Green Energy: Ports

Graham Stuart Excerpts

Wednesday 18th October 2023 Westminster Hall

[The Minister for Energy Security and Net Zero (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I begin by thanking and congratulating my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. We have heard high-class contributions from pretty much every person who has spoken so far. I will return, if I have time, to the trite and empty remarks—which were perhaps written by others—from the shadow Minister, the hon. Member for Manchester, Withington (Jeff Smith).

Just by way of context, it is worth highlighting the record, because track records should count for something. Less than 7% of our electricity came from renewables in 2010. That was the dire inheritance of this Government. It was the CfDs developed and delivered by this Government that transformed the economics of offshore wind and which led us from the Labour record of less than 7% to nearly half in the first quarter of this year. We have gone from a desperate legacy, where nearly 40% of our electricity came from coal—the filthiest of fossil fuels—as recently as 2012 to that being eliminated next year under this Conservative Government. It is this Conservative Government who have led the world. We have cut emissions more than any other major economy on earth and grown our economy significantly at the same time.

We heard about crowding in private investment, Great British Energy and writing cheques, which is the last thing we need. We have heard that from Labour before, yet every Labour Government in history have ended with unemployment higher than it was at the beginning, when they started. They all offer hope and cheques for all, promises of huge support and endless taxpayer subsidy, which will deliver nirvana. Nirvana has never been delivered by Labour—not a green one and not any other kind. I said that bit would come at the end, but I had to indulge myself and do it at the beginning.

As has been said by everyone here today, ports are so important to unlocking the green revolution. As colleague after colleague have highlighted, from the Humber to Wales to Scotland, the southern North sea and Northern Ireland, ports have an enormous contribution to make to economic regeneration. The fact that we are blessed with this phenomenal renewable energy opportunity in the UK—which this Government, uniquely and unlike the previous, are committed to unlocking—means that we can turn levelling up from an excellent concept into genuine delivery. The previously highly carbon-dependent areas of this country are the very areas that genuinely need that, and they are best set to benefit from it. Their ports are what will make that possible.

I recognise the importance of existing port activity in south Wales in securing the UK’s and indeed Europe’s energy supply. Last year, rather than being, as in the previous year, a net importer of a billion cubic metres of gas, we moved to being an exporter of 19 billion cubic metres of gas, making a significant contribution to storage in Europe and the energy security of an entire continent. A lot of that came through south Wales. Of course, it is the two LNG terminals in the constituency of my right hon. Friend the Member for Preseli Pembrokeshire, on the Milford Haven waterway, that helped to deliver that. Looking forward, the success of the Celtic freeport bid, covering Milford Haven and Port Talbot, demonstrates the opportunity to unlock investment and therefore growth for the south Wales area and delivering those high-paid, long-term jobs that so many colleagues on the Government side of the House not only talked about, but have a history of delivering.

The right port infrastructure is vital to deliver offshore wind and other renewables, as part of our transition to net zero. Big though the energy business, carbon capture and related things are, perhaps the biggest opportunity here is what all this will facilitate. When we took on the COP presidency, just 30% of global GDP had made net zero pledges. By the time the presidency was handed on by the UK to Egypt, that figure stood at more than 90%. The world is following. If we create among the world’s first genuine net zero industrial clusters, the inward investment that will come—into non-directly energy-related, yet still energy-dependent businesses, as every business is—could be quite phenomenal. That is why colleagues are right to share their excitement and why my right hon. Friend the Member for Preseli Pembrokeshire is right, again and again—alongside, as always, the hon. Member for Strangford (Jim Shannon)—to come here and enthuse about the importance of this and the opportunity it brings.

The Government’s policies, as set out in the British energy security strategy and endorsed in “Powering Up Britain” earlier this year, include bold new commitments, so that we can supercharge clean energy and accelerate renewable energy deployment. The Government set an ambition of 50 GW of offshore wind by 2030, up from just 14 GW today. The UK has the largest offshore wind sector in Europe and is home to all four of the largest offshore wind farms in the world. As part of that ambition, we are aiming for up to 5 GW of floating offshore wind. Colleagues have rightly highlighted the importance of ports to that, given the gargantuan scale of the products that will be required. Ports will play a vital part.

Colleagues have raised the issue of ensuring that we maximise the industrial heft and capability from this sector, which is why we are looking at reviewing the contracts for difference scheme and improving it with non-financial factors and other ways of encouraging industrial development.

