill (Scarborough and Whitby) (Con)]

Even before Dogger Bank comes on stream, the UK is leading the world in offshore wind generation. I hope that in due course we will also lead the world in nuclear generation. If we are to charge up all those electric cars and power all those air source heat pumps, we will need an awful lot of electricity at peak times. We will also be producing a lot of electricity at off-peak times. Does the Secretary of State agree that hydrogen will have an important part to play in powering heavy vehicles and heating homes? If we are to do that, we need to make sure that our gas grid does not become a stranded asset, because we might need to press it into service.

[Claire Coutinho]

I thank my right hon. Friend and he makes an excellent and correct point. While making sure that we grow our intermittent energy sources such as solar and wind, we must also have a stable baseload underneath that. He is right that hydrogen will play an interesting role, and I am speaking to the sector about how we can move forward. It is an exciting policy area and I will explore it in many ways. We also have a trial on heating homes. I pick him up on one point: we will be using gas for a long time. Even the independent Climate Change Committee acknowledges that we will still be using gas in 2050.

[Several hon. Members rose—]

[Barry Gardiner (Brent North) (Lab)]

I value the cross-party consensus that this country has enjoyed for the past 20 years, which is responsible for some of the strenuous targets that the Secretary of State has outlined. However, I was disappointed by the Prime Minister’s statement and, indeed, the tone of the Secretary of State’s remarks today. In the spirit of cross-party consensus, will she set out a hierarchy for the utilisation of the 10 MW of low-carbon hydrogen that the Government have now committed to, so that the limited supply of hydrogen power is delivered first to high-energy users such as those in the steel, ceramics, glass and cement sectors who need the extra heat that electricity cannot provide?

[Claire Coutinho]

The hon. Gentleman is absolutely right that hydrogen possesses enormous potential when it comes to our industrial sectors. I will be meeting many people from the sector tomorrow and will be looking at that point very carefully, and I would be happy to speak further with him about it.

[Vicky Ford (Chelmsford) (Con)]

When the new Select Committee on Energy Security and Net Zero first met, the first thing we did was to have huge roundtable days with over 50 different stakeholders from the sector. Time and again, those stakeholders talked about the tardiness of getting planning approval and access to the grid, so I absolutely welcome action that will deliver cleaner, cheaper and more secure energy. I also get the point about needing carrots, not sticks, for electric vehicles. In my constituency, those with driveways pay only 5% tax on their electricity, but those who do not have a driveway have to pay 20% tax. That is true all across the country, so will the Secretary of State join me in pushing the Chancellor for those carrots to be fair carrots?

[Claire Coutinho]

My right hon. Friend is a huge champion of all environmental issues, and I look forward to speaking to her Committee in due course. It is really important that we have a just and fair transition—that is exactly what the proposals we have set out aim to do. She will know that tax matters are for the Chancellor but, again, I would be happy to speak to her further about those issues.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Honestly, this statement takes Orwellian doublespeak to new levels. It must have set some record for the largest number of misleading statements in the smallest amount of space. I do not know how the Secretary of State has the gall to stand at the Dispatch Box and say that this is about easing the burden on hard-working people, when she knows that all the evidence shows that what has been announced will increase costs for ordinary people.

For example, we have heard from the Climate Change Committee that the changes when it comes to landlords and efficiency standards in homes will cost renters an extra £300 a year. The Office for Budget Responsibility is clear that, as a result of the changes that are going to be made, our dependence on gas will cost us more. If the Government really cared about hard-working families, they would not be handing Equinor £3 billion to develop the climate-wrecking Rosebank oilfield; they would be admitting that what the Secretary of State is doing is ripping up the climate consensus for short-term electoral calculation and populist right-wing propaganda.

[Claire Coutinho]

I thank the hon. Lady for that question, but if she had any constituents living in properties off the gas grid, it would be clear to her how worried people were about those policies. We have given them this reprieve because we understand that putting in some of those technologies, such as heat pumps, would have cost them thousands of pounds—making sure that they had the right insulation in place, for example.

