Gas-fired Power Stations
Graham Stuart Excerpts(1 month, 2 weeks ago)
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Caroline Lucas (Brighton, Pavilion) (Green)
(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero to make a statement on the Government’s plan to build new gas-fired power stations.
The Minister for Energy Security and Net Zero (Graham Stuart)
The second consultation of the review of electricity market arrangements was launched yesterday. It sets out the choices that we need to make to deliver a fully decarbonised electricity system by 2035. Since 2010, the Government have reduced emissions from power by 65% and thus made the UK the first major economy in the world to halve emissions overall. We have built record volumes of renewables, from less than 7% of electricity supply in 2010 to nearly 50% today, allowing us to remove coal altogether by October this year.
Our success in growing renewables is the reason we need flexible back-up for when the wind does not blow and the sun does not shine. Our main source of flexible power today is unabated gas. More than half of our 15 GW of combined-cycle gas turbines could be retired by 2035. Meanwhile, electricity demand is set to increase as heat, transport and industry are electrified. We must ensure that we have sufficient sources of flexibility in place to guarantee security of supply. We need up to 55 GW of short-duration flexibility and between 30 and 50 GW of long-duration flexibility. Our aim is for as much of that capacity as possible to be low carbon.
While low-carbon technologies scale up, we will extend the life of our existing gas assets, but a limited amount of new build gas capacity will also be required in the short term to replace expiring plants as it is the only mature technology capable of providing sustained flexible capacity. We remain committed to delivering a fully decarbonised electricity supply by 2035, subject to security of supply, and we expect most new gas capacity to be built net zero-ready. The Government have committed £20 billion to carbon capture, usage and storage, and are developing comprehensive support for hydrogen. In the future, unabated gas plants will run for only a limited number of hours a year, so emissions will be entirely in line with our legally binding carbon budgets.
Caroline Lucas
I am a bit tired of this Government shunning any scrutiny of their climate record and instead relying on a past record, because while the UK may indeed be the first major economy to cut its territorial emissions by half since 1990, we are not on track to achieve our 2030 targets, and if we factor in consumption emissions, the UK has cut emissions by only 23%. So let’s have a little less complacency from the Minister. He will know that the Government’s announcement on new gas-fired power stations does in fact, contrary to what he claimed, risk undermining our climate targets and leaving the country reliant on imports of expensive gas. Members should have been given the opportunity to question the Minister on its implications for the decarbonisation of the UK’s energy system by 2035, with 95% of UK electricity being low carbon by 2030.
First, why was the statement not made in Parliament? Why was it made instead at Chatham House, where Members were not able to question the Minister on the impact of this decision? Secondly, will the Minister explain how this proposal differs from the functioning of the existing capacity market, or will he admit that it is just the Government’s latest attempt to stoke a culture war on climate? Thirdly, the Climate Change Committee is clear that no new unabated gas plants should be built after 2030, so what is the Government’s timeline for developing these new gas-fired power stations?
I asked the Minister about this yesterday in the Environmental Audit Committee; I did not get a response. I also asked him what is being done to ensure that these gas plants are zero carbon by 2035; that was not set out either in the Secretary of State’s speech yesterday or by the Minister today. The Minister did tell the Environmental Audit Committee that the plants would be required to be both carbon capture and storage-ready and hydrogen-ready. That does not amount to a meaningful plan, so will he please give us more than his thus far unevidenced words of assurance, and will he explain what the Government’s plan is to support the development of batteries and long-term storage technologies and to drive innovation so that we can get off volatile gas for good?
Graham Stuart
It is rather odd to be asked about the ability to scrutinise this, when yesterday was the launch of a consultation that will go on for some time and, as the hon. Lady knows, I was in front of the Select Committee yesterday. It is rather strange that she should highlight that point.
The hon. Lady is confused, as she often is, because she is so political. She would appear to set politics always ahead of climate. She struggles to recognise that that United Nations framework convention on climate change rules are about territorial emissions—countries own the emissions in the territory where they take place. Her numbers on embedded emissions are wrong, but she does not care about that; she just carries on with a political diatribe against the Government, who have done more than any other in any major economy on this Earth to decarbonise their economy. And we have done it not as the hon. Lady would have us do it—by being reduced to living in yurts—but while growing the economy by 82%. It is people like the hon. Lady who make people on my side of the Chamber at times think that we are perhaps engaged in some form of madness; we are not, but she doesn’t half make it sound like we are.
Can these new gas plants be consistent with the Government’s commitment to decarbonise the power sector by 2035? Our published net zero scenarios for the power sector—I invite the hon. Lady to read them—show that building new gas capacity is consistent with decarbonising electricity by 2035. From those scenarios we expect that, even with new gas capacity, rather than the 38% of electricity generation which in 2022 came from gas, that figure will be down to 1% by 2035—or, if we follow the scenario set out by the Climate Change Committee, perhaps 2%. We are going to have that as a back-up. It is sensible insurance; it is about keeping the lights on while we carry on the remarkable transformation this Government have achieved in moving from the appalling legacy of the Labour party of less than 7% of electricity coming from renewables to nearly 50% today.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
The announcement on gas-fired power stations is extremely welcome, but at the moment a kilowatt-hour of electricity in the UK costs 44 cents, against 17 cents in the US and 8 cents in both China and India. We have become fundamentally uncompetitive because of this green obsession. We want cheap electricity and we should have gas and we should have coal, and we should postpone net zero indefinitely because we are only 1% of global emissions. We are making no difference, and the US economy is growing consistently faster than ours because of cheap energy. This is a good first step against the net zero obsession. We need to go further.
Graham Stuart
I would chide my right hon. Friend with the science and evidence that are emerging all the time. There is a climate challenge and emergency, which is why we are looking to reduce our emissions. He is quite right to challenge that by saying, “We are less than 1% of global emissions, so how does this make sense?” That is why we hosted COP26 and got the rest of the world to commit to following us. We are bringing in the carbon border adjustment mechanism from 2027 precisely to ensure that we create an economically rational system that supports jobs in this country, while meeting the climate challenge that needs to be met.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am little puzzled about what all this is about. The Committee on Climate Change and all credible energy experts have said that we will need a small residual of unabated gas in the system for the medium term, and that is consistent with a fully decarbonised power system. No one disputes that, and it is barely worth an announcement. We should extend the lives of existing plants to meet that need. If new-build plants are needed in the short term to replace some of those retiring gas-fired power stations, there is no disagreement, provided they are capable of converting to hydrogen or carbon capture, as the Government say they must be.
However, that is not what the Secretary of State said yesterday at the Chatham House meeting. The Government’s own analysis published yesterday shows that 24 GW of existing gas capacity could be maintained via life extension and refurbishment, and 9 GW of new capacity is already in the baseline under existing capacity market arrangements. That is an uncontroversial position and analysis, and hardly something worth making a huge fuss about. But again, that was not what the Secretary of State talked about at yesterday’s Chatham House conference.
Given that analysis, could the Minister enlighten us with the number of new gas plants that the Government are hoping to build, given there is no mention of that in the 1,500 pages of documents that were published yesterday? That is an important point, because it appears to show the Government’s intention to go beyond what is already in the analysis and build a large number of new gas-fired power stations for the future.
There is a great deal in the review of electricity market arrangements published yesterday that is worth discussing, not least the Government’s glaring failure to bring forward low-carbon flexible technologies such as long-duration storage, which everyone knows we will need. It is a shame that the Minister has not properly addressed that. Will he give us clarity on whether this is a meaningless announcement within existing policy arrangements? Or, as has been said, is it an attempt to conjure a culture war out of climate and energy policy, with announcements with no substance or value that show that the Government have no serious plan for energy in our country?
Graham Stuart
The hon. Gentleman asked whether new power plants will be hydrogen or carbon capture, utilisation and storage ready; we will legislate to make that a requirement. He asked how much there will be; around 5 GW, but that is dependent on so many interrelated things, such as the growth of low-carbon and flexible storage, which, as he referred to we are a world leader in developing and supporting both in innovation and through the capacity market. He suggested that none of that was clear yesterday, but it was made crystal clear.
We are a world leader, having announced £20 billion for CCUS. The hon. Gentleman will remember, because he has been around a long time, that in 2003 the then Labour Government said that carbon capture, utilisation and storage was urgent and that there was no route to 2050 without it, but then they proceeded to do nothing about it. This Government are getting on with it. We are putting our money where our mouth is and developing technologies such as carbon capture and hydrogen, in a way that the Labour Government failed to do—as they did with renewables, to boot. All they do is talk about climate, but the truth is that the greatest climate risk to this country is if the right hon. Member for Doncaster North (Edward Miliband) destroys the market and starts some state-run quango, which will wreck the renewables growth that we have seen.
Jerome Mayhew (Broadland) (Con)
I welcome the announcement. The independent Committee On Climate Change recognises that we will need unabated gas in the electricity market right up until 2035 and beyond, and more widely that even in 2050, 25% of our energy needs will come from hydrocarbons. Does my right hon. Friend agree that this is exactly the right way to maintain lower energy production costs, while still meeting our net zero targets?
Graham Stuart
I do agree with my hon. Friend. The point is to have a wide range of back-up capacity, but not to use it very much with fossil fuels, and, as I think has long been the case, to ensure that any new gas generation should be carbon capture-ready. We look forward to it being hydrogen-ready, too. We are in a very similar position to Germany and other countries that are looking at exactly that. For instance, I think both Germany and Ireland, as part of their growth in renewables, recognise the need for gas, albeit used less and less, to ensure that the lights stay on and there is appropriate insurance in place.
Dave Doogan (Angus) (SNP)
What a cluster—it is unbelievable that we are in this situation. In the Secretary of State’s letter to Members today, she said that the Government are taking steps to make sure the lights stay on. That is the legacy of 14 years of the Conservatives in charge of energy. Uncomfortably, I find myself in agreement with the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg). This is a significant departure, and one we should be alarmed about. Where is the Government’s precious nuclear baseload now? Where is the exemplar of CCUS working at the necessary scale, from which the Government are taking inspiration? Would it not have been an elegant solution to have unabated gas winding down at the same time as battery storage and long-duration pump storage was winding up? We cannot have that, because the Government have dragged their feet on both things. What does the Minister say to people who are having infrastructure for transmission put throughout their communities and are being told to suck it up because that is what we need to get gas out the system, when the same Government are now building gas-fired power stations?
Graham Stuart
The hon. Gentleman, who is supposed to lead on this subject for his party, should have listened to what I said earlier. In 2022, 38% of generation came from gas. By the mid-2030s, it will be 1% or 2%. Why are we having it? To balance the renewables we are growing, particularly in Scotland, and support Scottish jobs. Of course if we put generation in Scotland when the demand is in the south, we have to provide connecting infrastructure. Previous generations had to wire up the UK to become the rich and prosperous country we are today. We need to do it again now. We are working with local communities, listening to their voices and making sure they are not misled by people who come up with such nonsense as the hon. Gentleman just did.
James Wild (North West Norfolk) (Con)
I commend my right hon. Friend for his refreshingly clear articulation of our strong record in this area, both in the House today and in the media yesterday. Obviously, security of supply must come first. How will the plans incentivise investment in back-up gas-fired power stations, while minimising costs to consumers, which is also very important?
Graham Stuart
I thank my hon. Friend. He and my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) are absolutely right to focus on the economics. We have to get the economics right. We have used an auction-type mechanism in the capacity market to ensure flexible capacity. We are incentivising more and more of that to be low carbon, with batteries coming in at scale, as well as pumps and potentially hydrostorage. We also need hydrogen and carbon capture. We are ensuring a balanced system with discipline built into it to drive costs down. When CBAMs and so on come on stream, I firmly expect that in the 2030s we will have lower-cost energy than our neighbours and we will, as my right hon. Friend the Member for North East Somerset referred to, be more economically competitive.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
Thank you, Mr Speaker—tapadh leibh.
It is concerning that this was announced in Chatham House and not here in the House, and that the Secretary of State is not here today. Off-piste speeches have cost in the past. My Committee heard this morning that an Energy Minister made a speech a decade ago that, with the effect it had on investment, cost 1,000 jobs. The Minister says that this is a consultation, but have the Government picked a winner? What room have they given for storage to be in the mix? Are they confusing energy security—we have learned from the Ukraine war important how that is—with continual electricity supply? Given what the Minister says about the percentage of gas used by 2030 and after, what percentage of capacity will this provide, and what percentage does he envisage will be used day to day? What thought has been given to consideration of other technologies in his gigawatt demand?
Graham Stuart
I thank the hon. Gentleman for his question. I suggested, on different scenarios, about 1% or 2% of total generation coming from gas in future, compared with 38% in 2022, on an annualised basis. Clearly, as the hon. Gentleman should know better than anybody here with his deep knowledge of the subject, it is based on intermittency. It depends on how much the sun shines and how much the wind blows, but we will ensure we have a robust system. That is exactly what we are doing. I would love it if people could celebrate this country’s global leadership and the fact that we are driving this forward, especially those such as members of the Green party, who are supposed to care about climate change. We are doing this in a way that maintains security of supply and, by bringing in more and more renewables, with the lowest-cost and most flexible system to back it up, doing so in a more and more economical fashion.
Alexander Stafford (Rother Valley) (Con)
I welcome the announcement today. It is pure common sense. When the wind is not blowing and the sun is not shining, we need security of supply. Although we need to deal with climate change in the medium to long term, we must also deal with security of supply in the short term, so I welcome the announcement. Does the Minister agree that for medium and longer-term security of supply, we must upscale what we are doing in the hydrogen sector, with more hydrogen production and usage, and be a world leader in hydrogen? For the moment, we are slipping behind a bit.
Graham Stuart
I agree with my hon. Friend about the importance of hydrogen. Where I disagree with him is that, having seen the projects in hydrogen allocation round 1—eight projects, I think—I do not think there is any indication that we are slipping behind. The truth is that the whole world needs to do this, because everyone’s analysis, from the International Energy Agency to the Climate Change Committee to my own Department, suggests that hydrogen and carbon capture are necessary to bring about the decarbonised system we seek. He is absolutely right on the importance of hydrogen. He can expect more developments, because this country is leading on that, as it is on CCUS.
Sir Mark Hendrick (Preston) (Lab/Co-op)
I have a great deal of respect for the Minister and his knowledge of the subject, and the fact that he, like most of us in this Chamber, recognises the need to cut carbon. I am sure he is not one of those who, like the right hon. Member for North East Somerset, would follow the flat earthers. But clearly, a great deal of trust and reliance is being put on carbon capture and storage, and on hydrogen. Both are still quite new technologies. We have talked about this stuff for 25 years. The Minister seemingly forgets that this Government have been in power for the past 14 years and we are still not off the blocks on hydrogen and carbon capture and storage. Is it not the case that the Government are taking this position because it is a nod and a wink to the gas and oil industries whose support they will probably need before the election this year, and that this is part of the whole agenda of placating the right wing of his own party?
Graham Stuart
I was with the hon. Gentleman nearly all the way. He is right: the whole world is looking at carbon capture and hydrogen, because that is what the science says. Everybody who analyses it says that we need it bur that it is not yet at a great level of maturity. Just as in so many other areas, this country is leading the way. We have cut emissions more than anyone else. He knows the dire legacy left by his party in 2010, with less than 7% of electricity from renewables, which was just appalling, and the real danger if we go back to that. That is why we have gas power as a back-up, so that we have a completely sound system. We will seek to deliver a decarbonised system by 2035. The biggest risk to that would be if the right hon. Member for Doncaster North were to come in and start to mess with a system that has lifted us from the back to the front of climate leadership. That is the real danger, and that is what we need to avoid.
Mrs Heather Wheeler (South Derbyshire) (Con)
Will my right hon. Friend stop by South Derbyshire, specifically the Willington site, which already has planning permission for a new gas power station, and cut the ribbon when it opens? We want spades in the ground, so I welcome the announcement. I invite him to come and have a look at that site, which is ready to go.
Graham Stuart
I agree with my hon. Friend and I applaud those who are investing in our system. We have made ourselves one of the most investable countries in the world for clean energy. Gas has an important part to play in that balance, and with the development of carbon capture and hydrogen there is every opportunity for such assets to have an even longer life in a green fashion. I would love to come and see my hon. Friend.
Wera Hobhouse (Bath) (LD)
Oil and gas are the energy sources of the past, and we need an intermittent energy source. Gas power plants are not intermittent. They sit there, and then because there is too much renewable energy it is shut off, and gas—the carbon energy—continues to flow. That is the reality of today: we are wasting renewable energy. The Government do not recognise that reality, and do not respond to it.
My question is this, however. How many times have Ministers met representatives of the oil and gas industry, and how does that compare with the number of meetings with representatives of the renewables industry?
Graham Stuart
As so often—the hon. Lady does it spectacularly well—she is completely and utterly wrong. Renewables are turned off, as she would say, because of constraints within the system, and gas is turned on because the system could not cope otherwise. That is why we have the transmission acceleration action plan and the connections action plan. [Interruption.] Every time we try to build out the infrastructure, the hon. Member for Angus (Dave Doogan) opposes it. He says that he and the Scottish National party want to be a friend of the renewables industry and Scottish jobs, but then he opposes the infrastructure that is required for it.
Graham Stuart
I meet representatives of the oil and gas industry a lot, because the truth is that even given our world leadership—and we have cut emissions by more than any other major economy on the planet—75% of our primary energy today is still from oil and gas. We will still be dependent on oil and gas in 2050, when we are at net zero. That is why it is so crazy that the Opposition parties, including that of the hon. Lady, believe in opposing licences when we are actually dependent on the product. All that ending licences would do is lead to the loss of British jobs and the import of higher-emission products from abroad. I really do hope that Opposition Members will think a bit more deeply and we can hear some common sense. I hear it in the Corridors from Back Benchers, but from the Front Benchers and the hon. Lady I hear nothing but nonsense.
Martin Vickers (Cleethorpes) (Con)
I welcome this policy decision, which is a recognition of reality. Can the Minister confirm that the new plants will be able to convert to low-carbon alternatives in the future?