The hon. Member for Aberavon (Stephen Kinnock) asked me what work we could do with the Crown Estate. The first thing is to work super closely with it, which we do. We are backed by colleagues from His Majesty’s Treasury, and it has been great to see how we can work together co-operatively to unlock this. As part of the tender for the offshore wind leasing round 5 in the Celtic sea, the Crown Estate will require floating wind developers to set out specific commitments to ports, as well as binding commitments on wider issues such as enhancing skills, addressing environmental impacts and delivering community benefits. I hope that that answers the hon. Gentleman’s reasonable question.

[Douglas Chapman]

During my summing up, I mentioned the ferry terminal from Rosyth to Europe. The Minister has brought in other issues such as skills, training and so on, but the other thing that we should think about is our ports for exports and ferry services. I noticed that he made a note that he would contact his colleagues at border control—that is a complete roadblock at the moment—to make sure that the ferry service can go ahead and be a success.

[Graham Stuart]

I certainly sympathise with the Scottish Government’s troubles and challenges with ferries. As the hon. Gentleman suggests, through my officials I will pass on that message to other Departments to facilitate that. Anything we can do to help, we will seek to do.

[Douglas Chapman]

Will the Minister give way?

[Graham Stuart]

I will not.

The offshore renewable energy catapult has estimated that floating offshore wind could deliver more than £40 billion for our economy by 2050, creating about 30,000 jobs in the process. We are moving at pace to deliver those benefits, with more than 25 GW of floating wind projects with confirmed seabed exclusivity—the most in the world. The last thing we need to introduce into the excellent track record and system for bringing in private sector investment from all over the world—which we are proud of—is Labour’s plans for Great British Energy clunking into a carefully calibrated set of market mechanisms. That will have exactly the opposite effect of the objectives that the shadow Minister, the hon. Member for Manchester, Withington, set out.

Going further, the Crown Estate has announced its plans to hold a seabed leasing round in the Celtic sea, capable of supporting up to a further 4.5 GW, as we have heard. We also understand the importance to investors of certainty on a long-term leasing pipeline. If they can see the scale, we can get large-scale investment. We are acutely aware of that issue and are working closely with the Crown Estate and with other Government Departments. We must ensure that the multiple uses of our seas are thoroughly considered, so that we can then provide the visibility to unlock investments in ports, which will then unlock further investment.

The Government recognise the critical role that ports will play in achieving our green energy ambitions and the importance of securing investment in the infrastructure. They will also be a big enabler for offshore wind and a catalyst for wider supply chain development.

[Stephen Kinnock]

rose—

[Graham Stuart]

I think I am about to be cut off. Are we finishing at 4 pm?

[Judith Cummins (in the Chair)]

No, we have until 4.15 pm.

[Graham Stuart]

Then I would be delighted to give way.

[Stephen Kinnock]

I am sure that the Minister is absolutely delighted that the voting interruption has given us some additional time. He was talking about floating offshore wind infrastructure. I do not know if he is coming to this, but I asked about grid capacity. There are real concerns that there will not be the grid capacity to facilitate all this, which is having an impact on developers’ thinking, too. What comments does he have on that?

--- Later in debate ---

[Graham Stuart]

I thank the hon. Gentleman for another excellent and well-made point. One of the biggest challenges facing my Department is ensuring that we have the facilitating infrastructure. No matter how interesting the generation is—nuclear, floating, fixed-bed, onshore, offshore—it does not really matter if the electrons cannot get where they need to. That is why we commissioned the Winser review on transmission, and I am really grateful to him for his work. We are going to be reporting back on that as soon as we can. We are working closely with National Grid and others to speed up the extraordinarily long times it takes to put that infrastructure in place. The hon. Member for Aberavon was right to say that if we want to realise our Celtic sea ambitions or our other ambitions around the UK, we need the facilitating infrastructure.

More locally, we are also focused on connections. We will shortly be coming out with a connections plan, because we have queues filled with projects that may never go ahead. We need to find ways to deal with that legally and properly. We now have a dedicated Minister for Nuclear and Networks, precisely because we recognise the challenge. The hon. Member for Aberavon is right to highlight that. We are working flat out on it and it is probably our top priority.

[Stephen Crabb]

On the important issue that the hon. Member for Aberavon (Stephen Kinnock) raised about the grid, is the Minister aware of any specific work by National Grid looking at the grid needs of ports, so that we know which UK ports are going to be energy ports? We can predict where those locations are going to be and we can see activity already happening. Is National Grid doing a piece of work to map the grid requirements of the next 20 to 30 years and put together plans for individual port locations?

[Graham Stuart]

One recommendation of the Winser report was that we pull together a much more coherent overall spatial plan. In previous years, things were done on a fairly linear basis, as we have seen in East Anglia. We have been taking steps through the holistic network design—not necessarily the best title—in phases simply to ensure that we have a more strategic and joined-up approach. We cannot do it project by project; we have to plan the whole thing out. We want to take it from a regional basis to a national basis. Further information will be set out by the Government.

