Offshore Wind: Public Ownership
Graham Stuart Excerpts(8 months, 1 week ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your—as ever—sartorially elegant chairmanship, Mr Dowd. I congratulate the hon. Member for East Lothian (Kenny MacAskill) on securing this important debate, and the hon. Members who have taken part in it.
The hon. Gentleman gave a well-constructed, well-researched and thoughtful speech from the particular political perspective from which he hails, and I thank him for it. He will be aware of the important role that offshore wind and other renewables play in delivering secure, domestically generated energy, and the boost that provides for economic growth across the UK. He is right that we must harness the opportunities of offshore wind for Scotland and maximise the benefits for our nations—whether that is Wales, Scotland, England or Northern Ireland.
Where the hon. Gentleman and I differ is on how best to exploit that opportunity from where we start. This Government believe that a state-owned model is not the best approach. I am sure that, if we had allowed some new state company to come in and dominate our offshore wind sector, we would never have seen the 70% reduction in the cost of offshore wind that we have seen over recent years. It was the contracts for difference framework that we created, which allowed companies from all over the world, state or non-state, to come in, that transformed the economics of offshore wind and opened up the potential for not only the UK but the whole world of this important technology in tackling net zero.
The UK market is open to offshore wind investment, whether from state-backed or privately owned developers, and it has been extremely effective. The success of CfD has been in leveraging private capital to support wider public benefits. Our market-friendly approach has transformed the economics, as I said.
The UK encouraged an estimated £50 billion of new investment in low-carbon sectors in 2021 and 2022 alone. We currently have 14.2 GW of installed offshore wind capacity, the most of any nation in Europe. The hon. Gentleman made many references to different countries, but we have more of it than anybody else, and we drove its changing economics by taking a competitive approach rather than a protectionist, state-run approach that would never have delivered such a transformation.
We are committed to our ambition of reaching 50 GW by 2030, including up to 5 GW of floating offshore wind. We have not only the world’s largest operational wind farm project—Hornsea 2 off the Yorkshire coast, which is named after a town in my constituency—but the second, third and fourth largest projects.
Graham Stuart
I will make a little more progress, if I may.
Properly regulated markets that incentivise private capital—or indeed state capital—to invest in the energy system provide the best outcomes for consumers. Market competition is the most effective driver of efficiency, innovation and value. Private ownership of energy assets improves performance and reliability, and offers consumers greater choice and higher standards of products and services.
Our free market approach means that we have a highly competitive offshore wind market, which benefits from the expertise and experience of developers from all over the globe. It has enabled significant decarbonisation of our energy system, with dramatic drops in the cost of renewables. In 2010, when Labour left power, this country had a paltry 6.7% of its electricity coming from renewables. That was shameful. In the first quarter of this year, nearly 48% of our electricity came from renewables. Ten or 11 years ago, nearly 40% of our electricity came from coal. Next year, that will be zero, again because of our market-friendly policies, which would be at risk were His Majesty’s Opposition to have their ideas for state-run energy companies wrecking one of the most successful markets in the world. All over the country people are benefiting from the growth of the sector, and the cheap, secure, low-carbon electricity it produces.
Scotland has already benefited from the opportunities in offshore wind. It is a shame the hon. Member for East Lothian could not bring himself to recognise any of that. With its strong winds and plentiful coastline, it has made a significant contribution towards our offshore wind ambitions: so far, 3 GW is operational or under construction, and more than 40 GW of capacity is in the pipeline. The opportunity is enormous. The Scottish taxpayer already benefits from the Crown Estate Scotland seabed leasing. All net profit from offshore wind leasing rounds and rent is passed on to the Scottish Government for public spending.
We welcomed the recent announcement of a potential £200 million investment in high-voltage direct current manufacturing in the highlands by Sumitomo of Japan, which could create up to 150 jobs. The offshore wind industry has also supported the revitalisation of ports from Wick to Dundee. A huge range of diverse companies in Scotland already benefit from the offshore wind industry’s growth: crane manufacturers, consultants, underwater operations experts, turbine maintenance specialists and more. We know that opportunity will only expand as we grow the industry further.
The UK, as I have said, leads the world in floating offshore wind, a new technology that opens up access to new, deeper areas of seabed. The Hywind Scotland project was the world’s first floating windfarm. Combined with the Kincardine project, also in Scotland, it has given the UK one of the largest amounts of operational floating capacity anywhere in the world, at 80 MW. The UK has the world’s largest floating wind pipeline, with around 25 GW already identified, including through the ScotWind leasing round and INTOG processes. That represents a huge opportunity for the Scottish economy, especially from installation and lifetime maintenance activities, which are best undertaken locally.
I suggest to the hon. Member for East Lothian that, if he is as passionately committed as he suggests to jobs and benefits for Scotland, he should not be sending a message that we want to deter foreign investment, but signalling that we welcome it.
Graham Stuart
I will in a moment, if time allows.
To achieve our deployment ambitions and secure high-quality local jobs, we must continue to build a robust and competitive UK offshore wind supply chain. We are focused on maximising the economic opportunity arising from our transition to clean energy. Our significant strengths, including in wind energy and innovation, mean we have an essential role in building those supply chains, as demonstrated by this Government’s investment to date.
Through the offshore wind manufacturing investment scheme, the UK Government have made available funding to support investment in major port and manufacturing infrastructure. We have seen more than £500 million invested by SeAH Wind and JDR Cable Systems in manufacturing facilities, which will create or safeguard up to 1,200 jobs. I want to see similar investments in Scotland. That is why we continue to work with industry as it develops a long-term industrial growth plan for the sector, following the publication of Tim Pick’s recommendations.
Government backing attracts the private investment needed to deliver net zero. That includes research and development, where we are supporting innovation in floating wind technology through the floating offshore wind demonstration programme. That uses £31 million of Government funding, alongside £30 million from industry, to keep the UK at the cutting edge of offshore wind innovation. We are not stopping there. Just two weeks ago, applications closed for the Government’s floating offshore wind manufacturing investment scheme, which will provide up to £160 million to kick-start investment in port infrastructure projects needed to deliver our floating offshore wind ambitions.
The hon. Member for East Lothian gave a passionate speech effectively opposing the world’s investing in our renewable energy, and in offshore wind in particular. I caution him to think again, send out a more positive line to the world and recognise the huge investment opportunities here.
Kenny MacAskill
Does the Minister recognise that everything that he has said about private sector investment can and does happen in Denmark, but Denmark has taken a 20% stake on behalf of the Danish people, as Norway has done for oil and gas? None of what the Minister has suggested is impossible in Denmark, and it is happening. Does he accept that?
Graham Stuart
Denmark’s situation, size and industrial history are very different from the UK’s. What I am saying is that the UK is a European and, indeed, a world leader. We have decarbonised more than any other major economy on earth, and we believe that it is making us the best possible investment environment. We do not see the advantages of taking the state stakes that the hon. Gentleman suggests.
It remains essential that communities most affected by offshore wind and its associated infrastructure can benefit from its deployment. We recognise, for example, that regional distribution charges particularly impact the north of Scotland. That is why our cross-subsidy scheme provides more than £100 million annually to protect electricity consumers in the far north. It is worth £60 a year to every household in the north of Scotland.
We also want communities and individual families that are not involved directly in the industry to see benefits. That is why we have recently consulted on proposals for community benefits for transmission network infrastructure, including in Scotland, because we are essentially rewiring the whole UK economy as we make this transition. We must do it at speed, but in a way that has community support and in which we recognise the impact on host communities. Developing transmission infrastructure, particularly between Scotland and England, will be key for unlocking the full potential of renewable energy, and offshore wind in particular. It will mean that we can get electricity from where it is generated to where it is needed.
Hon. Members will have seen that the first annual contracts for difference auction completed last week. I am delighted that it delivered a total of 3.7 GW of renewable electricity. Contracts have gone to geothermal projects for the first time. There are record numbers of tidal stream projects, in which Scotland is a major player; I was delighted to visit the European Marine Energy Centre in Orkney and see so much of the significant work going on there. We also saw a doubling of onshore wind from last year’s record auction, and new solar. We hoped that offshore wind would be successful in this round, but we recognise that the challenging macroeconomic pressures felt by the industry around the world impacted its ability to come through the round successfully.
We are reflecting carefully on the results of allocation round 5 so that we make appropriate adjustments for AR6. That is how it works: we get data by trying to understand supply chain costs and commissioning research, but the most valuable data of all is actual behaviour in real auctions. That information will come into adjustments for AR6 to ensure that our evidence base reflects the true market environment. At the same time, value for money for the consumer through a competitive process remains an important feature of the CfD scheme, and I make no apology for always prioritising protecting the consumer. With annual auctions now in place, the allocation round is due to open in about six months, meaning that there is an opportunity to gain a contract with minimal delay to deployment for projects that were not successful this time.
This Government have made real progress in delivering the ambitions set out in the British energy security strategy and our “Powering up Britain” plan. We are committed to achieving our ambition of 50 GW of offshore wind by 2030. It has a vital role to play in delivering a decarbonised power system by 2035, subject to security of supply, and achieving our legally binding 2050 net zero commitments. We need to celebrate what we have done to date and recognise that most of the growth is not in the past, but in the future. The opportunities for Scotland, Wales, Northern Ireland and England are immense, and we should work collectively to ensure that we attract investment and create as many jobs as possible in this country supporting the transformation of our energy system and our spearheading of the global move to net zero, which is so important to us and future generations.
Question put and agreed to.
Offshore Wind Contracts
Graham Stuart Excerpts(8 months, 1 week ago)
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Edward Miliband (Doncaster North) (Lab) (Urgent Question)
To ask the Secretary of State for Energy Security and Net Zero if she will make a statement on the implications for offshore wind of contracts for difference allocation round 5.
The Minister for Energy Security and Net Zero (Graham Stuart)
The first annual contracts for difference auction—the first that we have ever done—was completed last week and delivered a total of 3.7 GW of renewable electricity, with contracts going to a record number of projects. The auction delivered significant quantities of new solar and onshore wind generation, as well as supporting 11 new tidal stream projects and, for the first time, geothermal projects. It was a competitive auction, set against a backdrop of highly challenging macroeconomic conditions that have impacted the sector globally. Given that this was our first annual round, it was to be expected that it would have a lower capacity than the previous biennial rounds, and, because last year’s round was the first for three years, a higher annual element than that record round.
The Government remain committed to offshore and floating offshore wind projects, and this round provides valuable learning for subsequent auctions. Work has already started on allocation round 6, incorporating the results of the recent round, and we look forward to a strong pipeline of technologies being able to participate. The move to annual auctions means that allocation round 6 will open in just six months’ time, in March 2024, which means that there could be minimal or indeed no delay in the deployment of new capacity through that round.
The Government also remain committed to our target of decarbonising the power system by 2035 and our ambitions for 50 GW of offshore wind, including up to 5 GW of floating offshore wind. Our trajectory for meeting these aims, as well as our legally binding carbon budget 6 targets, is not linear. The outcome for one technology in one auction does not prevent us from reaching those goals.
Edward Miliband
What a load of nonsense. No wonder the Secretary of State is in hiding.
This auction is an energy security disaster for Britain, and an act of economic self- harm on the part of the Government. No new offshore wind projects means that families’ energy bills will £2 billion higher and our energy security will be weakened. Worst of all, this was totally avoidable. Ministers were warned again and again about the impacts of higher inflation—in a letter from RenewableUK in March, and again in July—and offshore wind is so much cheaper than gas that they could have raised the price in the auction and it would still have saved billions of pounds for families, but they refused to listen.
First, will the Minister tell us why the Government ignored those repeated warnings? Secondly, he said on Friday that every country was in the same boat, but that is just wrong. Ireland listened to industry and adjusted its price, and had a successful auction in March 2023. Why did the Government not learn that lesson? Thirdly, is not the terrible truth that this episode reveals a much deeper flaw in their approach? For month after month this summer, they claimed that the answer to our energy crisis was more oil and gas, and this is the result. We will now be more dependent on expensive, insecure fossil fuels. We will be more exposed to the whims of petrostates and dictators. Every wind farm that we fail to build makes us more exposed to dictators like Putin, and he knows it.
Bills higher, security worse, jobs lost, climate failure—the Government have trashed offshore wind, the crown jewels of our energy system, raising bills, just as they trashed onshore wind by banning it, raising bills, and just as they trashed home insulation, raising bills. We have seen 13 years of failed energy policy, and all this fiasco shows is that the Conservatives are, quite simply, a party unfit to govern.
Graham Stuart
I was pleased to see the other day that the rumours of the right hon. Gentleman no longer being in his position were not true. It is perhaps understandable in that context that he is so passionate about this highly successful round that has seen 3.7 GW on an annualised basis. I think that is a record round. He was a member of the previous Labour Government who left this country with 6.7% of its electricity coming from renewables. In the first quarter of this year, 48% of our electricity was from renewables. It was this Government, with our contracts for difference system, who transformed the economics of offshore wind. We have 77 GW of offshore wind in the pipeline—more than enough. We have 7.5—[Interruption.] The right hon. Gentleman understandably, given the weakness of his arguments, wants to heckle at all times, knowing how easy it is to dismantle them. He asks me where that capacity is, and I can tell him that 7.5 GW is currently under construction.
As ever, the right hon. Gentleman fails to be on the side of consumers. We moved to an annualised auction precisely to ensure that we could learn the lessons from each round, add them to our industry insight and ensure that we could move forward. The projects take multiple years to be developed, and none of them has disappeared. I predict that, moving on from the triumph of 3.7 GW of renewables, which came through successfully on Friday, allocation round 6 will be more successful still. We will continue to build our reputation as the country that has cut emissions more than any other major economy and that has transformed our electricity generation. He mentioned insulation—how he has the gall, I do not know. We have moved from 14% of homes being properly insulated when he left power to over 50% by the end of this year.
Selaine Saxby (North Devon) (Con)
I thank the Minister for his engagement with this process, particularly with the new technology of floating offshore wind. Three floating offshore wind projects were due to bid in allocation round 5 but none did, due to the low administrative strike price. As chair of the all-party parliamentary group for the Celtic sea, I have repeatedly been told that these projects are part of our future energy supply. Can he outline what steps he is taking to ensure that these projects will float in allocation round 6 and to give confidence to developers in the region?
