Energy Bill [Lords]

Baroness Laing of Elderslie Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

Our biggest task worldwide is to get to net zero. We must transform our entire energy system. The Liberal Democrats welcome many of the Bill’s proposals. However, it is simply not ambitious enough. We need bold action now to protect consumers from spiralling costs and to put us on the path to net zero.

The Government continue to protect the oil and gas giants. Typical direct debit customers have seen their annual gas and electricity bills almost double, while oil and gas giants have announced record profits. Last year, Shell forcibly installed prepayment meters in over 4,000 homes while making £32 billion in profit. UK consumers have been among the least protected in Europe. When will this Government put struggling UK citizens first?

The energy price cap is not fit for purpose. The current price cap is set at a high level to incentivise people to switch energy suppliers, but research shows that vulnerable customers who struggle to pay their energy bills are much less likely to switch suppliers. We Liberal Democrats would reform the price cap to protect these customers by bringing in a capped tariff set lower than the existing price cap. I urge the Government to consider this.

The best way to reduce energy bills is to move harder and faster towards renewables. However, a lack of grid capacity is seriously holding back renewable energy projects. Many face delays of up to 15 years. In Wokingham, for example, the Liberal Democrat council has been told that its first ground-mounted solar farm project will only be connected in October 2037, a decade later than originally promised. How can we decarbonise our power system by 2035 when ready-to-go renewable projects cannot get the grid connection they need?

Britain will have to build seven times more transmission lines in the next seven years than it has built in the last 20. This huge task will require a major change in approach by the regulator. Ofgem is not empowered to consider the benefit of long-term investment, as its remit focuses on short-term costs to consumers. This is a major reason behind the lack of grid investment. In the other place, an amendment was agreed to give Ofgem a specific statutory net zero objective. I urge the Government to keep this provision in place.

The Bill, as amended, also now contains a ban on opening new coalmines. Less than two years ago, the Government announced that they were leading an international effort to end the use of coal, yet soon afterwards they gave the greenlight to the Cumbria coalmine, a gateway to allowing more fossil fuels in the UK and flying in the face of our net zero commitments. The Government must ensure that this ban on new coalmines remains part of the Bill if they are to retain a shred of credibility on climate action. Huge changes to people’s lives will be required to get to net zero. We must bring people on board, or there is a risk that people will not accept the necessary changes, making our progress to net zero more lengthy, costly and contested.

Community energy provides cheaper, greener power and distributes benefits locally. The community energy sector has the potential to be 20 times bigger by 2030, powering 2.2 million homes and saving 2.5 million tonnes of CO₂ every year. However, community energy projects currently generate just 0.5% of the UK’s electricity. This is because the financial, technical and operational requirements involved in becoming a licensed supplier put initial costs at more than £1 million. The amendments agreed in the other place would rectify this, and they must remain part of the Bill. Ministers have said repeatedly that they want more community energy. Now is the time to show that they mean it.

Some 77% of people say that they would support a new onshore wind farm being built in their area. Our UK communities know that renewables are the solution to our energy crisis. However, this Government continue with their dogmatic opposition to onshore wind and solar. The Bill does not contain provisions to roll out solar power, and the effective ban on onshore wind remains.

Another disappointment is that the Bill does not contain provisions to cut flaring, venting and leakage of methane from gas and oil platforms. Methane is a potent greenhouse gas, with 80 times the warming effect of CO₂. It accounts for 13% of global greenhouse gas emissions. The UK has signed the global pledge to cut methane levels by 30%, and a ban on oil and gas flaring and venting in the North sea would dramatically reduce methane emissions. It is supported by the Environmental Audit Committee and the Government-commissioned independent review of net zero. We must mandate monthly leak detection and repair activities. The North Sea Transition Authority must identify and publish a league table of the best and worst performing companies, so that methane emissions can be publicly monitored. We can reduce methane waste by 72%, but the Bill is currently silent about that and needs amending. We still have much to do to protect consumers and reach net zero. The Bill, although substantially improved in the other place, still does not go far enough. As it passes through this House, we must ensure it does not become a missed opportunity.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call David Duguid.

--- Later in debate ---

[Duncan Baker (North Norfolk) (Con)]

When Russia invaded Ukraine and the energy crisis started, nobody would have thought that a small village called Bacton on the rural North Norfolk coast would play a central role. North Norfolk is home to Bacton gas terminal, a hydrocarbon gas processing plant supplying up to one third of the UK’s gas supply. As well as importing and exporting gas from Europe, Bacton acts as an important interconnector between Belgium and the UK.

Since the start of the war, Bacton has shot to prominence and has been working overtime. I mention it this evening to place on record its importance to the UK energy revolution, and to the hydrogen sector in particular. Bacton’s potential is absolutely enormous. It plays and it will continue to play a very significant role in the future of our energy security, specifically in the future of blue and green hydrogen production.

Already there are plans to launch a £1.3 billion project by Hydrogen East to transform Bacton into a hydrogen hub of the future. That hub in that little village in my constituency has the potential to power London and all of the south-east into the future. That is how significant it is. As the Secretary of State and the Minister know, they are warmly invited to see for themselves why leaders in the sector are looking seriously at this project and the potential it offers.

We know that the Energy Bill will make provision to secure our energy production and regulation, instead of subjecting the UK to volatile international markets, but a transition to hydrogen is also estimated to deliver 12.9 million tonnes of CO₂ reduction. Not only will that provide us with 25% of what is needed to reach net zero, but the economic situation must not be overlooked. Importantly, it will generate up to £11 billion in private investment and more than 12,000 new jobs by 2030.

As many have said, hydrogen production will be the backbone of our transition away from fossil fuels, and it is vital that we accelerate our move towards those greener alternatives. Bacton and its £1.3 billion project could, as a terminal into the hydrogen energy of the future, heat up to 20 million homes for decades to come, with long-lasting impacts. So what is the problem? Well, all we need now is for the Government to sit up, take notice and give us the momentum, the investment and the support. By repurposing the existing infrastructure, we could, according to many of the projections, see hydrogen production in Bacton fully up and running by 2030, putting the UK on a world-leading path.

My coast already provides some of the highest concentration of wind farms in the world. It is not too far out of the question to say that North Norfolk has the ability to do that again, and—with Bacton set for the hydrogen energy revolution—it could be one of our country’s capitals of the secure energy future. We just need the Minister to help us with that. Bacton gives us our own secure energy production facility, long-lasting security and a greener future, and it certainly enables the UK to be a main player in this market.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.