Graham Stuart
I thank my hon. Friend. We will be legislating precisely to create exactly that obligation for carbon capture and/or hydrogen readiness.
Sammy Wilson (East Antrim) (DUP)
I hope that this decision is indicative of a realisation that seems to be slowly dawning on the Government about the impact of the madness of their net zero policy, which has damaged the UK economy. We have higher electricity prices than most of the other G7 countries, we have lost vast numbers of jobs in energy-intensive industries, and now it has been recognised that because of the intermittency of wind and solar there is a risk of blackouts.
I welcome this common-sense decision, but given that we are going to use gas to power these stations, why does the Minister not take the next logical step and legislate to allow us to tap into our vast UK gas resources? As the United States has shown, that would bring down prices, give us energy security, and make our economy more competitive.
Graham Stuart
The right hon. Gentleman could not be more wrong: we have record levels of employment, and we overtook France recently to become the eighth largest manufacturer in the world. I would not expect him to join the dismal party opposite in talking this country down. In truth, we are leading the world in tackling climate change, and we have created more jobs than at any time in British history. Going forward into the 2030s, by harnessing more and more British low-carbon, renewable energy we will lower bills for families and increase our competitiveness. As I have said, in a world that is increasingly recognising the need for action and seeking to introduce measures such as the carbon border adjustment mechanism—effectively, carbon taxes at the border—the UK is in pole position to grow from its already strong economic position into an even stronger one as a result of the net zero policies of this Government.
Bob Blackman (Harrow East) (Con)
Across London and the south-east, many much-needed developments that are required for the increasing population have literally been frozen because of a lack of supply from the grid. Nuclear power can provide the baseload; renewables are unreliable, and obviously gas is required at peak times in particular. Does my right hon. Friend agree that this is all about topping up the grid at peak times, when people want to use electricity, because gas is the fastest way to bring a power station on to the grid and is also the fastest to shut down?
Graham Stuart
My hon. Friend will be aware of all the work we are doing to speed up transmission. We are halving the timeline from 12 to 14 years to seven, and the connections action plan has already moved forward connection dates for projects amounting to 40 GW. We are putting in a lot of work across the piece. This gas capability is there as a back-up, but the usage and the emissions resulting from it will fall precipitately over the next 10 years, and we can all celebrate that.
Deidre Brock (Edinburgh North and Leith) (SNP)
After their years of delaying meaningful investment in clean, cheaper, reliable renewable energy technologies such as tidal and long-duration pumped hydro storage, it is no surprise that the Government are now having to scramble to create new dirty gas-powered plants. How much does the Department estimate the new plants will cost, where is it suggesting they should be built, and what does the Minister mean by carbon-capture-ready? Does he mean carbon-capture-operational?
Graham Stuart
As I have said, further legislation will come forward in the not-too-distant future, and the hon. Lady will be able to scrutinise it—but it is extraordinary that she should say of a country whose renewable energy generation has risen from less than 7% to approaching 50% that we have gone slow on renewables. We have decarbonised our power system faster than any other major economy on the planet.
The reality denial that we hear from the Scottish National party is quite extraordinary. The hon. Lady highlighted tidal energy. Well, guess which country in the world uses the most tidal energy. The right hon. Member for Orkney and Shetland (Mr Carmichael), who is one of the greatest champions of tidal, could tell the hon. Lady, if she is really so ignorant. He is a fellow Scottish MP, and he could tell her that the UK has more tidal deployment than any other nation. We are proud of that, we are proud of the transformation, and it is about time the SNP and the Labour party stopped misleading the people and the House.
Patrick Grady (Glasgow North) (SNP)
The Minister said earlier that we faced a climate challenge, after struggling for words to describe what we are facing. Why can the Government not join the global consensus and admit that what we are facing is a climate emergency? As the Secretary-General of the United Nations has said, the year of climate warming is over and we are in an era of climate burning.
Graham Stuart
Unlike the hon. Gentleman, I am not primarily concerned with words—I am primarily concerned with action—but in fact I did use the “emergency” word. I do not know whether I broke some golden rule which says that Ministers should not use it, but I do treat this as an emergency. I see the world warming up, I see the negative impacts of climate change, and that is why I spend every single day feeling proud to be part of the Department that is decarbonising its country faster than any other in the world. The hon. Gentleman should get away from rhetoric and start to focus on action.
Jim Shannon (Strangford) (DUP)
I thank the Minister for all his answers. While there is certainly an urge to prioritise our net zero promises, I am grateful to the Government for taking back-up precautions into consideration. As the Minister has often recognised in responding to questions from me, Northern Ireland plays an important role in our contribution to meeting the net zero targets. Will he therefore ensure that Northern Ireland is prioritised as a leading location for any new gas-powered stations that are to be built?
Graham Stuart
The hon. Gentleman sometimes gives the impression that he would like me to be running the energy system in Northern Ireland, but it is devolved—and we have Ministers there again, which is a cause for celebration. I will work closely with Ministers in Northern Ireland, as I do with Ministers in other devolved Administrations, because if we are to meet our net zero targets, Northern Ireland must deliver its own targets. Scotland has to deliver its targets, as does Wales.
We must work together, in a spirit of collaboration. We can do that, and if the hon. Gentleman can persuade his right hon. Friend the Member for East Antrim (Sammy Wilson), who is sitting beside him, that it can be done in a way that strengthens our economy as well, we really will have something to celebrate.
Oral Answers to Questions
Graham Stuart Excerpts(2 months ago)
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Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Advertising Standards Authority is responsible for regulating advertising in the UK across traditional forms of media, and it takes environmental issues seriously. I encourage the hon. Gentleman to approach the ASA directly with that request, as it operates independently of Government.
Mr Sheerman
Thank you for waking me up, Mr Speaker. The Adfree Cities campaign is very significant. Most of us have seen flashing coloured screens proliferate in our towns and cities, and much more densely in other countries, such as France and Germany. Not only do these screens use a lot of energy and electricity, but they are very invasive of people’s dwellings. Can we be very careful about the proliferation of those screens?
Graham Stuart
As I said, the ASA would be the key people to go to. Companies in the sector are, and should be, mindful of their net zero obligations. They are looking into making commitments to source all their electricity from renewable sources, which is a solid thing to do, as well as using digital technologies to minimise energy usage. The Net Zero Council is producing road maps for all industry sectors across the economy, to encourage businesses to do everything they can to minimise their environmental impact.
Theo Clarke (Stafford) (Con)
Andrew Selous (South West Bedfordshire) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government plan to publish the second consultation imminently. It will set out a clear direction on how the GB electricity market arrangements will evolve to keep electricity bills as low as possible for consumers of all types.
Andrew Selous
There are two questions that my constituents ask me most frequently: when will we see cheaper electricity from renewables, and when people in areas such as mine, which host a lot of renewable production, benefit from cheaper prices, as a result of hosting that infrastructure?
Graham Stuart
The Government are moving on from our appalling inheritance in 2010 of less than 7% of our electricity coming from renewables, with that figure today up to well over 40%. Every day we add to that, we displace gas and other fossil fuels and lower bills for people, and we plan to keep that going. We already have solar, onshore wind and other developers providing benefits to consumers, and we will come forward with plans for those hosting—
Sir George Howarth (Knowsley) (Lab)
People who are considering changing their boiler struggle to find accurate information about the benefits and the costs. Will the Minister consider issuing new guidance that makes clear both the costs and the benefits of switching to a heat pump?
Graham Stuart
It can be a complex matter. That is why the Government have committed to looking at rebalancing the system costs across electricity and gas, as well as to ensure that people can benefit, as I do, from a heat pump, which provides a warm home and low bills.
Alyn Smith (Stirling) (SNP)
John Penrose (Weston-super-Mare) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
I thank my hon. Friend for his continuing interest in this issue. The REMA programme is considering a number of options, including sending more efficient locational signals, which I know he is very knowledgeable about, zonal pricing, reform to transmission charging and changes to network access. The second round of the consultation is imminent.
Grahame Morris (Easington) (Lab)
Graham Stuart
The Government are doing the right thing, have done the right thing and will continue to do the right thing in coming to a fair settlement between miners, the Government and the taxpayer. That is what we will continue to do, and I am happy to meet the hon. Gentleman to discuss it further.
Andrew Jones (Harrogate and Knaresborough) (Con)
Graham Stuart
Of course, my hon. Friend has a highly distinguished history in the marketing industry. We agree that it is important that the public get the information they need to save money on their bills, as we set out in the net zero growth plan. That is why last autumn we relaunched the “It All Adds Up” campaign, which helped British households save an estimated £120 million last winter. Whether it is elf on the shelf or other such routes, we will find ways to better communicate with the public, precisely to allow them to be well informed in doing their bit for net zero.
Mr Toby Perkins (Chesterfield) (Lab)
Peter Aldous (Waveney) (Con)
Graham Stuart
I can. What the sector does not need, of course, as OEUK has itself set out, is the tens of thousands of job losses that would be driven by the ideological and climate-damaging obsession of the right hon. Member for Doncaster North (Edward Miliband) with ending new UK oil and gas licensing.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Rachel Hopkins (Luton South) (Lab)
Graham Stuart
The hon. Lady is right to salute the astonishing investments that we are seeing throughout the automotive sector, and I am delighted that the Government have been able to help to bring them about. As she knows, we are committed to spreading more and more charging across the United Kingdom, not least in motorway service areas, so that we have the infrastructure to facilitate the decarbonisation of transport alongside all our other emitters.
Cherilyn Mackrory (Truro and Falmouth) (Con)
Earlier this month we welcomed the Prime Minister to A&P Falmouth to meet its workforce and talk about its fantastic submission for funding under the floating offshore wind manufacturing investment scheme to enable the port of Falmouth to support the emerging floating offshore wind sector in the Celtic sea. Can the Minister reassure my constituents that the Government are looking at all the applications with a scrutinising eye to ensure that the supply chain can be built up throughout the south-west?
Dame Nia Griffith (Llanelli) (Lab)
The potential loss of 2,800 jobs at Tata Steel in Port Talbot is devastating for workers and their families, with possible knock-on effects for Trostre in Llanelli. As well as investing in the electric arc furnace, will the Government commit themselves to primary green steelmaking in the UK to preserve our security and our jobs?
Graham Stuart
The hon. Lady should, alongside us, celebrate the £500 million that the Government are contributing as part of an overall £1.25 billion investment in the modernisation of steel production at Port Talbot through, for instance, the electric arc furnace. Government and industry will also invest £100 million in skills to ensure that there are thousands of jobs for the future, and that we reduce emissions as well.
David Duguid (Banff and Buchan) (Con)
Will my hon. Friend reaffirm the Government’s commitment to develop four operational CCUS clusters, including Acorn in my constituency, by the end of the decade? Will my colleagues in the Department for Energy Security and Net Zero make representations to His Majesty’s Treasury to bring forward the financial investment decisions at the soonest opportunity?
Graham Stuart
I am grateful to my hon. Friend, and he is absolutely right: CCUS has such an important role, and we are committed to those four clusters. As we announced in March last year, we have delivered £20 billion of investment to make sure that we carry on with the transformation and decarbonisation of this country that was so woefully lacking when we took power in 2010.
Sam Tarry (Ilford South) (Lab)
Last week the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), shared a platform with an extremist, far-right, climate change-denying conspiracy theorist called Steve Bannon, who claimed that man-made global warming is a “manufactured crisis”. Will the Secretary of State condemn those crazy comments and perhaps distance herself from the former Prime Minister?
Matt Warman (Boston and Skegness) (Con)
National Grid’s Grimsby to Walpole project will see pylons driven across Lincolnshire’s beautiful landscapes and will take major chunks of some of this country’s best agricultural land out of production. Does the Secretary of State agree that it is vital that residents respond to the consultation that is currently going on, and that National Grid should be told to take into consideration food security as well as energy security when it considers such applications?
Graham Stuart
I thank my hon. Friend for his question. As he will know, I cannot comment on a specific proposal. We need to rewire this country in order to have homegrown energy. That means hosting new infrastructure, with the presumption that it is above ground and done in a way that minimises negative impacts on food security, which I am confident that any proposals that come forward will do. Let us make no mistake: we must rewire this country. We must power the UK more from this country, clean up our energy and reduce our dependence on foreign fossil fuels.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Every single winter, the village of Altnaharra in Sutherland is the coldest community in the whole of the United Kingdom. Some parts of the United Kingdom are colder than others—that is geography. May I ask that this fact be taken into consideration when the Government look at schemes to help people with the cost of paying their electricity bills?
Energy Charter Treaty: UK Withdrawal
Graham Stuart Excerpts(2 months, 1 week ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government have today announced that the UK is withdrawing from the energy charter treaty (ECT).
The statement follows the Government’s announcement on 1 September 2023 that the UK was reviewing its treaty membership in the event that the modernised treaty was not adopted by November 2023. The modernised treaty was not adopted, and the review has now concluded. It has carefully considered the views of stakeholders in business, civil society and Parliament following extensive engagement.
The energy charter treaty was signed in 1994 to promote international cooperation in the energy sector in eastern Europe and central Asia following the break-up of the Soviet Union, primarily to facilitate investment in fossil fuels. However, the failure of the modernisation process means the treaty is no longer fit for purpose. The treaty means British taxpayers could bear unfair financial risk as the Government implement the necessary policies to secure the UK’s energy supplies and decarbonise.
The UK has been a strong advocate for modernising the treaty to better align it with modern energy priorities, international treaty practice and commitments on climate change. However, over a year after contracting parties reached an agreement in principle on modernisation, following two years of negotiations, there is still no clear route for adopting the modernised treaty. I am clear that the UK cannot remain in an unmodernised treaty that does not align with our unwavering commitment to energy security and net zero.
I am proud of the UK’s strong and stable investment climate. Twenty-three billion pounds were invested in UK low-carbon sectors in 2022 alone, and the review into the UK’s ECT membership particularly considered investor and business interests. Business groups supported withdrawal over remaining in the unmodernised treaty, and the UK will now join Italy, France, Germany, Poland, Luxembourg, Spain, the Netherlands, Slovenia, Denmark, and Portugal in leaving the treaty. Alternative protections for investment and trade in the energy sector will remain with all but four out of 48 of the treaty’s existing signatories. Following withdrawal, the UK will remain an attractive destination for investment in the energy sector due to its favourable environment and strong rule of law.
The UK will now initiate the process to withdraw from the energy charter treaty. The UK is required to give a one-year notification of withdrawal, removing treaty protections for new investments made after this period.
[HCWS279]
Offshore Petroleum Licensing Bill
Graham Stuart ExcerptsTuesday 20th February 2024
(2 months, 1 week ago)
Commons ChamberRead Full debate Offshore Petroleum Licensing Bill 2023-24 View all Offshore Petroleum Licensing Bill 2023-24 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 20 February 2024 - (20 Feb 2024)
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I rise to support amendments 17 and 19, and to speak to my amendments 22 and 24 on energy efficiency tests and amendments 23 and 25 on the energy charter treaty.
Let me start with amendment 25. At the moment, the energy charter treaty, of which we are a member, is a failed international treaty. It binds us to any contract that we sign for oil, gas or any energy. Once it is signed, we cannot get out of it without paying the hope value of that contract. What I mean by the hope value is that a member does not pay the actual material value if it wants to stop that contract now; it has to pay all the potential value of that contract if the oilfield, for example, were fully exploited.
The treaty has cost other European countries billions and billions of pounds when they have tried to implement climate mitigation policies. It is dangerous, because the decisions are made not by British courts or by international courts with a British judge, but by secretive tribunals where the corporations get to appoint the people who make the deliberations. It is so outrageous that European Union members have agreed to withdraw en masse—they are currently negotiating on how to do so in a co-ordinated way—and to do side letters with each other to ensure they are not bound by the 25-year clause under which any extant licences that have been signed must continue to be honoured, even after withdrawal.
The Minister for Energy Security and Net Zero (Graham Stuart)
What has that got to do with this?
Lloyd Russell-Moyle
Because if we sign more licences while we are still part of the energy charter treaty, the Minister is binding the hands of future generations. If we withdrew from the energy charter treaty, as our allies and partners are trying to do, and then decided to award new licences, future Governments and generations could, without penalty, withdraw or reduce those licences. That very much relates to the Bill, because I am saying: “If you want to do this for short-term gain”—I do not believe the Government’s premise to start with—“at least allow future generations and Governments to come and fix your mess; do not bind their hands under international treaties.” I think that that is relevant to the awarding of new licences.
The fact that so many countries are fleeing the energy charter treaty means that this is the moment to negotiate with our partners to work out a new way forward. The British Government themselves accept that the energy charter treaty has failed. They have tried to make significant amendments to it to allow flexibility on climate change goals. It has not been possible to amend it, which is why European partners are trying to withdraw. This test would do two things. Not only would it avoid binding future generations, but it would put a rocket up the derrière of our Ministers and Departments to ensure that they fulfil the pledge of reform or withdrawal, which is a pledge that we have already made.
Let me address amendments 22 and 24 on the energy efficiency test for home heating. In reality, the biggest proportion of domestic energy is spent on home heating. Huge domestic bills will not be solved one iota by the Bill, as the Minister has admitted, because the product will be sold on the international market and the marginal price at which we buy it back will still be inflated. Our electricity market, which is linked to that marginal price, will continue to be inflated. The best and most efficient way to reduce energy bills and the demand and need for gas—the way that we all know needs to happen—is to ensure that our homes meet decent energy efficiency standards.
The amendments set out that the Government need to redouble their efforts to ensure energy efficiency before we commit to and invest in new licences for offshore drilling, and that we need a median rating of band B in energy performance. At the moment, C is seen as standard and D is common in private rentals. Privately let homes are the worst in the sector, and greater help is needed. We cannot continue to rely on Government programmes that do not touch the sides. We need a proper approach in which we go street by street with councils and local government, fully funded by central Government, with clawbacks in future years.
