Net Zero Strategy: High Court Ruling

Debate between David Duguid and Greg Hands

Thursday 21st July 2022 Commons Chamber

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

Thank you, Mr Speaker. I did wonder if I had managed to catch your eye.

Will my right hon. Friend confirm that this Government, whoever leads them after the summer, will remain committed to the net zero by 2050 target, given that, as he rightly said, in successive hustings, all candidates confirmed their commitment to maintaining that target? Will he also confirm that the UK oil and gas companies are at the forefront of driving forward the energy transition through so many different initiatives, such as carbon capture and storage, which will be so important to the St Fergus gas terminal in my constituency?

[Greg Hands]

My hon. Friend is correct. He is always a strong voice for all the industries in his constituency, whether they be traditional oil and gas or those making the transition to carbon capture, utilisation and storage, hydrogen and so on. All these technologies will be crucial. The Climate Change Committee itself has said that carbon capture, utilisation and storage is “essential” to the achievement of our net zero goals. We remain on course to reach net zero by 2050 as a world leader, particularly under the COP presidency of my right hon. Friend the Member for Reading West (Alok Sharma).

North Sea Oil and Gas

Debate between David Duguid and Greg Hands

Wednesday 9th February 2022 Commons Chamber

[Greg Hands]

On the second matter, it would not be right for me to opine on planning decisions. On the first, the licences are not new—I do not think the hon. Lady heard my statement—regardless of what she may read in The Daily Telegraph. In some cases, they were granted as early as 1970. The issue is how those licences are taken forward once they have regulatory approval.

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

I welcome my right hon. Friend’s confirmation that these are not new fields and, in some cases, have been licensed for many decades. Can he confirm that these fields and their production profiles are already factored into this Government’s energy transition plans for net zero by 2050—not only the Government’s plans but the recommendations of the Climate Change Committee? As part of an already declining domestic production profile, even those and further oil and gas fields that are still to come do not close the gap between current oil and gas provision and renewables, although that gap will steadily close as time goes on.

[Greg Hands]

My hon. Friend makes some strong points. He is absolutely right that these are not new fields; they are fields that have already been licensed and that therefore have been taken into account in our net zero strategy and in our upcoming carbon budgets. What that would mean if they were to get regulatory approval—I stress that that is an independent process—is that probably, in the future, we would be importing more gas, which would come with higher emissions and at a higher price.

Oral Answers to Questions

Debate between David Duguid and Greg Hands

Wednesday 19th January 2022 Commons Chamber

[Greg Hands]

Of course the Government are fully aware of these issues; there is no change in the Government’s position. We published the net zero strategy and we are seeing it come through. We are delivering on all of the aspects. My right hon. Friend the COP President just mentioned the climate change compatibility checkpoint. We are delivering on all of these things with haste.

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

I welcome my right hon. Friend’s response and the Government’s ongoing commitment to support the UK oil and gas sector in their role to drive forward the energy transition to net zero. Will my right hon. Friend join me in welcoming yesterday’s High Court ruling to throw out claims by certain environmental activists that UK Government support for the industry was unlawful?

[Greg Hands]

I thank my hon. Friend for his question. We welcome yesterday’s judgment. I, probably like he, wonder whether the SNP and the Scottish Green Government in Edinburgh would share our welcome. There will be an ongoing need for oil and gas as we reduce demand amid the transition to lower carbon energy, which, in the end, is the solution. I know from my visit to his constituency just last month how important renewables are for delivery in his constituency of Banff and Buchan.

Oral Answers to Questions

Debate between David Duguid and Greg Hands

Tuesday 11th January 2022 Commons Chamber

[Greg Hands]

The hon. Gentleman will not be surprised to hear that I disagree with him on the independence referendum, but we engage regularly with the Scottish cluster and Acorn, and I met Storegga before Christmas. I have also met with my hon. Friend the Member for Banff and Buchan (David Duguid), the MP for St Fergus, and have been to his constituency recently. Just to be absolutely clear, the Scottish cluster is the reserve cluster, which means that it met the eligibility criteria and performed to a good standard in the evaluation criteria. We also recently published our track 2 update for CCUS, which highlights our increased ambition of capturing and storing 20 to 30 megatonnes per annum by 2030. I think there is a great future there for the Scottish cluster.