Graham Stuart
I thank my hon. Friend, who is an absolute champion of floating wind and the economic opportunities it offers for her area and the rest of the UK. I was delighted to speak to her last week and meet her yesterday, and I pay tribute to her efforts. We have the largest floating wind pipeline in the world, based on confirmed seabed exclusivity arrangements. We have around 25 GW already identified, including through the ScotWind leasing round and innovation and targeted oil and gas—INTOG—processes. As she, as a great champion, knows, the Crown Estate is moving forward with its leasing round 5 for up to 4 GW of capacity in the Celtic sea this year. We have been the world leader on floating energy and we are going to stay the world leader. Thanks to the efforts of my hon. Friend, I know that we will have support across the House.
Dave Doogan (Angus) (SNP)
The Minister failed to point out that 3.7 GW is scarcely half of what was achieved in auction round 5. He also failed to mention, when he was heralding onshore wind, that 90% of that will be found in Scotland. Since 2014, the four auction rounds have yielded 1 GW, 2.5 GW, 5 GW and 7 GW, so a nil return is an utter catastrophe.
The critical need for massive investment in offshore is patently obvious for bills and for the climate, yet this ambition has been thwarted by an incompetent previous Secretary of State and by the Treasury, which knows the price of everything and the value of nothing. Can the Minister assure us that the Department will get round the table with industry as a matter of urgency to try to repair this damage? Industry needs a strike price that reflects the not-mutually-exclusive goals of lower bills, net zero, and jobs and investment in Scotland and elsewhere. Can he confirm whether a recovery group for auction round 5 will be convened by him or the Secretary of State to try to get this catastrophe resolved? And where is she?
Graham Stuart
The hon. Gentleman and his party never fail to trash this country—[Interruption.] He can heckle all he wishes. I will be meeting industry representatives this afternoon and, as I have said, we will be announcing in two months’ time the price ceiling for the next round—[Interruption.] I am getting heckling, not least from His Majesty’s Opposition, who left us in that parlous situation. We are the world leader in so many of these technologies and we are going to continue to be. If the hon. Member for Angus (Dave Doogan) were to recognise the need to attract investment to this country and not talk it down, he might find that Scottish jobs would be even stronger in the pipeline than they are already.
Sir Desmond Swayne (New Forest West) (Con)
If any, how much of the completed wind capacity still requires connection to the national grid?
Graham Stuart
Until wind capacity is constructed, it is not normally connected to the grid. That which has not been connected to the grid will need to be connected to the grid.
Mr Speaker
I call the Chair of the Select Committee on Energy Security and Net Zero.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)
The boom and bust of this fiasco will inevitably have knock-ons for the supply chain. How concerned is the Minister about that? Also, how concerned is he about projects that were built on CfD securities but have not invoked the contracts and are now literally raking in the windfall of that act?
Graham Stuart
I do not quite follow the second part of the hon. Gentleman’s question, but I am happy to write to him on that topic.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
West Somerset, as the Minister knows, is ideal for offshore wind. I am interested to know why people did not bid in this round. What were their reasons? What can the Government do to learn the lessons of this round so that people like my hon. Friend the Member for North Devon (Selaine Saxby) can make sure that people are bidding in the next round?
Graham Stuart
We typically set out the key auction parameters in November, and those include the ceiling of what we will pay for particular technologies. We do that based on our analysis of supply chain costs, and we also commission external analysis. The most important data of all comes from individual auction rounds, and it is on that basis that we set the price parameters. The industry warned us, as it does every year, that it wants us to pay more. We always have to make a judgment call between making sure that we minimise—[Interruption.] It would be so much easier to give my answer, Mr Speaker, if the right hon. Member for Doncaster North (Edward Miliband) would stop—
Mr Speaker
Order. I think that, as a man who was always happy to heckle from the Back Benches, the Minister deserves a little bit himself.
Graham Stuart
We set the prices, and we immediately learn from each auction. One of the reasons for having an annual auction is that we can quickly adjust and, as I said, projects can then come into the next round with minimal delay.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The wind farm off Brighton has probably become as iconic as the pier itself, but the reality is that the Government’s failure will delay the construction of more of these beautiful installations around our coast. Is this failure not also a failure of the market-based private investment system that this Government are determined to pursue, rather than a publicly owned and co-ordinated building programme that can work alongside private investment so that we no longer have this failure where nobody bids?
Graham Stuart
I thank the hon. Gentleman for revealing the true face of where the Labour party is going. We can go back to the days when we had hardly any renewables, and we can allow Great British Energy, or whatever Labour is going to call its creature, to squeeze out private investment and destroy the most successful renewables market in Europe, and to destroy this Government’s progress on tackling the parlous position left behind by the right hon. Member for Doncaster North and his friends. We will continue to be the world leader in cutting emissions, but not if we move to the state-run, left-wing obsessions of colleagues like the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle).
Peter Aldous (Waveney) (Con)
Offshore wind plays, and will continue to play, a key strategic role in enhancing energy security, achieving net zero and revitalising coastal communities such as Lowestoft. To get back on track, can my right hon. Friend confirm that the criteria applying to round 6 will take account of current economic realities, that appropriate fiscal measures are being considered ahead of the autumn statement and that specific focus will be given to enhancing local supply chains?
Graham Stuart
I thank my hon. Friend, who has been such a consistent champion not only for the power of renewables to meet our environmental challenges but for the economic benefits that come from them. He is absolutely right that the nature of the CfD system is that it learns from the previous auction round, which is the most real data of all, and uses that learning to inform the next round. That is why I am confident that, just as we had a success with 3.7 GW on Friday, AR6 promises to be more successful still.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the Minister on turning complacency and chutzpah into a new art form. The ineptitude of Tory Ministers means that this latest CfD round saw the smallest auction return since 2015—a failing that was entirely avoidable. How will he ensure that the UK delivers the 35 GW of new offshore wind capacity that is needed in just six years? Why did Ministers yet again fail to heed the warnings from industry and experts in advance?
Graham Stuart
We have to set the parameters based on the best information we have. As I say, one reason for moving to an annual round is to allow us quickly to learn the lessons of each round. We did not get the wind on this occasion, which I regret, and we will put the real-world prices and learnings from that into the next round. That is the system we have, because we are always trying to make sure that we get the parameters right so that we balance the need to generate additional green energy with the cost to the taxpayer. Understandably, given their carelessness with the public finances and with consumers, the Opposition do not seem to care about that. My job is to balance it, ensuring that we get the generation, and we have 77 GW in the pipeline. We are in position and on track to meet our ambitions, which lead Europe—not that we would know that to listen to the hon. Lady.
Cherilyn Mackrory (Truro and Falmouth) (Con)
I thank the Minister for including geothermal projects in allocation round 5, as that is very welcome. However, I echo everything my hon. Friend the Member for North Devon (Selaine Saxby) says about the Celtic sea projects. What will we do differently in round 6? What advice would he give to those in the supply chains, specifically ports, that are trying to submit applications for the FLOWMIS—floating offshore wind manufacturing investment scheme—funding? What conversations has he had about grid capacity, to ensure that all of this eventually runs smoothly?
Graham Stuart
As ever, my hon. Friend is well-informed. We are working on all those fronts. FLOWMIS applications closed just two weeks ago, and we are working flat out to analyse them. I hope that by the end of the year we will have shortlisted to the primary list and those schemes will move forward to due diligence, as we take forward not only our floating wind deployment, but the supply chain in the south-west, Wales, Scotland and around the rest of the UK. We are working on all those fronts and are determined to do that. As she rightly highlights, seeing our first geothermal projects come through the CfD is fantastic, as are the 11 tidal projects. I pay tribute to all colleagues who have worked so hard to promote tidal energy and make sure that we continue to be a world leader in that as well.
Olivia Blake (Sheffield, Hallam) (Lab)
This is an embarrassment for the Government and shows that we are falling further and further behind in the race for green jobs internationally. We have the lowest growth in these industries among the eight biggest economies. Should the Government not be focusing much more on broadening and increasing the capacity of offshore wind, rather than not listening to industry and making fatal errors?
Graham Stuart
If the Labour party is not nationalising or creating some state-owned behemoth, it wants just to hurl money in the direction of business. Our judgment is to balance those things and I am pleased to say that we have been successful; we have the largest offshore wind sector in Europe. This country and this Government, through the CfDs, transformed the economics from the situation we inherited after the right hon. Member for Doncaster North and his colleagues had been in power.
Stephen Crabb (Preseli Pembrokeshire) (Con)
Delivering on the floating offshore wind project in the Celtic sea is vital for our energy security and decarbonisation. Does the Minister agree that we now need to bolster confidence in this emerging industry? There are two things he can do. Does he agree that a successful allocation of FLOWMIS money to the south Wales ports in order to get this industry moving is vital? Does he also agree that we need to ensure that the Crown Estate’s leasing round at the end of the year is done successfully, but with more than 4 GW of visibility, in order to send a strong market signal to the industry to invest?
Graham Stuart
My right hon. Friend is also someone who, through thick and thin, promotes that industry and sees the opportunity it offers Wales. He makes a special bid for the Welsh ports, as I would expect him to do, but he will understand that I can make no comment on that. I entirely agree with him on the importance of the Crown Estate round. Suffice it to say that across Government we have been working flat out, with his and other colleagues’ support, to support the Crown Estate to ensure that we maximise the opportunity in the Celtic sea.
Wera Hobhouse (Bath) (LD)
The Government’s obsession with oil and gas has left us in this mess. The Department has prioritised new oil and gas licences over support for wind power, which flies in the face of our climate change commitments and our responsibilities to UK citizens—our constituents—to keep energy prices low. Oil and gas will always be more expensive than wind energy. When will the Minister fill the gap of 5 GW of offshore wind that we have now missed out on, which would have saved consumers £2 billion a year? I am not talking about the sixth auction round—I am talking about the fifth one, where we have missed out now.
Graham Stuart
The hon. Lady is completely mistaken. We are working flat out both to reduce demand for fossil fuels in this country and to build up our renewables. I would hope she would celebrate the fact that we have the largest offshore wind sector in Europe.
Mick Whitley (Birkenhead) (Lab)
The Government have long been warned that their focus on CfDs as the primary mechanism for financing new renewables risks undermining investor confidence in infrastructure assets with long lifespans but significant up-front capital costs, such as nuclear and tidal range generation. Following the Government’s decision to employ a regulated asset base model to support the development of new nuclear, will the Minister now commit to looking urgently at the optimum financial model for new tidal range projects, which could make a crucial contribution to the future UK energy mix?
Graham Stuart
The CfD scheme is among the most successful, if not the most successful, of its sort in the world. We always look at ways in which we can improve it. We are looking at bringing in non-price factors as we finesse it, but the Opposition party’s idea of some state-run enterprise, squeezing out private investment, would destroy the opportunities going forward. We need at least another £100 billion to be invested by 2030 and if the Labour party ever did threaten to come into power, it would put all that at risk.
Alex Cunningham (Stockton North) (Lab)
On Teesside, we have been promised thousands of jobs in the offshore wind industry, but investors are getting a little nervous as a direct result of Government failures to provide the right business environment. What will the Minister do to get the business environment right to deliver the jobs we have been promised, which are being put in jeopardy by Government failures?
Graham Stuart
We are getting that balance right and we will continue to do so. Making sure that we look after the consumer is always my guiding light, and we balance that with getting the generation we need. We have seen companies such as SeAH investing in Teesside and Sumitomo looking at investing in Scotland—
Graham Stuart
As the hon. Gentleman decries this and talks both the area and the nation down, he then tells me that investors are getting nervous. If he were to champion all the successes we have had instead of decrying them, he might find that he would give investors even more confidence still.
Sammy Wilson (East Antrim) (DUP)
I do not agree with the policy that the Minister pursues. His net zero policy is disastrous and has been costly in terms of electricity prices and future planning. However, I feel some sympathy for him today. He is being criticised by those who have highlighted high energy prices for not offering inflated prices to the wind industry, which claims that producing wind energy is getting cheaper but of course wants higher prices. As it was not offered that, it would not bid in the auction. Is the real reason for this not that for the first time he has refused to allow those who bid to walk away from their CfD agreements, to price electricity at whatever price they want and therefore to have inflated profits? Does that not indicate to him that the wind industry knows it cannot produce electricity cheaply and wants the system balanced in its favour?
Graham Stuart
The right hon. Gentleman and I do not see eye to eye on net zero or on the economic benefits of the wind industry. It does offer cost-effectiveness. It has been amazing to see how as it is scaled, it has been able to bring the price down. It was not obvious when we went out into the North sea that we would be able to bring the price crashing down, yet this country led the world in doing that. If he looks at the numbers, I hope he will find that the whole of this House can agree on one thing: offshore wind is an economic way of producing energy, and one that all of us should support.
Beth Winter (Cynon Valley) (Lab)
Last week, the think-tank Common Wealth made the critical point:
“Reliance on market coordination leaves the transition vulnerable to the demands of private capital”.
It is abundantly clear that private capital cannot deliver what is urgently required to stem the climate crisis. In Wales, the Welsh Government know that, which is why, over the summer, they launched the community-owned renewable energy company, Ynni Cymru. Does the Minister agree that that is what is required, and what action is he taking to address this?
Graham Stuart
I thank the hon. Lady for pulling back the veil on Labour’s real policy, which is that it hates private capital, it hates private investment and it would destroy the phenomenal success of this country in generating that. [Interruption.] The Front Benchers can heckle all they like, but that is what their Back Benchers want. That is the policy that threatens the British people and threatens our path to net zero. We must make sure that people such as the hon. Lady never have power in this country.
Joanna Cherry (Edinburgh South West) (SNP)
Scottish Renewables has said that the results are a major blow to the renewables sector in Scotland and should serve as an indication that urgent reform is needed. Scottish Renewables, not a political party but part of the industry, has also said that these disastrous results are bad for Scotland’s energy supply chain, which desperately needs a steady stream of projects to make its own investments in skilling up and in new technology. Will the Minister acknowledge that his and his Department’s failure to listen to warnings from the industry is holding back Scotland’s renewable sector?
