Nuclear Power: Technology Selection Process Launch
Grant Shapps Excerpts(1 year, 5 months ago)
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The Secretary of State for Energy Security and Net Zero (Grant Shapps)
In March this year, as part of the Powering Up Britain strategy, the Government set up Great British Nuclear (GBN). GBN will deliver the Government’s long-term nuclear programme, driving forward nuclear projects in the UK. The organisation’s first priority is to administer a competitive process to select the best small modular reactor (SMR) technologies from around the world.
This SMR Technology Selection Process (TSP) will underpin the Government’s commitment to two nuclear Project Final Investment Decisions (FIDs) during the next Parliament. It will support the Government’s ambition to deliver up to 24GW of nuclear power in the UK by 2050. This would mean nearly a quarter of Great Britain’s total power demands being met by low-carbon, secure nuclear energy, supporting the UK’s energy security, and contributing to our net zero targets. It would rebuild a UK industry that was the envy of the world following the opening of the world’s first commercial nuclear plant at Calder Hall, Cumbria, in 1956, and can be again.
Nuclear power as a share of the UK energy mix has been reducing as older plants naturally retire. However, we are acting to reverse this trend. As a major first milestone, the Government invested £700 million in Sizewell C last year, representing the first state backing of a major new nuclear project in over 30 years This builds on the significant EDF investment in Hinkley Point C since 2016 and the Government are now working in partnership with EDF to develop Sizewell C, towards our objective of achieving a FID this Parliament.
Beyond Sizewell, GBN will promote a programmatic approach both to nuclear technology selection and project deployment to drive further progress. This will not only give the supply chain the long-term certainty it needs to invest in homegrown capability and skills, it will in time offset plant retirements and strengthen UK energy independence. GBN now has in place an experienced interim executive team, including Simon Bowen as Chair and Gwen Parry-Jones as Chief Executive Officer. Since April, swift progress has been made on the Powering Up Britain commitment to gather market intelligence to inform GBN planning.
Today GBN launches the next phase of the SMR TSP and invites SMR vendors to register their interest. This is an important next step in identifying those companies best able to reach a project FID by the end of 2029, which could result in billions of pounds of public and private investment in SMR projects. It demonstrates that the Government are delivering on their priorities to partner with the nuclear industry and jointly spearhead the future of nuclear technologies, to secure decarbonised and domestically-generated electricity to power the economy. The Government recognise the importance of moving quickly to uphold our energy security and net zero ambitions, and are seeking to deliver the fastest competition of its kind in the world.
The Contract Notice, published today, sets out an intention to enter into a development contract with those successful bidders, with the option of pursuing a project through FID to construction and subsequently operations, providing a route to market for successful bidders. In practice, this means offering chosen technologies an unprecedented level of support: funding to support technology development and site-specific design; a close partnership with GBN, which will be ready and able to provide developer capability; and support in accessing sites.
As a first step in this process, interested parties will be required to respond to a selection questionnaire. Once this stage is complete, GBN will down-select those technologies which have met the criteria, and then enter into detailed discussions with those companies as part of an invitation to negotiate phase. The Government will seek to decide as soon as possible which technology or technologies to support. This process is designed to afford Government flexibility in the number of projects they choose to support, and the ability to support successful projects through the construction phase subject to approvals and if this proves value for money.
This SMR TSP is a further significant step in the revival of nuclear power in this country. The Government remain strongly committed to the full spectrum of nuclear technologies and are continuing to consider how all technologies could further contribute to UK energy security and meeting climate change targets.
As we seek to increase diversity across the pool of nuclear technologies available in the UK and to strengthen our nuclear sector supply chain, I can announce today up to £157 million of grant funding awards across three existing nuclear programmes:
Up to £77.1 million from the Future Nuclear Enabling Fund, subject to due diligence of short-listed applicants, with details to follow shortly.
Up to £58 million to National Nuclear Laboratory, Ultra Safe Nuclear Corporation and the UK’s Nuclear Regulators for the development and design of a form of Advanced Modular Reactors (AMRs) and their fuels; and
£22.3 million from the Nuclear Fuel Fund which will enable eight projects to develop new fuel production and manufacturing capabilities in the UK. The successful companies are Westinghouse, Urenco UK, Nuclear Transport Solutions, and MoltexFLEX.