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

I welcome the hon. Member for Ayr, Carrick and Cumnock (Allan Dorans) back to his place—even though he did kind of trample over my question a little bit. Will my right hon. Friend confirm the UK Government’s support for the oil and gas sector and its vital role in driving the energy transition to net zero? As part of that support, will he confirm what recent engagement he has had with the Acorn CCS project in my constituency of Banff and Buchan on its role as the first reserve cluster?

[Greg Hands]

As I have mentioned, I met with Storegga before Christmas, and my hon. Friend and I also talked about this in his constituency in early December. I am looking forward to further engagement with the cluster. I also agree with what he said about oil and gas. We have a North sea transition deal, and the important thing is transition. It would be mad, particularly at this time of elevated gas prices, to do anything to close down the North sea, and it is not our objective to do so. Therefore, we should stick to the transition deal, support our key oil and gas sector in the North sea and absolutely reject a lot of the politics coming out of the SNP, which has turned to be anti-North sea, which is not holding Scotland’s best interests at heart.

Storm Arwen: Power Outages

Debate between David Duguid and Greg Hands

Monday 6th December 2021 Commons Chamber

[Greg Hands]

Let me deal with each point in turn. It would not be fair to say that yesterday was a photo opportunity. The Secretary of State visited the armed forces, engineers, local residents, the relief centres and so on. It was most definitely not a photo opportunity, but an opportunity, as I discovered in County Durham on Wednesday and in Aberdeenshire on Friday, to thank those who had responded. Engineers had come from Northern Ireland and the Isle of Man to assist and we felt that it was right to go and thank them for their efforts. The Secretary of State is on a call at the moment with the Prime Minister and the head of Northern Powergrid.

On the response, the point here is that the mutual aid system is in place between the distribution network operators. The right hon. Member will know from his time as Secretary of State the importance of the mutual aid system—the NEWSAC, or North East South West Area Consortium, system—whereby different companies across the United Kingdom provide help to each other when a storm comes in. That is why engineers can be deployed right the way across the country. That is the most effective thing, because restoring power involves quite dangerous, health and safety-intensive work to restore overhead power cables, and those are the people one needs to be able to do the job.

The right hon. Member says it took a week to bring in the Army, but it is for the local resilience forum to say what the needs are locally. As soon as the local resilience forum in Aberdeenshire and that in Durham gave us the call, the Army was deployed very quickly indeed. He talks about investment, and I mentioned earlier that £60 billion has been invested in the network over the last eight years.

I learned at first hand on Wednesday in County Durham and on Friday in Aberdeenshire about the particular nature of this storm. There was the unusual wind speed and the fact that, rather than the prevailing south-westerly winds, the wind came in from the north-east, which makes a big difference for the power network. There was also the nature of the icing and the accumulation of icing on cables, which was a particular part of the storm. One of the engineers I spoke to in Durham on Wednesday described how he had experienced this particular set of circumstances only once before in his 35-year career in the industry.

Finally, on climate crisis, the right hon. Member is right: of course, there will be similar events like this and more of these events in the future. That is why we need to do everything we can—for example, with our net zero strategy in October—to make sure this country becomes more resilient to these kinds of events. We are currently doing the joint consultation with Ofgem on the future system operator, and that is exactly the kind of response that we need: a net zero strategy for how we equip the country overall, plus in particular how we make sure that the grid becomes more resilient to these kinds of events in the future.