Turning to Equinor, far from us paying that company money, that is something that will pay tax into the Exchequer, unlocking green investment and allowing people in the wider sector to continue in 200,000 jobs across the economy. Those are jobs, people and communities that we will need in the transition to renewable energy, because they are the same people with the same skills that will be used. It would be right for the hon. Lady to talk to the people of those communities about this issue.

[John Redwood (Wokingham) (Con)]

The Secretary of State is right that, in order for this to work, green products need to be affordable and attractive. What study has her Department made of the attractions of synthetic and sustainable fuels as another option, compared with batteries? They may be easier for many of these users.

[Claire Coutinho]

I thank my right hon. Friend for that question—we have spoken about this issue before. We will be consulting on synthetic fuels, in particular for aviation, and we are looking at alternative fuels more widely, for example for rural homes. I would be happy to keep up the conversation with him about our progress.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

In the words of my constituent Adam:

“In Vauxhall these climate policies would help local parents like us to pay our energy bills this winter and keep our children safe and warm. Without these policies children in London face a bleak future as the climate crisis does irreparable damage to the world around them.”

Like many other Vauxhall residents, Adam is deeply concerned about the impact of the Government’s delays and about the world we are leaving for our children. Does the Secretary of State not understand that these delays run contrary to the aim of making the lives of the next generation better than the lives that we all enjoy today?

[Claire Coutinho]

We do understand the importance of energy efficiency. In fact, during our tenure we have raised the proportion of energy-efficient homes from 14%, when we came to office, to 50%. We are also spending £6 billion in this Parliament and a further £6 billion up to 2028, in addition to the £5 billion that will be delivered through the energy company obligation and the great British insulation scheme. This is something that we are taking seriously, and the hon. Lady can give her constituent that assurance.

[Sir Edward Leigh (Gainsborough) (Con)]

Given that our total emissions are less than the increment in Chinese emissions every year, my right hon. Friend is right to be pragmatic about this. At present there are planning applications for solar farms ringing Gainsborough totalling 15,000 acres—enough to feed the city of Hull every year—all based on a fiddled application for a national infrastructure project. There is currently a planning presumption against building solar farms on land graded 1, 2 or 3a, but not 3b. But for a farmer there is no difference between 3a and 3b land. Can we change that planning presumption and build solar farms on top of factories and on grey land, rather than taking good farming land?

[Claire Coutinho]

I entirely agree with my right hon. Friend about the need to build solar farms in more appropriate places, which is why I announced, in the last couple of weeks, that it would be easier to build them on industrial rooftops, car parks and warehouses in the way that he has described.

[Claire Hanna (Belfast South) (SDLP)]

The Secretary of State has suggested that many people have not bought into the concept of net zero. Instead of seeing that as an opportunity for leadership, the Government play into misinformation about made-up taxes and the seven deadly bins. She will be aware that Northern Ireland is already a laggard on climate issues because the Assembly was collapsed just after it had finally passed binding targets, and before it had taken any meaningful action on issues such as retrofitting, planning for renewables and transforming agrifood. Is she also aware that Northern Ireland relies largely on the all-island single energy market for our energy needs, and is she confident that her Government are keeping up with their responsibility to ensure that we match the standards of that market?

[Claire Coutinho]

We care about climate change, which is why we have the most ambitious targets of any major economy. That is what we have delivered on to date, and that is what we will be delivering on when we get to 2030 as well. As for the single electricity market, I am familiar with that, and we talk to our Northern Ireland counterparts regularly to make sure that it is working in a way that benefits the Northern Irish people.

[Jason McCartney (Colne Valley) (Con)]

The Secretary of State is right: we must take people with us on this journey to net zero. When it comes to incentivising people in the take-up of electric vehicles, what more can the Government do to broaden—or turbocharge—the provision of public EV charging points by companies and councils?

[Claire Coutinho]

The most important thing that we can do to turbocharge that is get the grid working and look at both transition and distribution, which is exactly what we are planning to do in our responses to the Winser report. I would say to anyone who wants to buy an electric vehicle that if that works for them they will be able to do it, and nothing in our plans will change that.

