Green Energy: Ports

Dan Poulter Excerpts

Wednesday 18th October 2023 Westminster Hall

[Stephen Crabb]

I am grateful for my hon. Friend’s intervention. Banff and Buchan is a constituency with which I am very familiar, as he knows, and there are some exciting things happening. For a long time the north-east of Scotland was associated with fishing and oil, but there is a lot more to talk about now, so I look forward to hearing further contributions from him this afternoon.

To encourage the investment required for all the ports that we have an interest in and are talking about this afternoon, the targets that the Government are setting are really important because they set the level of ambition and send a signal to investors in the marketplace about what the Government want.

There are two documents that are particularly important in describing the opportunities flowing from the new energy environment that we are in. One is the energy security strategy published in April last year; the other, which was published in March this year, is “Powering Up Britain”, which speaks to the role of new renewable technologies in our energy mix and outlines the scale of the ambition. Because of my local port and our proximity to the Celtic sea, I have a particular interest in the Government’s ambitions for floating offshore wind. In those two Government documents, I believe there lies a major new industrial opportunity for our nation.

The targets that have been set include 5 GW of floating offshore wind, 10 GW of low-carbon hydrogen production capacity, up to 70 GW of new solar, and an ambition for between 20 million and 30 million tonnes per annum of carbon storage. That is an exciting and ambitious set of targets that the Government are setting out. Meeting them will require a lot of work and a lot of investment, and ports will be right at the centre of it.

Different ports will undoubtedly offer different capabilities according to size, location, local skills mix and local supply chains. It is too easy to say that there will be something for everyone, but if the floating offshore wind sector in the Celtic sea plays anything like the role that the Government are setting out for it in “Powering Up Britain”, it will generate new activity in multiple port locations across south Wales and south-west England.

But let us not get ahead of ourselves. The truth is that we still do not have any floating offshore wind projects up and running in the Celtic sea. That leads me on to the final section of my speech, in which I will outline the significance of what we have in my constituency at Milford Haven, as well as summarising the key asks that I want to put to the Government.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I feel this is an appropriate juncture to intervene. My right hon. Friend will be aware of the importance of Felixstowe port in Suffolk, which has almost 50% of the UK’s container trade. Through strategic investment, there is a great opportunity for the Government not only to support the economic growth of ports, but to support them in delivering the decarbonising agenda. In the case of Felixstowe, investment in the Ely junction will make a significant difference by potentially improving freight rail capacity to the port. Will my right hon. Friend join me in urging the Minister to recommit today to the Government securing timely funding for upgrading that junction and others in the east of England? That will allow improved freight transport to Felixstowe, will help to decarbonise the transport of goods to the port and will improve its economic capacity.

[Stephen Crabb]

I am grateful for that intervention. I am not familiar with the specifics of what my hon. Friend is talking about, but as I am generally in favour of upgrading junctions, I will echo his call to the Minister to support the investment required. His point about decarbonisation is really important; I might say a few words myself about decarbonisation in the context of the local energy industry in Milford Haven.

In the port of Milford Haven, we have the UK’s single largest cluster of energy-related businesses, with high-capacity oil and gas pipelines, electricity connections and a wide range of conventional oil and gas companies, as I referred to earlier. The energy sector in Pembrokeshire supports the employment of 5,000 skilled workers across Wales and the employment of many hundreds more throughout the wider supply chain.

Last week, alongside representatives of many companies at the port, I had the pleasure of celebrating the delivery of the 1,000th cargo of liquefied natural gas at the South Hook LNG terminal. This afternoon we are talking about the green energy revolution, but the truth—this is a point that the Minister understands very well—is that we will rely on oil and gas for decades to come, and the terminals in my constituency that have done a lot of the heavy lifting in the last couple of years in enhancing UK energy security will be as vital as ever. Those conventional energy companies are themselves taking huge strides and making big investments to decarbonise, reduce their own carbon footprint and fit in with the framework of policy and ambition that the Government have set out.

I commend those companies—South Hook LNG, Dragon LNG, the Valero oil refinery, the Puma oil import terminal—which are all part of a cluster around the Milford Haven waterway that is sharing best practice and working together. They are part of the wider south Wales industrial cluster, which has been charged by the Government with the mission of leading decarbonisation efforts. I look forward to hearing the remarks of my friend the hon. Member for Aberavon (Stephen Kinnock). The south Wales corridor—from Milford Haven in the west with its big hydrocarbon plants, through to Port Talbot with the enormous Tata steelworks, and then to Newport and the border of England at Gwent—accounts for a major chunk of Wales’s overall carbon emissions, so the south Wales industrial cluster’s efforts to decarbonise are vital. The Government support them, but it would be good for Ministers to engage even more with the cluster and particularly, from my point of view, with the energy cluster in Pembrokeshire.