Graham Stuart
I thank the hon. and learned Lady for her question. Industry always asks to be paid more money. Our job is to make the right judgment call on getting the balance right.
Hywel Williams (Arfon) (PC)
I saw in the newspapers yesterday that astronomers have discovered a water-covered planet in a far away galaxy. I have to disappoint these excited scientists that, from his answers today, the Minister appears to have got there before them. [Interruption.] On another planet, yes.
Seriously though, this setback to the Erebus project in south-west Wales is deeply disappointing. It was the first of its kind in Wales and was supposed to pave the way to a developing industry. I hope the Minister can reassure me that he is taking steps to make sure that, in AR6, projects such as Erebus are enabled to compete successfully and to lead the way for this industry in Wales.
Graham Stuart
I thank the hon. Gentleman, not least for his attempt at a gag. I can tell him that what he says is the whole basis of the system—that it learns from each round. The most real economic data that we get is from an auction round. Moving to annual rounds, there will be ebb and flow as the right balance is sought between getting the generation that we require, set against our extremely ambitious deadlines, and not paying too much. That is the balance that we strike. We have 3.7 GW and I imagine that we will do even better next time.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I feel as if I am almost taking my life in my hands, but I do want to commend the Minister for one small piece of good news in this round, which is in relation to the development of marine renewables. The success of the auction for tidal stream development illustrates what would be possible for wave power if it were to be given the same opportunity in AR6. But for tidal stream, does the Minister agree that what is now needed is the 1 GW target for deployment? Will he work with me and other people in the House with an interest in this and the marine renewables sector itself to deliver that ahead of AR6?
Graham Stuart
May I pay tribute to the right hon. Gentleman? I met him in his constituency when I visited the European Marine Energy Centre and saw for myself some of the projects in the water. I am personally determined to ensure that tidal stream continues to grow. We maintain our global leadership, with a very high percentage UK supply chain as a further positive to it. He tempts me to get ahead of myself on policy, but I cannot do that. However, what we are doing and what our dedicated pot this year did is further strengthen that so that we can get in a position where that might be a realistic policy position to take.
Dame Nia Griffith (Llanelli) (Lab)
Even with a higher price, offshore wind would help to slash bills. When the Minister saw the Irish Government recognise inflation, up the price and proceed to a successful auction, what discussions did he have with the industry and with Treasury colleagues about the price to be set?
Graham Stuart
I thank the hon. Lady for her question, which is a good one. Obviously, we did look at whether intervention, given that prices continue to change after they are set, was the right thing to do. We think that the CfD mechanism—the way that it is operated—is sound and that the best thing to do is to allow that to pass for the year. One reason for having the annual auction was precisely to allow us quickly to adjust, and, as I say, as soon as November, we will be setting the parameters for the next year.
Richard Foord (Tiverton and Honiton) (LD)
Last November, the Government paid up to £700 million to China General Nuclear Corporation to buy out China’s state-owned nuclear power enterprise from Sizewell C, and we spent the best part of 2022 freeing ourselves from our reliance on Russian oil and gas. Given the failure of this Government to sell offshore wind projects in the latest round, can the Minister please comment on how energy independence from authoritarian states was served by this inability to run an auction?
Graham Stuart
We are now running these auctions every year, and every year, we will be seeking to get the generation that we require at the lowest possible cost to the consumer. I make no apology for doing that. The fact that we have the most successful system, not only in Europe, but globally, is something that should be applauded and recognised.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Windsor report last month provides a sobering analysis about the scale of new electricity transmission infrastructure required to serve increased renewable generation and consumer demand in a very short space of time. However, as the report finds, there is considerable resistance locally to pylon development, as we are finding out in my constituency. Competence for such development is with the Welsh Government, but will the Minister pull together a working group of Ministers from across the UK and experts to consider the Windsor report, and in particular the advantages of cable ploughing technology, which would underground those cables at a comparable cost to overhead pylons without the visual damage?
Graham Stuart
I thank the hon. Gentleman for his constructive and effective question. He is absolutely right to highlight the challenges of making sure that we have the right transmission and connection infrastructure to facilitate offshore wind. We have to do that in a way that minimises negative impacts on communities, that rewards them for hosting it, and that looks at new technologies and innovations, just as we do in other areas, in order to facilitate that effective connection with minimal negative impact on communities that host.
Jim Shannon (Strangford) (DUP)
In light of the disappointing results of the CfD AR5 auction and given that I am always trying to be constructive in my contributions in this House, will Government revisit the exclusion of Northern Ireland renewable projects from the scheme, especially in light of the significant increase in onshore wind and tidal stream projects supported by the AR5? Northern Ireland is perfectly positioned for onshore wind and tidal stream to make a major contribution to energy security and net zero from AR6 and beyond. Will the Minister commit to enable Northern Ireland to be part of AR6?
Graham Stuart
I suggest that it is the hon. Gentleman and his colleagues who need to commit to facilitating that in Northern Ireland. Energy is devolved and it is up to them to get the devolved Assembly up and running. If they get devolved government going in Northern Ireland, they will unleash these opportunities. It is not for this Department, which is not responsible for energy in Northern Ireland.
Energy Charter Treaty: Review of UK Membership
Graham Stuart Excerpts(8 months, 2 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
On 30 August 2023, the UK announced it is reviewing its membership of the energy charter treaty (ECT) and will make a further decision if modernisation has not been adopted by November 2023.
The ECT is a multilateral agreement with 51 contracting parties, covering energy co-operation on trade, investment, transit, and energy efficiency. The ECT was signed in 1994 to promote international co-operation in the energy sector in eastern Europe and central Asia, following the break-up of the Soviet Union, with a particular focus on investment in fossil fuels.
The UK has been a strong advocate for modernising the ECT, recognising that the existing treaty is not aligned with modern energy priorities, international treaty practice and commitments on climate change. The UK and other contracting parties spent two years negotiating a modernised ECT and amendments were agreed in principle on 24 June 2022.
If adopted, the modernised treaty would have a stronger focus on promoting clean, affordable energy, including technologies like carbon capture, utilisation and storage (CCUS), hydrogen and other renewables. Modernised terms would also strengthen the UK Government’s sovereign right to change their energy system to reach net zero.
The decision to adopt the modernised ECT was paused in November 2022. This followed several EU member states, including France, Germany, Spain and the Netherlands announcing plans to withdraw, leading to an impasse on modernisation. In July 2023, the EU Commission called for a co-ordinated EU withdrawal. The EU is seeking a bloc-wide position this autumn, but upcoming European Parliament elections in 2024 raise the prospect of prolonged uncertainty.
The UK’s preference has been to modernise the ECT, but we must now prepare for the possibility that this will not be achieved. The UK is reviewing its membership, recognising its long-standing position that the unmodernised ECT is out of step with modern treaty practice and the UK’s energy priorities. This reflects our unwavering focus on energy security and net zero. The review will conclude by November and will carefully consider the views of stakeholders in business, civil society and Parliament to inform the UK’s approach.
[HCWS995]
Draft Electricity Capacity (Amendment) Regulations 2023
Graham Stuart Excerpts(10 months ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
I beg to move,
That the Committee has considered the draft Electricity Capacity (Amendment) Regulations 2023.
It is a great pleasure to serve under your chairmanship, Mr Robertson. The regulations were laid before the House on 12 June. The draft instrument seeks to make technical changes to the capacity market scheme, the Government’s main tool for ensuring security of supply in Great Britain.
As set out in the “Powering Up Britain” paper, which was announced in the House on 30 March, we have bold new commitments to super-charge clean energy and accelerate renewable deployment. In the shorter term, while the future geopolitical context is still uncertain, we recognise that the world is likely to face continued challenges this winter around security of supply, considering Russia’s illegal invasion of Ukraine.
What does the draft instrument do? To ensure that the capacity market continues to function effectively, we regularly make adjustments to the implementing legislation, based on our day-to-day experience of operating the scheme. In that context, the draft instrument makes changes to three electricity capacity regulations to deliver technical improvements that support the functioning of the capacity market.
Graham Stuart
I will make a little more progress first. The capacity market is now well established, with capacity auctions held every year since its inception in 2014. The draft instrument aims to reduce the administrative burden associated with the process, as we believe that it is more appropriate instead to notify the market when the intention is for an auction not to be held, rather than having to announce each year that it will be. The change will not impact the nature of participation in the scheme or announcements regarding the targets for the capacity auction. It simply seeks to change the way in which the announcement is made that confirms whether auctions will be held.
We have also been made aware that the existing transfer route that enables capacity agreements to be terminated in order to participate in the contracts for difference scheme cannot be used in practice, due to interactions between the definitions used in the regulations and the delivery timeframes. The draft instrument seeks to amend the definition of the contracts for difference transfer notice to enable the transfer route to be used. The draft instrument seeks to improve administrative arrangements by extending the timescales associated with the settlement body’s calculation of penalties and issuing of associated invoices for non-delivery.
Alan Brown
I thank the Minister for giving way. Paragraph 7.1 of the explanatory memorandum states that nuclear can form part of the capacity market. Will he explain how nuclear can bid in? We keep getting told that the great thing about nuclear is that it provides baseloads. How does that work in the capacity market auction?
Graham Stuart
As happy as I would be to engage in a wider discussion about nuclear this morning, I think it might be best if I wrote to the hon. Gentleman to set out those specific concerns.
Turning to the Government consultation, the changes in the draft instrument were consulted on at the start of the year and were broadly supported by respondents. We also consulted on a wider range of changes, including to the capacity market rules that set out the detailed provisions for the delivery of the scheme.
As was signalled in the Government response to the consultation, we intend to follow a two-phased approach to reforms to the capacity market. First, we will proceed with technical changes to strengthen the security of supply and ensure better value for money. In the second phase, we intend to undertake further analysis and development before taking a final decision on implementation.
The capacity market continues to support low-carbon technologies, with growing participation of demand-side response and storage technologies. In line with the broad support for greater alignment of the capacity market with net zero, the Government remain committed to introducing an emissions limit reduction for new build and refurbishing plants into the capacity market and exploring options to address barriers to low-carbon technologies to help drive the transition to a net zero power system by 2035, subject to security of supply. Further analysis is required to understand the impact that the proposals will have on energy security.
Through developments to the capacity market and the review of the electricity market arrangements programme, we are confident that the right market signals will be in place to ensure that we meet our 2035 decarbonisation target, subject to security of supply. As has been highlighted, we have also made a number of technical amendments to the capacity market rules, which were laid before the House on 12 July. Rule changes will be introduced to reduce administrative burdens for prospective capacity providers and clarify how auctions are operated for the benefit of participants.
In conclusion, the draft instrument introduces a number of technical provisions necessary to enable the continued efficient operation of the capacity market, so that it can continue to deliver on its objectives. I commend the regulations to the Committee.
Graham Stuart
I thank colleagues for their contributions. As has been said, these are technical and uncontroversial amendments. I will write to the hon. Member for Kilmarnock and Loudoun about his earlier questions. The capacity market is technology-neutral, and all capacity can bid to win agreements to make capacity available when needed. As I also set out, we are going through two phases of changes to improve the capacity market, exactly in line with what he described, in that we want to encourage demand-side response.
To go back to what the hon. Member for Bristol East said about funding, the point of the auction system is to get the capacity we need to be there when we need it, at the lowest possible cost. If we want to have back-up and we cannot guarantee when we will call on it, we need to use that kind of transparent system, which increasingly encourages—as we are seeking to do by changing the system—green and flexible technologies, rather than diesel generators and so on, at the lowest possible cost. That is the aim of the amendments we are making, and I am glad to see agreement across the Committee today.
Question put and agreed to.
Renewable Energy in the East of England
Graham Stuart Excerpts(10 months, 1 week ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mr Twigg, and to conclude this debate, which was so brilliantly set off by my hon. Friend the Member for Waveney (Peter Aldous). As you will recognise, Mr Twigg, it is rare to hear, especially in a short debate such as this, such a wide-ranging, deeply thought-through and comprehensive speech as the one that we have just heard from my hon. Friend. His grasp of the key issues in the energy space is remarkable, and it is grounded not only in his constituency, but in the wider region he represents.
My hon. Friend will be aware of the important role of offshore wind, as he highlighted, and other renewables in delivering secure, domestically generated energy, and of the boost they provide for economic growth, although I am sure he will also allow me to set out the Government’s position. The policies set out in the British energy security strategy and endorsed in the “Powering Up Britain” papers, which I announced to the House on 30 March 2023, include bold new commitments to super-charge clean energy and accelerate renewable deployment. My hon. Friend suggests that we have the opportunity to be a global exemplar. Not to diminish the—for the most part—accurate and properly based challenges he set out, but we already are the global exemplar. We have cut our emissions by more than any other major economy on earth since 1990. We took the position—a rather parlous one, when we think about it—just 13 years ago, when less than 7% of our electricity came from renewables. That is now well over 40%. In some senses, we are a victim of our own success, which has created some of the grid pressures that he rightly highlighted.
Turning to coal, I am the co-chairman of the Powering Past Coal Alliance, an international grouping of countries and organisations committed to ending the use of coal in power production. Nearly 40% of our electricity came from coal as recently as 11 years ago, in 2012. Next year that figure will be zero. We are a global exemplar, although I share my hon. Friend’s frustration when he asked whether—despite all the jobs that have been created and our success in leading—we have harnessed all the economic benefit. Have we embedded the industrial capability that we could have for the long term? If I had a mission in this job, apart from delivering and helping to facilitate this extraordinary transformation, it would be to do so in a way that leads to the long-term, high-paid jobs that my hon. Friend is so right to challenge the Government to work towards.
Wind overtook gas as our largest source of electricity during the first three months of this year, delivering more than a third of our entire electricity supply for the first time. I am proud of that. As my hon. Friend has said, the east of England plays an important role in supporting our offshore wind ambitions. Just last year, our contracts for difference scheme allocated support for a further 7 GW of offshore wind capacity, the majority of it located in the North sea and supported through the east of England. Since 2014, we have more than doubled our solar capacity in east England to more than 2 GW, with a further 1 GW of shovel-ready capacity and 2 GW more in planning.