[Wera Hobhouse (Bath) (LD)]

The cheapest energy is the energy that we do not use. It is unforgivable that the Government have cancelled the obligation for landlords to upgrade homes to an EPC grade C rating by 2028 at the latest. A comprehensive home insulation scheme would reduce bills and carbon emissions this winter. I am going to make a proposal that might sound quite attractive to Conservative ears, because it is about incentivising and tax breaks. Will the Secretary of State consider allowing landlords to offset spending on insulation against their income tax bills? That would benefit tenants by enabling them to live in warm and comfortable homes.

[Claire Coutinho]

I set out earlier the amount that we are spending on insulation: £6 billion in this Parliament, with a further £6 billion to 2028 and an additional £5 billion through the energy company obligation and the great British insulation scheme. The real-world reason for why we did not pursue that policy is that it could have cost property owners up to £15,000, and we did not want to put further pressure on rents at a time when families are really struggling. With regard to the hon. Lady’s policy on income tax relief, I suggest that is not necessarily the best response, because a lot of landlords are pensioners and will not necessarily pay income tax. However, we will continue to look at everything we can do to ensure that insulation is properly delivered.

[Mark Pawsey (Rugby) (Con)]

The announcement changed two key dates that were the subject of a lot of work by the previous Business, Energy and Industrial Strategy Committee. Does the Secretary of State agree that in terms of the preparedness of the industry affected and the awareness of consumers, there is a contrast between the automotive sector and domestic heating, with far more progress having been made on the former, so there was a stronger case to put back the dates on home heating than on the automotive sector? Does she also agree that if we are to have power available where it is needed for electric vehicles and to heat our homes, we need to speed up the reinforcement of the electricity grid?

[Claire Coutinho]

I completely agree with my hon. Friend’s points about the grid. Every single person in the sector I have spoken to has said that the announcements we have made about the grid are the most important made to date. In terms of electric vehicles, if the prices get to a point where families want to adopt them, they will do so. Nothing in our policy stops them. On domestic heating, it is right that we have taken some space for households that would not be suitable for such technology. He is right to welcome the uplift on the boiler upgrade grant. I have spoken to providers such as Octopus, which has said that it has seen a fivefold increase in inquiries since we announced the policy.

[Alex Cunningham (Stockton North) (Lab)]

It was clear from talking to industrialists about net zero and carbon capture last week that they were exasperated with the Government’s start-stop approach to business, the snail’s pace of decisions and, of course, the lack of clarity. The Chemical Industries Association has reported declining production and said that domestic demand remains low. It needs CCUS, its fellow industrialists need CCUS and net zero needs CCUS. When will we get some final decisions, or are those initiatives also under threat?

[Claire Coutinho]

The hon. Gentleman is absolutely right to articulate the potential of carbon capture and storage. Earlier in the year, we set out the £20 billion package—a large package by international standards. We have set out some progress, and we are working at pace to ensure that we can set out more later in the year. He talks about lack of clarity; if he is worried about that, I gently say that he might want to look at his own party’s position.

[Greg Smith (Buckingham) (Con)]

Further to the question from my right hon. Friend the Member for Wokingham (John Redwood), synthetic fuels—by that, I mean genuinely synthetic fuels made from green hydrogen and atmospheric carbon capture, rather than biofuels or fuels from waste—are net zero, because the amount of carbon at the tailpipe is the same volume recaptured to make the next lot of fuel, yet the myopic zero-emission vehicle mandate prevents the UK from benefiting from synthetic fuels for our road vehicles. Will my right hon. Friend show the same welcome pragmatism she has shown to the rest of the agenda and revisit the zero-emission vehicle mandate?

[Claire Coutinho]

We have set out our position on the zero-emission mandate. However, we are also looking at synthetic fuels. As I said, we are consulting on them for aviation, and we can look at them more broadly. However, we have set out the position on the ZEV mandate, which has been widely welcomed.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Given that the rowing back on the commitments towards net zero came on the first day of the parliamentary recess, it looked an awful lot like there was an attempt to avoid democratic scrutiny. The Secretary of State has said that she wants to take people with her. May I put to her a group of people she could take with her by reversing some of these daft decisions: private renters. When I meet families who are renting from private landlords, particularly in the Marsh area of Lancaster, I hear that their energy bills are far higher because of their doors and windows and how their roofs are leaky and not insulated. That rowing back on the standard in the private rented sector is costing families more. Will she please look again at that?