The Government are going further by today committing to consult in the autumn on alternative routes to market for new nuclear projects, in addition to that provided by the TSP. Government are particularly keen to understand where GBN and the Government could support the private sector to bring forward projects, and to further explore the role of nuclear energy in industrial decarbonisation as well as low-carbon heat and hydrogen production. The evidence received will help shape future policy and ensure that the UK’s nuclear programme is as comprehensive and inclusive as possible. Further details will follow on both this and the nuclear roadmap, which we have committed to publish by the end of the year and which aims to set out further next steps for civil nuclear.
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Oral Answers to Questions
Grant Shapps Excerpts(1 year, 5 months ago)
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Dr Philippa Whitford (Central Ayrshire) (SNP)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
We are supporting Scotland through the North sea transition deal, contracts for difference for renewable energy, and more than £80 million of net zero innovation portfolio funding.
Ian Blackford
I thank the Secretary of State for that response, particularly in relation to CfDs. Will he commit today to a clear pathway for the true commercial-scale development of tidal stream energy? A ringfence in the CfD auction is welcome, but it is only scratching the surface of what the industry can deliver. Investors in projects are stalling, as they need long-term visibility. The industry—and, indeed, all of us—needs this technology to succeed. Let us unlock this predictable, renewable power and create an industry and sector that we can be proud of and that can be made on these islands. We need a commitment today that the ringfenced budget will increase, to allow costs to fall and true-scale projects to be delivered. If we want energy security, here is the pathway.
Grant Shapps
Fortunately, the answer is pretty straightforward. As the right hon. Gentleman mentioned, we are doing tidal power in this CfD round. That is to be welcomed and we look forward to this industry expanding in the future, as some of the technicalities and technical difficulties are resolved. I know that the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) has visited recently to see this in action.
Dr Whitford
Energy storage is vital to managing demand as we switch to renewable electricity. Pumped storage hydro is the most efficient large-scale storage method. UK capacity could be more than doubled by six projects across Scotland that have been shovel ready for more than five years. They take a long time to build, so why are the UK Government not supporting investment in infrastructure that is critical for our future energy security?
Grant Shapps
I have discussed this matter with SSE in relation to that particular hydro storage project, and my hon. Friend the Under-Secretary of State met MSPs yesterday to discuss the subject as well. We are keen to have this kind of hydro storage, which is why our plans allow for it to be taken forward. However, I have to say to Opposition Members—all of them—that it is no good just having one kind of storage or one kind of tidal power; we also need to protect the Scottish economy with oil and gas to make sure we are not subjected to Putin or any other dictator holding us to ransom over our energy security.
Virginia Crosbie (Ynys Môn) (Con)
It is good to hear that the Secretary of State is supporting the economy in Scotland, but my question is: how are the UK Government investing in grid capacity in Wales? In Wales, such investment is crucial if we are to support energy transition projects such as the Holyhead hydrogen hub, Minesto, Morlais, BP Mona, Lightsource BP and, of course, new nuclear at Wylfa.
Grant Shapps
Grid capacity in Scotland, Wales, England and Northern Ireland is at the top of our list. The Winser review has done a lot of work to look at how we can speed up the delivery of that capacity, given the big transition that is going on and this country’s big lead in renewables, which makes that necessary.
Alan Brown (Kilmarnock and Loudoun) (SNP)
On pumped storage hydro, it is as though the Secretary of State just does not get it. It increases energy resilience and would reduce the £4.2 billion balancing costs that are getting paid out at the moment. The 1.5 GW Coire Glas scheme can be delivered in seven years, and it would power 3 million homes for a 24-hour period. The Government have found £700 million for Sizewell C and they have implemented cap and floor mechanisms for interconnectors, so why is he not having proper discussions with SSE about a cap and floor mechanism?
Grant Shapps
The Secretary of State does in fact get it, because we support the idea of having things such as hydro power. Again, I have to say that there is a choice where taxpayers’ money is spent. It has to be done competitively in the round. To be talking merely about storage and not the generation, including nuclear power, which is a key part of this country’s energy security future, simply means that the overall view that the SNP has is unbalanced when it comes to how we power our nations.