This Government have driven that change. We have introduced the landmark Energy Bill, which is currently passing through the House, which contains measures to accelerate the rate of deployment of offshore wind farms, reduce the time it takes to get planning consent, and reform environmental regulations to streamline processes, while maintaining protection of the marine environment, but doing so in a more strategically joined-up way—a thread running through my hon. Friend’s excellent speech. He may or may not be aware that the Department for Environment, Food and Rural Affairs is running the marine spatial prioritisation programme, which, on a cross-purposes analysis, aims to optimise the use of our seas and manage competing priorities on the seabed. It is, in conjunction with my Department, leading on exactly the kind of strategic overview that my hon. Friend rightly highlighted.
We recently concluded our consultation on making changes to the national policy planning framework in England—again, as part of pulling together a more strategic approach. When designated, local authorities will be better able to respond to the views of their communities when they wish to host onshore wind infrastructure. Offshore wind developers in East Anglia will also be required to consider co-ordination of their infrastructure before submitting a planning application for any new network infrastructure. My hon. Friend rightly highlighted the project-based, linear approach and the need for a more co-ordinated and coherent one. [Interruption.] I am being given further “refreshment”, which is always marvellous.
Where communities such as those in the east of England host this infrastructure, we want to thank and, to be fair to them, also reward them for doing so, as my hon. Friend said. Our consultation on guidance on community benefits for transmission network infrastructure closed a couple of weeks ago, and I hope to be able to share the results later in the year. We have also just closed our consultation on developing partnerships for communities who wish to host new onshore wind infrastructure in return for lower energy bills. My hon. Friend also picked up on that.
Finally, I want to discuss network infrastructure, which, as my hon. Friend said, is an essential component for driving renewable deployment, and we need to build it more quickly. In Great Britain, around four times as much new transmission network will be needed in the next seven years as was built since 1990. The timescales for delivering transmission network infrastructure are currently 12 to 14 years, often far longer than the time taken to deliver the generation being connected—and we all recognise that having wonderful, new, low-cost, brilliantly planned generation is no good if we cannot get the electrons where they need to go. The lack of network capacity is already a challenge, as around 5% of wind generation is currently curtailed, meaning its output is reduced because there is not enough capacity on the network to transport it. This could increase to between 15% and 20% in the mid-2020s, as wind generation increases further.
In order to accelerate the delivery of network infrastructure, we appointed Nick Winser as the electricity networks commissioner, who is tasked with advising on how we can halve the timeline for delivering new electricity transmission infrastructure. His report will be published imminently, and the Government will respond with an action plan later this year. We will also come forward with a connection plan at the more local level, precisely because of the central importance of sorting out our transmission.
Placing all new infrastructure offshore is not a feasible option, as ultimately the electricity needs to get to where the demand is, which is of course onshore. Therefore, even with offshore cables, infrastructure such as substations are required onshore at landing points. To support faster delivery of transmission and better co-ordination, the holistic network design, or HND, developed by the electricity system operator, sets out a blueprint for the connection of groups of offshore wind projects to the grid—again, picking up on my hon. Friend’s central point about the need for a more strategic and coherent approach, informed, as it will be, by high-level spatial strategies.
This is the first time that connections and transmission reinforcements have been considered together for multiple projects, and it is revolutionising the way that we design our network infrastructure. Considering multiple projects together has allowed opportunities to co-ordinate infrastructure while balancing impacts on the environment, communities, cost to consumers and deliverability of the infrastructure.
Of course, as my hon. Friend has said, concerns have consistently been raised about the proposed infrastructure in East Anglia. I would like to reassure the House that the Department is working closely with developers, transmission operators and National Grid ESO to explore voluntary options to minimise infrastructure where possible, while also recognising that timely delivery of projects in the east of England will be key to achieving the 2030 ambition for offshore wind.
In the limited time that I have left, I will try to briefly review some of the points that my hon. Friend made and consider whether I can make any reasonable response to them. He mentioned the revolution, and that is what is going on; indeed, we need to tell the story to the nation about how we are rewiring this country. If people look around even the most beautiful landscapes, they will see things that they usually do not notice because they are just so used to them—major pieces of industrial infrastructure that were required to create the foundations for the wealthy and successful country that we are. Nevertheless, we will need to rewire things. Even with the best will in the world and strategic planning, co-ordination and minimisation of impacts, as well as a real focus on good design principles, there will be impacts, and we need to let people know that delivering net zero will require them.
My hon. Friend touched on the fact that we have been developer-led, project by project, which is very much changing. He also mentioned the focus on delivery, and on skills and jobs. I co-chair the green jobs delivery group, which is the high-level Government and industry body that is looking to get the information from the engineering specialities that he mentioned, so that information can be shared with the Minister for Skills, Apprenticeships and Higher Education, who also sits on that body, to make sure that education programmes are better aligned with and support the kind of revolution that is required.
My hon. Friend also mentioned the CfD budget. When he talks about that, I think he is probably talking more about the administrative strike price, as we call it in our jargon-world. That is the top level that we will pay, whereas the budget is the amount that we will commission. We always keep that price in mind, and obviously we recognise that there are financing costs, supply chain squeezes and inflation. However, those things are very much taken into account when we design these policies. We cannot always get everything right, but the industry always tells us that we have allowed insufficient funds for this type of work and typically predicts, ultimately, rather less generation coming through than actually occurs. However, we are now operating on an annual basis, so that we can better respond to those issues.
My hon. Friend also talked about hydrogen and the role of the east of England in being able to deliver it, not least in Bacton, Felixstowe and the agriculture sector. Like him, I am very excited about hydrogen. If we can properly harness our unique renewable resources and do things correctly in a co-ordinated fashion, we will not only have low-cost electricity, but we will become a leader, certainly in the European context and perhaps globally, in the production of green hydrogen. Of course, we are also blessed—he did not mention this—with 78 gigatonnes of carbon storage; we have the vast share of Europe’s carbon storage potential, and we can host carbon storage for our neighbours, too.
My hon. Friend is quite right to highlight all the opportunities in these sectors, and he is also right to congratulate people such as Stuart Rimmer at East Coast College and John Best for the internships he has supported. He is also correct that not only do the Government need to get the overall frameworks right, but we need to facilitate and support local authorities, communities and individuals to play their part. If we get this work right, we will not only deal with the environmental challenges, but reinforce our industrial strength, and grow and strengthen the prosperity of this country. That process can be led, to a great extent, from the east of England.
Question put and agreed to.
Oral Answers to Questions
Graham Stuart Excerpts(10 months, 2 weeks ago)
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Bill Esterson (Sefton Central) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government are investing billions to support the development and deployment of carbon capture, utilisation and storage, hydrogen and other decarbonisation technologies, and have a range of policies supporting industrial decarbonisation, such as the industrial energy transformation fund and local industrial decarbonisation plans.
Bill Esterson
There are 23 clean steel projects across Europe, but none in the UK. Meanwhile, the UK is the only country in the G20 where steel production is falling. Other countries recognise the importance of their domestic steel industries, and they recognise the importance of investing in low-carbon steel. Why do this Government not support our steel?
Graham Stuart
As the hon. Gentleman knows well, this Government do support the UK steel industry. On his broader point, which he mentioned in his original question, UK industrial emissions have fallen 65% since 1990, and we are making significant investments in industrial decarbonisation, not least the £20 billion announced at the end of March, which will contribute to decarbonisation through CCUS and help the steel industry.
Dominic Raab (Esher and Walton) (Con)
Do Ministers agree that the Government’s competition for small modular nuclear reactors will help provide the volume of energy we need for energy-intensive domestic industries and, over the long term, at a lower cost than previous nuclear power stations?
Graham Stuart
I thank my right hon. Friend for his question. There is enormous enthusiasm on the Government side of the House for the potential of nuclear, including small modular reactors. We are determined to see that go forward as quickly as possible, which is why the new organisation, Great British Nuclear, is doing a rapid down selection of technologies this year, precisely in order to unlock the benefits that my right hon. Friend so correctly highlights.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
On decarbonisation, many organisations, such as the Institution of Civil Engineers, are asking about the Government’s net zero growth plan, which said:
“The public will play a key role in the transition and therefore we will set out further detail on how Government will increase public engagement on net zero.”
Can the Minister clarify when that detail will be published?
Graham Stuart
I thank the Chair of the Energy Security and Net Zero Committee. He is right that as well as top-down Government policy, we must unlock the huge public desire of people to play their part and make sure we have the right information in place. That will be provided and produced as soon as possible.
Mark Pawsey (Rugby) (Con)
The Minister will welcome measures that many businesses are already undertaking simply because they are the right thing to do, including traditionally carbon-intensive industries, such as cement manufacturing. Cemex in my constituency is investing to use decarbonised raw material and trialling the use of hydrogen in the combustion process, which will significantly reduce the amount of CO2 generated by every tonne of cement manufactured in Rugby?
Graham Stuart
My hon. Friend is right, and he is right to champion those industries that are working so hard to decarbonise already. As my hon. Friend says, we have the net zero hydrogen fund, which will provide up to £240 million by 2025 to support the development and construction of new low-carbon hydrogen production plants, which will be able to assist in cement as well as other industries.
Dame Maria Miller (Basingstoke) (Con)
Stephen Kinnock (Aberavon) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government are committed to placing the UK at the forefront of the floating wind sector. I am delighted to announce that the Crown estate will be providing an update to industry this morning on a 4 GW leasing round in the Celtic sea and has already commissioned the survey work required to support it.
Stephen Kinnock
The development of floating offshore wind in the Celtic sea is a once-in-a-generation opportunity for my Aberavon constituency, for Wales and for the entire United Kingdom. Last week, the Climate Change Committee rightly blasted the Government for failing to deliver on their net zero commitment. I am profoundly concerned that floating offshore wind will be squandered due to the lack of grip and direction that the committee described. When will the Minister be bringing forward an industrial strategy for floating offshore wind, which will ensure that Welsh manufacturing and Welsh jobs are placed at the heart of turbine and substructure fabrication, starting with the vital seabed licensing process.
Graham Stuart
I thank the hon. Gentleman for his question. We are the world leader in floating offshore wind and we are determined to stay there in order to realise the industrial benefits, which he rightly champions, and the opportunities in Wales. The floating wind demonstration programme—[Interruption.] The Labour Front-Bench team really do not like to hear this, do they? The fact that we have cut our emissions more than any other major economy on earth under this Government is what leads those on the Labour Front Bench to sense their own inadequacy, because they know what they left behind. That floating wind demonstration programme is supporting innovation with £31 million of Government funding matched by £30 million from industry.
Mr Philip Hollobone (Kettering) (Con)
Floating offshore wind and all these exciting generation technologies are wonderful, but all of them will come to nought unless we can increase the speed and capacity of the grid connections to get the electricity onshore and to the users who need it. What is the Minister doing to sort out the national grid and to speed up the way in which grid connections are made, because, without this, we will go nowhere?
Graham Stuart
My hon. Friend puts it so well. It is so true: whatever the generation, if we cannot get the electrons where they need to go, we are frustrated. That is why we are determined to speed up the connections. That is why, from the Pick report on offshore wind to the Nick Winser review, this Government, led by the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie)—this is the first time that this country has had a networks Minister—are absolutely focused, in a laser-like way, on making sure that we speed up and get the delivery of the infrastructure that we need to deliver the green transition.
Alexander Stafford (Rother Valley) (Con)
Sir Christopher Chope (Christchurch) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
Population growth is taken into account when setting our decarbonisation goals. Specifically, it is accounted for in our baseline emissions projections, which help determine the effort required to meet our carbon targets.
Sir Christopher Chope
Does my right hon. Friend accept that in 2050, on present Government policies, we will have 25 million more people in this country than there were in 1990, the base date for carbon dioxide emissions? He obviously accepts that a higher population leads to higher global emissions, but can he also say that when it comes to climate change, it would be a good idea for this Government to concentrate on a net migration policy, rather than net zero?
Graham Stuart
As my hon. Friend knows, the Prime Minister is absolutely determined to bring net migration down to sustainable levels. I would also point out to him that the UK does not set decarbonisation targets per capita, because all countries need to reduce emissions in absolute terms. We are determined to play our part in doing that—to move to net zero, but in a pro-growth, pro-business manner.
Kenny MacAskill (East Lothian) (Alba)
It is not simply about empowering future generations, but those that exist. That is why the roll-out of smart metering is important. The latest quarterly statistics claim that 57% of UK households have smart meters, but that masks the fact that only four out of 32 Scottish local authorities are above 50% in the roll-out of smart metering, five are below 30%, and three island councils are below 10%. All those are also the areas with the highest fuel poverty. As we approach March 2024, when radio teleswitching will go off, how will we ensure that people have access to smart metering, enabling them to get off-peak tariffs?
Graham Stuart
The hon. Gentleman is right, both to enthuse about the importance of smart metering and the benefits it can bring—even more so as we move forward in the coming years—and to highlight the importance of ensuring, as ever, that something so important is equitably distributed. I, or colleagues, would be happy to meet him to discuss how we make sure that the issues he has rightly raised are addressed.
Mr Laurence Robertson (Tewkesbury) (Con)
Dr Kieran Mullan (Crewe and Nantwich) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
Our “Powering up Britain” plan seizes opportunities from the transition to a decarbonised energy system. Our policies, backed by billions of pounds of Government funding—but more importantly, leveraging in about £100 billion of private investment—will support up to 480,000 jobs in 2030.
Nicola Richards
Enfinium is building a new energy-from-waste facility in my constituency, which will process nearly 400,000 tonnes of waste to generate electricity for more than 95,000 homes and businesses each year. Will the Minister join me in welcoming this investment in renewable energy, and outline how the Government are supporting energy-from-waste facilities across the country?
Graham Stuart
I thank my hon. Friend, and I am delighted to join her in welcoming this new investment, which will be a huge asset to her community as well as having positive national implications. Energy from waste with combined heat and power is supported through pot 1 of the contracts for difference scheme—our auction system. We expect to announce the results of the latest round in early September, and I hope the House will watch that announcement with great interest.
Dr Mullan
What assessment has the Minister made of the role of a tariff support mechanism to encourage short-term private sector investment in deep geothermal to support levelling up?