However, we cannot expect our citizens to pay a penny out of their pockets up front. Homeowners are already overstretched, with huge additional bills, in a mortgage market that has been destroyed by the Government. They cannot afford an extra cent, an extra penny, for home improvements. That all needs to be covered by the Government. My amendments would incentivise the Government to do that and to ensure that we have made every effort to reduce gas demand before we go ahead with the foolish endeavour of drilling more oil and gas, which will not reduce prices, will not stop fuel poverty in this country and will not deal with any of our long-lasting problems. It would be a sticking plaster that does not even stick.
I worked with the Opposition Front Benchers on amendment 17, which sets out the climate change test, so I am delighted that they have tabled it. A similar amendment has been tabled by my constituency neighbour, the hon. Member for Brighton, Pavilion (Caroline Lucas). It is important to say that we cannot meet our climate targets if we do not honour and respect the IPCC’s work and reports. We are on a hiding to nothing if we think that we can keep drilling and extracting more while meeting our energy targets.
Graham Stuart
It is a pleasure to take part in the debate this afternoon, which has been wide-ranging, well informed and genuinely interesting. I thank Members from across the Committee for their participation and for playing an important role in scrutinising this important piece of legislation.
Before I move on to specific amendments I will, if you allow me, Dame Rosie, briefly outline the importance of this Bill. The UK leads the world on tackling climate change, and is the first major economy to halve emissions. The Bill will protect jobs, tax receipts and sovereign capability, so that we can continue that world leadership. As one of the world’s most decarbonised major economies, the UK remains dependent on oil and gas and will continue to be, albeit in reducing amounts, according to the Climate Change Committee. Even when we are at net zero in 2050, we will require oil and gas. However, we are a net importer and, as has been discussed, UK production is falling fast.
The ambition of the right hon. Member for Doncaster North (Edward Miliband) to destroy UK supply ignores industry, the unions and his own Back Benchers, and would simply replace UK oil and gas with higher-emission imports. That is at the heart of this; that is why we want to pass this legislation—it is because of the policies of the parties opposite. The hon. Member for Angus (Dave Doogan) looks a little confused. The parties opposite are very clear that they want to end new licensing, and we would thus have to import more from abroad. It is as simple as that. That would mean more LNG, which has four times the embedded emissions of domestically produced gas. That is the reality. That is at the heart of the Bill; that is why it is so important that we legislate today to send a signal to industry that continued fast-declining production in the North sea is the right thing to do environmentally, economically, in terms of tax—on every front. If it was not, we should not and would not do it.
Graham Stuart
I will make a little more progress.
Annual licensing will improve our energy security and that of our neighbours. It will support 200,000 jobs and safeguard billions in tax revenue and, as my hon. Friend the Member for Banff and Buchan (David Duguid) set out so well, it will safeguard the skills needed for successful energy transition. Hon. Members can listen to everyone from Offshore Energies UK to Robert Gordon University for evidence of the need for that. These things are not in tension; they mutually complement each other and need to be supported.
Graham Stuart
I promise to come to the hon. Gentleman before I finish.
Turning to the amendments selected today, I first thank my right hon. Friend the Member for Reading West (Sir Alok Sharma) for amendment 12 on flaring and venting. As has been discussed, the guidance from the North Sea Transition Authority is clear that all new developments should be planned on the basis of zero routine flaring and venting. The Government have already committed to ending routine flaring and venting by 2030, going further than the World Bank’s zero routine flaring initiative. That voluntary North sea transition deal is reaping rewards. Based on the latest data, North sea flaring is down 50% since 2018, and the sector is on track to deliver the 2030 target.
I fear that the amendment would risk replacing voluntary momentum with a slower, compliance-based, more resistant approach from industry. However, I will continue to engage with my right hon. Friend as the Bill moves to the other place, with a view to delivering the end of flaring and venting by 2030 at the latest, which is an ambition he and I share, as do the Government.
With that, if the hon. Member for Brent North (Barry Gardiner) has not lost his mojo and his moment, I shall give way to him.
Barry Gardiner
I am very grateful to the Minister for giving way, and no—I would not lose my mojo on this. We all know that there is 110% more oil and gas already in the world than we can use if we are to remain within the 1.5°C threshold. Does the Minister think the climate really cares where that oil and gas are used? His argument about imports implies that he does believe that the atmosphere cares. The damage will be done; the only way we can reduce its impact is by ensuring that the proposed additional exploration licences are not achieved.
Graham Stuart
I thank the hon. Gentleman for his question. He has taken a long and deep interest in this issue, for which I pay him respect. It is the burning of oil and gas that is the primary issue. He mentions 110%—we probably have 200%, 300% or 400%. There are countries setting out to massively increase their production. That is all driven by demand. If we—as a species, as a globe—are to get to net zero, we will have to cap wells all over the world. We will have to leave it in the ground. The most important thing is to ensure that the demand curve is going in the right direction. Despite all the issues, challenges and difficulties of maintaining our role as the leading major economy in cutting emissions, the UK’s biggest challenge in dealing with climate change is not domestic, despite the difficulty of that; it is to get others to join us on a net zero pathway. The idea of producing our own emissions to ever-lower standards and replacing them with higher-emission products from abroad is for the birds. It makes no sense.
Graham Stuart
I am going to press on. [Interruption.] I do not mean to be rude, but I think I am unlikely, given his previous performance, to be terribly afeared of hearing from the hon. Member for Angus.
I turn to a series of amendments that seek to place conditions on when oil and gas licensing rounds are run. Amendment 15 relates to carbon capture, usage and storage, and the Grangemouth refinery. The oil and gas sector provides a significant portion of the investment that the UK needs to go into wind, CCUS and hydrogen, and I fear that the amendment would drive that investment elsewhere. It would also tie UK production of oil and natural gas to the refining activities of one refinery—Grangemouth—which I am sure Members across the House would agree is neither practical nor desirable.
Amendments 22 and 24 would result in an inconsistent approach between oil and gas licensing and our ambition for domestic energy efficiency. The Government already have a clear aim for as many homes as possible to reach energy performance certificate band C by 2035 where cost-effective, affordable and practical. That is the minimum standard required to replace fossil fuel boilers with low-carbon heating such as heat pumps.
On amendments 23 and 25, we are already reviewing our energy charter treaty membership. As far as we are concerned, there is no longer a clear route for modernisation. We will update the House in due course.
New clause 2 was tabled by my hon. Friend the Member for North Devon (Selaine Saxby), who was right to highlight the importance of achieving strategic co-existence between different uses while maintaining environmental protection. Work is under way to ensure that we strike the right balance between our different marine priorities. The soon-to-be-commissioned strategic spatial energy plan and cross-Government marine spatial prioritisation programme will ensure, as she rightly outlines, that we take a strategic approach to identifying future sites for marine developments and energy infrastructure, and that these can co-exist with our environmental and wider marine priorities. I appreciate what my hon. Friend seeks to achieve and assure her that the Government share her desire to protect the marine environment—not least, of course, in the Celtic sea.
Amendments 2, 3, 13 and 18 seek to add an additional climate test to the Bill. The UK produces far less oil and gas than we need, and even with new licences, production is expected to decline faster than the average that is required globally to align with the UN’s 1.5°C pathways. All that this test would do is stop licensing and increase dependence on imported products like LNG, which has production emissions that are four times higher than those of domestically produced gas. The right hon. Member for Doncaster North knows this—he must—so what, other than ideology and a desire to please his Just Stop Oil backers, could lead him to table an amendment that could raise emissions, lose British jobs and hammer our economy? Truly, it is a mystery.
Dominic Raab (Esher and Walton) (Con)
My right hon. Friend is making a powerful speech. Is the reality not that reducing producer emissions in this country only to increase reliance on imported consumer emissions is entirely counterproductive for the environment and very damaging in terms of public support for the direction of travel?
Graham Stuart
My right hon. Friend is absolutely right. That is the absurdity: ending licences will simply increase our imports. It will not change our consumption. If imports such as liquefied natural gas have higher emissions embedded in them, they are counter to our net zero aims.
I now turn to amendments 8 and 9, which together add a new energy and job security test to the Bill. The test, with its complex set of criteria, would damage investor confidence and cause confusion for industry, risking our energy security, jobs, and the skills and investment needed for the green transition we all want to see. It would make our system of administration of this area as opaque as the answers the hon. Member for Angus gave to straightforward questions earlier.
Amendments 10, 11, 13 and 14 introduce additional just transition tests to the Bill. We are absolutely clear on the importance of achieving a net zero basin by 2050 and are on track to deliver that. We need the skills, expertise and resources of the oil and gas industry to support our transition to cleaner technologies, maintaining oil and gas jobs so that they are not lost before renewables and other clean technologies grow to take up those skills.
Sir Alok Sharma
I have listened intently to the Minister and I welcome his willingness to work together on the issue of flaring and venting. What I did not hear from him was the clarity that I wanted on whether Government would look to introducing an amendment similar to amendment 12 in the other place. Perhaps that is something we can discuss before the Bill returns to this House.
Sir Alok Sharma
I am delighted to see the Minister nodding. I would just point out that even if the Government do not support a similar amendment in the other place, I am fairly confident that a similar amendment will be moved and I expect supported in the other place. This place will then have the opportunity to opine on that particular amendment, so I will not divide the Committee on this occasion. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 10, page 1, line 6, at end insert—
“(aa) the just transition test (see section 4ZD)”.—(Dave Doogan.)
This paving amendment, together with Amendment 11, introduces a new test to be applied by the OGA before inviting applications for seaward new production licences.
Graham Stuart
I beg to move, That the Bill be now read the Third time.
It is my great pleasure to thank everyone who has supported the progress of the Bill. I recognise the excellent contributions of Members from across the House who have engaged closely with this important piece of legislation. I thank those on the Government Benches who spoke for their engagement with the Bill. In particular, I thank my right hon. Friend the Member for Reading West (Sir Alok Sharma), and my hon. Friends the Members for North Devon (Selaine Saxby), for Waveney (Peter Aldous), and for Banff and Buchan (David Duguid), for their contributions and the excellent points that they have raised in Committee.
I also welcome the robust scrutiny from the hon. Member for Southampton, Test (Dr Whitehead), the hon. Member for Angus (Dave Doogan), who spoke for the Scottish nationalists, the hon. Members for Kirkcaldy and Cowdenbeath (Neale Hanvey), and for East Lothian (Kenny MacAskill), who represent the Alba party, and others. I thank them all for their participation. I also pay tribute to my officials for their work over these past months, as well to Parliamentary Counsel for their commendable work, the House authorities, parliamentary staff, Clerks and Doorkeepers.
The Offshore Petroleum Licensing Bill will give industry the certainty that it needs to continue to invest in the North sea, to strengthen our energy security and to support the transition to net zero. The UK is leading the world on our journey to net zero emissions. We have the fastest reduction in emissions of any major economy —of any member of the G20 on the planet. In fact, we recently celebrated not only fulfilling and even exceeding the targets of the sixth carbon budget coming out of the landmark Climate Change Act 2008, but officially halving our emissions since 1990; we are the first major economy on the planet to do so.
Even when we have reached net zero in 2050, oil and gas will still play an important part in meeting our energy needs, as data from the Climate Change Committee shows. As the most decarbonised major economy in the world, 75% of our primary energy comes from oil and gas. Those who work in the North sea producing oil and gas—there are 200,000 jobs supported by the industry—should not be ashamed of what they do. It is the demand end—our cars, our homes and our factories—that we need to change. We need to meet that challenge; like Don Quixote, we will be tilting at windmills if we, a net importer, try to make our production the problem, rather than demand. [Interruption.] The hon. Member for Glasgow Central (Alison Thewliss), who could not be with us earlier, but is very welcome now, asks me for the evidence of that. The evidence is that we have cut our emissions more than any other major economy.
Alison Thewliss (Glasgow Central) (SNP)
That was not what I was asking. The Minister says that we need to look at demand; where is the national insulation programme, so that we can insulate all our homes and reduce demand in that way? There isn’t one.
Graham Stuart
The hon. Lady may not have been present for the previous stage of this Bill, but as she has been present for other debates in this House, I cannot claim that she is an absentee Member, so it is extraordinary that she is unaware of the amazing transformation in insulation in this country since 2010. Is she not aware that, in 2010, just 14% of homes were decently insulated? Today, the figure is well over 50%. We are spending £6.5 billion in this Parliament, and will commit another £6 billion between 2025 and 2028, precisely to deliver the transformation that she calls for. On top of that, we have the eco schemes, and obligations on industry. That is how we have taken ourselves from the parlous, shameful situation left behind by the Labour party in 2010 to one where, although there is still much more to do, 50% of homes are decently insulated.
Jim Shannon (Strangford) (DUP)
The Minister was very kind to come to my constituency in Northern Ireland to look at the potential schemes for sea turbines and the contract for difference arrangements. At the time, he indicated that, whenever the Assembly was up and running, the contract for difference scheme would be the responsibility of the Northern Ireland Assembly. He was very keen and eager to assist the Assembly. Is it his intention to contact the Northern Ireland Assembly to ensure that the CfD scheme can be promoted? His input into that will make a big difference.
Graham Stuart
I thank the hon. Gentleman, who is a consistent champion not only for his constituents but for the clean transition. I look forward to meeting and working with the new Minister for the Economy, who I believe has the energy portfolio in Northern Ireland.
The Bill will give industry the certainty that it needs to continue investing in the North sea, to strengthen our energy security, and to support the transition to net zero. The Government’s position is clear: we should, as far as possible, seek to meet continued UK demand for oil and gas from the UK’s own sources. That means continuing to use the North sea—a UK success story that has contributed billions of pounds in tax revenue and supports an industry of around 200,000 workers. The oil and gas industry, with its strong supply chains, expertise and skills, is vital to driving forward the net zero transition and the investment in clean technologies that we need to meet our net zero targets.
We all want the energy transition delivered in an orderly way that does not risk thousands of those jobs. Artificially reducing our production from the North sea or banning new licensing would do just that and jeopardise the energy transition, our progress towards net zero and our climate leadership, not to mention the billions of pounds in lost tax revenue. The Bill is about ensuring a smooth and orderly transition. New licences awarded under the Bill will manage the decline in domestic oil and gas production, rather than increase production above current levels, and they will give industry certainty by sending a strong signal of support for continued investment in the sector—investment that is necessary both for our energy security and to help deliver the energy transition. I commend the Bill to the House.
Dr Whitehead
It is customary on Third Reading to start with thanks, and I would like to thank two groups of people. First, I thank the civil servants who held their noses to write this pile of rubbish for the House’s consideration. Secondly, I thank the Government for introducing the Bill, because as a number of people will know, it has led directly to the election of a new Labour Member of Parliament for Kingswood, following the resignation of the former Government climate tsar, who wrote the net zero report and had this to say about the Bill:
“This bill would in effect allow more frequent new oil and gas licences and the increased production of new fossil fuels in the North Sea… I can also no longer condone nor continue to support a government that is committed to a course of action that I know is wrong and will cause future harm.”
He then resigned, and the rest is history. Thank you, Minister, for increasing Labour’s representation in this Chamber by one seat. Although we hope to have a lot more seats in the very near future, that is progress.
The Minister has form on this. He was the Minister in the Adjournment debate on fracking some while ago—
Dr Whitehead
Sorry; the Opposition day debate on fracking, which effectively brought down the Truss Government as a result of the various prevarications at the time. I thank the Minister for that.
What I do not thank the Minister for is the completely misleading and almost erroneous way in which he has characterised the future under the Bill. On licences, the Bill will do things that are already done, and it will not make any change. It will not suddenly increase confidence across the sector, because the sector knows that the Bill is just a piece of performative theatre; and it will do nothing—contrary to what the Minister and others have claimed—to cut energy bills, tackle the cost of living or improve our energy security.
At a time when people across this country have suffered two years of crushing energy costs and an inflationary crisis driven in large part by our significant exposure to gas prices—which, as we all know by now, are set internationally—the Bill offers no solutions. The Secretary of State herself admitted that it would not cut bills, and Lord Browne, the former chief executive officer of British Petroleum, said that it was
“not going to not make any difference”
to energy security. The board of the North Sea Transition Authority, which is responsible for giving out licences, unanimously agreed that the Bill is unnecessary and would challenge its independence. However, even though the Bill will achieve none of its stated aims, it is far from consequence-free.
Graham Stuart
Offshore Energies UK has said that if Labour’s policy was implemented, it could cost this country 42,000 jobs and £26 billion of economic value. Perhaps the shadow Minister will respond to that consequence.
Dr Whitehead
We are talking about what the Government are doing through this policy—that is what we are concentrating on today. I hope we will have another much wider debate about the effect that a comprehensive transition policy for the whole North sea field would have, with associated arrangements for the transition of investment, energy security and worker and job security, in the context of future jobs and future energy security. Many people in the industry have already said that that is exactly what we need to secure the future of the North sea. It is a declining basin; its output will not change greatly as a result of the measures that the Government are proposing. On the other hand, unless urgent action is taken to secure a holistic transition for the North sea, it certainly will not have the investment and the future that so many of us want to see. We need to put that overall consideration alongside some people’s shorter-term concerns about what will happen to the oil and gas industry right this minute.
Graham Stuart
The data simply does not exist, as I think I set out. It does not exist and we cannot make a comparison if the data does not exist. We are world-leading in having that data; others do not have it. On the methane comparison, we are already below the internationally set goal; we have very low methane emissions in the North sea. On the comparison with LNG— which is the buffer fuel, which is why it is the true comparator, rather than Norwegian gas, which the hon. Gentleman is failing to admit—methane is emitted as it is shipped, so the methane story would make it even worse for LNG versus domestically produced fuel. Perhaps the hon. Gentleman would put that into his argument.
Dr Whitehead
I would not put it into my argument, but I am a little puzzled under those circumstances that the North Sea Transition Authority recently published a factsheet on precisely this point about the relative emissions of various contributors to gas and oil into the UK, which looked at the contribution from various countries and at the various emissions levels of those contributions, and set out how those contributions arise. I do not know whether the Minister is quite up to date with what his own North Sea Transition Authority is doing, but perhaps he ought to have a little look at that because he would see that actually the data is there. It does exist, and we can draw the sort of conclusions I drew this afternoon from it, and indeed from a number of other international data sources that are coming in.