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

I thank my right hon. Friend for his visit to Aberdeenshire on Friday, particularly to probably one of the hardest places to get to—I am not saying that Banff and Buchan is a hard place to get to—when we went to visit the engineers on the ground in a wooded area just outside the village of Methlick in my constituency. I think they really appreciated the visit from my right hon. Friend, and we certainly appreciated the work that they have put in.

I associate myself with my right hon. Friend’s remarks in his opening statement thanking those engineers as well as the resilience partnerships and emergency services. Will he join me in also thanking the local communities, individuals and community groups that have come out in force and shown community spirit, as they have done throughout the covid pandemic as well?

On the communications issue that a number of hon. and right hon. Members have raised, can I urge my right hon. Friend to make sure that the review that has been announced by Ofgem will look not only at the lessons learned and what went wrong with communications during this storm, but at what we can do in future to reach out to those who have become overly dependent on social media and handheld devices, and how we can go back to how we managed to communicate, say, 20 years ago?

[Greg Hands]

I thank my hon. Friend for that, and it was invaluable to have his assistance on Friday when visiting his community in Banff and Buchan. I met the SSE engineers at Methlick, and this is also a good occasion to thank in particular Mike Coull from the Little Kitchen, who has been working flat out to provide free fish and chips to the community affected in Methlick. I thank my hon. Friend for everything that he has done to keep his constituents posted and to make sure he fulfils his role here in the House, scrutinising the UK Government.

It was also a pleasure in particular to meet in Aberdeenshire those who had come from across the UK to assist. I was talking to one of the engineers who had come up from Liverpool, and there was a genuine professional satisfaction in coming from right the way across the country to help people in their time of need. I saw that from right across the UK, and I think people were very thankful for that. I also join with my hon. Friend in thanking the local communities.

On the review, of course people have become more dependent on electricity. Generally, that can be a good thing for us, particularly with electric vehicles and electricity as a source of power, but we also need to recognise that greater dependence means a greater responsibility, which I am sure will be part of the joint BEIS-Ofgem review coming up.

Oral Answers to Questions

Debate between David Duguid and Greg Hands

Tuesday 16th November 2021 Commons Chamber

[Greg Hands]

Of course, I share the hon. Lady’s concern for vulnerable people who face potential rises in energy prices. She will know that VAT is a matter for the Treasury but, of course, a VAT cut would be very untargeted towards vulnerable people. That is why we have schemes in place, such as the warm home discount, winter fuel payments and cold weather payments, to help vulnerable and elderly people. The Government have got the policy right.

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

On energy security, UK natural gas production has come down from around two thirds of UK demand in 2015 to less than half in the first quarter of this year—with, by the way, around 25% coming ashore at St Fergus in my constituency. Does my right hon. Friend agree that although we see a welcome increase in UK renewable capacity, it is far preferable, while a reducing demand for gas still exists, to source that gas domestically rather than to depend on foreign imports?

[Greg Hands]

My hon. Friend is absolutely right that we will always prefer British gas production to foreign imports. Some 50% of the gas we currently consume comes from the UK continental shelf, with an additional 30% from Norway. My hon. Friend is right to mention the transition; I know how much he fights for his constituency’s huge extent and variety of energy producers. Earlier this year, we were delighted to agree the North sea sector transition deal, which will offer a fantastic future for my hon. Friend’s constituents and those right across north-east Scotland.

Carbon Capture and Storage

Debate between David Duguid and Greg Hands

Wednesday 20th October 2021 Westminster Hall

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

Let me start by congratulating my hon. Friend the Member for South Cambridgeshire (Anthony Browne) on securing this important debate, and I thank all Members who have spoken.

We have already made huge progress in this country on decarbonising the electricity sector. In 2019, greenhouse gas emissions from electricity generation were down 13% on 2018 levels and were 72% lower than 1990 levels. Earlier this month, the plan to decarbonise the UK’s electricity system in its entirety by 2035 was confirmed by the Prime Minister and the Secretary of State, to help boost the country’s efforts to achieve its net zero ambitions.