Alan Brown
The Secretary of State has proved he still does not get it—he is not having proper discussions with SSE. If we move to carbon capture and storage, the Climate Change Committee’s progress report identified “risks” and “significant risks” associated with industrial clusters and carbon dioxide storage, which proves it is nonsensical to have Acorn as a reserve. When will the Government announce the track 2 clusters and provide parity for Acorn? When does he envisage Acorn starting construction? That is vital to meet the 2030 targets.
Grant Shapps
As the hon. Gentleman knows, we have already pumped £40 million into Acorn. It is on the reserve list. He asks when; the answer is this year for track 2 and track 1 expansion. So I say it again: the Secretary of State does get it.
Bill Esterson (Sefton Central) (Lab)
Mr Gagan Mohindra (South West Hertfordshire) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
Ending Russian imports in April 2022 has shown that Russian gas belongs in the past. Our system was well supplied last winter by North sea gas and reliable imports—a far cry from Labour’s energy surrender plan, sponsored by Just Stop Oil, which would put us back at square one and in the hands of despots such as Putin and his tyrannical regime.
Mr Mohindra
I welcome the Secretary of State’s answer. Could he explain what steps his Department is taking to ensure that no country will ever be able to hold the UK to ransom through our energy supply?
Grant Shapps
It is about having a balanced energy supply, which means renewables, nuclear power, and yes, where necessary, oil and gas licences—to do without them puts the security of every single person in this country at risk and means that household bills will go up. Sadly, that is exactly the policy of His Majesty’s official Opposition.
Caroline Lucas (Brighton, Pavilion) (Green)
A recent report by the Energy and Climate Intelligence Unit shows that, regardless of Ministers’ plans to expand domestic oil and gas production, imports of gas will continue to rise significantly unless we tackle demand. New oil and gas licences simply will not deliver energy security as the oil and gas is sold at global prices on international markets. They will cost the taxpayer dearly while being a disaster for the climate. Will the Government finally do what is needed by ruling out new licences and committing instead to measures that will genuinely make the UK energy secure, including a nationwide street-by-street home insulation programme, unblocking onshore wind, and installing new solar on every roof?
Grant Shapps
We have gone from 14% of our homes being insulated under the previous Government to nearly 50%—it will be 50% this year—and we have set up an energy taskforce to reduce the usage of energy and make it more efficient. However, the policy of the hon. Lady’s party, and that of the official Opposition, of importing all the oil and gas that we require and not providing new licences is simply insane. It means that every single family in Britain will be subject to the next tyrant like Putin, and that the carbon used will be double what is taken from the North sea. It is bonkers policy.
Sir Christopher Chope (Christchurch) (Con)
Mr Laurence Robertson (Tewkesbury) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The Government are supporting the installation of rooftop solar in numerous different ways: financial incentives, performance standards and the solar taskforce.
Mr Robertson
For years now, I have been trying to persuade Governments of all colours to change building regulations to require all new buildings to be fitted with solar panels. That would have the benefit of securing supply, reducing household bills considerably and helping us towards net zero, so why do we not do it?
Grant Shapps
I assure my hon. Friend that I am a great enthusiast for solar panels—I have had them on my home for the past 12 years, and they perform very well. I want to see more people do that. In fact, over that period, we have gone from virtually no renewables in our system—6.9%—to 43% in the last quarter. I am very keen for that expansion to go further and faster. We need to ensure that it is part of the building code, but we also want to make sure that other forms of renewables can be installed, so it is a balance between not being too prescriptive and making sure that we make speedy progress, particularly on all the commercial rooftops in this country.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
A few weeks ago, I had the pleasure of visiting an innovative housing project in Rumney in my constituency, which had solar panels in nearly all the new buildings but also ground source heat pumps, electric vehicle charging points and battery technology in the houses, bringing down bills for the residents while contributing to net zero. Will the Secretary of State join me in praising Cardiff’s Labour council and the Welsh Labour Government for the work they have done on this issue, and will he explain what we are doing to ensure greater manufacture of those technologies in this country?