The argument that the marginal unit of gas must always be LNG is simply not correct, because the Bill makes no provision whatsoever for the shape of UK gas demand at the point at which the gas is extracted and used. It effectively assumes that our national demand for gas will remain unchanged in perpetuity. When we are in a crisis caused by our reliance on fossil fuels and committed to a net zero transition, that assumption is patently wrong.
Graham Stuart
I hesitate to intervene again, but to suggest that this Bill has the assumption that our gas demand remains the same is absolute nonsense. Of course it is coming right down. We are on a net zero pathway. We are leading the world in that and our demand is falling fast; it is just that our production will fall even faster. The hon. Gentleman should not mislead the House, and I am sure he would not want to do so.
Dr Whitehead
I think I have already indicated that gas production is predicted to fall by 95% by 2050. The addition of one or two licences will not make any difference at all to that precipitous fall in practice, as it will be four days more of gas over the period. That is the basis for why we say that the Government’s commitment to net zero transition while producing large amounts of additional gas and oil is patently wrong. We should be sprinting towards clean energy. We should be investing in renewables, rather than banning them, as the Conservatives have done with onshore wind. We should be saving the country billions by moving to decarbonise power systems by 2030 and making far greater efforts to insulate homes and reduce gas demand there.
On climate change, on energy security, on jobs and on bills, this Bill has nothing to offer but false promises that frankly insult the public’s intelligence. To support this Bill, we would need to believe that we can double down on the causes of the cost of living crisis and still solve it; that we can somehow defy geology in the North sea and change the fundamental nature of international energy markets; and that we can ignore all the science and credible experts on climate change and still meet our commitments, including our commitment to transition away from fossil fuels made by the Minister at COP28 a few short months ago. It is clearly nonsense, but it is emblematic of a Government who have run out of ideas and run out of road—a Government who can see the many real challenges our country faces, but have no answer to them beyond confected political drama. In their misguided pursuit of a political dividing line, they have shrunk our country on the international stage, made us hypocrites in the eyes of the world and opened the door in this country to a new divisive politics on climate change that I sincerely believe the Ministers sitting opposite me today are not comfortable with, do not want as their legacy and will come to regret profoundly. This Bill will deliver nothing, but it threatens much. For that reason, I urge the House to vote against it.
Offshore Petroleum Licensing Bill
Graham Stuart ExcerptsMonday 22nd January 2024
(3 months, 1 week ago)
Commons ChamberRead Full debate Offshore Petroleum Licensing Bill 2023-24 View all Offshore Petroleum Licensing Bill 2023-24 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Barry Gardiner
I am well aware of that—of course I am—but the hon. Member will have heard the discussion that took place earlier about global leadership. He will know that other countries around the world are not declining at the required rate, and leadership is about taking a lead.
The logic of drilling for more when the world has already more than it can safely burn is that of the myopic salesman, not the visionary politician, or to use the Prime Minister’s words, it is the logic of the zealot. The Government’s actions are already making the UK a less attractive place for green investment. Three quarters of all North sea oil and gas operators currently invest nothing at all in UK renewables. The largest operator, Harbour Energy, has ruled out such clean investment altogether, yet last year the five oil super-majors—BP, Shell, Chevron, ExxonMobil and TotalEnergies—rewarded their investors with record payouts of more than £79 billion, so we know the money is there to do it.
The Minister for Energy Security and Net Zero (Graham Stuart)
Will the hon. Gentleman give way?
Barry Gardiner
The Minister is asking whether I will give way. The right hon. Member has long confused the scoring of party political points with the ability to debate an issue to arrive at the truth and get decent policies out the other end. However, if he has changed the habit of a lifetime, I will happily give way to him.
Graham Stuart
I thank the hon. Gentleman. He mentioned a specific company, Harbour Energy, and it is absolutely investing in the Viking carbon capture centre and playing a positive role. That is true of the whole oil and gas supply chain in this country, which the hon. Gentleman, if he went to visit them, would find are working right across the energy sector. Weakening one part, as he would with no new licences, would damage the new clean emerging sectors, too.
Barry Gardiner
I recognise the work that Harbour Energy is doing and I also recognise the work that the Government have done in trying to attract more investment into green energy and renewables, and I welcome that work. I want us to have a cross-party consensus around getting to net zero. The trouble is that—and the Minister knows this to be true—he and many people on his side, including the Prime Minister, have tried to make this a wedge issue, a political issue to divide people. I think he really does need to step up to the plate. If he wants cross-party consensus, he has to try to build it, not score cheap political points.
Dr Alan Whitehead (Southampton, Test) (Lab)
We have had an excellent and pointed debate this evening. Certainly, Opposition Members have together pointed out the deficiencies in the Bill, pointed out what a specious and potentially damaging Bill it is and, indeed, questioned why the Bill was brought to the House in the first place. All that is what I very much want to do.
My hon. Friend the Member for Rotherham (Sarah Champion) called this Bill “illogical and damaging” and pointed out that it could put marine protected areas at risk. My hon. Friend the Member for Llanelli (Dame Nia Griffith) pointed out that it makes us look ridiculous on the world stage. My hon. Friend the Member for Brent North (Barry Gardiner) pointed out that the Bill itself was based on a series of lies and, indeed, quoted the UN Secretary-General stating that “the truly dangerous radicals” are the countries that are increasing their oil and gas output.
My hon. Friend the Member for Coventry South (Zarah Sultana) pointed out strongly that this Bill, contrary to its claims, is not about energy security. My hon. Friend the Member for Warwick and Leamington (Matt Western), who reminded us of the real effects of climate change right now, pointed out that the future is largely electric and this Bill is a “great deception”. The hon. Member for Bath (Wera Hobhouse) called it stupid, unnecessary and dangerous—she did not mince her words very much. My hon. Friend the Member for Nottingham East (Nadia Whittome) laid many of the myths of the Bill to rest and questioned why the Government are pushing it in the first place. The hon. Member for Brighton, Pavilion (Caroline Lucas) pointed out the “political theatre” behind the Bill and why it is completely incompatible with our climate change commitments.
This really is a reprehensible Bill. It is a Bill based on a number of myths and, frankly, lies, which require people to believe that there are people around really saying that oil and gas is going to be stopped immediately and will not continue to play a substantial role, as it will in the energy economy up to 2050. No one is saying that oil and gas will not continue up to a period of time and no one is saying that the existing fields in the UK will not continue to produce and contribute their products in the future. There will be jobs in that continuing North sea oil operation.
However, this is a one-clause Bill with effectively two sections in it. The first section ostentatiously requires the Oil and Gas Authority to do what it is already doing; indeed, both the hon. Member for Angus (Dave Doogan) and the hon. Member for Brighton, Pavilion reminded us that the Oil and Gas Authority has been carrying out regular licensing rounds every 18 months since 2016. It is required to do so because it is bound by the maximum economic extraction requirement. All that is already in legislation and the Oil and Gas Authority is already doing it.
The second section sets out an entirely bogus climate test, which by definition cannot be failed. That is achieved by skewing the test conditions to test UK gas production emissions only against aggregate liquefied natural gas imports, which are overall likely to be dirtier in production than UK gas, and not against pipeline-delivered gas that, in the case of our main importer Norway, is half as dirty in production as gas in the UK.
There is no emissions test for oil, despite its constituting 70% of North sea fossil reserves—80% of which, as we have heard, is shipped and refined overseas. For oil there is a “net importer” test, which requires the OGA to issue licences if the demand for oil and gas products in the UK is greater than the production—when that has been the case in the North sea for 20 years, with no prospect of reversal. It is a Bill built on completely bogus premises.
Graham Stuart
The hon. Gentleman is talking about bogus premises, but he just suggested that we could get more pipeline gas from Norway. Does he not recognise that if we do not produce as much gas here, it will not be gas from Norway that we can access but will inevitably be LNG with higher emissions? Will he please, for the benefit of the House, step up and be honest? We do not have the option to get massively more gas from Norway—if we did, we would have done it already.
Dr Whitehead
I think I am going to get injury time for that intervention. If the Minister had been listening to what I was saying, he would know that I was stating that the Bill, in a very bogus way, has deliberately sidestepped the fact that there is gas available for import that is much cleaner than ours in its production. We should use that as a test, but the only test carried out was on LNG which, conveniently, is a little bit dirtier than the gas we produce in this country.
The Bill is about not what it says as much as what it does. As the former Energy Minister and author of the Government net zero report, the former right hon. Member for Kingswood, said recently, the Bill goes against everything the UK is saying internationally about moving away from oil and gas, and it has already damaged our international stance by appearing to double down on precisely the thing to which we are saying the opposite on the world stage. The right hon. Member for Reading West (Sir Alok Sharma), the former president of Glasgow COP, said in a courageous and precise speech this evening that the Bill puts into legislation something that already happens under the agency of the OGA. He also stated that its sole purpose is to double down on more oil and that nations around the world will not take that very kindly as far as our commitments are concerned.
The OGA itself emphasised that the Bill was “not necessary”, but
“would significantly challenge one of the tenets of independence for the NSTA, to decide when to run a licensing round.”
Whatever the position in the North sea objectively, the OGA would be forced to scrape up at least a licence a year forever. We know the claim that that would somehow do something for energy security is also bogus. The right hon. Member for Maidenhead (Mrs May) recently said that
“new oil and gas licences only provide for energy security if all that energy is sold into the UK and, actually, it will be sold on the world market”—
a point that a number of Members have made this afternoon.
The whole Bill appears to have come about as a result of a wheeze, cooked up by a couple of strategy advisers over a heavy lunch, to put the Opposition on the wrong foot—or, to put it another way, on the right side of history. Quite honestly, that wheeze should have been put down as soon as the effects of the heavy lunch wore off, but instead it has persisted through the corridors of power and has finally made it to the Floor of the House in the shape of this risible Bill, the contents of which evaporate on the first examination by anybody of its serious purpose.
That says rather more about the state of the Government than anything else. Where were the quality controls on policy making? How did something so evidently content-free and fact-averse as this piece of legislation ever make it so far? How did the present departmental Government Ministers, for whom I have a great deal of respect, allow it to happen on their watch, when they must know it is a load of hokum with no policy merit at all? Now they are forced to go out and try to justify it to the House. It is a very sad reflection of what a tiny, bitter and sad space the Government have retreated into, where serious policy development in the energy sphere—God knows we have enough of that to be working on—is replaced by such ill-advised emptiness. That is what this Bill is, in the end: just empty. If passed, it will linger on the statute book for a short period, make no difference to anything in the meantime and be rapidly overtaken by the reality of the forward march to decarbonisation in energy.
However, the Bill will have one lasting effect, as I have mentioned, because it signals strongly and, I am afraid, potentially lastingly that the UK is not serious about its climate and net zero ambitions and is prepared to say duplicitous things on both an international and a national stage. That is bad news for all the genuine work that has so far been done by the UK on net zero climate leadership. This Bill will not stick, but that charge might. For that reason, if for no other of the many reasons that have been put forward in this debate, it is best that we take this Bill no further than Second Reading and refuse as a House to let it pass to further stages.
The Minister for Energy Security and Net Zero (Graham Stuart)
I thank my right hon. Friends the Members for Reading West (Sir Alok Sharma) and for Chelmsford (Vicky Ford), and my hon. Friends the Members for Waveney (Peter Aldous), for Moray (Douglas Ross), for Stoke-on-Trent Central (Jo Gideon), for Banff and Buchan (David Duguid), for Broadland (Jerome Mayhew) and for South Dorset (Richard Drax) for their contributions to this interesting debate.
The UK is the global climate leader. It is under this Government that that position has been secured. How is it to be measured? Do we have objective measures? Of course we have. The central challenge is to reduce emissions, and under the Conservatives this country has reduced emissions by more than any major economy on earth. How have we done that? Has it been an accident? No, it has not.
We inherited an absolutely awful situation. We heard from the hon. Member for Llanelli (Dame Nia Griffith) about her time in government, and she talked strongly about the work that Labour did on renewables. Well, it did not add up to much under her and the right hon. Member for Doncaster North (Edward Miliband). Renewables were less than 7% of our electricity in 2010. Now, that has been transformed. Coal—the dirtiest of fossil fuels—is a further ghastly legacy of the Labour party. We hear so much piety from Labour Members, but what was their performance in government? I will tell you, Madam Deputy Speaker: it was failure. Nearly 40% of our electricity came from coal as recently as 2012. By October this year, it will be zero.
It is the Conservative Government who have stayed laser-focused on delivering climate leadership, and it is in that light that this legislation comes before the House. The shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), asked why we have introduced the Bill. The Labour party, the Scottish National party and, of course, the Liberal Democrats say that we must have no new licensing in the North sea, even as our production is expected to halve over the next decade, and despite the fact that if we fulfil our world-leading ambitions for 2030 and 2035, which we will, production of oil and gas in the North sea will fall even faster in the country that is decarbonising more than any other major economy on earth. That is the reality; that is the context for the Bill, which brings in annual licensing.
Several hon. Members rose—
Graham Stuart
The Labour party will support oil and gas jobs—just not in this country. Not having new licences here will make no difference whatsoever to our consumption, but it will make a difference to how much we have to import, and our import dependency will go up. Worse than that for those of us who care about the environment, and to put in their place the pieties that we heard from Opposition parties, it will actually lead to imports with higher emissions than production here, as the right hon. Member for Doncaster North and other Labour Members know, and will worsen our ability to move to net zero in the short term. That is not to mention the 200,000 jobs supported throughout the country, 90,000-plus of which are in the north-east of Scotland and being abandoned by the Scottish National party.
Several hon. Members rose—
Graham Stuart
The measures will make no difference to our consumption and no difference to world consumption because we are net importers. We are not spilling our product on to global markets. Our oil, for instance, which the hon. Member for Brighton, Pavilion (Caroline Lucas) often mentions, is refined at European refineries. It is then turned into product that we can use here. It contributes directly to European and UK energy security.
Several hon. Members rose—
Graham Stuart
If Members oppose the Bill and allow no new licensing, the impact will be higher emissions, and they will not see the investment that we are seeing in new projects such as Rosebank. What is the carbon footprint of the product from Rosebank? It is expected to be much lower than the average across the North sea and what is expected globally. So, again, not only does closing off licensing mean that we will import more, but it will get in the way of investment into and transformation of our base.
John Redwood (Wokingham) (Con)
I want to see far less imported LNG. Can the Minister give us some good news on what we might be able to achieve in getting more gas out, and will he ensure that many blocks—not just one—are put up for a licence round to get rid of that LNG?
Graham Stuart
The estimate from the North Sea Transition Authority is that a billion of barrels of oil equivalent, including gas, would be lost if we did not have new licences. That is lost tax revenue for this country, on top of the 200,000 jobs and lower emissions—[Interruption.] So far, I have not mentioned the tens of billions of pounds of tax. [Interruption.] It is not surprising, given how comprehensively easy it is to destroy the Labour party’s arguments, that the right hon. Member for Doncaster North keeps up his constant chuntering. He cannot win the argument while he is on his feet, so he sits there and tries interrupting those who can. If we do not have new licensing, which is Labour’s policy, we will see emissions go up in the short term; 200,000 jobs undermined; tens of billions in tax not brought into the public Exchequer; and—for those who care about dealing with the climate emergency—we will lose the very engineering skills and talent that we need to retain in this country in order to make the transition.
Several hon. Members rose—
Graham Stuart
In the time I have, I will try to respond to a few of the points that have been made by colleagues.
My hon. Friend the Member for Waveney highlighted the commitment of oil and gas companies to net zero. Oil and gas businesses are funding clean energy work. The hon. Member for Brent North (Barry Gardiner) picked on one such business, and it turned out that it was investing heavily in our clean energy transition. My hon. Friend the Member for Moray talked about fighting for those 90,000 Scottish workers. I have already mentioned the hon. Member for Llanelli and her rather risible attempt to suggest that Labour had any sort of record on renewables. My hon. Friend the Member for Stoke-on-Trent Central emphasised the importance of oil and gas workers to CCUS, which is absolutely essential.
My hon. Friend the Member for Banff and Buchan said that we are reducing production at twice the rate required internationally. That is true, and it is why new licensing in the North sea is fully aligned with net zero; those emissions are part of that. The hon. Member for East Lothian (Kenny MacAskill) talked about oil and gas being essential to deliver renewables, and supported new licensing. I thank him for that. My hon. Friend the Member for Broadland said that what we use is what counts—that is so true. The most important thing is to look at demand: removing and changing vehicles, factories and homes so that they no longer use oil and gas is absolutely central.
My right hon. Friend the Member for Chelmsford rightly said how important it was that we present this policy correctly. Of course, if only the Labour party was playing a proper and honest part in that, we would be able to champion the tremendous performance of this country in tackling climate change. I really do appreciate the speech that my right hon. Friend made.
Graham Stuart
The hon. Member for Warwick and Leamington (Matt Western) talked about the zero-carbon homes standard, and the importance of improving the insulation and energy efficiency of homes. He is quite right; that is why this Government have gone from the terrible position of just 14% of homes having decent insulation—EPC rating C or above—when we came to power, to above 50% today.
I fundamentally disagree with the right hon. Member for East Antrim (Sammy Wilson) about net zero, but he correctly highlighted that we would just be sacrificing well-paid jobs without making any difference to our emissions, apart from putting them up.
Mr Sheerman
On a point of order, Madam Deputy Speaker. I have been in this House longer than most people, and it is a courtesy to the House in a winding-up speech to give way in an even-handed way. This Minister has given way to a Conservative Member, but he refuses to take any interventions from the Opposition.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the hon. Gentleman for that point of order. It is up to the Minister to decide to whom he gives way. It would be slightly more usual for him to give way to Members who had been in the Chamber throughout the debate. However, it is up to him to decide. And I really do not like points of order in the middle of winding-up speeches.
Graham Stuart
You have given your guidance, Madam Deputy Speaker, which is to give way to those who have been in the Chamber for the debate, not to Johnny-come-latelies who come in and want to usurp them.