[Claire Coutinho]

I thank the hon. Lady, but that takes some gall when the Labour party left the proportion of energy-efficient homes in this country at 14% and we have taken it to 50%. I have set out the multiple billions that we will be spending on insulation, which is important to us. But, at the same time, asking families up and down the country to spend £10,000 on updating homes would have been passed on in rents and may have led to more shortages in the private rented sector. That is something we absolutely must not see at a time when families are struggling.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I too welcome my right hon. Friend’s comments on grid connections; that is something I am concerned about and have raised a number of times. Can she reassure businesses that may be making investment decisions right now that, when she brings forward her plans, those timescales will dramatically reduce? I am not talking about reducing from the 10 years we have seen reported to eight, six, four or even two years—I am talking about a really serious reduction in practical timeframes.

[Claire Coutinho]

My hon. Friend is a doughty campaigner for all the industries in her area. Our ambition is to tackle the challenge with the grid. We will be setting out for the first time a geo-spatial plan, looking at planning and looking at all the different connection points to make sure we have an overall strategy for the country, which will immeasurably speed up the connection process.

[Ben Lake (Ceredigion) (PC)]

September’s offshore wind auction failed to attract any successful bids, a result that dealt a severe blow to hopes for a floating offshore wind industry based off the south-west coast of Wales. What reassurances can the Secretary of State offer that lessons will be learnt from that auction process and that action will be taken to ensure that investment in this new exciting industry is secured in future?

[Claire Coutinho]

The hon. Gentleman is right to talk about offshore wind as an exciting industry, which has done incredibly well under our contracts for difference programme. We are looking at floating offshore wind, and he will know the support we have put in place, but I have been speaking to investors and stakeholders and will be making sure that we look at some of the challenges the sector faces.

[Patrick Grady (Glasgow North) (SNP)]

What role does she see for the concept of 20-minute neighbourhoods in helping the United Kingdom to meet its net zero targets?

[Claire Coutinho]

The point of our proposals is to make sure that people have choice, that we can bring people with us and that people can live their lives in the way they want to. We can enable them through decarbonising the power grid and giving them alternative options, so we can make sure that we can get to our net zero targets in a way that is practical and achievable for families.

[Jim Shannon (Strangford) (DUP)]

At the Democratic Unionist party conference on Saturday past, the Ulster Farmers Union, of which I declare I am a member, had a leaflet on achieving net zero. Can the Secretary of State outline how we will meet our international obligations in terms of net zero with this rollback and how firms and farmers that have already invested in green policies and procedures will be able to compete with those who can go full steam ahead with older practices and no incentives whatsoever to change?

[Claire Coutinho]

We are not rolling back from our targets at all; I agree with the Climate Change Committee’s assessment that there is no material difference between the projections in June and the recent assessments it made post the announcements. I welcome a lot of the work that many of our farmers are doing to pursue environmental goals. I have talked to many in my constituency who are doing quite phenomenal things at a local level. They will be supported by our agriculture policy, the landmark Agriculture Act 2020 and the Environment Act 2021 that we have brought forward in recent years.

[Richard Foord (Tiverton and Honiton) (LD)]

Last winter the taxpayer covered around half the cost of British people heating their homes. That amounted to exactly £39.3 billion of taxpayers’ money spent between last October and this March. At the end of last year, 33% of properties with a loft did not have loft insulation. How concerned is the Secretary of State about the cost to future taxpayers of rowing back this Government’s previous insulation plans?

[Claire Coutinho]

The hon. Gentleman is right to point out that we spent £40 billion last year helping people with their energy bills, paying on average half of people’s energy bills to support them through that difficult time. On insulation, I would say that when we came into power, 14% of homes were energy efficient, and now that figure is 50%. We are spending £6 billion in this Parliament, a further £6 billion to 2028 and £5 billion through the energy company obligation and the Great British Insulation Scheme to make sure that our homes are energy efficient.