In October last year, I led a debate in Westminster Hall about floating offshore wind. I will not repeat everything I said about the new industrial opportunity for Wales and south-west England that lies in the Celtic sea, but I underline the point that this is not some piece of green idealism. The Government’s targets for reaching net zero and ensuring a greater degree of energy security require industrial development in the Celtic sea on a very large scale. Milford Haven is in an ideal geographic location for the Celtic sea developments.

Milford Haven also has more than 50 years of energy industry skills and heritage. Many companies in the local supply chain are well able to adapt and are excited about the potential new opportunities from floating offshore wind. More than 20 companies have expressed an interest as potential developers in floating offshore wind projects in the Celtic sea, including large companies such as RWE and Equinor, which have global footprints and are already investing in Pembrokeshire ahead of the opening up of the Celtic sea. Other companies such as Floventis are already working with local schools and colleges to look at what kind of skills will be required and to excite young people about the green energy revolution. We will need many more people going into technical trades—more welders, pipe fitters, marine engineers, navigators and people who can work offshore—as well as project planners and all the other highly skilled jobs that are required to deliver such projects. It is an exciting time down in Milford Haven.

Let me wrap up by summarising a few asks of the Government. The first—the Minister has heard me ask this before, but I will ask it again—is that it would be great if he could visit Milford Haven, sit down with some of the companies that I am talking about, and get a sense of the excitement and the work that is happening. The previous Secretary of State made a fleeting visit in the middle of August to RWE’s net zero centre at its power station in Pembroke, but we need the Minister to engage with the whole sector. He has previously committed to coming down. Transport to west Wales is appalling—the Welsh Government need to pull their finger out when it comes to running train services, but that is a debate for another day—so it is difficult to get to. There are so many good Scottish colleagues present, so I will make the point that, given the number of visits that Scottish constituencies get, it would be great if Wales could have some of that as well. That is my first ask: come to Pembrokeshire and see what is happening.

Secondly, the bidding process for the floating offshore wind manufacturing investment scheme closed recently. I have written to the Secretary of State, copying in the Treasury. I strongly support Milford Haven’s application for FLOWMIS funding. I have made this point previously, and I will make it again this afternoon: if this fund is to help unlock strategic investment in port infrastructure, it has to be used in a targeted way. I love levelling-up funds—I love the way they are used and spread around—but this is not a levelling-up fund. It has to be used to encourage private developers to release their funding, to incentivise and to send a market signal. I encourage the use of that money. There is £160 million. It should be more, and hopefully it could be more. I would like to see Milford Haven and the port of Port Talbot in south Wales get their asks. Investment is needed in both locations. Everyone who is considering the industry of floating offshore wind in the Celtic sea will agree that Milford Haven and Port Talbot are the two western-facing ports in the Celtic sea where this will happen first.

Thirdly, we appreciate the support that the UK Government have given to establishing the Celtic freeport. I am delighted that Milford Haven, and Port Talbot 70 miles away, have a twinned arrangement and are partners in the Celtic freeport enterprise. A lot of work remains to be done on the governance and on getting the freeport up and running and doing its thing. I ask the Minister to show a real interest in that and to meet representatives of the Celtic freeport to capture their vision of how they want to use that to incentivise investment, particularly in supply chains, so that floating offshore wind does not happen in the same way as fixed-bottom offshore wind, where we ended up relying on companies based and doing work overseas. We want much more of the work for this new industry to be based in and close to our constituencies in south Wales.

My fourth ask of the Minister is on working with the Crown Estate, which I know he already does. If the Minister looks at what the Crown Estate has said ahead of its next leasing round, he will see that it is emphasising the importance of developers working with what they describe as integration ports. These are the ports where the kit is going to be assembled, and these are enormous pieces of kit. I take my hat off to Dan Labbad and his team, who are doing a very good job, but it is important that the plan that the Crown Estate is working on aligns with what the UK Government are doing. That aligned leadership is going to be important if we are going to make those strides and get the industry off the ground.

I was going to make a final point about contracts for difference, but the hon. Member for Strangford (Jim Shannon) will be leading an excellent Westminster Hall debate on that subject tomorrow afternoon, so I will let him make those points. I am sure that he and I think the same about the issue.

I will leave it there. I look forward to hearing from other Members.