Offshore Petroleum Licensing Bill

Debate between Dave Doogan and Angus Brendan MacNeil

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

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

The hon. Gentleman rightly mentions the sky-high energy prices that people in Scotland face, even though Scotland generates so much energy. What role does he think zonal and modal energy market modelling, rather than a one-size-fits-all, UK-wide approach, would play in substantially reducing energy costs in the likes of Sutherland in Scotland, and also in England, in places like Surrey? Everybody would be a winner if we moved away from the UK-wide model and towards the zonal and modal method.

[Dave Doogan]

The hon. Gentleman raises an interesting question. There has been a lack of investment, and the network that delivers energy around GB was designed for a small number of very large generators. It is ill-equipped to deal with many smaller systems of generation. That is why we find ourselves switching off wind turbines and, where the demand still exits, replacing them with gas, much to all our constituents’ cost and misery. The failure to transition in the electricity distribution network across GB is exactly the same failure we see in our dependency and desire to keep looking backwards. We should transition from hydrocarbons to renewables in a way that respects communities.

In closing, we should grasp Scotland’s bright future with both hands. In so doing, we will rid ourselves of the mismanagement of successive UK Governments in Westminster.

Energy Bill [Lords]

Debate between Dave Doogan and Angus Brendan MacNeil

Report stage
Tuesday 5th September 2023 Commons Chamber

[Dave Doogan (Angus) (SNP)]

I start by paying tribute to my predecessor in this role, my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), whose work on energy, particularly on access to clean and affordable energy, was exceptional. I base my ambitions in this role on his record. I also note the Minister’s kind remarks about my hon. Friend and thank him for them.

I want to highlight the abject abandonment of community-owned energy projects in this Bill. It is patently obvious that any just transition to net zero is simply not possible if local communities cannot sell the energy they produce to local customers. Local energy trading provides manifold improvements, including lower prices, protections against price shocks, enhanced energy security, network redundancy and a return on investment back to communities.

The UK Government kicking this can down the road is a hammer blow to efforts to achieve a just transition, and they are doing so without even trying to disguise the fact. Worse still, they have instead provided a paltry £10 million over two years—the Minister left out the “over two years” bit—to fund feasibility studies in England. That is not seedcorn funding; it is chicken feed served up with extra disdain for Scotland and Wales, as the UK Government have steadfastly refused to apply Barnett consequential to this admittedly pitiful sum.

Fundamentally, this sop to Tory Back Benchers does not—as one of the Minister’s Back Benchers said—remove the barriers preventing community energy schemes from selling their power locally. The Local Electricity Bill would have done that, as would amendments made to the Energy Bill had they not been removed by Ministers in Committee in July. Why is this Tory Government so loth to put power in the hands of the people?

Turning to nuclear, English MPs maintain an enduring obsession with nuclear. Their total failure to concede or even rationally acknowledge the catastrophic decommissioning and clean-up costs of that energy source is, by any measure, incredible. As they drag Scotland and Wales along with them for the ride, it is almost as if those English MPs, and indeed the Government, can foresee a time in the not-too-distant future when they will need to buy Scotland’s energy rather than just taking it, as they have got used to doing over recent decades. Nuclear is their insurance policy against Scotland’s independent future.

New nuclear is a millstone around the neck of our net zero future, consuming disproportionate costs per megawatt-hour. If we contrast nuclear with offshore wind, we see that although construction costs for nuclear continue to spiral out of control, and SMR nuclear continues not to get off the ground, the cost of offshore wind has fallen by 80% in a decade. New offshore wind projects coming online within the next two years will be paid about £45 per MWh, which is half the wholesale power price of £90 per MWh forecast until at least the end of the decade, and 60% less than the £115 per MWh of electricity from Hinkley C nuclear power plant.

Tories and Labour Members alike will cry, “This is all about baseload for when the wind does not blow”—I am surprised they have not done so already. Of course, that is correct; we do need baseload, but it does not have to be nuclear. If successive Westminster Governments had invested nearly as much rhetoric and taxpayers’ money creating a renewable energy mix as they have done for nuclear, we would be in a very different place. It would be a place where tidal flow and barrage schemes complement widespread impoundment, pump storage and run-of-river hydro schemes, together with green hydrogen production, battery storage, solar on every appropriate elevation of a domestic or commercial property, and timely delivery of carbon capture, usage and storage.

[Angus Brendan MacNeil]

The hon. Gentleman makes a point that must be recognised and understood for the future. Before Hinkley Point was commissioned, the question was of providing 6 GW of nuclear baseload rather than just 6 GW of baseload, and of seeing whether there could be a mix of green energy, as he argues, or if it would have to be nuclear energy. By prescribing the way the Government have in the past while sticking to 2012 index-linked CfD prices, nuclear is a way to make and print money very quickly.