[Sammy Wilson (East Antrim) (DUP)]

I welcome the Government’s belated recognition that net zero policies are costing individuals in their pockets, costing jobs and of course producing huge profits for the eco industry. But is the Secretary of State not concerned that, by maintaining the legal target for 2050, she hands a weapon to those who want to use the judicial review mechanism either to delay or to stop important decisions on airport expansion, new roads and oil and gas licences—delaying even some of the policies that she says today she wants to delay to save people money?

[Claire Coutinho]

We are confident that we can meet those targets, and we see opportunities in the transition ahead of us—we see jobs, investment and opportunities to export British products around the world. That is what I will focus on in this job to ensure that we make the most of the energy transition and that it benefits all parts of our country. We also want to do that in a sensible way that protects families and household incomes.

[Andrew Bridgen (North West Leicestershire) (Reclaim)]

The Secretary of State is explaining that she is only slowing the Government’s headlong dash to net zero because of waning public support. When did the Secretary of State think that she was ever going to maintain public support for policies that will make our constituents poorer, colder and less free, while at the same time allowing communist China to increase its emissions by more than our total emissions in every year of this decade?

[Claire Coutinho]

As I said, the climate transition presents huge opportunities for this country and the people of this country when it comes to jobs, investment and improving our energy security. That will be the focus of my work in this role. However, we will do that in a way that protects finances and families from clunky and clumsy unimplementable policies.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the Secretary of State for her statement.

Oral Answers to Questions

Claire Coutinho Excerpts

Tuesday 19th September 2023 Commons Chamber

[Mr Speaker]

I welcome the Secretary of State.

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

Our contracts for difference scheme is a UK success story, having contracted more than 30 GW of capacity, including 20 GW of offshore wind, since 2014. AR5 delivered a record number of clean energy projects, enough to power the equivalent of 2 million homes, and the Government’s commitment to offshore wind remains unchanged, which is 50 GW by 2030.

[Peter Aldous]

I welcome my right hon. Friend to her place. The great advantage of the CfD scheme is that with forward planning it has the flexibility to adapt to changing economic conditions. Can she therefore confirm that the Government will be working collaboratively and straightaway with industry to ensure a successful round 6 so that offshore wind can get back on track, and UK consumers and the UK economy can benefit from low-cost, low-carbon energy?

[Claire Coutinho]

I thank my hon. Friend for his long-standing support in this area and I can confirm that we are wasting no time in engaging the sector in advance of AR6. I personally spoke to offshore wind stakeholders following AR5 and confirmed our commitment. The Minister for Energy Security and Net Zero held a roundtable with the sector on 12 September. We are listening to the sector and annual auctions mean we can respond quickly.

[Selaine Saxby]

Question 2 please.

[Claire Coutinho]

I know that as chair of the all-party group on the Celtic sea my hon. Friend is a long-standing supporter of offshore wind. We have announced that AR6 will open in March 2024 and we have published an indicative timetable. We are supporting research and development in floating wind technology via the floating offshore wind demonstration programme, announcing up to £160 million in capital grant funding.

[Mr Speaker]

Can we work to the order, as it is a grouped question? The question should not be answered in that way. Selaine Saxby should be asking a direct question.

[Selaine Saxby]

Thank you, Mr Speaker. I am keen to understand better what more can be done to assist floating offshore wind in AR6 following what happened in AR5.

[Claire Coutinho]

I know my hon. Friend is a long-standing supporter of offshore wind. We have announced that AR6 will open in March 2024 and we have published that timetable. We are supporting floating wind technology through different programmes and manufacturing investment schemes too.

[Mr Speaker]

I call the Chair of the Energy Security and Net Zero Committee.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

We also welcome the Secretary of State to the Dispatch Box. With many renewable projects built on the strength of contracts for difference, but with reports of many not invoking these contracts and instead benefiting from the higher energy prices, can the contracts in principle be invoked later, when prices fall, or could the Government enforce the invoking of the CfD contracts now, at the start of the generation of these projects, rather than their taking the high prices while they can?

[Claire Coutinho]

The CfD programme has driven prices down over time to enormous effect, by 70% since they started, which is much more than people expected. I would be happy to take the hon. Gentleman’s particular point away but overall this is a successful programme, and our annual auction changes will also make a difference.