Graham Stuart
There is no greater champion than—or anyone in this House with half the knowledge of this, as far as I can tell—my hon. Friend in supporting the potential of deep geothermal. When the Prime Minister responded to his report, I know he thanked my hon. Friend for all the work that went into it. I can confirm that geothermal technologies that generate electricity are eligible for the contracts for difference scheme. We are also supporting and encouraging the development of geothermal heating projects through the green heat network fund, which supports the development of low-carbon heat networks. Under the leadership of my hon. Friend, I am confident that geothermal has a positive future.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Private sector businesses in the Humber are ready and willing to invest £15 billion in carbon capture, storage and decarbonisation projects. However, this is being put at risk because, of the eight track 1 carbon capture and storage projects selected, not a single project was approved for the Humber, despite the Humber being the largest carbon emitter in the country and the fact that 80% of the UK’s licensed CO2 storage capacity is accessible from the Humber. When will these businesses get the clarity they need? When the track 1 expansion process is launched, will both Humber pipelines be approved?
Graham Stuart
I thank the hon. Lady for her question, and she is right to be frustrated because of the enormous potential both to decarbonise and to unlock industrial benefits for the area. We are moving as quickly as possible. I have already said that the Viking project and the Scottish cluster are in the favoured position, and the team is moving as quickly as possible this year to provide more certainty and unlock further investment.
Tim Farron (Westmorland and Lonsdale) (LD)
Private sector investment in clean energy is vital, but does the Minister agree that one reason that the United Kingdom, despite having the highest tidal range on planet Earth after Canada, still uses so little of it, is a lack of public sector leadership? Areas such as Morecambe Bay, which could contribute to tidal energy, bringing down people’s bills and protecting us against Putin, are something that we could move forward. Will the Minister agree to meet me and other MPs around the bay, so that we can bring forward plans to get the most out of our tidal energy?
Graham Stuart
I am not an expert in the hon. Gentleman’s history on this topic, but I hope it has been consistently in favour of tidal energy, and therefore different from so many other areas of policy. I share his enthusiasm for the potential of tidal energy. That is why we are the world’s leading nation in the deployment of tidal range, and why tidal power is eligible for the contracts for difference scheme. Notwithstanding so many issues, I would be happy to meet the hon. Gentleman.
Philip Davies (Shipley) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
We estimate that the net cost excluding air quality and emissions-saving benefits will be equivalent to about 1% to 2% of GDP in 2050. As my hon. Friend knows, emissions are global, and we all need to play our part. The UK has a part to play in tandem with others, and that is why I will be working with other Ministers at the conference of the parties in Dubai.
Mick Whitley (Birkenhead) (Lab)
Graham Stuart
The hon. Gentleman is right to be frustrated about progress. But as the Secretary of State said, when the right hon. Member for Doncaster North (Edward Miliband), who is chuntering on the Front Bench, was in power, just 14% of homes were decently insulated; by the end of the year, it will be more than 50%. We have set up the energy efficiency taskforce because we want to go further and faster. We are determined to do more. We are spending £12.6 billion over this Parliament and the next, and—
Graham Stuart
I share the hon. Lady’s enthusiasm. We are taking steps to support this technology, and I would be delighted to meet her to discuss it further.
Mr Philip Hollobone (Kettering) (Con)
Graham Stuart
Unfortunately, we do not have public data by constituency and do not yet have the full data for 2022. However, I can tell my hon. Friend that in 2021, north Northamptonshire generated a total of 362 GWh of renewable electricity. The people of Kettering, like their representative, want Kettering to be one of the greenest constituencies in the country.
Olivia Blake (Sheffield, Hallam) (Lab)
Peter Aldous (Waveney) (Con)
Graham Stuart
I could only just hear my hon. Friend’s question, as the shadow Secretary of State made it quite hard to hear. The Government recently completed a call for evidence on this very subject, looking at the introduction of non-price factors in the contracts for difference scheme so that it values things other than just cost deployment. My hon. Friend, like all Members on the Government Front Bench, wants the maximum number of jobs created and retained in this country.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Lia Nici (Great Grimsby) (Con)
Will my hon. Friend please outline what his Department is doing to look at the import of green hydrogen feedstock into the UK, to increase the scale and speed of the UK industry and help us achieve our 10 GW capacity by 2020?
Graham Stuart
I am aware of proposals on the shipping and possible piping of hydrogen and the important part that must play. If we are to decarbonise all of British industry, we will need shipping as well as piping. I will be happy to meet my hon. Friend to discuss what further we can do.
Alex Cunningham (Stockton North) (Lab)
I very much welcome the recent progress on developing carbon capture, usage and storage on Teesside. I hope we will see the final confirmation that it will happen and the work will start. That said, local industrialists and investors are concerned that the Department is not now asking BP to build the CO2 collection pipework as originally planned, meaning that it will not go to CF Fertilisers or Kellas or pass by the Alfanar site. Could the Minister provide an update, please?
Graham Stuart
We are moving at top speed to drive forward CCUS. We are in a world-leading position. The opportunity is enormous in the Tees, the Humber and areas in the north-west as we seek to get that right and embed those industries in this country.
George Eustice (Camborne and Redruth) (Con)
The unique geology of Cornwall means that there is huge potential for geothermal energy. There are a number of projects bidding for the current allocation round. Geothermal energy has a competitive strike price, has lithium as a by-product and makes use of mature technology. Will the Secretary of State ensure that those benefits are properly factored into any assessments?
Mark Pawsey (Rugby) (Con)
At a time when the cost of generating electricity is falling thanks to the increasing use of renewables, my constituents do not understand why the price of electricity remains linked to the price of gas. I know that the Government are undertaking a review of electricity market arrangements. When might they expect to see a change?
Graham Stuart
My hon. Friend is quite right to ask that question. We would all like to see gas setting the price of electricity more frequently. That is why we are accelerating the take-up of renewables, which were so pitifully low in quantity when Labour was in power. We need a Conservative Government to keep up progress and lower bills right across the country.
Mr Gregory Campbell (East Londonderry) (DUP)
The Secretary of State outlined the progress being made on small modular nuclear reactors. Can he provide an estimate of how many there might be within 10 years?
Road Fuel Prices
Graham Stuart Excerpts(10 months, 2 weeks ago)
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Tim Farron (Westmorland and Lonsdale) (LD)
(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on road fuel prices.
The Minister for Energy Security and Net Zero (Graham Stuart)
From rural hamlets to coastal communities, it is a properly functioning market that ensures fair prices for motorists, but for that market to function customers need transparent data to find the best price. On that basis, when we saw fuel prices rising last summer we asked the Competition and Markets Authority to investigate whether the market was working for customers as it should. Today, the CMA published its final market study report and I am shocked by its findings: rising fuel retail margins, and clear evidence of a rocket upwards and a feather downwards in the pricing pattern for diesel.
It is completely unacceptable that consumers have been paying more. The financial impact of the 6p per litre increase, just in the fuel margin, from 2019 to 2022, cost customers of the four supermarket fuel retailers £900 million last year alone. Asda’s fuel margin target was three times higher for this year than in 2019 and Morrisons doubled over the same period. It is wrong that in a cost of living crisis drivers do not get a fair deal on fuel and end up being overcharged.
Motorists should not be used as cash cows by the fuel industry. The Government will not stand for it and I know this House will not stand for it. Therefore, we accept the CMA’s recommendations in full. We will create a statutory open data scheme for retail fuel prices and an ongoing road fuel prices monitoring function for the UK market. We will consult on the design of the open data scheme and monitoring function as soon as possible this autumn, but that is not enough. I have asked the CMA to have a voluntary scheme up and running by next month and I fully expect fuel retailers to share accurate, up-to-date road fuel prices. The CMA will also continue to monitor fuel prices.
I demand that fuel retail bosses stop ripping off consumers, by making prices available so that the market can operate as it should. Transparency is vital for competition and to keep prices down.
Tim Farron
I am extremely grateful to the Minister for Energy Security and Net Zero and am delighted to see him, but I am disappointed not to see the Chancellor of the Exchequer. I would have thought that this was something that he cared about.
The problem is that the Government have stood for this over the past year. This morning, right under the Government’s nose, greedy petrol retailers imposed an additional cost of more than £900 million on people filling up their cars. Retailers swiftly passed on price increases in the wholesale market to drivers, and the prices rocketed. Yet when the wholesale prices dropped, prices were lowered only very slowly. I think we could all see that for ourselves. The RAC called this
“nothing short of astounding in a cost-of-living crisis”,
which confirmed that
“supermarkets haven’t been treating drivers fairly at the pumps”.
This affects not just the cost of driving. Higher road fuel prices have a knock-on effect on inflation across the economy, pushing up prices in every sector of our country.
The CMA makes it clear that rural areas still face the highest prices. Where supermarket pumps are fewer and further between, such as in Cumbria and Somerset, fuel retailers are likely to have costs that are higher still. The CMA found that fuel prices in rural places, such as my own in Westmorland and Lonsdale and in Somerton and Frome, are on average 1.2p per litre higher than those in urban areas. Of course, in rural communities with poor public transport links, people have no choice but to drive and the distances to travel are so much greater, affecting, in particular, people who work in the care sector. Once again, rural communities feel taken for granted by this Government.
One solution should be to expand the 5p per litre fuel duty relief scheme to those many isolated parts of Cumbria that are not currently covered by it, so that families in Cumbria are not left at the mercy of the most expensive fuel prices.
Why did the Government fail to stop greedy retailers hitting families with an almost £1 billion excess fuel bill in the first place? Will the Chancellor and the Prime Minister summon those company bosses to Downing Street and press them to return those unfair profits by lowering their prices? Will the Government expand the rural fuel duty relief scheme to more areas, to support communities such as mine that are struggling with the highest petrol prices?
Graham Stuart
I thank the hon. Gentleman for his question. He and the RAC are right to highlight the particular issue in rural communities such as those that he and, indeed, I represent, and the particular pressures on consumers there. He will understand that rural fuel duty relief is a matter for the Chancellor and that what we need is a properly functioning market. That is why we are implementing the findings of the CMA in full and putting in place an interim regime, starting next month.
Iain Stewart (Milton Keynes South) (Con)
Towards the end of last year, the local radio station in Milton Keynes, MKFM, published research showing that, although there was considerable competition in Milton Keynes, petrol and diesel prices were substantially higher across the board than those in equivalent urban areas. I very much welcome the proposal for a real-time fuel price comparator, but will my right hon. Friend assure me that the Government will keep an eye on price differentials between different urban areas and intervene if necessary?
Graham Stuart
As ever, my hon. Friend champions his constituency in this House. I completely agree. That is why the monitoring function is so important in tandem with transparency. We have to make sure that people can see the prices. We know that consumers are prepared to travel but, if they do not know that there is a cheaper price available 2 or 3 miles down the road, they will not access it. That is something that we aim to put right.
Kerry McCarthy (Bristol East) (Lab)
People across Britain are facing the highest mortgage costs in Europe, the highest inflation among advanced economies, and the highest tax burden in 70 years. They are paying the price for 13 years of Conservative failure.
In that context, it is more important than ever for the Competition and Markets Authority to do all it can to help to bring down prices. Effective competition in the interests of consumers must be at the heart of our economy. That is why we firmly support the CMA’s proposals to help to bring down the cost of fuel.
‘Filling up the tank at supermarkets is an essential part of everyday life for families and small businesses across the country, so the fact that the average annual supermarket margins on fuel increased by 6p per litre between 2019 and 2022 is deeply worrying.
I am pleased to see that the Secretary of State has accepted the recommendations from the CMA to stop retailers artificially inflating petrol prices during a cost of living crisis; as he says, transparency is very important. However, given that the then Business Secretary wrote to fuel retailers and the CMA more than a year ago to highlight apparent unfairness in fuel prices, why has it taken so long for the Government to take action on this issue? Motorists did not need a report to tell them that they were being fleeced by fuel retailers; they see it every time they fill up at the pump. Why did the Government need to wait for the CMA to tell them what everyone else knew before they took action?
In Northern Ireland, the Consumer Council published a fuel price checker in September 2020, which has helped to keep fuel costs below those in England. Why have the Government taken almost three years to agree to do the same in England? Once again it is too little, too late from a Government, who have again sat on their hands. I note what the Minister said about an interim voluntary scheme and about consulting as soon as possible, but can he give a clear indication of when the Government will introduce the change in the law that is needed to make this permanent?
Graham Stuart
The hon. Lady is right to highlight the cost of living crisis and the level of taxes. That, of course, is why her party getting into power would be such a disaster for ordinary consumers and motorists throughout the country. We have come through the pandemic and made sure we have kept the country afloat; for instance, the Government supported paying nearly half of everyone’s energy bills through the last winter. A Labour Government would be a threat to markets such as this, which we need to function properly, not in the way they would under Labour.
As for why this has taken so long, the hon. Lady ought to know, having seen the disaster of her £28 billion energy borrowing package, which dematerialised: it was a great announcement, but it did not survive contact with reality.
Several hon. Members rose—
Harriett Baldwin (West Worcestershire) (Con)
When the Chancellor announced that he was cutting fuel duty by 5p a litre, which cost the Exchequer billions of pounds, little did he expect that, as outlined so persuasively today by the CMA, it would feed through immediately into the profits of fuel retailers—although cynical British motorists may not be surprised, because they observed it themselves on a day-to-day basis. I welcome the steps that the Minister has announced, and urge him to act with greater speed in implementing them, but is he as surprised as I am that he has been asked this urgent question by the Liberal Democrats, who voted at their conference to hike fuel duty sharply?
Graham Stuart
I would like to say I was shocked or surprised, but I am not because—as everyone in the House knows, except the tiny number who sit on the Liberal Democrat Bench—hypocrisy is their main method of behaviour. The initial Government cut in fuel duty of 5p per litre represented savings for consumers worth about £2.4 billion. We on the Conservative Benches are on the side of the motorist. We are going to make sure that the market works and motorists are properly served by it.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Minister says he will not stand for motorists’ being ripped off, but that is exactly what Ministers have done. The Government have been complacent the whole time, following the 5p fuel duty cut.