[Dave Doogan]

My hon. Friend is correct. Over and above the self-evident environmental consequences of nuclear, the way in which this and successive Westminster Governments have fiscally mismanaged the pursuit of nuclear leaves nothing to the imagination.

To continue my remarks, we do not live in that place. We live here in broke, broken Britain. The Bill fails the people on energy once again because it is bereft of strategy and completely loses control of costs. If we want to evidence such calamitous incompetence, we need look no further than auction round 5, or, more specifically, the strike price therein. That price threatens to kill off construction-ready projects from that auction round. At the very best, it will mean even less of the additional supply chain value landing in domestic companies and local workers’ bank accounts, further deepening the cost of living crisis. Penny wise, pound foolish.

Contrast that with the strategic ambition of the Scottish Government, who are investing in communities by maximising the economic, supply chain and employment opportunities of onshore and offshore wind, with up to £1.4 billion of developer supply chain commitments on average across Scotland. I have seen the extraordinary investment and opportunity at Montrose port in my Angus constituency with Seagreen, but we need sustained investment to win those crucial multiplier effects and make the just transition a systemic reality for our communities.

--- Later in debate ---

[Dave Doogan]

The hon. Gentleman is entirely correct: he did miss me highlighting what would replace that baseload, and I refer him to Hansard after today’s debate.

The challenges of inflation and interest rates have altered the parameters to such an extent that this Government’s pretence that it is business as usual is breathtaking. Have they not seen what happened in the recent auction round in Spain or, conversely, what happened in Ireland when the Irish Government intervened to protect investment in renewables and reaped the benefit and reward for their economy?

If projects do slip from allocation round 5 as a result of an unrealistic strike price, where do Ministers think the supply chain capacity, the skilled workers and the specialist vessels will go? They will not wait around here, waiting for the Department to get its sums right—they will be off to the US and the EU to access commercially cogent incentive packages such as those found in the Inflation Reduction Act or the EU’s Net-Zero Industry Act. The stakes could not be higher for both net zero commitments and UK energy prices.

I am proud that the SNP has worked to protect people from the worst effects of the Westminster cost of living crisis with our amendments to the Bill, with steps that would protect the next phase of contracts for difference projects within AR5, properly provide for a comprehensive and complementary mix of energy storage solutions, advance local supply rights and work towards supporting our most vulnerable with the development of a social tariff, especially for those with higher energy use caused by medical conditions. I am pleased that the SNP’s new clause 39 will be put to a vote this evening, and I urge all Members to support that provision, which, while modest in scope, would have profoundly positive effects on many in our rural constituencies who live off the grid and have to heat their homes through liquid fuel.

[Angus Brendan MacNeil]

rose—

[Angus Brendan MacNeil]

The hon. Gentleman mentioned a small issue that makes a big difference. The energy bills support scheme, which was very harsh, ended far too soon and has caused an awful lot of problems. This has been covered by Radio 4, and people have written letters about it—I have a letter here from Stourport, in the constituency of the hon. Member for Wyre Forest (Mark Garnier), who is a member of my Energy Security and Net Zero Committee. People the length and breadth of the UK are feeling the harshness of the Government’s penny-pinching and tight deadlines, and those who live in caravan parks or on boats are being especially hammered by this. This Government should listen and make a difference. One of the big things affecting people watching this debate today is that they are not getting that £400 for the last year.

[Dave Doogan]

I agree entirely, and I echo the calls from my Scottish National party Westminster leader, my hon. Friend the Member for Aberdeen South (Stephen Flynn), who wants to see the £400 support package reintroduced. The idea that the pressure on household budgets from energy prices has somehow gone away is for the birds.

Energy security is not some abstract area of Government policy, nor is the purchase of energy a discretionary one for homes and businesses in our constituencies. Failing to legislate and plan strategically in this area, as Westminster has done in perpetuity, is the very reason people are facing the choice between heating and eating. It is the same reason that businesses across these islands have closed their doors due to energy costs. The exorbitant cost of energy in the UK is a function of supply-side constraint, and this Government have compounded that through incompetence, inaction, lack of ambition, penny-wise, pound-foolish misadventure and their obsession with nuclear.

Just imagine how much more perilous the situation for energy consumers in England would be if they never had Scotland’s energy powerhouse to shore up this Government’s incompetence and spaffing money on nuclear left, right and centre. This Bill was an opportunity to make up lost ground and catch up with functioning unions—the United States and the European Union—but as usual, the dysfunctional United Kingdom gets it wrong again, and it is ordinary taxpayers and bill payers who will pick up the pieces and pay the cost. There is one reason why households in energy-rich Scotland are facing fuel poverty and haemorrhaging household budgets on energy costs, and it is sitting in this Chamber: the UK Government.