We are working with our European neighbours. I spoke to the German ambassador only this morning about the fact that all of us around the North sea need to think and work together on a common basis. If we do so, we will be better able to realise the huge opportunities in the surrounding seas, do so at the lowest possible cost and maximise European energy security and the jobs and benefits that spring from doing that work.

For floating offshore wind specifically, the industry road map 2040, developed by the floating offshore wind taskforce, identified the need for up to 11 ports across the UK to support the roll-out of commercial-scale floating offshore wind. That is a significant opportunity for the years to come. To support the industry, the Government launched the £160 million floating offshore wind manufacturing investment scheme, which the shadow Minister, the hon. Member for Manchester, Withington, asked about in one of the much more reasonable comments in his speech. We are doing everything we can to bring the timing of that forward and do the assessment, and I hope that we will be able to announce the next stage—due diligence—before the end of this year, but that is tight.

In the coming years, the UK and other countries will exponentially increase their offshore wind deployment in the North sea, the Celtic sea and across a range of new markets. We signed a memorandum of understanding with countries surrounding the North sea in the week before Christmas last year about our rejoining the North Seas Energy Co-operation forum, and we will be having another ministerial next month to ensure that we are working closely together.

We will work with industry, through RenewableUK and the Offshore Wind Industry Council, to assess supply chain needs, which so many colleagues have rightly raised, and to identify the opportunities for the UK to lead and benefit from sustainable growth in the industry, including through building new export opportunities. As a former exports Minister, I recognise that by leaning in ahead as we have done—we have cut our emissions more than any other country on earth—and developing the technologies and solutions, we then have the long-term opportunity to export it. If we can capture more than enough of that energy to meet our own needs, we can export it directly. We could also convert it into green hydrogen, and we can export that. We can also bring in the carbon that will still necessarily be emitted by certain industries and our western European neighbours and put that into the 78 gigatonnes of capacity we have in the North sea. There is so much to be done here, and it can make such a difference: it can bring about the renaissance of industry in the north-east and north-west of England, in Scotland, in Wales and in Northern Ireland, as well as all around the country. It is a very exciting thing.

As I said, ports are not just important for offshore wind. They will also play a key role for carbon capture and storage, supporting the decarbonisation of emitters. Maritime shipping will play a key role, linking emissions captured from the dispersed sites with offshore CO₂ storage sites. Import and export ports across the UK that can handle large volumes of CO₂ will be required to facilitate the transport and storage of CO₂ via ships. We heard about the plans for the Humber and elsewhere, indeed including on the south coast as mentioned in the brilliant, albeit short, speech by my hon. Friend the Member for Southampton, Itchen (Royston Smith).

On hydrogen, the Government recognise that port infrastructure will have a big role to play. We have a target of 10 GW of low-carbon production by 2030. As the hydrogen economy matures and the UK exploits export opportunities, we will need the right port infrastructure to accommodate large transport ships bringing in or taking away hydrogen, and we are determined to seize those opportunities for the UK economy. It is so important that we do not have an Administration who would do the exact opposite—and who have a track record of that.

[Peter Aldous]

Offshore wind champion Tim Pick has highlighted some of the obstacles that need to be overcome for the industry to realise its full potential. Some of that focuses on ports. Will the Minister provide a bit more detail on the Government’s response to his proposals and recommendations?

[Graham Stuart]

We are working with industry through the Offshore Wind Industry Council, of which I am a co-chair, to consider Tim Pick’s wide-ranging recommendations, including developing an industry growth plan. Again, this is to do with supporting the development of the UK supply chain and, as we do this massive deployment, trying to ensure that as much as possible of the industrial heft of that can be delivered through the UK and UK jobs. That work is ongoing, and we will keep going.

The hon. Member for Strangford will be aware that Northern Ireland has a target for 1 GW of offshore wind from 2030. SBM Offshore and Simply Blue are developing FLOW projects in Northern Ireland. Likewise, Simply Blue is developing the Erebus project in the Celtic sea.

I was asked about meetings. Notwithstanding any transport and logistical challenges, I would be delighted to come to Wales. I must pay tribute once again to my right hon. Friend the Member for Preseli Pembrokeshire, who is relentless, albeit always cheerful and well-considered, in promoting the need for understanding and engagement with his part of the world and the opportunities that offers for the whole of the UK in contributing to the global challenge on climate change and, most importantly, in delivering a more prosperous and better future for constituents in his part of the world. Thank you, Mrs Cummins, for chairing the debate.