Energy Bill [Lords]

George Eustice Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

This is a large and technical Bill that sets in place important frameworks, particularly when it comes to carbon capture and storage and the wider deployment of hydrogen and heat networks. I will address my comments, in the time that I have today, to part 3 of the Bill, particularly the support for low-carbon heating schemes and the opportunity that this provides for doing something creative for the off-gas grid homes in this country. It links to the earlier intervention of the hon. Member for Strangford (Jim Shannon) and to a private Member’s Bill that I introduced at the beginning of this year.

At the moment, we have 1.7 million homes in this country that are currently off the gas grid, most of which use kerosene at the moment. Under the current Government plan, which is born out of a strategy that dates all the way back to 2017—several Governments ago—the intention is that all those 1.7 million homes would be banned from having a replacement boiler after 2026 and told that, instead, they must have, effectively, either an air source heat pump or a ground source heat pump. As the right hon. Member for Leeds Central (Hilary Benn) said, there is a role for those heat pumps, but they are not for every home. In particular, in rural and especially coastal areas, air source heat pumps can be prone to rusting and decay. It is also the case that they need a lot of insulation to make them work, and, in some older homes, high levels of insulation mean less ventilation, which can lead to problems with damp, mould and all of the health problems that go with that.

Perhaps, more important than anything, the capital cost of these air source or ground source heat pumps for a single property is around four times that of a conventional boiler.

[Alec Shelbrooke]

My right hon. Friend touches on a point that I was going to raise later. My concern about the banning of gas boilers from 2024 is the impact that that will have on industry and on farming in particular, especially in relation to those costs. Farming is under a lot of pressure at the moment. Does he agree that this is similar to the argument that he is making about households in 2026?

[George Eustice]

My right hon. Friend makes an important point. As the right hon. Member for Leeds Central said, we need a diversity of different technologies because it is essential that we have all the tools in the box to achieve our objectives.

There is also a wider problem with the current Government strategy. Just before we get to 2026, we can envisage plumbers and boiler engineers across the land going out to people and saying, “If I were you, I would get a new boiler now because the drawbridge is about to come up.” That will probably mean that we will have a surge of investment in boilers at just the wrong time. On top of that, there is likely to be a “mend and make do” approach that will stretch for many years. All of this means that the objective of making carbon reductions, and getting not just to net zero but to our objectives under carbon budget 5, gets potentially further away, rather than closer.

The good news is that there is a better way. In recent years, the technology and supply of renewable liquid fuels have developed. If we were to use renewable liquid fuels such as hydrotreated vegetable oil, there is a great opportunity for us to get an 88% reduction in our carbon emissions, but far faster than the current Government strategy. It could get us an 88% reduction by carbon budget 5 simply by having an adaptation of those existing boilers.

A pilot in my own constituency has been testing hydrotreated vegetable oil. Residents who have used it report that it burns more efficiently. Some say that the use of the fuel is around 30% lower than with kerosene. The people at the church hall like it because they need intermittent heat, and they can switch it on without having a heat pump running continuously, wasting all that energy. The staff at the school like it because it works for their Victorian building. There is a huge amount to be said for opening the door to the deployment of these renewable liquid fuels. The Government already recognise this, because the renewable transport fuel obligation, introduced in 2007, creates an incentive scheme to require both importers and refiners of fuel to source some of that from renewable sources, such as hydrotreated vegetable oil. The Bill is an opportunity to extend the architecture of the RTFO, a long-standing scheme, to domestic boilers as well so that we can have that incentive.

I know that some officials in the Department argue that we cannot be certain that hydrotreated vegetable oil comes from renewable sources. I do not accept that. There is a British standard—an accreditation scheme for HVO that comes from renewable sources. It would be very easy for the Government, through regulation, to insist that only British standard-certified HVO would be allowed for this purpose. The officials have also raised questions about the supply of renewable HVO, but we are seeing an exponential rise in supply both from the United States and from the European Union and the potential to develop it in this country as well.

I very much hope that the Government will look favourably on amending the Bill—clause 104 of part 3 of the Bill would be key—preferably with their own amendment to give respite to 1.7 million homes in rural locations. If not, I shall seek, if I have the support of the House, to amend the Bill. My private Member’s Bill attracted huge support not just from Conservative Members, but from Members across the House, and the Government should consider it.