Grant Shapps
Of course, I am delighted that the Barnett formula stretches so far in providing some of the excellent additions to those buildings. I just want to repeat that no Government have gone further and faster in the G7 than this one in introducing renewables and ensuring that they now power a very significant part of our grid. We want to go further and faster still, and we will make sure that things such as building codes help with that plan.
Stephen Farry (North Down) (Alliance)
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
Next week will mark the 500-day anniversary since Putin launched his invasion of Ukraine and began trying to blackmail the world on energy. As ever, Britain stood strong in the face of tyranny, and I am pleased to report that from Saturday just past, energy bills are falling by an average of 17% for households. We are committed to powering Britain from Britain, despite some alarming energy surrender plans coming from the Opposition.
Ruth Cadbury
The Climate Change Committee’s report published last week found that of the policies and consultations that are the responsibility of the Secretary of State’s Department, no less than 33 are overdue. He cannot blame anyone else. Will he now own up to the Government’s appalling failure?
Grant Shapps
The actual data argues the opposite way. We have met all our carbon budgets to date. The Climate Change Committee last week said that the chances of reaching carbon budget 4 are “slightly increased”. We are confident of meeting it, and we have set out our plans for carbon budgets 5 and 6. I have to say that given that this country has the best record in the world among developed nations for getting carbon under control, it is surprising to hear the Opposition’s view.
Mark Fletcher (Bolsover) (Con)
Edward Miliband (Doncaster North) (Lab)
Six days ago, the Climate Change Committee delivered its most scathing assessment in its history on the Government’s record, saying that they were off track on 41 out of 50 key targets. It said that we have gone “markedly” backwards in the past year, on the Secretary of State’s watch. Who does he blame for this failure?
Grant Shapps
As has been discussed more than once in these questions and answers, we have taken this country from having only 7% renewable energy to over 40%. We have decarbonised faster than any other G7 nation and we are on track for carbon budget 4, having already overdelivered on carbon budgets 1, 2 and 3. Based on our record to date, we are doing a pretty good job.
Edward Miliband
That answer is total complacency from a Secretary of State who has just been proven to be failing on every major aspect of his agenda. That is why Lord Goldsmith resigned. Lord Deben has said he is failing, and the right hon. Member for Maidenhead (Mrs May) has said that we are losing the global race. Is not the truth now that even the Tories do not trust the Tories on the climate crisis?
Grant Shapps
This is one of the problems with not being prepared to follow the data, which shows us overdelivering on the commitments of carbon budgets 1, 2 and 3, and that we are more likely to meet carbon budget 4 than we were a year ago. If the right hon. Gentleman wants to ignore all that and still roll out his pre-written question, that is how we get to his conclusions. The truth is that the Government are delivering on the issues of climate change while protecting every single household in the country from Putin’s tyranny. I am afraid that has already been surrendered by the right hon. Gentleman, who subscribes to the Just Stop Oil approach.
Olivia Blake (Sheffield, Hallam) (Lab)
Grant Shapps
The whole House will welcome the hydrogen economy as an important way to store power. It is becoming increasingly apparent that that power is most likely to be used in heavy industry as well as heavy transport. This Government are committed to hydrogen power, but we are also keen to ensure that it does not impact on people’s energy bills, just as those bills are starting to fall thanks to the support that we provided families with this past winter.
Peter Aldous (Waveney) (Con)
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?
Grant Shapps
My right hon. Friend is absolutely right about the opportunities of geothermal. He will be pleased to know that it just received a potential allocation through the contracts for difference round. As he and other hon. Friends have pointed out, geothermal has great potential in this country, and we look forward to supporting it.
Dave Doogan (Angus) (SNP)
Communities in Padanaram, Forfar, Aberlemno and Stracathro in my constituency have been on the receiving end of an extraordinarily flawed consultation by SSEN—Scottish and Southern Electricity Networks—on taking a 400 kV line from Tealing to Kintore. I welcome the investment, but can the Minister advise on the minimum standards for consultations on capital infrastructure of this nature, and why will Ofgem not mandate that there is a community benefit?
Grant Shapps
I will, with the hon. Gentleman’s permission, arrange to write back to him in a more detailed structure, given that the development is actually in the constituency of my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie).