The right hon. Member for East Antrim also highlighted an excellent point about the hypocrisy and humbug that is absolutely central to Labour’s response to this Bill.
Graham Stuart
If the hon. Gentleman, who has hardly been here, would sit down, I will fortunately be able to come to a close.
The amendment put forward by His Majesty’s Opposition suggests that maximising the falling production from the North sea will put us at the greater mercy of petrostates. That is so obviously untrue that I hope they would hold their heads in shame about it. That has been at the heart of the Opposition’s approach to this Bill.
The Bill is designed to send a signal to the industry that we have its back. It is all about ensuring that we get to net zero in the most efficient and effective manner possible, and it will underpin this Government’s continued leadership on climate now and for many years to come. I urge the House to support the Bill.
Madam Deputy Speaker (Dame Rosie Winterton)
Well, that was lively. [Laughter.] Now that I have Members’ attention, I want to emphasise how important it is for those who have participated in debates to get back in good time for the winding-ups speeches. When the wind-ups come up early, please just keep an eye out for them and make sure to come back, because people who have participated will be mentioned in the wind-ups and it is courteous to be here to hear them.
Oral Answers to Questions
Graham Stuart Excerpts(3 months, 2 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
The Secretary of State is unwell and sends her apologies both to you, Madam Deputy Speaker, and to the House.
Ministers in the Department regularly meet Ofgem to discuss a range of issues. The Secretary of State met suppliers, alongside Ofgem, in November to discuss consumer energy debt and the protection of vulnerable customers. I know that many families are struggling with their energy bills this winter, which is why we are providing cost of living support worth £104 billion between 2022 and 2025.
Martin Docherty-Hughes
I am grateful for that answer. Just a few days ago, the Office for National Statistics showed that the number of households who had been unable to pay their energy bills has increased by nearly 40%. Does the Minister, on behalf of the Secretary of State, who I hope gets better soon, accept that the UK Government’s failure to listen to stakeholders such as Citizens Advice, which is calling for the £400 energy bill discount to be reinstated, has led to soaring energy debt among those who can least afford it, such as my constituents?
Graham Stuart
I thank the hon. Gentleman for his question; he is right to highlight the issue of debt and families who are struggling. This is why we are providing £104 billion—or, on average, £3,700 per household—between 2022 and 2025, which is one of the most generous packages in Europe. In the autumn statement, we increased the national living wage, which is worth £1,800 to a full-time worker, and increased benefits by 6.7%—that is worth £470. Just last week, we also delivered a tax cut for 27 million people, which is worth £450 for the average worker. So we are taking steps, but we recognise the reality for many people that he set out.
Douglas Chapman
In my country, energy debt is rising, as Scottish consumers pay a premium on their energy bill—it is a high price to pay to keep the lights on in England. In the light of that imbalance, has the Minister discussed abolishing the not-fit-for-purpose Ofgem? If not, should his Government not give full responsibility for energy pricing in Scotland to the Scottish Parliament?
Graham Stuart
We have moved decisively to support families in Scotland and across the rest of the UK. I am pleased that the price cap has fallen by half since its peak last year, and we are making sure that our support is targeted at the most vulnerable. I have already laid out many of the measures we are taking precisely to ensure that people in Scotland and elsewhere are supported in what has been a tough time. Overall, we are, of course, looking to power up Britain. We have set out a plan to do that, precisely in order to have more of our power coming from Britain and to remove our dependence on foreign fossil fuels. I hope that the hon. Gentleman and his party will support us in our efforts to deliver that.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the Scottish National party spokesman.
Dave Doogan (Angus) (SNP)
The situation for bill payers this winter is even worse than it was last winter, which is why the SNP has called for the reinstatement of the £400 energy support scheme. However, the Government have stubbornly refused to sufficiently stand by householders, who are freezing all over these islands, despite reports of increased hospitalisations and the doubling of burns from hot water bottles in Scotland. How will the Tories extend just a fraction of the interest they have shown in exploiting Scotland’s natural energy resources to the people of Scotland, who are freezing yet again this winter?
Graham Stuart
As I set out in response to the hon. Gentleman’s colleagues, we have acted decisively, offering among the most generous support of any nation in Europe. We can be proud of the efforts we have made and I am pleased to see that the energy price cap is down so significantly.
Kevin Foster (Torbay) (Con)
Duncan Baker (North Norfolk) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The environmental impact of onshore windfarm cables is assessed through the consenting process. Minimising potential environmental impacts of new infrastructure is a Government priority. We are committed to ensuring that new electricity network projects mitigate environmental impacts at every opportunity.
Duncan Baker
Although I am a huge supporter of offshore wind, there is no doubt that the trenching through my beautiful countryside is not without its own set of problems. Flooding, agricultural run-off and pollution have all been hugely exacerbated since the summer with what has happened in North Norfolk. What measures do we really have to force wind companies to clean up and repair the countryside after the damage they cause when they trench through it?
Graham Stuart
I thank my hon. Friend for his question and for persistently raising these issues to make sure that we get the transmission infrastructure that we need, but in a way that has the minimum negative impact on his constituents and others. I will follow up his question today by looking specifically at the regime, making sure that the companies concerned not only go through all the correct permissioning ahead of time, but are properly followed up to ensure that they deliver it in a way that does not leave the problems that he has itemised.
Dr Alan Whitehead (Southampton, Test) (Lab)
On 28 November, I asked the Minister how many planning applications for onshore wind had been lodged in England since the alleged loosening of planning restrictions on onshore wind in September. The answer then was zero. Even now that the policy has had more time to bed down, the answer, I am afraid, is still zero, and I predict that it will be zero the next time we meet. In September last year, the Secretary of State said that the changes made in September
“will help speed up the delivery of onshore wind projects”.
Does the Minister think that the Government have succeeded?
Graham Stuart
I thank the hon. Gentleman for his question. As he will be aware, in the last contracts for difference round, a great deal of onshore wind was successfully brought forward and it still constitutes the largest single form of renewable energy in the United Kingdom—the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) will correct me if I have got that wrong. I share with the hon. Gentleman a frustration in making sure that we see that pulled forward, so that we see more projects in England as well as in the rest of the UK.
Dr Whitehead
I am glad the Minister is frustrated about the complete failure of this alleged policy turnaround, but I am frustrated because if we had not had the absurd ban in the first place, the onshore wind development that would have taken place would have saved each family £180 on their energy bills. All Labour is suggesting is that onshore wind is treated like any other development. How long will it be before the Minister accepts the reality and concludes that he needs to go back and properly repeal the ban?
Graham Stuart
I thank the hon. Gentleman for his question and his personal commitment to this area, but he knows as well as anyone the parlous performance of the previous Government, which his right hon. Friend the Member for Doncaster North (Edward Miliband) was a leading figure in. Less than 7% of our electricity came from renewables as recently as 2010. It is this Government that have led the world after a flatlining in carbon emissions from our electricity sector under Labour. We have seen renewables grow and, by October, we will see coal entirely removed from our mix.
Dave Doogan (Angus) (SNP)
New renewable energy generation demands new transmission infrastructure. This Government have been asleep at the wheel for 14 years, showing zero pace, ambition or grip in delivering that energy infrastructure, and that is why bills are so high. Nevertheless, we are where we are. Will the Minister confirm to the House for the record what National Grid has said: that UK Government policy is that when constructing new transmission infrastructure, overhead lines are the starting position?
Graham Stuart
I thank the hon. Gentleman for his question. Of course, we have been moving at pace. We have had the Winser review and the connections plan. In the autumn statement and, indeed, the Prime Minister’s speech in September, there was so much to drive forward and change the transmission infrastructure, including halving the 14-year timeline to seven years. We are working flat out.
It should be noted that the reason overhead lines are preferred is the cost of undergrounding. Not only is it vastly disruptive, as my hon. Friend the Member for North Norfolk (Duncan Baker) said; either undergrounding or offshore is five to ten times more expensive than having overhead infrastructure, and sometimes even more than that. That is why it is the starting presumption. We want to power Britain from Britain and in a low-cost manner, so that when we get to the 2030s and we have decarbonised our electricity system, we have a low-cost electricity system, while ensuring that we install the infrastructure in a way that is friendly and supportive to communities.
Liz Twist (Blaydon) (Lab)
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister for Energy Security and Net Zero (Graham Stuart)
I meet regularly with business leaders and chair several groups bringing together Government and industry so that we can drive progress towards net zero. That includes the Net Zero Council, which is meeting next week and includes members from right across the economy. Like me, they are delighted that the UK is leading the world in tackling climate change. We are the first major economy to halve its emissions, ahead of every other major economy, and we have one of the most ambitious decarbonisation targets in the world.
Bill Esterson
Contrary to what the Minister has just said, and to what he said about onshore wind, this country has fallen on his party’s watch to seventh in the world for attracting investment in renewables. Well-paid jobs, lower bills and economic growth will all follow, but only if we attract investment, so why are the Government enabling what EY has described as the “diminishing of green policies” and undermining the economic benefits of net zero?
Graham Stuart
I thank the hon. Gentleman for his question, which has a sort of comic element given Labour’s monumental failure to deliver renewables when it was in power, coupled with the fact that it wants to bring forward GB Energy. That, as his left-wing colleague, the hon. Member for Cynon Valley (Beth Winter) just said, would be public investment. It would drive out private investment and destroy the transformation of the UK energy system that has happened under the Conservatives—it had flatlined under Labour. We have led the world and have now decarbonised more than any other major economy on the planet. Under the policies of this Conservative Government, which major world economy is predicted to decarbonise fastest by 2030? This one.
Dame Meg Hillier
If I may puncture the Minister’s rant, I would like to ask him what certainty his Government will give businesses. We need a £23 billion combined investment from the public and private sectors, but because targets have been missed, that figure will need to double or treble every year between now and 2050, according to a Public Accounts Committee report. The Government’s chopping and changing in delivering what they need to do is a big problem in businesses having the confidence to invest. That has happened on his watch, so what is he doing to improve the situation?
Graham Stuart
I thank the hon. Lady for her question and for her work on the Committee in holding the Government to account. Of course, we have realised £198 billion of investment into clean energy since 2010, and we have a plan, which we set out in “Powering Up Britain”. The Labour party has only an intention to borrow £28 billion a year, putting up families’ taxes, putting up bills and destroying the most investable market in Europe that we have had to date. We will have another £100 billion of private investment by 2030, and the Conservatives will carry on our work leading the world in transforming our energy system so that we have lower-cost, home-produced energy while also delivering on net zero—things that signally did not happen under Labour.
Dominic Raab (Esher and Walton) (Con)
UK start-up Newcleo and French start-up NAAREA—Nuclear Abundant Affordable Resourceful Energy for All—have just announced a partnership to promote small modular nuclear reactors. What support are the UK Government providing, and what proportion of our energy mix does the Minister think this kind of initiative can support?
Graham Stuart
My right hon. Friend is right, and it is great to see excitement across the Chamber about developing nuclear. It is just a shame that, when it came to the secondary legislation to enable the business models, Labour Members did not support it—they say one thing in one place and a different thing when it comes to making the laws of the land. I am pleased to say to him that, under the Conservatives, the plan is to bring the jobs, technology and opportunity of small modular reactors to this country, as part the ambition for up to 25% of our electricity to come from nuclear by 2050.
Katherine Fletcher (South Ribble) (Con)
I have been talking with businesses in South Ribble about achieving net zero. Businesses on Leyland business park are exploring geothermal, and we also have the huge advantage of the Howick Cross substation bringing in energy from offshore wind, onshore wind in Scotland, and the north-west and Welsh nuclear fleet. Does my right hon. Friend agree that, in future, businesses will look to site themselves where there is reliable and accessible cheap energy, and that South Ribble is well placed to take advantage of that?
Graham Stuart
My hon. Friend is quite right to highlight the benefits and attractions of South Ribble, and indeed the wider UK economy. It is not just that the areas that have those services will attract business within the United Kingdom: by rewiring and leading the world in delivering a low-cost, low-carbon energy system, we can attract more investment from abroad and have a renaissance, not least in the north of England but also in Wales and Scotland—all around the country. That is a result of the net zero policies that, uniquely, this country is managing to lead the world on following so many years of Labour failure.
Caroline Lucas (Brighton, Pavilion) (Green)
The Minister will know that the Climate Change Committee has a key role in advising the Government on their path to net zero, but he will also know that 18 months on from the resignation of Lord Deben as chair of that committee, the Government still have not announced a replacement, despite 60 applications for the role having been submitted and several people already having been interviewed. Are the Government scared of having their record scrutinised, or are they simply determined to destroy any last shred of the UK’s climate leadership? Will the Minister tell us now when the selection will be announced?
Graham Stuart
Given the hon. Lady’s lifelong passion for this subject, I find it extraordinary that she never, ever recognises the unique achievement of this country in halving emissions. I would have thought she would celebrate that. As the hon. Lady will know, the Climate Change Committee’s chair is not just a matter for the UK Government. The appointment of the chair of that committee has to be agreed by the devolved Administrations as well, and we are moving as quickly as we can.
Graham Stuart
The best thing, as barristers know, is to not ask a question unless you already know the answer, because it might not suit you. We are moving as quickly as we can to make sure that we have a chairman in place. I share the hon. Lady’s belief that it is an important role, and we want to have it filled as quickly as possible.
Simon Fell (Barrow and Furness) (Con)
One of the most effective ways in which we can hit our net zero targets is by delivering an effective carbon capture and storage industry, and I was delighted to see the Government make an announcement just before Christmas about the next round of that. The Morecambe bay net zero project based in my constituency could deliver a gigaton of carbon storage, helping some of our most energy-intensive industries through this transition period. I invite my right hon. Friend to come and visit.
Graham Stuart
I am not the Minister who leads on carbon capture, usage and storage, so I may have just swerved a visit, but of course I am always delighted to talk to my hon. Friend. If I can lean on my colleague in the House of Lords who is responsible for that policy area, I will let him know of my hon. Friend’s kind offer. I share his enthusiasm: by capturing the renewables around the UK and converting them into low-cost electricity, as we are also taking forward hydrogen and using the natural blessing of having so much carbon capture capability, we can deliver this country the jobs, the opportunity and the low-cost energy system for the future. I look forward to my hon. Friend’s continuing support.
Kerry McCarthy (Bristol East) (Lab)
Having shared a constituency border with the former Member for Kingswood for 14 years, I know that he was genuine in wanting what was best for his constituents. He knew that a green transition would protect their jobs at Rolls-Royce and Airbus, help the science park to thrive, and bring opportunities for small and medium-sized enterprises and the self-employed. He knew that home insulation and clean energy would bring warmer homes to Warmley and Woodstock, and lower bills to Bitton. He resigned because he had lost all hope that this Government would deliver on those things. He was right, was he not?
Graham Stuart
Just to spell it out—because we do have to speak very slowly for the Opposition Front-Bench team—we have cut our emissions more than any other major economy, and our plans and the expectation of the UN are that we will continue to lead the world. That is leading the world: not talking about it, not promising to borrow £28 billion and put everyone’s taxes up, and then fluctuating on a daily basis. It is about delivery. We have delivered and will continue to do so.
If we want to see the reality of Labour on energy, we only need to go to Nottingham. There, Labour invested in Robin Hood Energy, which went spectacularly bust—a forerunner of a Labour Government, perhaps, if there ever were to be one. It is typical of Labour to reverse all the principles of Robin Hood: all Labour does is steal from the poor in order to pay for the bailiff.
Matt Rodda (Reading East) (Lab)
Alun Cairns (Vale of Glamorgan) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
The North sea is a mature basin and production will naturally decline in the coming years. The Government are committed to supporting our oil and gas industry and the energy transition, which is why we have the North sea transition deal and have introduced the Offshore Petroleum Licensing Bill. We want to protect investment, the 200,000 jobs supported by the sector and the tens of billions of pounds coming in in taxes, as well as to use the existing industry to deliver the wider energy transition.
Alun Cairns
The Government’s action to use gas and oil reserves in the UK for the smooth transition to renewable sources is important for our energy security, but also offers great employment and wealth prospects in the process. Is the Minister aware that Offshore Energies UK published a workforce insight last year that highlighted that the number of people working in the sector could be increased by 50%? For that to become a reality, the sector needs to be stable and competitive. What commitment can my right hon. Friend offer to the stability and competitiveness of the sector?
Graham Stuart
My right hon. Friend is absolutely right. This is a declining basin, and it is so important as we go through the transition that we do not lose the skills and jobs of those people who are providing the oil and gas on which we currently rely. No country is doing more to decarbonise than we are, but we will continue to use oil and gas for decades to come. As our production falls even more quickly than our demand, and even more quickly than is required globally, it is essential that we support the industry, send the signal that my right hon. Friend suggested, and rebut the attitude of the Labour party, which would destroy those jobs, lose the tax and put up emissions.
Sammy Wilson (East Antrim) (DUP)
I welcome the fact that, belatedly, the Government have accepted that, despite their net-zero policies, the oil and gas industry is important for the future in the United Kingdom. Does the Minister recognise that to benefit from the oil and gas in the North sea that will be released by the new licensing regime, we need to have refinery capacity? There has been little, if any, investment in refinery capacity, because of the uncertainty of the future and the carbon taxes placed on it. When will the Minister address that issue to ensure that we get the full benefit of the oil and gas that we extract from our shores?
Graham Stuart
Effectively, we are part of a European market. Most of the gas that we produce is consumed in the United Kingdom, and most of our oil is refined elsewhere in Europe and contributes to European and UK energy security, as it is converted into product. It is one joined-up market for historical reasons, and our refineries are used predominantly for oil that comes from abroad, as opposed to that which comes from the North sea. These are multi-decadal investments, and as part of a managed decline in demand we will see refinery capacity reduced over time. We are doing absolutely everything to do this in the most sensible manner possible, and it is a shame that Labour Members would have us import more. They are all in favour of oil and gas jobs, so long as they are not in the UK, and they will bring in foreign imports from which we will get no jobs and no tax, with higher emissions. It makes no sense, and only the right hon. Member for Doncaster North (Edward Miliband) could champion such an insane policy.