Why has it taken the CMA so long to establish that motorists are being gouged by 6p per litre compared with 2019? It reported that diesel prices are an astonishing 13p per litre higher this year alone than they should have been. That is symptomatic of the “cost of greed” crisis. Asda received a fine for not complying with the CMA investigation. That shows an astonishing level of arrogance on the part of supermarkets that are ripping off their own customers. It is estimated that we are paying nearly £l billion a year in additional fuel costs due to the lack of competition. How does imposing an initial fine of £30,000 on Asda work as a deterrent when it is making so much money?
I am all for an open data fuel finder scheme, but really, is that it? I already use an app to shop around for cheaper fuel prices, so this open data will not necessarily bring competition in all areas of the UK, and reliance on an app obviously will not help those who are digitally excluded. What are the Government’s actual plans to ensure competition and reduced fuel prices, especially at motorway service stations, which are between 20p to 30p per litre more expensive? When will we see these fuel prices come down?
Graham Stuart
That is the closest I have ever seen the hon. Gentleman come to welcoming a Government response, so I shall take that with me. I do not mean to try your patience any more than I already do, Mr Speaker, but, as I said to the hon. Member for Bristol East (Kerry McCarthy), whether it is major energy packages or shipbuilding, we find that doing the work first leads to better long-term outcomes.
John Redwood (Wokingham) (Con)
Given corporation tax, carbon taxes, the windfall tax, fuel duties and VAT, is not the bulk of the price at the pump, and of other fuels, now tax-based? Will my right hon. Friend remind us of how much is tax and urge the Chancellor to reduce some of those taxes to cut the cost of living?
Graham Stuart
I thank my right hon. Friend for championing the consumer, as he always does. As he will be well aware, tax is a matter for the Chancellor, but the whole House will have heard his passionate call to make sure that taxes are held down to the lowest amount they possibly can be. That is one more reason why we cannot have the Labour party taking control of the country.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
In March, the RAC revealed that retailers are making a three times bigger margin on diesel than they were at the beginning of last year, and motorists are seeing absolutely no benefit from the Chancellor’s fuel duty cut. Given the Government’s dither and delay on taking any sort of action, how does the Minister feel when the Government’s flagship policy to help motorists is having little to no impact?
Graham Stuart
We are furious that these price cuts have not been passed on to consumers. That is why we asked the CMA to investigate and to get further into the detail, and it is why we will implement its findings in full.
Laura Farris (Newbury) (Con)
As my right hon. Friend is aware, I have been campaigning on the issue of fuel prices in west Berkshire for about a year and a half. One thing that has been particularly disappointing is the fact that fuel prices in every single neighbouring constituency are 5% to 8% lower. I wrote to the CMA and I am pretty disappointed to read its response today, which tells us a lot.
I welcome the introduction of a real-time fuel price comparator, but such a tool already exists, albeit in a slightly clunky form. I draw the Minister’s attention to the fact that it is not enough just to tell people what the prices are at different pumps in their local area. It must be transparent to consumers whether they are in a general area that has higher or lower prices, so that their MP can make representations on what the supermarkets may be doing in that area and the CMA can intervene properly.
Graham Stuart
My hon. Friend has been assiduous and, as she has shown with her question, focused and detailed in trying to rectify a problem that the CMA has fully displayed today. It is an unusual way round, but I would be happy to meet her to discuss the matter further to make sure we put in place all the right elements, so that this transparency genuinely gets through to the consumer.
Sammy Wilson (East Antrim) (DUP)
There is no doubt that fuel costs are driving up inflation, especially in rural areas. I think the fuel price checker has had a dampening effect in Northern Ireland because the supermarkets are always aware that that they are being looked on. However, does the Minister accept that his Government also have a responsibility? Net zero policies, with all their associated taxes—whether it is the emissions trading scheme, green levies or fuel duties—drive up prices, too. The Government have a role to play in reducing inflation as well as in transparency on supermarket prices.
Graham Stuart
The right hon. Gentleman is drawing the wrong conclusion from the sky-high prices of the past year or two. It is sky-high international fossil fuel prices that caused the enormous squeeze. The faster we can move to cleaner and cheaper sources of energy, the sooner we can ensure that our constituents save money and contribute to dealing with what is an ever more serious threat.
Mark Garnier (Wyre Forest) (Con)
Having brought a ten-minute rule motion on this subject some eight years ago, I am delighted that patience has finally paid off. One issue I was raising at that time was the inequality between the prices in towns and those on motorways, which the Scottish National party spokesman has mentioned. Is my right hon. Friend confident that the measures being brought in today will reduce those 15p or 20p premiums on road fuel prices at motorway service stations compared with normal areas?
Graham Stuart
As so often, my hon. Friend has been ahead of me. The issue he raises is part of the picture; like him, I have observed that the captive market along motorways is subject to higher prices than elsewhere. I hope that can be part of our consideration to make sure we have a system that works at its best for everybody.
Grahame Morris (Easington) (Lab)
May I respectfully point out to the Minister that this is not a town versus country or urban versus rural issue? The RAC has identified that some retailers are grossly profiteering, taking a three times bigger margin than they were at the beginning of last year, particularly on diesel sales. For the avoidance of doubt, will he confirm that the Government scheme he has outlined today will apply to all fuel retailers, not just those at supermarkets?
Graham Stuart
I will write to the hon. Gentleman with the precise details of everybody who will be included. He is right to highlight that this is not just an issue in urban areas. However, in those areas there tends to be more competition and easier transparency than there can be in rural and coastal areas.
Andrew Selous (South West Bedfordshire) (Con)
A couple of weeks ago, I drew the House’s attention to the fact that the same supermarket tanker would unload fuel at 10p a litre cheaper in one place than it would if it came 10 to 15 miles up the road to my constituency. If today’s report does not fix that, it will not have been good enough and the Government will have more work to do. I hope that my right hon. Friend will give me some reassurance on that point.
Graham Stuart
We have to make sure the market works. Transparency is our biggest single weapon, and we need to be doing this in a way that reaches people, be they digitally enabled or not; we are wrestling with those details. Let us look at the alternative to a market-based system—other countries have tried it, as it is a populist measure. It does not work, it leads to a shortage of supply and it ends up creating the very dominance that we seek to ensure is not exploited in systems such as we have seen in this CMA report.
Mr Toby Perkins (Chesterfield) (Lab)
The hon. Member for South West Bedfordshire (Andrew Selous) asked a good and apposite question. In February, I wrote to all the major supermarkets that have outlets in Chesterfield asking them why they were retailing petrol for 10p more a litre there than they were selling it for just 10 miles up the road in Sheffield. They were very transparent and honest about this, saying, “ It’s a market where we think we can make more money out of Chesterfield residents than we do out of Sheffield residents. That’s why we charge you more.” That is despite the fact that there is no additional cost to getting the fuel there. Although I welcome the greater transparency, making it easier for consumers, what they will see in Chesterfield is that they are paying more than they would up the road in Sheffield. Is there anything in what the Minister is announcing today that will empower people in Chesterfield to bring their prices down?
Chris Loder (West Dorset) (Con)
The good people of Bridport and Dorchester in West Dorset have had to pay up to 20p a litre more than those in towns not far away. The Liberal Democrats have been silent about that throughout the entire duration, so it is somewhat hypocritical of them to bring this matter to the House today, particularly given that they voted to increase the price per litre. Although I welcome what the CMA has had to say in its report today, it does not really deal with the issue we are seeing of rigorous yield management by supermarkets with their petrol prices. That is not a matter of competition; that is where they believe they can get more money out of a particular group people or community. I would be very pleased if the Minister would meet me to look at how we can take this forward and grasp that issue.
Ronnie Cowan (Inverclyde) (SNP)
Now that we know that competition on fuel prices has weakened in recent years and that that has led to inflated prices, particularly in my constituency where, despite a campaign for fair prices led by Stuart McMillan MSP, we have been paying over the odds for years, may I seek a guarantee that supermarket food prices are not following the same pattern?
Graham Stuart
Following this report, the CMA has decided to look into the supermarkets and will report back as soon as next month.
Richard Fuller (North East Bedfordshire) (Con)
I thank the CMA for its report and the Government for accepting the recommendations, although I think we are putting too much faith in price transparency to solve the market problem. I was interested to see in the trend profit margins for supermarket retailers and non-supermarket retailers that supermarkets are consistently increasing their margins while non-supermarket retailers are not. Will the Minister follow up with retailers, in the light of this report, to make sure that we check that the margins come down next year and in the following year?
Graham Stuart
I thank my hon. Friend for his typically penetrating question. As I said, one of the recommendations is to maintain a monitoring function, which will help to give us the market intelligence so that if further intervention is required, we will have the data on which to base it.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Patchy public transport contributes to high costs for rural households, as many people have no choice but to use their cars for essential journeys. Despite this, the rural fuel duty relief scheme does not apply to a single area in Wales. Will the Minister commit to pressing the Treasury to reconsider the scheme to take into account access to local public transport networks, as well as providing a guarantee of inclusion for Welsh areas?
Graham Stuart
I thank the right hon. Lady for her question and will ensure that His Majesty’s Treasury is aware of it.
Holly Mumby-Croft (Scunthorpe) (Con)
The good people of Scunthorpe spotted this issue some time ago, so I thank my right hon. Friend for his work on it and the measures he is recommending. Has the similar open-data scheme that has been trialled in Germany resulted in a boost in competitiveness? If so, when does my right hon. Friend think we will start to see the results at the pumps here?
Graham Stuart
I hope from as soon as next month, under a voluntary scheme. My hon. Friend gives me the perfect opportunity to repeat how determined I am to see the companies provide the data so that we have something far less clunky, as it has been called, and far more comprehensive than what we have today, and so that that can lead to the benefits that have been found elsewhere.
Dave Doogan (Angus) (SNP)
I am not certain that the seriousness of the situation that faces rural constituencies is being taken appropriately into account. My Angus constituents live in towns and landward areas that are miles away from supermarket fuels. They pay the highest prices for fuel, they have no public transport to speak of so have to use their cars and vehicles, they pay the highest delivery prices and they are often on the lowest wages. If the Minister thinks that greater transparency over fuel prices is going to help, he is stretching the point. My constituents in Angus know how expensive their fuel is and they know how far they have to travel to get cheaper fuel. This announcement will not fix the situation. We need the Treasury to get its act together and intervene in what is essentially critical national infrastructure, which is what road fuel is.
Graham Stuart
I will take that as a further representation to His Majesty’s Treasury.
Mr Philip Hollobone (Kettering) (Con)
Motorists in and around Kettering have long suspected that petrol and diesel forecourt retailers have been inflating prices well above where they should be. Prices go up far too quickly and come down far too slowly. Given the fact that the petrol and diesel forecourt retailers effectively ignored the letter from the Business Secretary in May 2022, will the Minister assure my constituents that the Competition and Markets Authority will continue to monitor the market closely to ensure that does not happen again?
Graham Stuart
My hon. Friend is quite right. Urging them to behave properly is not enough, which is why we will not only put in place a mandatory system to ensure that the data is there but ensure ongoing monitoring so that, as I said to our hon. Friend the Member for North East Bedfordshire (Richard Fuller), we have the data on which to base further intervention should that be required.
Jim Shannon (Strangford) (DUP)
This is a very welcome announcement, especially in respect of the information on fuel-price competition that will allow drivers to look for fuel at petrol stations that are closer and have better prices, thereby enabling them to save money. On any potential fuel fund offers, there is an older generation—I am probably one of them—who perhaps do not use apps and therefore do not understand how they work; what steps will the Minister take to ensure that they have access to information on fuel funding that is accessible for them and easily understood so that they, too, can take advantage of what is on offer?
Graham Stuart
I thank the hon. Gentleman for his question. I would not want to finish without mentioning that, as of Monday 26 June, unleaded petrol is 143.43p per litre, and that has reduced, on average, by 47.5p from June last year, and diesel is 145.6p per litre, and that has reduced by 53.3p per litre on the previous year. I will write to the hon. Gentleman to make sure that I can properly inform him in answer to his question.
Antony Higginbotham (Burnley) (Con)
This report clearly shows that residents in Burnley and Padiham and our villages have been overcharged for their fuel for too long. Does my right hon. Friend think that the Competition and Markets Authority now needs to relook at the ownership changes at Asda?
Graham Stuart
As the Minister for Energy Security and Net Zero, that perhaps stretches slightly beyond my brief, but, as those on Treasury Bench will have heard my hon. Friend’s question, I am sure that he will be able follow up with others who have direct responsibility.
Rosebank Oilfield: Environmental Impacts
Graham Stuart Excerpts(10 months, 3 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate and on bringing us back into the positions in which we often seem to be in this Chamber.
The hon. Lady made reference to the Climate Change Committee. Lord Deben is coming to the end of a distinguished 10 years as chairman of that committee, which was set up in the Climate Change Act 2008 precisely to challenge Government, critique what we do and encourage further ambitious action. It is in no small part thanks to his leadership and his being waspish— I think his friends would say he was often waspish—from beginning to end that Governments have been challenged and driven to do what they should to deliver on climate. It is thanks to the Climate Change Committee and his leadership that this country has cut its emissions by more than any other major economy in the world since 1990. It is partly thanks to him that we have gone from the risible position, left by the Opposition when they left power in 2010, of generating less than 7% of our electricity from renewables to now generating well over 40%. As recently as 2012, nearly 40% of our electricity came from coal, the most polluting of fossil fuels. Next year, it will be 0%.
The hon. Member for Brighton, Pavilion is fully aware, and I am sure she understands, that I cannot comment on the detail of the application for the proposed Rosebank oil and gas development. Development proposals for oilfields under existing licences, such as Rosebank, are a matter for the regulators—the North Sea Transition Authority and the Offshore Petroleum Regulator for Environment and Decommissioning—following their standard regulatory processes. As such, it would be neither appropriate nor helpful for me to engage in a running commentary on a live application ahead of a final decision being reached by both regulators.