Andrew Jones (Harrogate and Knaresborough) (Con)
Unlocking access to the grid will unlock significant private sector capital ready to come in for microgeneration of battery storage projects. Can my hon. Friend give me an update on the timing for the Winser review and the Government’s response to it?
Energy Security and Net Zero
Grant Shapps Excerpts(1 year, 6 months ago)
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Tom Hunt (Ipswich) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I mentioned before that we are paying around half of the household energy bill. We are also paying around one third of business energy bills right now through the energy bill relief scheme.
[Official Report, 28 February 2023, Vol. 728, c. 629.]
Letter of correction from the Secretary of State for Energy Security and Net Zero (Grant Shapps):
An error has been identified in my response to my hon. Friend the Member for Ipswich (Tom Hunt).
The correct response should have been:
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I mentioned before that we are paying around half of the household energy bill. We are paying around half of wholesale energy costs for some businesses.
Energy Price Guarantee Extension
The following is an extract from Department for Energy Security and Net Zero questions on 18 April 2023.
Chris Clarkson (Heywood and Middleton) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The energy price guarantee has been extended at the same level for a further three months until the end of June. By then, the Government will have covered nearly half of a typical household’s energy bills during this winter, and a third to a half of business bills as well.
[Official Report, 18 April 2023, Vol. 731, c. 111.]
Letter of correction from the Secretary of State for Energy Security and Net Zero (Grant Shapps):
An error has been identified in my response to my hon. Friend the Member for Heywood and Middleton (Chris Clarkson).
The correct response should have been:
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The energy price guarantee has been extended at the same level for a further three months until the end of June. By then, the Government will have covered nearly half of a typical household’s energy bills during this winter, and around half of wholesale energy costs for some businesses as well.
Oral Answers to Questions
Grant Shapps Excerpts(1 year, 7 months ago)
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Michael Fabricant (Lichfield) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
As set out in the Government’s fusion strategy, the environmental and economic impact of fusion energy could be transformational. The Government’s programme aims to drive commercialisation of fusion energy by building a prototype fusion energy plant by 2040.
Bob Blackman
I thank my right hon. Friend for that answer. When I was studying physics at university more than 40 years ago, fusion was a gleam in our professor’s eye. Now we have been able to achieve it, but the key is scalability. What effort is my right hon. Friend making to invest in the research and development that is required to bring this clean, cheap and green energy to fruition?
Grant Shapps
As my hon. Friend says, fusion has always been talked about as 20 years hence, but to speed that up we have invested £700 million in fusion in the spending review period. We are working to get the world’s first fusion power station connected to the grid by 2040, with works scheduled to start in 2032.
James Grundy
The north-west has long been home to a large number of jobs dependent on the nuclear sector. Does my right hon. Friend foresee the potential for future jobs in the north-west as we continue to develop nuclear fusion technology?
Grant Shapps
Yes, absolutely. Fusion technology could be fantastic for the north-west and part of a big jobs boost. The UK Atomic Energy Authority believes that around 4,500 suppliers will be involved in that, and many of them will be in the north-west.
Mark Fletcher
With the West Burton spherical tokamak for energy production plan, we have the opportunity to further solidify the east midlands as the home of the UK nuclear sector. What assessment has my right hon. Friend made of the economic benefits to the east midlands of that plant?
Grant Shapps
My hon. Friend is absolutely right, and the importance of that plant to the east midlands could be tremendous. The spherical tokamak for energy production—STEP—programme could support a large number of jobs. When I launched “Powering up Britain” with the Prime Minister at Culham, we stood next to the tokamak—the hottest place in the solar system. Some might think that that would be the sun, but it is 10 times hotter than the sun. To put that in context, that would be more than all the hot air from the right hon. Member for Doncaster North (Edward Miliband) in an entire year.
Michael Fabricant
My right hon. Friend has answered all the questions that I was going to ask. What work is he doing with Manchester University—I have not told him that I was going to ask this—which is also doing research in that area?