Alex Cunningham (Stockton North) (Lab)
Mary Kelly Foy (City of Durham) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
The UK is the first major economy to halve its emissions. Since the Prime Minister’s speech in September, we have announced the £960 million green industries growth accelerator, helped to deliver the first global agreement to transition away from fossil fuels at COP28, acted to protect motorists from unfair prices at petrol stations, announced backing for 11 major projects to produce green hydrogen, and committed to the biggest nuclear expansion in 70 years. We have a plan. Our plan is working and it will get us to net zero. It will guarantee our energy security and bring consumers and the British people with us.
Mary Kelly Foy
My constituents have told me they are no longer eligible to receive the warm home discount, which, along with Ofgem’s price increase, is making the cost of living even more severe in the City of Durham. Will the Minister meet me to discuss that? What, if any, discussions has he had with the Minister for Disabled People, Health and Work, the hon. Member for Mid Sussex (Mims Davies) about the impact of fuel poverty on disabled people?
Graham Stuart
We are providing targeted support for the most vulnerable through the warm home discount. I am pleased to say that we have raised it to £150 and extended it so that it now reaches 3 million low-income households, giving them a rebate on their energy bills every winter.
Mr Philip Hollobone (Kettering) (Con)
Edward Miliband (Doncaster North) (Lab)
In the past month, the former Prime Minister who legislated for net zero has condemned the Minister’s oil and gas policy. His colleague the former COP President has accused the Government of “not being serious” and the Government’s net zero tsar has resigned his seat in disgust. Why does the Minister think that that is?
Graham Stuart
As we have rehearsed, the UK is the first major economy to halve its emissions. It is the one that is delivering more going forward. It is so important that we recognise that we will continue to need oil and gas for decades to come. The Labour party’s policy will do the opposite; it will weaken British jobs, reduce taxes and put up emissions, and that is why we remain committed, working across society, to ensuring that we deliver.
Edward Miliband
It is not just us who oppose the Minister’s Bill, but those on his own side—he has lost an MP over it. I know he brought down the last Government over fracking; he is trying to do it again with his new Bill. That is the reason that people have lost confidence. They see the hottest year on record and a Government backsliding on net zero. Is it not the truth that the Conservatives who know and care most about climate change no longer support this Government?
Graham Stuart
The right hon. Gentleman would love to think that was the case, but the Conservative party is united in driving this forward and in delivering. We are powering up Britain from Britain. We have taken ourselves from the abject position left by him when he was in government, which so many of my colleagues have described. We must not go back to that, because it would put bills up, it would put emissions up, and it would stop us being the global net zero leader that we are.
Duncan Baker (North Norfolk) (Con)
Graham Stuart
I agree with my hon. Friend and the Prime Minister on the importance of Bacton, which, like all gas terminals across the country, has the potential to play a crucial role in our energy security. The decarbonisation of these terminals is vital to delivering both economic growth and net zero. The Hewett field, 20 km offshore from Bacton, was awarded a licence for carbon sea storage by the North Sea Transition Authority in 2023. I hear his loud voice—it will be heard on the Government Benches—about its potential to be a hydrogen hub as well.
Sarah Green (Chesham and Amersham) (LD)
Graham Stuart
The hon. Lady is absolutely right to highlight that issue. At the autumn statement, we announced plans to halve the time it takes to build new critical powerlines as well as reducing average delays from five years to no more than six months. The connection action plan at the more local level will release more than 100 GW of capacity and give powers to the system operator to terminate stalled projects. We are seeking across multiple Departments—led by this one—to deal with the issues that she rightly raised.
Cherilyn Mackrory (Truro and Falmouth) (Con)
Vicky Ford (Chelmsford) (Con)
Graham Stuart
As we make the transition, it is essential that we do so fairly, not least for those with less. We have committed to keeping the transition to electric vehicles affordable for consumers, and we support innovations for those without a home charger such as cross-pavement cable channels and peer-to-peer charging schemes. I know that my right hon. Friend will continue to raise the VAT issue. As she rightly said, all taxes, including VAT reliefs, are kept under review by the Chancellor.
Samantha Dixon (City of Chester) (Lab)
Liz Twist (Blaydon) (Lab)
Graham Stuart
I apologise for the Secretary of State not being here. I will write to the hon. Lady promptly in answer to her question.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Transparency is important in the development of the energy sector. National Grid is refusing to publish its assessment of Bradwell as a potential landfall site for cables and interconnectors. It must be logical to prioritise brownfield sites with existing connections to the electricity network. Will my right hon. Friend please require National Grid to publish fully its assessment so far?
Graham Stuart
When my right hon. Friend thinks that something is important, she does not let it go. That message will go out clearly from this Chamber, and I will happily work with her to see whether we can find a resolution and give her the information and insight that she requires.
Charlotte Nichols (Warrington North) (Lab)
Following the recent state visit from the Korean President, when he identified nuclear as one of the key sectors for future collaboration in the UK-Korea trade deal, and the publication—albeit two years later than promised—of the civil nuclear road map last week, could the Minister please detail what conversations are taking place with the Department for Business and Trade to maximise inward investment opportunities for the nuclear supply chain in Warrington North and across the UK?
Nick Fletcher (Don Valley) (Con)
The additional power supplies from offshore wind farms are creating the need for further pylons, yet if we doubled the voltage of power lines from 400 kV to 800 kV, we might not need them. That is used in China and America, and would stop the need for all the additional power lines running up and down the country. Will the Department look into that?
Graham Stuart
It will be useful for us both if I write to my hon. Friend and set out the technical assessments, constraints and issues around that, because he makes an interesting point.
Dame Nia Griffith (Llanelli) (Lab)
The Government have finally committed to a carbon border adjustment mechanism to protect our energy-intensive industries from being undercut by imports made with dirtier energy or in more heavily polluting processes. Will the Minister explain why the Government are delaying that until 2027, when the EU is introducing equivalent legislation a whole year earlier? Will he speak urgently to ministerial colleagues about bringing that date forward, both to protect our industries and reduce our carbon footprint?
Graham Stuart
I thank the hon. Lady for her support for the introduction of a carbon border adjustment mechanism. This is to make sure that we do not have carbon leakage—to use the jargon—where carbon costs imposed on companies here lead to that production simply going abroad, with no betterment to the planet. His Majesty’s Treasury takes the lead on this particular policy, but I will ensure that her sentiments are passed on to my Treasury colleagues.
Selaine Saxby (North Devon) (Con)
Can my hon. Friend confirm that, given all the questions about carbon accounting, sustainability and value for taxpayers’ money, the Government will not be guaranteeing Drax billions more in subsidies?
Grangemouth Oil Refinery: Energy Security
Graham Stuart Excerpts(3 months, 3 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
May I begin by thanking the hon. Member for East Lothian (Kenny MacAskill) for securing this important debate and colleagues across the Chamber for joining it? I recognise that news of a plan to transition Grangemouth refinery into an import terminal is undoubtedly a matter of concern for many people. However, I make clear that the Government are committed to ensuring continued fuel supply, protecting jobs and creating opportunities in Scotland and across the UK. The primary responsibility of my Department is for the energy security of the whole of the UK, including Scotland. On 29 November, I met the Scottish Cabinet Secretary, Neil Gray, and we agreed that both our Governments would continue to work closely on this issue through forums such as the Grangemouth future industries board. Scotland and the UK will continue to have reliable supplies of fuels after the transition, in line with the UK Government’s commitment to energy security and resilience.
Before I go into specifics, I want to recognise that Grangemouth refinery has been an important asset for the fuel supply of Scotland and the local economy since it opened in 1924. No final decision on the future of the refinery has been made, but the planning for the conversion of the refinery into an import terminal is a commercial decision by its owner, Petroineos. That reflects its view of the economic sustainability of the refinery in the context of expected refining margins, domestic demand projections and international competition. Even in this macroeconomic context, the UK and Scottish Governments are working together to understand all the options for the future of the refinery.
Christine Jardine (Edinburgh West) (LD)
As the Minister just said, Grangemouth is a vital economic factor for the immediate vicinity, for my constituents in Edinburgh West and indeed for all of Scotland. Will the Government continue to support Grangemouth, given its importance to the future success of the green freeport, of which it is a vital component, not least because of its future capability to produce the sustainable aviation fuel on which so many developments are predisposed?
Graham Stuart
The hon. Lady is absolutely right to champion such opportunities, of which there are so many going forward. That is why, if a decision is made on refining there, I believe that would be countermanded multiple times over by the opportunities in issues such as SAF, which she mentioned. Scotland and that area have such a role to play in delivering and continuing the UK’s global leadership in cutting emissions. We recently celebrated the fact that we have halved emissions—we are the first major economy on earth to have done so—and of course going forward we are ambitious than any other major economy on earth. Scotland has such a vital role to play in that.
David Duguid (Banff and Buchan) (Con)
My right hon. Friend makes an excellent point about the importance of the jobs at Grangemouth and the skills that have been developed over the years—this year, it is 100 years since it first came on stream. Does he agree with me and most of the oil and gas industry, which is adamant that the skills, technologies and supply chains that supply not just the Grangemouth refinery but the whole North sea offshore industry are vital for managing not just the energy security of today but the energy transition of tomorrow?
Graham Stuart
My hon. Friend is a great champion of those workers in the oil and gas industry. We now have an integrated energy industry. He may have seen the recent research suggesting that 90% of those currently employed in oil and gas have transferrable skills to the green transition, in which we can positively expect to see many more jobs in future if we maintain the strength of that industry today. That is why it is so disappointing that some Opposition parties oppose new licensing of oil and gas when that is vital to maintaining those jobs and that capability. In that respect, the Alba party is more constructive than others sitting on the Opposition Benches.
We are working closely with both the company and the Scottish Government to ensure a managed transition of the site, support its workers and ensure that Scotland’s fuel supply remains resilient. Petroineos’s plans will ensure that the Grangemouth site can maintain Scotland’s fuel supply through imports. Adapting the infrastructure to accommodate imports in larger tankers, particularly of diesel at Finnart on the west coast of Scotland, will ensure that the import terminal has greater flexibility and maintain robust fuel security.
I recognise that consumers may be worried that increasing the UK’s reliance on imported fuel products could increase the price they pay at the pump. I want to provide reassurance that this conversion is unlikely to drive up the price of petrol and diesel for the Scottish consumer. Fuel prices are mainly driven by international petroleum product markets and exchange rates, and imports into other sites such as Clydebank are already competitive in the Scottish market.
I also want to acknowledge that the announcement of the conversion will be concerning to the refinery’s employees and their families. We remain in close contact with the Scottish Government to mitigate impacts on jobs and the local economy. As part of our commitment to levelling up, the UK Government are already supporting the Falkirk Council area through the UK shared prosperity fund. Its allocation of more than £6.1 million will deliver a range of interventions that support local businesses, communities, people and skills. We are also supporting Falkirk Council with £40 million of UK Government investment through the Falkirk city and regional growth deal, which is supporting a range of locally driven projects that will create high-value jobs to help boost the local economy. We are working with the Scottish Government to deliver the Forth Green freeport, which covers the area. The freeport aims to drive a transition to net zero by 2045 by attracting up to £6 billion-worth of investment and creating approximately 50,000 jobs, generating an estimated £4.2 billion in gross value added in the first five years.
Douglas Chapman (Dunfermline and West Fife) (SNP)
The Minister is giving a comprehensive reply. The Forth Green freeport is really important. He mentions that he has been in discussion with the Scottish Government and others in the Grangemouth area. Will he also make a direct plea to the freeport to make sure it is fully involved in any potential reinvestment in the facility at Grangemouth, which has been part of the industrial heritage and the industrial scene in Scotland for a very long time? It would be a very valuable contribution if the Government could make such an intervention.
Graham Stuart
As the hon. Gentleman will be aware, through contracts for difference and many other policy announcements from the UK Government, we are driving enormous growth in jobs in the green sectors. We expect them to grow to 480,000 jobs by the end of this decade. As I say, as a global leader in decarbonisation, Scotland, and that area in particular, has an enormous amount to offer and there are huge opportunities coming forward. We will publish next year a green jobs plan, working with industry to identify the pressure points and the opportunities going forward.
The Government remain absolutely committed to supporting the North sea oil and gas sector. The conversion of the refinery into an import terminal is not expected to impact significantly on North sea production. That is because only a very small amount of oil refined at Grangemouth currently comes from the North sea. Indeed, since the start of 2022, Grangemouth has received on average less than 10% of its supply from the North sea via the Forties pipeline, which the hon. Member for East Lothian referred to. This North sea crude would be made available to the open market via the terminal at Hound Point, alongside the rest of the Forties blend production. I can also confirm that there will be no impact on gas supplies.
I assure the House that the Government will continue to back North sea production by granting licences for new projects, such as the Rosebank field development. Developments such as Rosebank will continue to strengthen our energy security, support the transition to net zero, and create new jobs and opportunities. Rosebank, for example, is expected to be significantly less emissions-intensive than previous developments, which will help the UK to reach its ambitious targets for net zero. Its operator, Equinor, estimates that it will produce oil at around 12 kg of carbon dioxide per barrel, compared with an offshore production average of more than 20 kg of carbon dioxide per barrel. So it is already a much more efficient production. If electrification were to go ahead, it would be significantly lower again. In addition, the Rosebank project will provide investment of £6.3 billion in UK-based businesses, support around 400 UK-based jobs, and add around £24 billion to the UK economy across the project’s lifetime, according to its operator. Yet that licence finds itself opposed by the Labour party, even if it supports jobs and helps us to green the basin.
I want to finish by reiterating to the House the Government’s commitment to backing the North sea oil and gas sector to protect our energy security, attract investment, and create opportunities for communities in Scotland and across the UK. It is a declining basin. It is expected to fall, with new licences, at 7% a year. New licences are not part of increasing production, because we will not have increased production. It is about managing the decline and doing so in a way that brings forward developments such as Rosebank with lower emissions than the alternative. That is why it is the right thing to do for the environment, however counterintuitive that might seem. It is also the right thing to do for jobs and for the maintenance of the capability for the long term as we go through the transition and the green economy grows in the freeport as well as elsewhere.
The UK Government will continue to work closely with the Scottish Government on this issue to ensure that when the time comes, there is a just transition of Grangemouth into an import terminal—if that is the decision made—and to ensure that fuel supplies for Scotland and the UK are maintained. The Government will also continue to support economic development in the local area to ensure that there is a just transition for the workforce.
I look forward to continuing to engage with Members, and with the hon. Member for East Lothian in particular, on this vitally important issue.
Question put and agreed to.
Long-Duration Electricity Storage: Consultation
Graham Stuart Excerpts(3 months, 3 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
Today I am announcing the next steps the Government are taking to create a policy framework to encourage investment in long-duration electricity storage. This delivers on commitments we have made in the British energy security strategy and “Powering Up Britain: Energy Security Plan”.
The Government have today published a consultation which proposes a cap and floor investment framework to address the barriers to the deployment of long-duration electricity storage. The consultation seeks views on our approach, including the eligibility criteria for assessing applications, the design of the cap and floor mechanism and our proposed options for delivering the scheme.
Long-duration electricity storage technologies will be central to a secure, cost-effective and low-carbon energy system. External analysis indicates that deploying long-duration electricity storage could save billions of pounds for consumers, making sure that we reach net zero in a proportionate and pragmatic way.
Pumped hydro storage is the most mature example of long-duration energy storage. Novel technologies including hydrogen, liquid air and compressed air storage, are also emerging. The Government’s £69 million longer-duration energy storage competition, part of the £1billion net zero innovation portfolio, is supporting the commercialisation of these technologies.
In “Powering Up Britain: Energy Security Plan”, we committed to put in place an appropriate framework to enable investment in long-duration electricity storage which will contribute to balancing the electricity system. The consultation follows a call for evidence in 2021 to understand the barriers to the deployment of long-duration electricity storage.
A copy of the consultation will be deposited in the Library of the House.
[HCWS171]
COP28
Graham Stuart Excerpts(4 months, 2 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
May I thank you, Madam Deputy Speaker, as well as all the staff of this House and colleagues across the House, for all your hard work this year? I wish everyone a very happy Christmas.
It was a privilege to attend the summit in Dubai over the past two weeks. I was proud to represent a country that has cut greenhouse gas emissions more than any other major economy since 1990; that has boosted our share of renewable electricity from a rather dismal 7% in 2010 to almost half today, while almost entirely phasing out coal power; that has led the world in mobilising green finance; and that is now ensuring that we bring the British public with us on the transition to net zero, thanks to the Prime Minister’s plans to protect families from unnecessary costs and give people more time to adapt to changes.
While we are on track, the world is not. The global stocktake confirmed that emissions need to peak by 2025 and fall by 43% between 2019 and 2030 to achieve the Paris goal of limiting warming to 1.5°C. The current pace of global decarbonisation is well behind that trajectory, and the urgency of the climate challenge means that we cannot delay any further.
The Russian invasion of Ukraine has underlined the importance of transitioning towards renewables, which are less vulnerable to price shocks. That is why our objectives throughout COP28 were clear: we needed to agree urgent action to ensure 1.5° remains viable as a ceiling, including trebling global renewables, doubling energy efficiency and phasing out unabated fossil fuels; and we needed to reform international finance to unlock the trillions required in climate funding.
Today I am delighted to say that we have secured a final agreement that supports those goals. For the first time ever, we have a global agreement on a transition away from fossil fuels. The agreement on fossil fuels builds and expands on the UK’s leadership at COP26, which had the first reference to phasing down coal power, secured agreements behind efforts to decarbonise key sectors of the global economy and, most notably, saw the proportion of global GDP covered by net zero targets increase from around 30% to 90% during our presidency.
This week’s COP28 agreement is not perfect. We wanted to see more action on coal, and on ending the construction of new coal power plants in particular. Like some of the small island states, we wanted greater clarity and fewer loopholes in the agreement. None the less, this is a turning point. We are unifying the world around a common commitment, listening to the islanders of the Pacific and elsewhere, whose voices must be heard, and showing that we are responding to the science by moving away from fossil fuels and raising a torch to inspire action.