Energy Bill [Lords]

George Eustice Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

The study would also consider how tidal range projects in close proximity to major population centres including Merseyside and Bristol can help us overcome the transmission and supply issues that continue to plague our energy grid, which constitute in the view of many experts the biggest stumbling block to the decarbonisation of our energy system. It would also take a whole-system approach to considering how we should best fund new tidal range projects. The most often cited barrier to the development of tidal range installations is the cost of their construction, but with operation lifespans of a century or more, their cost is more comparable to that of new nuclear and even offshore wind. It is vital that we look seriously at how other forms of financing, including the regulated asset base model recently applied to new nuclear, can help us in kick-starting tidal range generation.

[George Eustice (Camborne and Redruth) (Con)]

I support Government new clause 63 and welcome their bringing it forward. I had tabled amendment 8 and new clauses 40 and 50, each of which in different ways sought to give the Government the powers they needed to extend the existing renewable transport fuel obligation so that it might cover domestic heating fuels for off-grid properties. Government new clause 63 achieves that, creating the same power by replicating section 124 of the Energy Act 2004, and therefore I will not press my amendment or new clauses to a Division. I thank the Minister for the work he has put in on this; we have discussed it many times and I know he has worked hard to get a cross-Government consensus.

I also welcome the Minister’s commitment to a consultation. Some Members have questioned the timing of it, but we all have to be realistic about how long these things can take and the fact that a consultation needs to be done properly, and we should therefore accept in good faith the undertaking he has given at the Dispatch Box today. So I support that.

I want to address a point raised earlier by the hon. Member for North Antrim (Ian Paisley) and reassure him that I did not hang him out to dry. I am very conscious of the fact that Northern Ireland has 400,000 homes that are off the gas grid, and when discussing the Government new clause proposal last week, I highlighted the fact that Northern Ireland was a special case. The Minister has given an undertaking that conversations are continuing with officials in Northern Ireland, and I hope we can find a resolution to that issue.

My final point is not really a matter for today’s Bill: the associated issue of the proposed ban on replacement boilers for off-grid homes currently proposed for 2026. I know that the Government will be looking at that—it is a consequential consideration following an amendment they have put forward today—and I look forward to hearing what Ministers will have to say about it in due course.

[Nadia Whittome (Nottingham East) (Lab)]

I rise to speak in support of new clause 35. My amendment is about funding for decarbonising homes and I hope Members across the House will agree that it is badly needed. Our homes are among the least energy-efficient in Europe and heating them accounts for 14% of all UK carbon emissions. If we do not retrofit around 29 million existing homes in the UK we will not be able to reach net zero by 2050. This is a mammoth task, so we must act now.

However, decarbonising housing is not just about tackling the climate crisis: millions of people are living in freezing homes that are expensive to heat, left at the mercy of the volatile gas market. Poor-quality housing is costing people their health and even their lives. Retrofitting homes would reduce bills, make homes safer and improve people’s quality of life. It would also create new jobs in every part of the country, helping build the green economy we so desperately need.

The Climate Change Committee has found that people accept the need to make changes to their homes, but they need well-designed policies to help them to act. The biggest barrier for many will be the up-front cost. The Government have funding to retrofit the homes of people on low incomes, and that is available through the social housing decarbonisation fund and the sustainable warmth fund, but the amount on offer just is not enough, particularly given the rising labour and material costs. In fact, last year, the number of Government-funded energy efficiency measures installed in UK homes dropped by half, year on year. It is now a shocking 97% below 2012 levels.

If the Government had not cut energy efficiency support in 2013, just imagine how many more people might have spent last winter in a comfortable home and how many fewer families would have had to choose between heating and eating. Short-sighted Tory cuts have cost us a decade in a fight we cannot afford to lose. We need long-term consistent funding and a clear road map of how the decarbonisation of housing will be achieved. Local authorities are uniquely placed to understand the needs of their area and to target schemes where they can provide the most benefits. In Nottingham, against the odds, more than 4,000 homes have been retrofitted by the city council in the past decade. Just imagine what more could be achieved by councils across the country with long-term predictable funding for decarbonising homes. The amendment is calling for the Government to undertake an assessment of the benefits of providing this funding to local authorities. I hope the House will invest in our future by supporting new clause 35.