Grant Shapps
I am going to have to riff this one, since that came out of the blue. The UK Atomic Energy Authority is working across the country, including with Manchester University. Its CEO, Sir Ian Chapman, is very proactive on this issue, and he hopes to work with Manchester University, and other institutions, to ensure that the coal-fired power station that was closed down at the end of March in West Burton is opened as a fusion power station connected to the grid. That will be done with the help of Manchester University and many other institutions.
Caroline Lucas (Brighton, Pavilion) (Green)
Even nuclear fusion’s most ardent advocates admit that it will be decades before an operational power station is built. At the same time, I remind the Secretary of State that his own Government’s target for decarbonising the power sector is 2035, so nuclear fusion will be no help in meeting that target. Instead of wasting taxpayers’ money on yet another nuclear white elephant, why will the Secretary of State not fully harness the things that we know will work, which means an energy system based on renewables backed up with interconnectors, batteries and storage, unblocking onshore wind and unleashing a rooftop solar revolution? Why is he not doing that, which will make the transition much quicker and much cheaper?
Grant Shapps
Well, Mr Speaker, we are! When we came to power in 2010, just 7% of our electricity was coming from renewables. Right now, if I look at renewables plus nuclear—I know the hon. Lady does not like to look at nuclear—that figure was 57% in the last year. The idea that we should ignore technology and take that luddite approach to energy is not the energy security that this Government seek.
Jim Shannon (Strangford) (DUP)
I have been a supporter of nuclear power and nuclear fusion in particular, and we in Northern Ireland want to take advantage of that, although we have been unable to do so until now. What discussions has the Secretary of State had with the Department for the Economy in Northern Ireland about nuclear technology and creating energy for rural farming, which is a massive industry not just in Northern Ireland but in my constituency of Strangford? We want to be part of this growth. How can that happen?
Grant Shapps
I firmly believe that all parts of the United Kingdom should be part of our nuclear revolution to ensure that we can get a quarter of our electricity from nuclear. Small modular reactors could be of tremendous interest in Northern Ireland, providing more localised power to individual communities which previously would not have been up for a gigawatt-style power station.
Richard Thomson (Gordon) (SNP)
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
North Sea oil and gas infrastructure can play a crucial role in lowering costs and speeding up deployment if it is repurposed for carbon capture and storage, therefore improving our energy security.
Mr Carmichael
The Greensand project in Denmark has proven the concept of carbon capture, usage and storage, but we know that the supply chain in this country is fragile. Indeed, if others go ahead and develop CCUS, that is where they will go. Companies such as EnQuest in Shetland, which operates the Sullom Voe oil terminal, are keen to do exactly what the Secretary of State is talking about. Would he or the Energy Minister agree to meet me and the operators of EnQuest to hear what it needs to get that exciting project across the line for a final investment decision?
Grant Shapps
The right hon. Gentleman is absolutely right about this, but the UK is playing a leading role with its recent £20 billion investment in carbon capture, usage and storage. We have sufficient space to store potentially 78 billion tonnes of carbon under the North sea—equivalent, I am told, to the space occupied by over 15.5 billion well-fed elephants. I would be more than happy to meet him to discuss the potential of the field he mentioned.
David Duguid (Banff and Buchan) (Con)
Unlike the SNP, who continue to talk down the fantastic Acorn project, which by the way has never actually stopped—[Interruption.]. One of the reasons it has not stopped is because of the over £40 million invested by this Government in the Scottish cluster; £80 million was promised by the SNP but never delivered. What progress has been made to provide access to CO2 storage sites such as those in the North sea for industrial clusters without direct access to those sites by pipeline—for example, through shipping? What advantage can be taken of existing infrastructure at ports located near storage sites, such as Peterhead in my constituency?
Grant Shapps
My hon. Friend is absolutely right about the £40 million that the UK Government have already spent on the Acorn project. We have track 1 expansion later this year and track 2 will be announced later this year for CCUS. We look forward to further developments. He is also right to highlight the importance of the storage and transportation of carbon; in fact, it is a subject being considered today in the Committee on the Energy Bill. By the way, the largest Energy Bill that the House has ever considered is being passed by this Government.
Mr Speaker
We come to Question 11. Is anyone from the Government Front Bench going to bother? They are still thinking about the last question, but I would like a Minister to answer.