[Andrew Bridgen (North West Leicestershire) (Reclaim)]

Given the unreliable and intermittent nature of both solar and wind-generated energy, we already have more of these projects than the grid can efficiently manage. Does the Secretary of State agree that what we really need is more reliable baseload capacity and that that can only be delivered via fossil fuels or nuclear?

[Claire Coutinho]

We have a strong focus on energy security, and that means having a just transition to clean energy but also investing in nuclear. The hon. Gentleman may have seen that we have started the capital raise for Sizewell C, and we support the oil and gas industry as a just transition fuel.

[Edward Miliband (Doncaster North) (Lab)]

I wish the Clerk of the House well in the future, and I warmly welcome the Secretary of State to her new role and congratulate her on her appointment to the Cabinet. I look forward to working together. Let us start with the truth. The offshore wind auction that she inherited was a totally avoidable disaster. It means another lost year for our country and another year of higher bills, and it is because Ministers obstinately refused to listen to warning after warning from industry. RenewableUK estimates that the auction failure will add £2 billion to bills. What is the Secretary of State’s estimate of the cost to families of this fiasco?

[Claire Coutinho]

I thank the right hon. Gentleman for welcoming me to my place. I am delighted to serve opposite him and face him at the Dispatch Box.

There are a couple of things I will point out. If we had tried to do what the right hon. Gentleman suggested, we would have delayed the 3.7 GW of clean energy that we secured, which is able to power 2 million homes. If we want to look at what is going to hurt people and their bills, I would point to his disastrous policies, whether it is the ultra low emission zone, which is hitting people who can least afford it, or his borrowing spree, which will raise inflation.

[Edward Miliband]

I am afraid the Secretary of State is quite wrong about that, because Ireland adjusted the price and had 3 GW of offshore wind. Let us talk about the way that this Government are jeopardising our energy security. They have delivered—[Interruption.]

[Edward Miliband]

This Government have delivered the worst cost of living crisis in a generation. There is a pattern here: they banned onshore wind and raised bills, they slashed energy efficiency and raised bills, and now they have trashed offshore wind, raising bills. That is why we are so exposed. I know that the right hon. Lady did not make those decisions, but now that she is the Secretary of State, she needs to tell us, after 13 years of failure, what is she going to do differently?

[Claire Coutinho]

Let me tell the right hon. Gentleman about the last 13 years. We have decarbonised faster than any G7 country, while also growing the economy. We have grown renewable energy from 7% of our electricity when Labour left power to 50% now. I am proud of what we have achieved over the last 13 years. We have a proud record when it comes to climate change and a proud record when it comes to renewable energy, and I am proud to defend it.

[Mr Speaker]

We now come to the SNP spokesperson.

[Dave Doogan (Angus) (SNP)]

I welcome the Secretary of State to her new role. I wish I could have welcomed her to her new role on 5 September, when we had the remaining stages of the Energy Bill, but she was not here. I wish I could have welcomed her on 7 September for the urgent question on the auction round 5 strike price, but she was not here for that either, so what has the new Secretary of State been doing in the midst of the chronic energy crisis facing our constituents and allowing her Department to see shovel-ready offshore wind go into abeyance? What has she been doing?

[Claire Coutinho]

I struggle to see how that was directly related to the question, but let me tell the hon. Gentleman what I have been doing. I was here for the Third Reading of the Energy Bill; perhaps he was not. During this time, I have been moving forward with all the Government’s priorities on energy security and ensuring that we can move to a just, clean transition.

[Dave Doogan]

Forgive me if that rendition is not immediately recognisable in offshore wind projects from auction round 5. I hope the Department has learnt some salutary lessons from this mess, but it will be consumers who pick up the bill. Can I ask the Secretary of State for her personal intervention in pumped storage to introduce a cap and floor mechanism, which industry has been clear is absolutely necessary to get this vital baseload energy source into position? Will she intervene personally and get that moving, because it is blowing in the breeze just now?

[Claire Coutinho]

I am absolutely focused on getting investment into offshore wind. One of the first things I did after AR5 was speak to investors from across the board, to make sure I was listening to their concerns, and there are multiple things they care about. One is having certainty; there was lots of welcoming of the move to annual auctions. The other is connections to the grid. I will be looking at all those things and making sure we can get the investment the sector needs.