Carbon capture, usage and storage has a key role to play in decarbonising the electricity system, but its role in supporting our ambitions to reach net zero by 2050 goes further than that. The industrial decarbonisation strategy, which we have already launched, marks the beginning of a process that will see wide deployment of key abatement technologies across industry. CCUS is, obviously, one of those key abatement technologies. It will be vital as we make this transition—something that is already acknowledged in our world-leading North sea transition deal, signed earlier this year.

The Climate Change Committee has described CCUS as a necessity, not an option, for the transition to net zero. We agree, and that is why in the Prime Minister’s 10-point plan for a green industrial revolution we set out to establish CCUS in at least two industrial sites by the mid-2020s and a further two by 2030 at the latest. CCUS is vital to transforming sectors such as steel—as was ably demonstrated by my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates)—cement, chemicals and other energy-intensive industries that lack viable alternatives to achieve decarbonisation. This summer we published the UK’s first ever hydrogen strategy, and we are moving forward quickly.

The net zero strategy, which was published yesterday, confirmed that the Government will set up a new revenue mechanism called the industrial decarbonisation and hydrogen revenue support scheme to fund industrial carbon capture and hydrogen projects, and to provide long-term certainty for private sector investment. The scheme will initially commit to awarding up to £100 million of contracts in 2023, and we will announce a funding envelope in 2022 that will enable us to award the first contracts to CCUS-enabled hydrogen. That was one of the key questions asked by my hon. Friend the Member for South Cambridgeshire. It will provide the certainty required to deploy CCUS at pace and at scale and will form part of a package of Government support, which will include the industrial decarbonisation and hydrogen revenue support fund and the £240 million net zero hydrogen fund.

To deliver our ambitions, we launched the phase 1 CCUS cluster sequencing process in May this year. Its aim was to provisionally sequence those clusters that are most suited to deployment in the mid-2020s. As we announced yesterday, following the phase 1 assessment, we have identified HyNet and the east coast cluster as track 1 clusters for the mid-2020s, with the Scottish Acorn cluster as a reserve cluster—I will explain what that means in a moment. This puts those places—Teesside, the Humber, Merseyside, north Wales and the north-east of Scotland—among the potential early super-places that will be transformed over the next decade. The track 1 clusters will be taken forward into negotiations, as the start of a process to determine their support under the Government’s CCUS programme. Those negotiations will allow us to confirm whether the clusters are affordable for Government, as well as whether they represent value for money for both the energy consumer and the taxpayer, prior to making final funding decisions.

For the Acorn Project—the Scottish cluster—we will continue our engagement to ensure that it can continue its development and planning. This means that if the Government choose to discontinue engagement with a cluster in track 1, we will engage with this reserve cluster instead. That decision was made following a transparent, objective and expert-led assessment process.

[David Duguid]

I repeat my thanks to the Minister for his commitment yesterday to meet with me later this week to discuss the evaluation criteria in more detail, particularly as they refer to the Acorn Project. As he referred to earlier, the Prime Minister said in his written statement yesterday that

“The UK Prime Minister’s 10 Point Plan established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest.”

The Scottish cluster is a reserve cluster that met the eligibility criteria and, we are told, performed well against the evaluation criteria. Will my right hon. Friend the Minister confirm that that status puts the Scottish cluster in a prime position to benefit from any acceleration of the programme that might be considered?

[Greg Hands]

I thank my hon. Friend for that intervention. We have been absolutely clear that the Acorn Scottish cluster is a reserve cluster, and we also have the existing commitment to have four clusters by the year 2030. Being a reserve in track 1 in no way prejudices a cluster’s position in track 2—in fact, it rather enhances it—so I will leave my hon. Friend to draw a conclusion from what I am saying without prejudicing proper process. I think that cluster is well placed.