Throughout the summit, the UK made significant progress on delivering that action, building on our legacy from COP26. We were pleased to be one of over 130 countries to support the global pledge to triple renewable energy and double energy efficiency by 2030. As co-chair of the Powering Past Coal Alliance, I was delighted to welcome 13 new members, including the United States of America and the United Arab Emirates—all committing to phase out unabated coal power. Through the Energy Transition Council, we are working with developing countries via our rapid response facility to help support them through the energy transition.
We also announced £1.6 billion-worth of new international climate finance projects, which will support developing countries to transition to net zero and adapt to the impacts of climate change, while also expanding green industries on a global scale. We joined the UAE’s climate finance framework, which sets out new principles to reform the global financial system, and we announced plans to launch the climate investment funds capital market mechanism to raise up to £7.5 billion over the next decade for green projects.
However, we recognise that keeping global warming to less than 1.5° is impossible without urgent action to protect, sustainably manage and restore forests. Following the historic agreement at Glasgow to halt and reverse deforestation by 2030, the Prime Minister made forests and nature a top priority for COP28. We agreed £576 million to safeguard 10 million hectares of forests and help half a million people in poor, rural communities, which are the most vulnerable to deforestation. I joined Brazil’s Environment Minister, Marina Silva, to welcome the Prime Minister’s pledge of a further £35 million for Brazil’s Amazon fund. That is on top of the £80 million we announced earlier this year, making the UK one of the scheme’s top three contributors. Finally, the new forest risk commodity measures in the Environment Act 2021 will ensure that there is no space on our supermarket shelves for products linked to deforestation.
However, that is not all. We secured the expansion of the breakthrough agenda—our clean technology accelerator—to cover 57 members and seven economic sectors, representing 60% of global emissions. Up to £185 million was announced for a first-of-a-kind, UK-led facility to help countries across Africa, Asia and Latin America to commercialise green technologies. Essential commitments to support resilience included up to £60 million of UK funding for loss and damage—a significant outcome of Sharm el-Sheikh, now carried forward into operation—an agreement on the framework for the global goal on adaptation, and an international green public procurement pledge to boost the use of green steel, cement and concrete. The UK endorsed a bold plan to triple nuclear power capacity globally, mirroring our domestic strategy for nuclear to make up a quarter of electricity production by 2050. There were also new partnerships with Brazil supporting industrial decarbonisation and hydrogen transitions, and a roadmap for the expansion of zero-emission vehicles in the developing world, backed by major donor countries. The great news is that British businesses will benefit hugely from all that, because as the world decarbonises it will use British expertise and skills as a springboard to realise the net zero transition.
Just as the Prime Minister announced measures to ensure that we bring consumers and households with us on the energy transition, our negotiations at COP have been about bringing countries with us, helping richer nations to set an example, encouraging the biggest polluters to replace fossil fuels with clean energy and working with developing nations to finance green growth. COPs are, above all, about people and our long-standing, trusted relationships with partners all around the world— from big emitters to small island developing states—afforded us significant influence. I am proud of the role that my team played.
I pay tribute to the UAE presidency and Dr Sultan al-Jaber, who acted as COP President, as well as a host of others, including the High Ambition Coalition for its leadership jointly to deliver this result. I was delighted that the UK was able to support a strong delegation of international parliamentarians at this COP, including the first ever pavilion dedicated to parliamentarians. Despite this landmark agreement, and however successful the UK’s record to date, we still have such a long way to go to finance the transition and achieve our global ambitions, so the UK will continue to encourage others to join the UK on a net zero pathway in this critical decade and help deliver a just, prosperous and secure future for all the peoples of the planet.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Edward Miliband (Doncaster North) (Lab)
I thank the Minister for his statement and, indeed, for his regular commuting between Dubai and Westminster. Given that he brought the last Government down over fracking, I think he did not want a repeat performance, hence his return.
I welcome some of the key outcomes from COP28, including in particular the commitments on renewables and, crucially, a transition away from fossil fuels. That shows that the COP process, however flawed and imperfect, can provide a forcing mechanism for action by Governments. I pay tribute to the civil servants in the Minister’s Department for their hard work. Indeed, by a remarkable coincidence, the breakthrough in the negotiations occurred in the 24 hours when the Minister came home and they were left in charge.
But, for all the advances made, the truth is that the world is still hurtling towards disaster, way off track for keeping 1.5° alive. While we need an over-40% reduction in emissions by 2030, we are currently on track for emissions not to fall but to rise, and a temperature rise of approaching 3°. Even after the agreement, that is the reality, so the question for the world in the run-up to COP29 in Azerbaijan and COP30 in Brazil is whether good words at COP28 are finally matched by actions equal to the scale of the emergency.
These will be the defining two years in this decisive decade, which will shape the lives of generations to come, so we need a Government in the UK who will stop congratulating themselves and using the UK’s record as an excuse for future inaction and instead lead at home in a way that is consistent with what we are demanding of others. The Minister complained about a lack of action on coal at the COP, but the Government are opening a new coalmine, watering down emissions targets, seeking to drill every last drop in the North sea and starting a culture war on net zero. That has sent a terrible message to business, investors and other Governments; one that was heard loud and clear by people at the COP.
Let me ask the Minister four questions about the Government’s approach. First, the COP decision says that we need to “transition away from fossil fuels” in line with the science. The science is unequivocal: for us to meet 1.5°, we must leave the vast majority of fossil fuels in the ground. He is right that many countries fear that some will seek to use loopholes in the COP agreement to avoid that reality. Our Government are doing precisely that: they say they want to drill every last drop in the North sea. The International Energy Agency, the Energy Transitions Commission, the Climate Change Committee and the former president of the COP, the right hon. Member for Reading West (Sir Alok Sharma), all say that that is incompatible with the science. Can the Minister explain how he expects to persuade other countries in the next two years that they must leave their fossil fuels in the ground when he wants to extract all of ours?
Secondly, on targets for 2030 and beyond, the COP decision makes it clear that we need not just ambition but policies that will meet those targets. However, the Climate Change Committee says that we are way off track for our 2030 nationally determined contribution. Can the Minister explain how he expects to persuade other countries to have policies to meet their targets when anyone can see that we are miles off meeting ours?
Thirdly, on finance, I welcome the contribution on loss and damage, but does the Minister recognise the lack of confidence that the Government will meet their promise to provide £11.6 billion of climate finance? Can he explain how he expects to persuade other Governments to keep their promises on finance when people suspect we will not keep ours?
Fourthly and finally, when the Prime Minister spends his time at home describing net zero as a massive burden—which is what he does—how does he remotely expect to persuade others, particularly those in the developing world, that it is a great opportunity? The Prime Minister claimed that nobody at COP raised with him his dither and delay; I suspect that was because he was not there long enough to hear the truth. His U-turns have been incredibly damaging for our country.
The positive outcomes at COP came despite this Government, not because of them. Britain needs a Government who will show climate leadership again—not climate hypocrisy—to cut bills, deliver energy independence, grow our economy and protect future generations. In the next two years more than ever, the world needs climate leadership from Britain. Is the truth not that people at home and abroad have seen enough to know this Government cannot provide the leadership that the world so urgently needs?
Graham Stuart
I thank the right hon. Gentleman for his questions. I welcome what he said about the overall COP result and the need to celebrate it and build on it, and the fact that we need to ensure actions match words in this critical decade. That was one of the things we were wrestling with most, because new NDCs for 2035 are being worked on now for announcement ahead of the Belém COP in the Amazon in 2025, but it is in this decade that we need to bend the curve further. It is absolutely right that we do so.
The right hon. Gentleman has focused on performance, and I am pleased to say that this Government have met every single carbon budget to date. The only major targets set on climate change in this country that have been failed were—let me think—the target of 10% renewables by 2010, set by the Government of which the right hon. Gentleman was a member. The target of a 20% reduction in emissions by 2010, again set by the Government in which the right hon. Gentleman served, was also failed. Every single carbon budget for which this Government have been responsible since my then party leader became the first leader to call for the Climate Change Act 2008 has been met. Our record is without parallel, and I will not have it trash-talked down by the right hon. Gentleman, whose record in government is so at odds with the words he uses.
On oil and gas, we are a net importer. We are transitioning; as I have set out, we are reducing our emissions faster than any other major economy on this planet. None the less, according to the Climate Change Committee, about 25% of our power will come from oil and gas even in 2050. We will be using mitigation technologies to offset that, but the idea that we should replace domestically produced gas with imported gas with four times the embedded emissions, when it will make no difference to our consumption, is environmental nonsense. That is why we are standing up for the 200,000 people who work in our oil and gas industry as it transitions; it is why we support the £50 billion in taxes that comes from that industry; and it is why we must retain the expertise of people in the sector going forward. The Labour party puts at risk our net zero transition—a transition that it did not set out on properly when it was in government, and that this Government are delivering on. As I said, we have met all our carbon budgets to date.
I welcome the right hon. Gentleman’s point about loss and damage. I assure him and the House that we will meet our target of £11.6 billion in climate finance on the original timetable set out by the Prime Minister. The Prime Minister came to COP, personally committed and passionate about ensuring that nature and forests—on which we have been a leader—were championed at that COP. Hopefully, I will be able to give more detail about that when answering other questions. As we move into the coming year ahead of the Baku COP, we will focus on a new, collective, quantified financial goal. The Prime Minister, with his focus and expertise, will ensure that the UK is an absolute leader in getting that right, amplifying the billions we have today into the trillions we need tomorrow.
Sir Alok Sharma (Reading West) (Con)
I agree that we saw significant progress at COP28, particularly the agreement on transitioning away from fossil fuels in the energy system. However, that agreement and all previous agreements are literally just words on a page; they will come to fruition only if all countries follow through in their domestic policies.
The Minister talked about raising the torch to inspire others. Once again, will he please review the plan to issue these annual oil and gas licences, and consider whether they are consistent with the international commitments we have made? Secondly, will he ask our right hon. Friend the Chancellor to urgently review the tax regime that gives significant subsidies to new oil and gas projects? This is a matter of trust. The Minister talked about the voices of the most climate vulnerable; they will be listening and watching, and they want to see action, not just from the UK Government but from every Government.
Graham Stuart
I pay tribute to my right hon. Friend for his efforts at COP26 in Glasgow, including the significant measure on phasing down coal. [Interruption.] Could the right hon. Member for Doncaster North (Edward Miliband) be quiet for one second? He did so little in government, and he has so much to say now—it is quite a contrast, is it not?
Returning to my right hon. Friend’s serious and respectful question on oil and gas licences, as I said, we are a net importer. We are producing our own oil and gas to ever higher standards, and I am proud of the North sea transition deal, which has seen the industry work with Government to cut emissions from production by 50% by 2030. My challenge back to my right hon. Friend is this: in what way is there any linkage between producing to ever higher standards and a falling level of oil and gas? New licences simply allow us to manage the decline of a basin that is expected to fall at 7% a year and to halve in a decade, and will see us growing our independence from imports, even with those new licences. That is why we are issuing them.
On the issue of subsidies, our tax regime is set at 75% —among the highest in the whole world. [Interruption.] The right hon. Member for Doncaster North cannot win the argument when he is on his feet, so he tries to do it when he is sitting down. If only he had shown the same energy when he was in government, we would not have had the woeful inheritance that we alone have had to turn round. We are expecting £50 billion in taxes from the oil and gas sector, and without new licences to allow for the greening of the basin so that we reduce emissions, we would not be able to ensure that each barrel of oil and production of gas comes with a lower level of production emissions than it does today. That is our ambition.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
I thank the Minister for advance sight of his statement.
At COP26 in Glasgow, Scotland became the first developed nation in the world to commit funding to address loss and damage. Does the Minister agree that loss and damage funding should be prioritised to meet the needs of the communities that need it most, and distributed in a way that does not add to the debt burden of the global south? Scotland’s First Minister has welcomed the deal, especially the new pledge of $700 million for loss and damage, but of course, that still falls short of the funding that will ultimately be required. What is the UK doing to push for more funding down the line, and how much will it contribute now?
The former president of COP, the right hon. Member for Reading West (Sir Alok Sharma), made an excellent point. The new agreement reached at COP28 commits all countries to transition away from fossil fuels. We welcome that agreement, to which the UK is of course a signatory. Can the Minister outline how the UK Government’s plan to increase oil production in the UK aligns with the plans to transition away from fossil fuels, and how can we trust them?
Graham Stuart
The hon. Gentleman is right to highlight the success of the loss and damage fund being operation-alised, but also to highlight the fact that it does not match the need for the quantum of finance. He asked me how we will be working on that. We have been delighted to contribute £60 million, of which £40 million will be going directly into the fund to help get it going. However, if we are to get it to the scale we require, it is going to need more than donor finance, which is why we have explored, and will continue to explore, options for innovative financial flows. So much of the change we have made there, even if there was an opportunity for increased debt, would not be debt financeable anyway, and that is why, as he said, we must make sure that those who are most vulnerable are rightly dealt with.
The hon. Gentleman mentioned the increase in production from oil and gas in the North sea. We are not seeing an increase in production; we are actually seeing production expected to fall at 7% a year. It is falling faster than is required globally. The IEA says that countries should be looking for a 3% to 4% reduction, and we will be reducing at 7%. As he knows, the UK has cut its emissions more than any other major economy on earth, has the most ambitious plans of any major economy to 2030 and, I believe, is the only one to have put into law a 77% reduction in the mid-2030s.
It is in that context, as we lead the world in reducing demand for oil and gas, that, none the less, our dependence on imports will grow. So it makes no sense whatsoever to see Scottish workers thrown out of their jobs in oil and gas, while we simply bring in imports from abroad with higher emissions, and lose the very subsea and engineering capabilities that we need for floating offshore wind, carbon capture and hydrogen. There is a complete disconnect in this crazy opposition to the maintenance of an already declining industry, which is fundamental to delivering the energy transition. Even if I have little hope for the right hon. Member for Doncaster North, who has always managed to have inconsistent and incoherent thoughts in his head all at the same time, I am hoping that perhaps the Scottish nationalist party can come to its senses and support Scottish workers and the energy transition.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I strongly welcome this statement. I congratulate the Minister and my noble Friend Lord Benyon on the negotiations, but also officials such as Alison Campbell and many of the officials in the Department for Environment, Food and Rural Affairs, who played a blinder in working towards and securing the agreement. I also want to pay tribute to the Minister for single-handedly making it possible for so many MPs to attend COP28. I pay tribute to him for doing that, recognising his previous presidency of GLOBE International UK.
I would like to say to my right hon. Friend that I was particularly proud of the mangrove breakthrough moment. I am conscious that the combination of nature and climate going together started very strongly in Glasgow and has accelerated. May I seek assurances from my right hon. Friend that we will commit to the £11.6 billion international climate finance funding? I know we have already started spending some of that. Will he also consider some of the approaches to things such as saltmarshes, the UK’s equivalent of mangroves, to make sure that continuing integration is part of our policy?
Graham Stuart
I thank my right hon. Friend for her question. I also thank her for her attendance at the COP and her continuing passion and ability to communicate the importance of nature as a value in itself, but also how, dealt with in the correct way, it is complementary to development and to the maintenance of carbon sinks. Nature, and making sure that an understanding of it is central to our thinking, is so important.
My right hon. Friend thanked my officials, and she is right to do so. When Dr Sultan al-Jaber made the historic announcement of the UAE consensus, the central text of the various texts we agreed was that on the global stocktake. Having thanked the two Ministers who led the work on the stocktake, he immediately thanked Alison Campbell and Mr Teo from Singapore for their fundamental role. Our officials and my team were very much involved in drafting and pulling together words, and I was delighted to be supported by them as we met those from Saudi Arabia to China, India and other partners. I pay tribute to all those countries that, just like us, had to move from their initial positions to find a consensus.
My right hon. Friend mentioned the presence of MPs. My first COP was in 2005 in Montreal, and I remember feeling then that the elected parliamentarians, who make the political weather, were not properly accounted for. When I look back to that historic Climate Change Act 2008, I am proud of the fact that my then party leader, the noble Lord Cameron, was the first party leader to support it—[Interruption.] If the hon. Member for Bristol East (Kerry McCarthy) could just be quiet for a moment, I was talking about parliamentarians. It was a combination of Friends of the Earth working with Back-Bench parliamentarians and a new green Conservative party, and an early-day motion—an instrument here that is often looked at askance—that triggered the Climate Change Act, which has been significant not only for the UK, but for the world.
Daniel Zeichner (Cambridge) (Lab)
One of the key themes at COP28 was food system transformation. Given the Climate Change Committee’s damning criticism of this Government’s failure to make progress on cutting emissions in the agricultural sector, could the Minister tell us what changes he expects to see in UK domestic policy as a result of the agreements reached in Dubai?
Graham Stuart
Again, the UAE can be very proud of the fact that, among so many other things, it really made sure that food was seen as an important part of this COP. He is right that land-use issues, agriculture and more sustainable agriculture are fundamental to delivering net zero. Under both my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) and her successor, we are working very hard to do that at home, but we were also able to announce at COP support for more sustainable agriculture and land use abroad. He is absolutely right that this is an area on which we must keep complete focus. We must make sure that we deliver in that area, as in so many others, to pull together and maintain our net zero pathway.
Vicky Ford (Chelmsford) (Con)
In the very hot summer of 2022 almost 1,000 wildfires swept through Essex. We are not immune from the real dangers of global warming, so it was a huge honour to be one of the representatives, from this Parliament’s Energy Security and Net Zero Committee, at the COP recently. The rate of new solutions, the rate of innovation and the rate of investment, as well as this new agreement, do bring hope, but promises must be delivered, and there is a gap between the science and the promises. Does my right hon. Friend agree that we must continue to do all we can—locally, nationally and internationally—to close that gap?