What I can say is that, as is normal for such applications, the regulators submit all proposals for extensive scrutiny. That scrutiny includes a detailed environmental impact assessment process and an extensive consultation. Comment is invited on the proposals from a number of statutory nature conservation bodies, and there is an opportunity for members of the public and non-governmental organisations to engage in the decision-making process. Once both regulators have made their final decision about the Rosebank application, that decision, along with a detailed summary of OPRED’s conclusions on its likely environmental impact, will be published on the OPRED website for all to see and critique.
To move away from the specifics of the Rosebank development, I am proud to say that, unlike those of most other countries, the UK’s climate commitments are set in law. Of course, it was this Conservative Government who not only transformed the parlous state that we inherited from the previous Labour Administration, but set in law that we should move to net zero by 2050—we were the first major economy to do so. The UK is unswerving in its determination to meet its climate commitments, and has one of the most ambitious 2030 targets in the world. Between 1990 and 2021, we cut our emissions by 48% while growing the economy by 65%—we decarbonised faster than any other G7 or major economy. As we rapidly transition our energy systems, we are supporting emerging economies to do the same. We are advocating the phase-out of coal power and ending unabated fossil fuel use.
The reality is very different from the picture painted by the hon. Lady and those who intervened on her. This country, the most decarbonised major economy in the world, is more than 75% dependent on fossil fuels for its energy right now; that is the basis of this civilisation. Our aim is to accelerate the reduction in oil and gas use, but we recognise that they are essential to modern life, and will remain so for many years to come, including in the production of cement, steel, plastics, chemicals, medicines and fertilisers. We are a net importer of oil and gas, and a fast-declining producer, so I ask the hon. Lady not to use words such as “expansion”. By supporting new licences, we are moderating the savage decline in domestic production, and that is the right thing to do.
Graham Stuart
I will make a little more progress, and then I will come back to the hon. Lady.
Reducing the decline in domestic production will not increase the use of fossil fuels in the UK. The hon. Lady’s economics seem rather upside down. It is demand that typically drives supply, rather than supply driving demand, although I recognise that there are movements in both directions. Increasing domestic production will avoid the need to substitute British gas with foreign liquified natural gas, which has much higher emission intensity. The effect of the proposal from the hon. Lady and His Majesty’s Opposition would not be that we consume less fossil fuel; it would be that we import more in tankers. There is not the option to have more Norwegian gas. Not producing our own gas would result in generating higher emissions directly. As well as that, to pick up on the economics of this, they say that the proposal will not affect price. There is a global price; it is a global market. Our oil is traded. It goes to refineries and comes back in the form of medicines, plastics and other things that are vital to our modern society. It is an international market and we are net importers. It is important to recognise that there are tens of billions of pounds coming into the Exchequer, especially at the moment with the energy profits levy tax rate at 75%.
We cannot make out that new projects would somehow cost the taxpayer, or be subsidised by the taxpayer. North sea production brings tens of billions of pounds into the UK Exchequer. It makes a material difference to our energy security because we produce it here at home. It also supports hundreds of thousands of jobs, which His Majesty’s Opposition and the Scottish National party have turned their faces against—and for what? Will there be an environmental gain? There will not be. It will not make a difference, by a single barrel of oil, to how much we consume. What it will do is lose hundreds of thousands of jobs, lose tens of billions of pounds for the Exchequer and lead to higher emissions. And it is worth the House recognising this killer point: it will remove the very supply chain that we need for the transition. The Climate Change Committee and every international body looking at this issue say that we need carbon capture, usage and storage, and we need hydrogen. Which companies, capabilities or engineering capacities are going to deliver those? It will be the jobs, people, balance sheets and skills that are vested in the traditional oil and gas companies, all of which are now involved in delivering the transition.
Graham Stuart
I will. Perhaps the hon. Gentleman can explain why Scottish nationalist policies will have a negative effect on the environment and cause the loss of hundreds of thousands of jobs in this country—for what?
Tommy Sheppard
With the greatest of respect, what the Minister says does not make sense. If most of the oil and gas coming out of Rosebank will be exported, how does not doing this lead to an increase in imports?
Graham Stuart
As I say, we are net importers in a global market. Oil and gas is processed in different places. It goes out and it comes back. As net importers, the alternative to using that gas here is that we will have more tankers coming in. As the hon. Gentleman knows, or certainly should, the upstream emissions attached to that are two and a half times higher than the emissions attached to gas, which Scottish workers are producing from British fields to the benefit of every taxpayer and the energy security of this nation.
Caroline Lucas
It is interesting that the only alternative to one set of fossil fuels is another set of fossil fuels. That is exactly what Lord Deben criticised in his report today. If the Government had done what they were meant to do, and actually set out the investment in home insulation schemes and reduced energy demand, we might not be in this position. If they had scaled up much more in the many other technologies that are out there, we would perhaps not be in this position.
I come back to what the CCC said. I expect the Minister to disagree with me, but does he disagree with Lord Deben and the Climate Change Committee? They said:
“Expansion of fossil fuel production is not in line with Net Zero”.
They said that the UK will need “some oil and gas”, but that that does not
“justify the development of new North Sea fields.”
Does the Minister disagree with his colleague?
Graham Stuart
As I said, North sea oil and gas production is declining. It will continue to decline with new licences—
Graham Stuart
It will not be expanding; it will actually be reducing. Throughout that time, even as we bring down our demand—ahead of nearly all other countries—we will still be net importers of oil and gas. It makes no sense, or only in the parallel universe occupied by the bizarre fringes of politics does it make sense for us to import—[Interruption.] It will not make a difference, by a barrel of oil, to our consumption. However, it will make a difference to the balance sheet, the jobs and the capabilities that we need to do the transition.
The hon. Lady is quite right to challenge me on this country’s past record on insulation—on the parlous state of the housing stock, for instance, and energy efficiency. In 2010, when we came into power, just 14% of homes were decently insulated with an energy performance certificate rating of C or above; in other words, 86% were not. That was the legacy from Labour. By the end of this year, it will be 50%; we have moved from 14% to 50%—
Mr Laurence Robertson (in the Chair)
Order. I do not want to bring this very lively debate to a close, but I am afraid I have to.
Motion lapsed (Standing Order No. 10(6)).
Net Zero: 2050 Target
Graham Stuart Excerpts(11 months, 2 weeks ago)
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The Minister for Energy Security and Net Zero (Graham Stuart)
It is a great pleasure to serve under your chairmanship, Sir Christopher, and to listen to this excellent and important debate. I begin by congratulating my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) on securing it. Of course, I come to this debate with some trepidation, as I am facing someone who did my job previously and then, unlike me—yet, anyway—went on to be Secretary of State at what was then the Department for Business, Energy and Industrial Strategy. He made immense progress on our path to net zero and energy security
I would not normally be rude, but I hope that the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) can perhaps move on, as we debate more often, from a rather adolescent approach to one that more genuinely engages with the substance. His was not a particularly brilliant contribution to this debate in comparison with those made by other Members, which I thought actually had some substance.
My right hon. Friend the Member for Spelthorne oversaw the publication of the landmark, world-leading net zero strategy. The independent Climate Change Committee described it as
“an ambitious and comprehensive strategy that marks a significant step forward for UK climate policy”
and as
“the world’s most comprehensive plan to reach net zero”.
It is worth highlighting a couple of points. When we came to power in 2010, just 7% of this country’s electricity came from renewables; now it is well over 40%. The issue of insulation and the number of houses being insulated was also raised. I do not know why the Liberal Democrat member who raised it, the hon. Member for Tiverton and Honiton (Richard Foord), is no longer here for the winding-up speeches, but anyway—he raised it before leaving the Chamber. It is worth noting that in 2010 the figure was just 14% and by the end of this year I expect that 50% of homes will have reached energy performance certificate level C or above, which is a huge—indeed, transformative—change, albeit one that needs to go much further and faster.
My right hon. Friend the Member for Spelthorne oversaw COP26, which was the biggest summit that this country has ever hosted. It brought together 120 world leaders and over 38,000 key figures from Governments, civil society, businesses, youth and more, in order to tackle the urgent challenge of climate change. It is also worth noting that we have met all our carbon budgets to date and that we are the first major economy to legislate for net zero—done under this Government. So this country is more on track than almost any other country and certainly more than any major economy on earth. That is the context that people could be forgiven for not realising was in fact the case from the rather adolescent contribution of the Scottish National party spokesman. I will leave to one side any comments that the chairman of the Climate Change Committee has made about the Scottish Government’s performance in meeting their climate targets, because doing otherwise would be to descend to the level that the SNP spokesman stayed at throughout his speech.
Barry Gardiner
When the Minister says that this country is “more on track”, does that mean that we are “on track” or that we are just closer to being “on track” than anybody else?
Graham Stuart
That is an excellent question—we have exceeded every carbon budget to date. We not only have the net zero strategy but we had the net zero plan on 30 March, setting out how we will do it. Of course that stretches through to 2037. Not every aspect of the way in which we will fulfil that aim has been set out to date—people would not expect them to be 14 years before that date—but we are on track. What we have to do is make sure we stay on track. I would not try to represent to the House today anything other than the fact that it is an extremely challenging business to ensure that we continue on track. That is what we are working on flat-out.
My right hon. Friend the Member for Spelthorne oversaw the publication of the British energy security strategy, which raised greatly the ambition set out in the net zero strategy, and since those documents came out the Government have continued to progress. In March, we published the Powering Up Britain package, which demonstrates that we are on track to reach net zero, and in the net zero growth plan we are bolstering delivery. That plan responds to the expert recommendations made in Mission Zero, the independent review of net zero, to which there has been reference in the debate, which explored how we can achieve net zero in the most pro-growth, pro-business way.
Our net zero ambition needs strong public and private partnership, and we are forging these links in a number of ways. Government policy and funding commitments are already leading to real outcomes, and we are leading the world in so many ways, not just on offshore wind.
The Government are committed to accelerating renewable electricity deployment. The Powering Up Britain package sets out our delivery plans for meeting those ambitions. It includes important announcements on a range of technologies, including up to £160 million of new funding to kick-start our investment in port infrastructure to deliver on our floating offshore wind ambitions, which were referred to earlier, and a new solar taskforce to drive deployment of that important technology as we seek to increase that fivefold by 2035. We launched the taskforce on 25 May, getting key players from Government, industry, regulatory organisations and other relevant organisations round the table to drive forward the actions required to deliver that ambition of deploying 70 GW of domestic and industrial rooftop and ground-mounted solar by 2035, all while cutting installation costs, boosting British skills and jobs, and improving grid access to support a solar power revolution.
Barry Gardiner
The Minister rightly refers to the need to improve our electricity supply from solar. Has he looked at the interconnection that is proposed from Morocco to come in at the Hinkley juncture? Are he and the Department now considering a contract for difference, which would enable that contract to go ahead?
Graham Stuart
I thank the hon. Gentleman for his question. We are looking at the Xlinks project. We have set up a team to look at it with no further commitment other than to make an assessment. It will be reporting to me shortly on that. We will look at the outline business case going forward. We are looking at it; I do not want to go further—positively or negatively—than saying that.
Gavin Newlands
I realise it is a stretch for the Minister to try to portray himself as the adult in the room with his contribution, but he mentioned good access. Will he therefore tell us what will happen with the grid constraints across the border, even in Orkney where all the energy it produces cannot actually be fed into the grid? When will that be resolved?
Graham Stuart
I thank the hon. Member for that question. It is a good question because the grid constraints, transmission and local connection are the biggest barriers standing in the way of decarbonising our electricity system by 2035. That is why the networks commissioner was asked to investigate that and will be reporting to us this month. That is why the Prime Minister appointed for the first time a Minister for Nuclear and Networks, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), who is working on that. The hon. Member for Paisley and Renfrewshire North is absolutely right to point out that the transformation we have seen in renewables, the change in our generation system and the requirement to grow our electricity capacity going forward puts enormous strain on that and creates not only supply chain, financing and deployment challenges in that space, but political ones because of the infrastructure impact on communities. A lot of work is going on in that space, and I am working closely with Scottish Government colleagues and other colleagues to try to ensure that we work in the most coherent manner possible.
We have heard mention in the debate of the need to improve the energy performance of homes across the country. Notwithstanding the transformation we have brought about—it is not enough—that is why we have established a new energy efficiency taskforce to drive forward improvements. That is why we are spending £12.6 billion over this Parliament and up to 2028 to support and provide long-term funding and certainty, supporting the growth of supply chains and ensuring that we can scale up delivery over time. Only yesterday I visited Octopus Energy’s centre, looking at how that company is trying to design heat pumps to be cheaper to install and more efficient, so they can drive the cost down and speed up the time it takes to install them, thus making the decarbonisation of heat in homes, which is a thorny and challenging subject, more realistic and deliverable.
The delivery of net zero relies on strong business action. That is why we brought together senior business and finance leaders into a new strategic net zero council co-chaired, alongside myself, by Co-op Group CEO Shirine Khoury-Haq. It includes Carl Ennis, CEO of Siemens; Ian Stuart, UK CEO of HSBC; Chris Hulatt, the co-founder of Octopus Investments, and others from UK business. The full membership reflects the cross-cutting nature of our net zero challenge. The next meeting is planned to be held in No. 10. We are mapping all the various business and sectoral organisations focused on net zero, looking to ensure that we have the most coherent architecture and that we can develop road maps for each sector, so that we can take the cross-cutting nature of Government in other policies and put it into something that people in particular sectors can more easily adjust to and adapt and that investors can invest in. The green jobs delivery group was formed after the publication of the net zero strategy and followed work by my right hon. Friend—
Oral Answers to Questions
Graham Stuart Excerpts(12 months ago)
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Chris Elmore (Ogmore) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
I am pleased to say that the green jobs delivery group is co-ordinating across Government to ensure we maximise the number of jobs in green sectors. The group has wide Government representation, including the Department for Education, the Department for Work and Pensions and the Department for Environment, Food and Rural Affairs, and includes members from Siemens, RenewableUK and the Institute for Apprenticeships and Technical Education.
Dan Jarvis
I thank the Minister for that response. He will know that South Yorkshire is fast becoming known for its green energy research. From Sheffield Hallam University’s Dext Heat Recovery project to the University of Sheffield’s Translational Energy Research Centre, there is huge potential in our region. Will the Minister look at what more he can do to work with and provide support to the South Yorkshire Mayoral Combined Authority, so that our region can become a world-leading energy innovation hub?