Net Zero Strategy and Heat and Buildings Strategy

Debate between David Duguid and Greg Hands

Tuesday 19th October 2021 Commons Chamber

[Greg Hands]

I welcome the hon. Gentleman’s warm congratulation on that decision. Perhaps he might have a word with some of his colleagues near him on the Opposition Benches. He makes a good point about Teesside. We will work closely with Teesside Members of Parliament and with the Tees Valley Mayor, Ben Houchen, with whom I had an excellent conversation on this subject just a couple of weeks ago, to make sure that the skills base in Teesside improves and continues to be trained to make sure that it can continue to meet the challenges of the low-carbon future. When I was up in Hartlepool in Teesside just a few weeks ago, I was incredibly impressed to see the new investment in, for example, cabling by an offshore wind company. That company was adamant that there were good skills there, but we must keep working to improve those skills as we go forward.

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

rose—

--- Later in debate ---

[David Duguid]

On behalf of Cornwall—no, I rise to speak on behalf of my constituency of Banff and Buchan, to which I shall turn in a moment. First, I thank my right hon. Friend the Minister for his visit last week to Aberdeen, where he expressed the Government’s ongoing and continuous support for the oil and gas sector and its valuable role in the energy transition to net zero. The North sea transition deal includes carbon capture and storage; far be it from me to correct the hon. Member for Kilmarnock and Loudoun (Alan Brown), but the hon. Member for Edinburgh North and Leith (Deidre Brock) got it right: it is St Fergus, not Peterhead. Is it not entirely predictable from SNP Members? They have been practising their script since before the bids even came in—they gleefully declare betrayal.

Given the fact that the Government have already expended £31 million in the Scottish cluster, will my right hon. Friend meet me to discuss the Government’s plans to help the Scottish cluster to develop and plan not only as a reserve but certainly for the next track of negotiations?

[Greg Hands]

I will of course meet my hon. Friend to discuss that. I thank him for taking a strong interest in my visit to Aberdeen last week. He is right that the oil and gas sector is in transition, welcomes the North sea transition deal and wants to work closely with the Government, the OGA, Oil & Gas UK and so on in continuing to make a massive contribution to Scotland and the whole of the United Kingdom.

On carbon capture, utilisation and storage, this is not the end of the story, as I said. We need to make a decision and make progress, but Acorn is the first reserve. If Members look at the rest of our policy, they will see that there is potential to expand our commitment yet further in advance of 2030.

Oral Answers to Questions

Debate between David Duguid and Greg Hands

Tuesday 21st September 2021 Commons Chamber

[Greg Hands]

The hon. Lady will know the course of that scheme through her important work as Chair of the Public Accounts Committee. She will also know that we are committed to publishing a heat and buildings strategy in the run-up to COP, and she will just have to wait and see what is in it. It is incredibly important that we take strong action to make sure that our public and private building stock remains sustainable for the future and makes its contribution as we move forward to net zero and our chairing of COP in November.

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

I welcome my right hon. Friend and the other new BEIS Ministers to their places.

Perhaps uncharacteristically, I agree with the hon. Member for Aberdeen South (Stephen Flynn) in backing the Acorn project, which is in my constituency of Banff and Buchan. The hon. Gentleman and other SNP Members often like to talk about the Scottish Government’s recent commitment to £500 million of support for a so-called just transition in the north-east of Scotland, but as far as I can tell no actual plan of action is connected to that funding to deliver the energy transition that we need. Will my right hon. Friend the Minister inform the House of what this Government actually plan to do to deliver net zero and how much investment has been and will be available through, for example, the North sea transition deal?

[Greg Hands]

My hon. Friend will know about the North sea transition agreement, which we announced earlier this year. I share his concern about the Scottish Government’s approach to all these things. It is still very early days for that coalition, but we are watching carefully. I am sure my hon. Friend will agree that Scotland has benefited enormously from UK Government investment in renewables. On the contract for difference scheme, for example, 20 of the 58 projects that have been awarded CfDs to date are in Scotland. That represents 34% of all CfD projects and 21% of total CfD capacity. My hon. Friend is right that the UK Government are delivering for Scotland.