Graham Stuart
I thank my right hon. Friend, and it was good to see her out in Dubai following up on so many of the issues, not least in recognising the needs of the most vulnerable and the poorest communities and countries around the world to ensure that they are not left behind and that we do have a just transition.
My right hon. Friend highlights the fact that she was a parliamentary delegate there, and we were proud to support GLOBE International UK, of which the hon. Member for Brent North (Barry Gardiner) and I were previous chairs, to provide the first ever parliamentary pavilion at COP28. I pay tribute to Malini Mehra, who has headed up GLOBE. She came in when it was in a troubled position for a promised maximum of six months, and she is still there. She is committed to ensuring that parliamentarians are armed with the information they need.
The answer to my right hon. Friend’s specific question is, yes, absolutely. When we consider that the country that has decarbonised most over the 31 years from 1990 to 2021 has reduced its emissions by 48%—namely, us—and that the world, on a 2019 basis, has to cut by 43% by 2030, with many large emitters pointing in the wrong direction, we can see that the challenge and the gap are not to be underestimated. COP28, with the UAE consensus, is significant, but there is so much more to do, and it has to convert into real change if we are to bend the curve further.
Barry Gardiner (Brent North) (Lab)
There is much in the Minister’s statement that I commend and agree with, and in particular I reinforce his praise to our officials who played such a significant part in the negotiations. I regret the tone of some of his responses to colleagues, because the cross-party consensus on this issue over the past 30 years has been fundamentally important to the progress that we have been able to make. The science is clear; the world’s Governments are not. Those who are ready to deliver the transformation required to win the war against climate change are now considering whether the United Nations framework convention on climate change process is capable of delivering it in time. How long does the Minister think it will be before we see coalitions of the willing, such as the Beyond Oil & Gas Alliance, imposing sanctions on those recidivist countries who are still driving our world towards disaster?
Graham Stuart
On the coalitions of the willing, the world is changing, and the EU has already legislated for a carbon border adjustment mechanism for selected parts of industry, which will put up a carbon tax or a carbon price at the border. There is a certain intellectual inevitability about that if costs of production in one country are not reflected in others, and ensuring that that is done in a just manner is important. I would hate to look back at COP28 and find that it was one of the last times that countries around the world were able, on the basis of mutual trust, to talk to each other and come to a common agreement. The hon. Gentleman, who is highly experienced in this area, knows just how tender—I am sure there is a better word. The hon. Gentleman knows just how fragile the process could be if we do not all step carefully and ensure that we carry people with us.
Trudy Harrison (Copeland) (Con)
The commitment that 24 countries have made to triple nuclear energy capability by 2050 shows that the world has woken up to the most powerful, least land-taking, reliably proven net-zero energy provision that we have in the world. That is testament to my right hon. Friend, his Department and this UK Government, who committed first to 24 GW. Will he join me in recognising that without the world-class skills—I draw Members’ attention to my entry in the register, because I am happily married to a nuclear welder with 45 years’ experience—and the blue-collar workers and nuclear operators working every hour, every day on sites across the UK, we would not, and the world would not be in a position to back atomic energy? Will he join me in commending Britain’s energy coast, which recognise that for us to tool up, retrain, train and recruit, we must regenerate nuclear communities, which are often coastal communities? That is exactly what Britain’s energy coast, and the energy coast business cluster, is doing so well in west Cumbria.
Graham Stuart
I pay tribute to my hon. Friend and her energetic, continual and well-informed—not least by marriage—understanding of the nuclear industry and its importance. I remember being at Sharm El Sheikh and it seemed that the only people talking about nuclear were 95 youngsters from some tiny pavilion at the back, who were going around promoting its importance. The science says that we cannot get to net zero without nuclear, in the appropriate places and with all the caveats. I remember saying to the incoming UAE presidency that, given their success with their Barakah reactors, and given the need to deliver nuclear and the UK’s determination for a renaissance, surely all countries involved need to come together and send a signal to the world, so that we are not leaving teenagers alone to champion the importance of nuclear. We as a country should step up loud and proud, and face down those who oppose nuclear from an ideological perspective, because it is so important not only to delivering net zero, but to delivering so many jobs in constituencies such as that of my hon. Friend around this country.
Mary Glindon (North Tyneside) (Lab)
Licensing aside, what sensible proposals does the Minister have to offer hope to the 1,500 people living in my constituency, and the other 200,000 people he referenced earlier, whose jobs depend on oil and gas now, and who could power our clean energy future? Offshore Energies UK estimates that if we get the transition right, the workforce could swell by 50%. Where is his plan for those workers?
Graham Stuart
I thank the hon. Lady. In her coded way—we all know there is an election coming up—I suppose that is as far as she could go in opposing the opposition of those on Labour’s Front Bench to sustaining those jobs as we go through the transition. Those jobs and that skillset will be required for the transition. If we pull them and say that there will be no new licences or investment in the North sea, those jobs will disappear or simply go abroad, and that makes no sense. Along with Michael Lewis of Uniper, I co-chair the Green Jobs Delivery Group, and we will be coming forward with a green jobs plan in the first half of next year. It is a transition, and as the hon. Lady will know, if she can persuade those on her Front Bench to get off their ideological opposition to something that is fundamental to the delivery of the transition, as well as maintaining our energy security today, I am fully behind her.
Mr Tobias Ellwood (Bournemouth East) (Con)
I, too, was at COP28, and I congratulate the UAE on what we have all been achieving there. The Minister is right to underline what Britain has done in moving from 7% to half of our energy requirements coming from renewables. He is also right to say that we are still behind the curve. We punched through a 1.5°C increase from pre-industrial levels in July this year, and climate change will soon overtake human conflict as a cause of loss of life. We are familiar with the long-term targets of 2030 and 2050 that the Minister has mentioned, but they are a long way off. Would it be wise to start introducing annual targets —a yearly roadmap—so that we can see incrementally how we will meet those long-term objectives?
Graham Stuart
Interestingly, my right hon. Friend takes us back to the days before the Climate Change Act 2008 when, if I remember correctly, Friends of the Earth was arguing for annual targets, and that was the Conservative party position. Once the Labour Government agreed to take the legislation forward, they realised, as did the civil servants involved, that there needs to be a period over which these things can be balanced out. I think their thinking was right and that the five-year carbon budgets were right. We do provide an annual report on our performance to date, but overall we have to allow for things such as the pandemic and all sorts of crises that come along. I think the architecture was right—I pay tribute to the right hon. Member for Doncaster North and his Government at the time—and it has withstood the test of time.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
As we have heard, the global stocktake decision text that was agreed in Dubai commits the parties to transitioning away from fossil fuels in energy systems. Can I press the Minister to clarify what the Government believe the implications of that aspect of the agreement are for the UK? Will it mean that the UK Government now have to accelerate action to reduce our dependence on fossil fuels in what remains of this decade? If so, what new measures will be needed? If not, are the Government really saying that the COP28 agreement changes nothing for the UK when it comes to fossil fuel usage?
Graham Stuart
I thank the hon. Gentleman for his question, which is a good one. Our nationally determined contribution and emissions promise for 2030 is for a 68% cut from the 1990 basis—far more than any of our peers. We can be proud of that. It was set precisely because it was, on the advice of the Climate Change Committee, aligned with a pathway to net zero 2050. None the less, the hon. Gentleman is right to say that we keep our policies under review, and as that committee pointed out this year, there are still gaps that need to be made up to ensure we deliver on that. We have always managed to do so before, and I am confident we will do so again. He is right to say that we should continually look at our policies to ensure that they keep us there, whether or not that deals specifically with fossil fuels. We are trying to move to zero-emission vehicles. Today we have made an announcement on hydrogen, with 11 projects being funded to produce green hydrogen around the country. We are, step by step, across the piece, putting in place the required policies. That means doing everything within the window to keep ourselves in our world-leading position, which is cutting emissions more than any other major economy.
Dr Luke Evans (Bosworth) (Con)
May I build on the wise words of my hon. Friend the Member for Copeland (Trudy Harrison), and congratulate the UK Government on signing the statement on civil nuclear fuel co-operation with the United States, Canada, France and Japan? That statement to secure supply chains, particularly of uranium, is so important, and the Government-led $4.2 billion of external investment will go a long way to securing our energy side when we need an energy mix. Does the Minister agree that that is exactly what the UK needs, not only for its energy security, but to meet its net zero targets?
Graham Stuart
My hon. Friend, as always, is well informed and insightful. We were pleased, along with 21 other countries, to join NetZero Nuclear, because nuclear has such an important part to play. As I said in a previous answer, we need literally everything, and we are pushing the envelope across the piece. By doing so, we are developing technological solutions that will not only serve our needs, but can be exported around the world for many years to come.
Anna McMorrin (Cardiff North) (Lab)
The Minister is right that COP is about people and relationships. I was also at COP, and heard first hand what country representatives were saying about the recent actions and messages coming from this Government, in stark contrast to some of what he is saying today. The Prime Minister has spent recent months wrongly telling the country that net zero is a huge burden, rather than the economic opportunity of the 21st century. How can he as a Minister go to developing countries saying that they must seize these opportunities provided by net zero, given his Prime Minister’s message at home?
Graham Stuart
As delightful and pleasant as the hon. Lady is outside the Chamber, she is always challenging within it. The Prime Minister remains committed. He has insisted on our commitment to net zero and our 2030 nationally determined contribution, while ensuring that we carry people with us. He was delighted to announce £1.6 billion of UK funding for new climate projects while at COP, including £887.8 million of new and additional financing, with other announcements focused on driving forward climate action on forests, finance and net zero transitions. This Government are walking the walk while ensuring and making no apology for the fact that we seek to maintain the national consensus and carry people up and down the country with us as we continue to lead. [Interruption.] The right hon. Member for Doncaster North insists on giggling, but we are leading in the way his Government singly failed to do before 2010.
Andrew Gwynne (Denton and Reddish) (Lab)
May I start by thanking the Minister? Politics aside, there is much we can all agree on in the deal at COP. I would like to see us go further in some areas, but I recognise that we have to build a coalition, and I thank him for the work he has done. However, it is about not just what we do, but what we say and how we say it.
Following on from my hon. Friend the Member for Cardiff North (Anna McMorrin), the way that the Prime Minister recalibrated the Government’s policy in this area had the opposite effect to the one we all would like to have seen. We got the following headlines: “Sunak’s U-turns make net zero harder” in The Guardian; “Could Rishi Sunak’s green review threaten UK net zero?” on the BBC; “Sunak’s net zero backsliding ‘deeply damaging’ for Britain” in The Daily Telegraph; and “Climate tech backers slam Rishi Sunak net zero retreat” in the Evening Standard. Does the Minister not get that these messages are heard across the globe? Will he go back to No. 10 and ask the Prime Minister to be just a bit more careful in his language and how he says things so that we can get net zero over the line?
Graham Stuart
In maintaining the public commitment to net zero, it was important to say to people in my rural east Yorkshire constituency, for example, who are off the gas grid and fearful concerning heat pumps, that they would not see their boilers ripped out when they did not think there was an affordable and deliverable alternative. As the Prime Minister announced, we combined that with a 50% increase in the heat pump subsidy level to £7,500, and we saw a tripling of interest in the following week. Words do matter, but there are many constituencies to talk to. I look to the hon. Gentleman to help provide the proper balanced and nuanced view. This country has cut its emissions more than any other major economy on earth and we have more ambitious plans going forward. The Prime Minister is behind net zero. We must have a balanced discussion to show that we are not inflexible. We are prepared to work with people and ensure we do it in the right way.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
The Minister said that we have to ensure we are not inflexible. The reality is that a number of the policies and issues we are discussing will have an impact on the next generation and the one after that. Whenever I go into schools in my constituency, the young people raise climate change with me. The reality is that climate change is harming children’s rights and access to food, water, healthcare and education. Does the Minister agree with UNICEF on the need to build towards a climate change action plan for children and young people by calling for an expert dialogue on children and climate change to be held mid-year at the session of the subsidiary bodies in 2024?
Graham Stuart
The hon. Lady is right to highlight children, who will inherit the planet we leave behind. In the meantime, they are peculiarly vulnerable to the negative impacts we are already seeing this year, let alone those we will see if we get to 1.5°C or beyond. She is right to highlight that. I cannot comment on the specific question she raises, but I will make sure that it is heard on the Treasury Bench and let her know as and when a decision is made by the Government. She is right to say that, just as we must ensure that the voices of the small Pacific island states and others are heard, because they are so much on the frontline, the voice of youth must be heard. I was pleased to meet youth representatives at COP28. We must ensure that we look to the people who will inherit the policies that we of a slightly greater age make in this Chamber.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I dare say that it might seem slightly implausible to people here in the Chamber when I say that I worked in oil fabrication, but I did, and the yard where I worked built some of the mightiest structures in the North sea today. What the Minister says about transitioning and redeploying skills is music to my ears and those of my electorate. I long to see the day when offshore wind structures are fabricated in the Nigg yard. However, there is a problem, which is that since the auction, some costs have risen by almost 40%. I suspect that the incentives will not be sufficient to get the industry to where we want it to be to make these things happen. Does the Minister recognise that, and does he have any thoughts as to how it might be addressed?
Graham Stuart
I am grateful to the hon. Gentleman for his question, which, as ever, is well informed and extremely reasonable. He is absolutely right. I visited the port of Nigg. I was interested to see nascent floating offshore wind work, fixed-bed offshore wind work and oil and gas work, and I wandered into a hall where they were making a large and sophisticated piece for Hinkley Point C, extraordinarily. That was all at Nigg.
The hon. Gentleman gets to the point about financing and whether the auction, which has been brilliant at lowering prices, has in fact helped drive too much of the industry out of this country. Behind the day job of transforming our generation, my passion will be to see how, without following some others with WTO-breaching local clauses, we can nudge and support more industry here. That is why we are bringing in sustainable industry rewards—non-price factors, in the jargon. We expect those to come in from allocation round 7 onwards as we work to make sure that we look after consumers first, while not missing any opportunity to utilise, maintain and grow jobs here. On offshore wind alone, our expectation—this is what the industry says—is that we will go from around 30,000 jobs in the industry today to more than 100,000 in the next six years. One of our biggest challenges is finding those people, training them and making sure we are ready to deliver them, as much as it is having more done here.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for the positives in his statement and the significant targets that the United Kingdom of Great Britain and Northern Ireland is setting to achieve our goals. Some of the figures he has referred to are encouraging. I wholeheartedly support help for poor countries, as he will be aware. Will he outline the parameters of the loss and hardship fund that has been mentioned as they pertain to ensuring that the fulfilment of human rights obligations is in the requirements for any award?
Graham Stuart
I thank the hon. Gentleman for his as ever gracious question. One of our disappointments—there were things we were disappointed with in the UAE consensus—was the watering down of elements we would have liked to see on human rights. He is right to highlight that. We have always wanted loss and damage to focus on the most vulnerable. The least financeable of all are people in an already parlous economic position, often at low scale, who are under threat from climate change. We hope that the funding that has been created for loss and damage can complement adaptation funding as well as mitigation work, and have climate justice at its heart. We have to look after the weakest and poorest on the planet. However unsympathetic the science, we have to ensure that policy recognises the realities for people all over the world.
Energy Security Plan: Gas Supply
Graham Stuart Excerpts(4 months, 4 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
I am pleased to announce that the Government have today published two updates to the March 2023 Powering Up Britain Energy Security Plan. The first sets out key considerations on the future role that gas storage and other forms of flexibility can play in the security of gas supply. The second sets out a proposed methodology for assessing medium range gas supply security.
Energy security is a priority for this Government as we transition to net zero. While we expect UK gas demand to decline as part of this transition, natural gas will continue to play a critical role in our energy system for decades to come. Alongside this reduced demand we are facing reduced domestic supply. With declining domestic gas production from the UK’s continental shelf, the UK will become more dependent on gas imports, including from global liquefied natural gas (LNG) supplies. As the gas storage and flexibility update highlights, natural gas LNG and interconnector imports are estimated to be approximately 11% of our total gas demand in 2023, rising to just
under 50% in 2045.
To slow this increasing dependence on gas imports and the risk of higher embedded emissions in them, the Government are backing the North sea oil and gas industry—so as to make Britain more energy independent. That is why we have introduced the Offshore Petroleum Licensing Bill to give industry certainty as to the future of licensing rounds. The continuing award of new oil and gas licences is essential to the UK’s energy security, further investment in moving the basin to net zero and in retaining the supply chain required for the transition. It will help slow the decline in the UK’s domestic production of gas as we consider the ongoing role of flexibility in the UK’s gas supply for the coming decades.
The role played by flexible sources of gas supply is expected to change over the coming years to provide two roles—continued and probably increased flexibility to respond to patterns of demand as well as making a contribution to baseload supply. For the gas system, the three forms of supply side, infrastructure-based forms of flexibility—geological gas storage, LNG and interconnectors—all share three key features: they can respond to peaks in demand, can be dialled up or down depending on demand across days and seasons, and their gas supply contribution is driven by market signals.
The gas storage and flexibility update therefore explores the future role that flexible sources of gas supply might play in gas security over the medium to long term, and the associated policy decisions for Government. We are proposing to launch a call for evidence on flexible sources in the coming months to support policy development on the future role of flexibility in gas security of supply.
The second update publication outlines a proposed methodology that could be used by the planned future system operator (FSO) to deliver a new medium range gas supply security assessment. This will be an annual assessment that will consider how the UK’s future estimated gas supplies compare against demand scenarios five and 10 years into the future. It will help Government and industry gain insight and plan for the UK’s future gas security. The Government will use this publication to engage with industry, academia, Ofgem, the system operators, and other stakeholders to further refine the methodology ahead of the FSO becoming operational.
I will place a copy of the documents: “The role of gas storage and other forms of flexibility in security of supply” and the “Medium range gas supply security assessment: methodology” in the Libraries of the House.
You can find the updates to the Energy Security Plan on: https://www.gov.uk/government/publications/role-of-gas-storage-and-other-forms-of-flexibility-in-security-of-supply, and
https://www.gov.uk/government/publications/medium-range-gas-supply-security-assessment-methodology.
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