[Jo Gideon (Stoke-on-Trent Central) (Con)]

3. What assessment she has made of the potential impact of carbon capture, usage and storage technology on economic growth.

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

We have committed £20 billion to the early deployment of carbon, capture, utilisation and storage, which will deliver economic growth and decarbonisation of our industrial heartlands. Our analysis has shown that it could support up to 50,000 jobs in 2030 and add up to £5 billion to the economy by 2050.

[Jo Gideon]

I thank my right hon. Friend for her reply. Following the commitment in “Powering Up Britain” to provide up to £20 billion of funding for early deployment of CCUS, how does she intend to finance that support? Does she recognise that CCUS funding needs to be matched by creating a competitive environment for private sector investment, including a carbon border adjustment mechanism to smooth the path to deployment, as recommended by the Commission for Carbon Competitiveness, of which I am a member?

[Claire Coutinho]

I welcome my hon. Friend’s work as a member of the Commission for Carbon Competitiveness, and she makes an excellent point. The £20 billion will be funded through a variety of sources and will be allocated in due course, and early this year the Government consulted on a range on measures to support decarbonisation, including a carbon border adjustment mechanism. The Government will provide a response to that consultation in due course.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

If the Secretary of State is looking for innovation that will make a real difference to economic growth, will she look at not only carbon capture and storage, but hydrogen? Many of the same universities and research establishments are looking at hydrogen as the new energiser for transport and so much else in our lives. Will she put some serious money into both hydrogen and CCS?

[Claire Coutinho]

I am interested in innovation in all of those areas, because that is what will get us to the ambitious targets we have set out. I will be looking at hydrogen, carbon capture, and every single other area to see what more we can do.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

4. What plans she has to help tackle methane leaks from oil and gas production.

--- Later in debate ---

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

The Government have committed £20 billion to support the early development of carbon capture and storage, and £500 million for the industrial energy transformation fund to help industry decarbonise, phase 3 of which is expected to open for applications in early 2024.

[Stella Creasy]

May I put on the record the thanks of Back Benchers to the Clerk of the House for his work?

Steel accounts for 8% of global carbon dioxide emissions and 50,000 jobs here in the UK. We have no viable alternative to steel, which is why the Government’s decision to go with an electric arc furnace only modelled for decarbonisation does not make any sense. Not only does it put at risk thousands of jobs but it makes the industry vulnerable to changes in steel prices, as the UK will have to import it. The Minister spoke about carbon capture, but can she explain why the Government have not gone for a combination of technologies such as carbon capture, or the retrofitting required for hydrogen-based steel production? That way, we would not only decarbonise the industry but protect those vital jobs and the industry in the UK for generations to come.

[Claire Coutinho]

As the Business and Trade Secretary set out, the Government’s deal has provided long-term security for at least 5,000 steel jobs. The investment will grow UK domestic green steel production. I gently urge the hon. Lady to look at her party’s plans for industry, which have been described as impossible and decimating the working classes.

[Caroline Nokes (Romsey and Southampton North) (Con)]

Energy-intensive industries come in many forms. Can my right hon. Friend provide any reassurance that the Government will review the classifications of what constitutes an energy-intensive industry? SB Joinery in my constituency contains a large sawmill and planing facility, but has been deemed ineligible for high levels of the energy bills discount scheme. Would my right hon. Friend be prepared to look at that case personally?

[Claire Coutinho]

I would be delighted to meet my right hon. Friend and discuss that particular case. We keep looking at everything we can do to support business, as we have done this entire time.

[Mr Speaker]

I call the shadow Minister.

[Sarah Jones (Croydon Central) (Lab)]

For years people have been calling on the Government to have a proper plan to help our steel industry decarbonise. Instead, the industry has lurched from crisis to crisis, and now the Government are spending £500 million in a deal that will make thousands of Port Talbot steelworkers redundant. Is it not the simple truth that jobs and wealth will be lost because there is no comprehensive plan for steel, automotive or any industry that needs to decarbonise?

[Claire Coutinho]

I refer the hon. Lady to my previous comments. The investment will provide long-term security for at least 5,000 steel jobs. We have had record investment of £4 billion in the auto industry this year. Again, I urge her to look at her own party’s plans. Its industry decarbonisation plans are disastrous, and will push jobs and investment out of this country.