Graham Stuart
I thank the hon. Gentleman for his question. He is quite right to highlight the need for innovation and for keeping us at the cutting edge of science. We committed £4.2 billion to net zero research and innovation over the period from 2022 to 2025. Just last week it was my privilege to open, up in Blyth, the Digital, Autonomous and Robotics Engineering Centre. In his area, and all over the country, green jobs offer a tremendous opportunity.
Ellie Reeves
Last year, I visited a home in Sydenham that has been fully retrofitted. Not only does that save bills and reduce emissions; it also creates jobs. This is something we could be rolling out now, yet the Government have spent less than 40% of the home upgrade funding pledged in 2019 to make homes more energy efficient. Will the Minister commit to actually making retrofitting a national priority, and support Labour’s plan to insulate 19 million homes by the end of this decade, creating thousands of jobs along the way?
Graham Stuart
I share the hon. Lady’s enthusiasm for improving the insulation and energy efficiency of buildings, including homes, around the country. As she will be aware, we have already transformed it for the better from the frankly dismal position in 2010, when 86% of homes—the legacy from the right hon. Member for Doncaster North (Edward Miliband) and the Labour party—were not properly insulated. By the end of this year that will be 50%, but I agree with her that we need to go further and faster, and ensure retrofitting wherever we can.
Mohammad Yasin
I recently had a meeting with Cranfield Aerospace Solutions, which is on track to certify a zero-emissions aircraft for passenger flight in 2026. The company is growing and has an ambition to reintroduce whole aircraft manufacturing to the UK, bringing in new jobs. The ATI—Aerospace Technology Institute—investment programme has been important in getting to this point, but, as they go beyond research and development, what more will the Government do to support ambitious companies such as Cranfield Aerospace and Hybrid Air Vehicles to manufacture the technology they have developed in Bedfordshire?
Graham Stuart
There are huge opportunities for our world-leading aerospace sector in the move towards sustainable aviation fuels. The Jet Zero Council helps to lead that work. We have set mandates to help drive take-up and ensure we are a world leader.
Chris Elmore
The Prime Minister before last, two years ago, told the country that Bridgend was going to be one of the great centres of battery manufacturing in this country, if not the world. Of course he meant Blyth, Mr Speaker, which is nowhere near Bridgend. Two years later, following the closure of the Ford factory, the people who worked in it for more than 40 years are still waiting for the UK Government to deliver on much-needed jobs across the M4 corridor. Will the Minister set out what support the Government will be offering and when they will deliver the long-anticipated battery plant for Bridgend?
Graham Stuart
What I can tell the hon. Gentleman is that the Government are working flat out to deliver that. I am looking to ensure that we strengthen the UK automotive industry as we move to zero-emissions vehicles.
Giles Watling (Clacton) (Con)
Last Friday, I was fortunate enough to visit the outer Greater Gabbard wind farm array with my constituency neighbour, my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin). We sailed right out among the wind turbines. The plan is to bring the power ashore in my constituency of Clacton, but that does not make sense to me. I do not understand why the power cannot be brought ashore to the decommissioned Bradwell nuclear power station on the Dengie peninsular—no need for more pylons or substations; upgrade what is there. Will the Minister ask National Grid why it is insisting on spoiling untouched beautiful countryside in the Tendring peninsular and putting more pylons across the Essex countryside?
Mr Speaker
I think there must be a lot of green jobs if you come that way. Try and answer that, Minister.
Graham Stuart
Thank you, Mr Speaker. I will ask the Minister who leads on networks, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), to get in touch with my hon. Friend to discuss that further.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Government’s plans for strengthening our energy security and reaching net zero have the potential to create tens of thousands of jobs in many of our communities. Does the Minister agree that the further education sector has a crucial role to play in unlocking new roles in engineering, technical and project management? The list goes on. Will he join me in commending Pembrokeshire College in my constituency, which is already working with floating offshore wind developers who are looking to bring new operations to the Celtic sea? They are showing the way forward in developing those new skills.
Graham Stuart
I congratulate Pembrokeshire College. It is so important to have the skills in place. That is what the green jobs delivery group is all about. Industry is working to make sure that we have the data on the forward expectations of need. That way, the Department for Education, through FE colleges and other institutions, can ensure that people have the right skills so that as much of the supply chain as possible for developing sectors such as floating offshore wind is here in the UK.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Stoke-on-Trent North, Kidsgrove and Talke are proud to be home to one of the largest European deep coalmine sites at Chatterley Whitfield Colliery, which has huge potential in geothermal. That is already being explored at Etruria. Will my hon. Friend meet me, Chatterley Whitfield Colliery Friends, Historic England and Stoke-on-Trent City Council, to see what green jobs can be created at that former colliery site, to bring it back into use with a green future?
Graham Stuart
I am being barracked by my Front-Bench colleagues, which is unusual even for me. I would be delighted to accept my hon. Friend’s kind offer.
David Linden (Glasgow East) (SNP)
The Minister for Energy Security and Net Zero (Graham Stuart)
I assume that the hon. Member is referring to the agreement at COP27 to establish funding arrangements for loss and damage under the Paris agreement. The main step that we are taking to help deliver that is the doubling of our climate finance to £11.6 billion between 2021-22 and 2025-26.
David Linden
Glasgow has a strong link with Malawi, which is one of the countries that really feels the impact of climate change. The Minister is right to reference that loss and damage fund. Will he go a bit further, as I know Christian Aid would want? Will the UK use its seat on the UN committee to mobilise that funding for loss and damage and make sure that the commitments made at COP27 come good, and countries such as Malawi are not left behind in the fight to net zero?
Graham Stuart
The hon. Gentleman is right to highlight that. Those on the frontline suffering the impact of climate change often have done least to contribute to it. It is important that we fulfil the pledges we have made, from Paris to the breakthrough agreement on loss and damage agreed at Sharm last year.
Jeff Smith (Manchester, Withington) (Lab)
The Minister for Energy Security and Net Zero (Graham Stuart)
The Government do not subsidise fossil fuels exploration, and support international efforts to eradicate inefficient fossil fuel subsidies and deliver net zero objectives. In addition, since 2021 no Government support has been provided to the sector overseas, including from UK Export Finance.
Jeff Smith
Really? At COP26 the UK signed up to a pledge to eliminate inefficient fossil fuel subsidies, but now the windfall tax has a super deduction loophole worth £11 billion to oil and gas companies—a benefit enjoyed by no other industry. That money could pay to insulate 4 million homes or build renewable power for millions of homes. This will not reduce bills, and it will drive a coach and horses through our climate commitments. Is it not a terrible way to spend public money as well as breaking our climate obligations?
Graham Stuart
Only for Labour Members—and perhaps some other people on the Opposition side of the House—is it possible to have a 75% tax on the sector, with the levy alone bringing in £25.9 billion between 2022-23 and 2027-28, and then talk about subsidy. Tens of billions of pounds come from the oil and gas sector in this country, and it provides energy security, keeps the lights on and keeps people warm. If the hon. Gentleman’s party were in power, it would cut off domestic supply, weaken energy security and slow down our transition. In every way, they get it wrong.
Kerry McCarthy (Bristol East) (Lab)
I think the Minister needs to look at the dictionary definition of “subsidy”. The approval of the Rosebank oilfield would be an astronomical waste of public money, handing £3.75 billion in subsidy to a Norwegian company in tax breaks and incentives without making any difference to British people’s bills. Does he accept that it will not create jobs or solve our energy security needs, and that it will be a backward step for climate targets as it pumps out carbon dioxide equivalent to running 56 coal-fired power stations a year?
Graham Stuart
Of course, we are a net importer of oil and gas and, if we do not produce domestic gas, for example, we will have more tankers—[Interruption.] We will have more tankers with higher emissions coming into this country. We will undermine a sector—[Interruption.] Oil, gas and renewables is effectively one sector—[Interruption.] It is very hard to get through my answer with all this enthusiastic barracking. It will undermine the energy security of this country if we do not produce oil and gas here while we are burning that. Thanks to the legislation of this Government, we can be confident that it is compatible with net zero because we have carbon budgets that are taking us there.
Kerry McCarthy
Rosebank is an oilfield and 80% of the fossil fuels produced will be exported. If what the Minister says is true, why has the Government’s own net zero tsar said that approving Rosebank would undermine our climate leadership on the world stage and “trash” our net zero pledge? Why are leading scientists warning that
“we already have more than enough coal, oil and gas to overshoot what is deemed our best hope of maintaining a liveable climate”?
Why is the Minister right and all the scientists wrong?
Graham Stuart
It is quite simple. We are reducing demand for fossil fuels, but we are net importers of them. Producing them here and destruction of demand have to be our focus and that is what the Government are doing. We are getting rid of the power stations burning coal. In 2012, nearly 40% of our electricity came from coal, the most polluting of fossil fuels—that was the legacy of the right hon. Member for Doncaster North (Edward Miliband)—but by next year it will be zero. We have moved from 7% to well over 40% with renewables, as the Secretary of State has said. It is economic insanity for us not to produce the oil and gas that we will need for decades to come when we are a net importer.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Dr Matthew Offord (Hendon) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
As a distinguished member of the Environmental Audit Committee, my hon. Friend has recently returned from the Arctic, where he saw the impacts of climate change. We recognise the importance of enabling local areas to play their part in delivering net zero. The net zero strategy and net zero growth plan set out our commitments on how we would help them to do exactly that.
Dr Offord
Local authorities have an overwhelming role in achieving net zero, but in the last hour the National Audit Office has told my office that central Government have not developed overall expectations about local authority roles in achieving net zero. There is little consistency in local authority reporting on net zero, making it difficult to gauge achievements. Neither the Department for Levelling Up, Housing and Communities nor the Treasury has assessed the totality of funding for local authorities to achieve net zero, with the nature of grant funding hindering value for money. So will the Minister carry out an analysis of local authority funding for net zero to inform the next comprehensive spending review, set up an appropriate review to assess the extent to which local authorities in practice have been able to use wider funding for economic growth and levelling up, and work with local authorities to assess the skills gap?
Graham Stuart
The Government invest £5 million a year in the local net zero hub programme. We have established the UK Infrastructure Bank, with an initial £12 billion of capital, for the twin goals of tackling climate change and levelling up, and it includes a specific loan facility for local government to deliver net zero. We are looking at other ways of enabling and encouraging local authorities to do more. The details of a devolution deal for retrofit pilots in Manchester and the west midlands will soon be worked out, and I look forward to that being pioneered.
Hilary Benn (Leeds Central) (Lab)
One risk to net zero is the delay in grid connections. The Chair of the Environmental Audit Committee wrote to the Secretary of State recently to highlight the problem of speculative applications for connections. These are applications that do not yet have planning permission and many never get it, but are clogging up the queuing system. What can be done to fix that?
Graham Stuart
The right hon. Gentleman, as so often, is absolutely right; this is a real issue. We have Nick Winser working on the transmission system and he will report next month. On the distribution level, to which the right hon. Gentleman refers, we will be coming up with a connections plan later this year and working with Ofgem to make sure that we have a system that weeds out projects that are clogging up the system and yet will never be delivered, and make sure that the ones that can be delivered get to the front of the queue.
Sarah Owen (Luton North) (Lab)
Mark Pawsey (Rugby) (Con)
The Minister for Energy Security and Net Zero (Graham Stuart)
On 30 March the Government launched a consultation to explore potential measures on carbon leakage, including a carbon border adjustment mechanism, mandatory product standards and measures to grow the market for low-carbon products. The consultation closes on 22 June and I hope my hon. Friend will consider contributing to it. It is worth noting that full implementation of the EU CBAM will not begin until 2026.
Tonia Antoniazzi (Gower) (Lab)
John Penrose (Weston-super-Mare) (Con)
Graham Stuart
I thank my hon. Friend for separately sharing his detailed thoughts on REMA and its reform. This is a complex area with multiple interrelated mechanisms; it requires careful consideration to unlock the £280 billion or perhaps £400 billion of investment in generation and flexible assets that could be needed by 2035. While I share his impatience and desire to move fast, it is more important still that we get it right. I aim to publish a second REMA consultation in the autumn, which will narrow the options for reform and detail the direction of travel.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Peter Gibson (Darlington) (Con)
Sainsbury’s, Morrisons and Asda are charging more for road fuel in my constituency than they are in neighbouring towns. Can my right hon. Friend explain what he is doing to help my hard-working constituents secure cheaper fuel?
Graham Stuart
We share my hon. Friend’s concerns. That is why we asked the Competition and Markets Authority to investigate. It is doing an inquiry. It came up with an interim report in recent days, and it will come back with a full final report and recommendations for 7 July, addressing the very issue that my hon. Friend rightly brings to us.
Anne McLaughlin (Glasgow North East) (SNP)
Graham Stuart
I thank the hon. Lady for her question and her years of effort to support constituents in this respect. I would be delighted to meet her.
David Duguid (Banff and Buchan) (Con)
There has been lots of talk in the Chamber today about green jobs. When I talk to stakeholders in the renewable and low-carbon technology sector, they talk about the need for electrical technicians, mechanical technicians, engineers, instrumentation engineers and all kinds of skills that currently exist in the oil and gas industry. Will my right hon. Friend join me in encouraging young people to consider a career in oil and gas, not just to meet the energy security demands of today but to develop the skills that will be much needed in the future?
Graham Stuart
When I recently visited Aberdeen, Inverness, Port of Nigg and Orkney in the constituency of the right hon. Member for Orkney and Shetland (Mr Carmichael), it struck me that nearly all—in fact, I think all—the companies I met were working across oil, gas and renewables. They are part of one system, whether it is fabrication, subsea engineering or any number of other things. In truth, our energy security is about oil, gas and renewables. We are reducing our use of fossil fuels, but producing it here at home is a noble career for people in my hon. Friend’s constituency.
Daniel Zeichner (Cambridge) (Lab)
In a few months’ time, there will be extra checks on food coming into the UK from Europe. That will require extra cold store capacity; it is being built, but the Cold Chain Federation tells me that there is a three-year to four-year wait for connection to the grid. What are the Government going to do to make sure those facilities are up and running in time?