--- Later in debate ---

[Theresa Villiers (Chipping Barnet) (Con)]

16. What steps she is taking to help promote the creation of high-skilled jobs in the renewable energy sector.

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

This is a crucial area. There are already over 400,000 jobs in the renewable energy sector and that will rise steeply over time. We are investing billions in skills, including green skills and including 26,000 training opportunities in energy efficiency and low carbon heating.

[Theresa Villiers]

May I urge the Government to give real priority to the creation of apprenticeships in the renewable energy and green sector? That way, we can use net zero to create great opportunities for young people and boost social mobility.

[Claire Coutinho]

As a former Education Minister, I am absolutely passionate about this area. We have delivered almost 5.5 million apprenticeships since 2010. The Minister for Energy Security and Net Zero, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) chairs the green jobs delivery group, which will publish a net zero and nature workforce action plan in the first of half of 2024.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I welcome the Secretary of State to her position. Although the UK has the second largest offshore wind capacity in the world after China, Denmark has three times as many jobs in the sector. Many British wind turbines are being built in Spain, Holland and Indonesia. Why are the Government so far behind the curve on the green jobs bonanza that is so possible for our country?

[Claire Coutinho]

Thanks to Government policy and spending, we will support another 480,000 jobs in the green sector by 2030. As I said, we are leading the way in decarbonising faster than any other G7 country, with the jobs that come with that right across the country.

[Mark Logan (Bolton North East) (Con)]

I, too, welcome the Secretary of State to her place and remind her that we started in this place at the same time, four years ago. Will she highlight the job opportunities in the new renewable energy sector that AI presents for my constituents in Bolton?

[Claire Coutinho]

My hon. Friend raises an interesting point about the job opportunities presented by AI, which will undoubtedly have an effect across the country and a beneficial effect in this sector. I would be delighted to meet him to speak about this further, but we will be setting out more detail on our green jobs delivery group and our net zero and nature workforce action plan in the first half of 2024.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Would it not boost skills in renewable energy generation and installation, as well as encouraging more uptake, if all those installing solar energy schemes had to be certified under the microgeneration certification scheme so that the householder, farm or business concerned would be guaranteed payment for surplus energy fed into the grid?

[Claire Coutinho]

The right hon. Gentleman asks an interesting question. We have explored his suggestion of legislating to make certification mandatory. We have no such plans at this time, as there is a mature approach to certification standards, and most UK domestic solar installations already take place within well-established schemes.

[Virginia Crosbie (Ynys Môn) (Con)]

18. What assessment she has made of the potential contribution of Great British Nuclear to domestic nuclear energy targets.

--- Later in debate ---

[Priti Patel (Witham) (Con)]

T1.   If she will make a statement on her departmental responsibilities.

[The Secretary of State for Energy Security and Net Zero (Claire Coutinho)]

Since my appointment a fortnight ago, the Energy Bill—which will deliver cheaper, cleaner, more secure energy—was given a Third Reading in this House. We have funded a record 95 renewable energy projects, and I have visited our pioneering Culham Centre for Fusion Energy. I have also launched the £1 billion Great British insulation scheme. We have bolstered our energy collaborations with Ireland and Japan, we have made our biggest ever climate finance pledge, and just yesterday we invited partners to invest in Sizewell C, a major component of our nuclear revival.

[Priti Patel]

I welcome my right hon. Friend the Secretary of State to her new role. She will be aware that the huge increase in offshore wind farms in the east of England has led to an unwelcome proposal from National Grid to put 100 miles of pylons across the area. We do not want that. We need an offshore solution. Will my right hon. Friend meet Members from the east of England to discuss this proposal?

[Claire Coutinho]

I thank my right hon. Friend for raising this issue today. I understand that concerns have been raised by local communities about the National Grid electricity transmission plans for network reinforcement between Norwich and Tilbury. The Minister for Nuclear and Networks, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), has visited the area and will continue to engage with colleagues, but I am also happy to meet local MPs to discuss the matter further.

[Mr Speaker]

I call the shadow Minister.