Edward Miliband (Doncaster North) (Lab)
They are too busy laughing at their own jokes.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
Nearly £200 billion has been invested in low-carbon sectors since 2010, which is 50% higher than has been invested in the US as a share of GDP.
Justin Madders
This is a global race and I fear that, with the US Inflation Reduction Act, we are being left behind. I am sure the Secretary of State will be aware of last week’s comments by Stellantis, which owns Vauxhall Ellesmere Port, about the need for urgent investment in the move to electric vehicle production. The Faraday Institution has reported that we need between five and 10 gigafactories in the UK to protect the automotive sector, and at the moment we have one, maybe two, coming on stream. How many does the Secretary of State think we need to save the automotive sector?
Grant Shapps
First, it is good news that the US has woken up to the need for this energy transition. I was in the US last week and they were pointing out to me that we had already spent £200 billion on this, with another £100 billion being leveraged in over the next six and half years to 2030. The point is we are ahead of the US, including on the transition to electric vehicles. The proportion of EVs sold in this country is way in excess of where the US is. By 2030, the US only hopes to get to 50%, whereas we will have ended the sale of pure petrol and diesel vehicles, so in fact we are ahead of the game.
Edward Miliband (Doncaster North) (Lab)
The US has created almost 10 times more green jobs in the seven months since the passage of the Inflation Reduction Act than the UK has created in the past seven years. That is why British business is deeply worried. Frankly, the Secretary of State is all over the place on this, because his only significant response to IRA, passed last August, was to describe it as “dangerous”. Can he explain why IRA is dangerous? Is not the real danger to Britain a Government who are standing on the sidelines while others win the race for green jobs?
Grant Shapps
I take the opportunity to clear this up, because I have heard the right hon. Gentleman mention that quote several times. I actually said that aspects of the way in which some Senators passed the Act were in danger of being protectionist. He refuses to quote in full and he therefore misquotes.
As I discovered when I was in the US just last week, the reality is that the US does not have the world’s largest, second largest, third largest or fourth largest offshore wind farm. Do you know why, Mr Speaker? They are all being built here in the UK, where we are decades ahead.
Edward Miliband
That is exactly the kind of complacency that is costing jobs. Let us talk about offshore wind. The Kincardine floating wind farm, off the coast of Scotland, is indeed the largest in the world. Its foundations were made in Spain, its turbines were made in Rotterdam, where it was also assembled, and the finished product was simply towed into Scottish waters—jobs that could have come to Britain but did not because we have no industrial strategy and the Government refuse to invest in our ports. Is not the truth that we will never win the global race with this Government because they think that public investment in green industry to bring jobs to Britain is dangerous?
Grant Shapps
If there was a failure to develop the supply chain, I wonder whether it could have been anything to do with the former Energy Secretary, who only managed 7% of electricity coming from renewables in Labour’s 13 years in office. As I mentioned, we are coming up to 50% of electricity coming from renewables. It is worth mentioning that we had the world’s first floating offshore wind farm and the largest floating offshore wind farm. It is also worth mentioning that we have just invested £160 million through FLOWMIS—the floating offshore wind manufacturing investment scheme–and that we have just succeeded in getting a monopiles factory, which will produce up to half of the monopiles for future offshore wind factories.
Alison Thewliss (Glasgow Central) (SNP)
Jill Mortimer (Hartlepool) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
Last week, as I mentioned, I was in the US promoting Britain’s ambitious plans for renewables, nuclear and the incredible potential of carbon capture, usage and storage, which could be worth trillions to our economy. By forging those closer links, we are bringing down bills, safeguarding our energy and putting Putin’s energy blackmail and ransom on the back foot.
Jill Mortimer
Does my right hon. Friend agree that we need to seize the unique opportunity in Hartlepool by commissioning an advanced modular reactor for our soon-to-be decommissioned site, to secure jobs and skills and to make Teesside a world-leading area for green energy?
Grant Shapps
First, I am very pleased that the Hartlepool nuclear power station has had its lifetime extended to 2026. Secondly, my hon. Friend is absolutely right to be enthusiastic about advanced nuclear reactors and technologies, some of which have a little way to go yet, but they get full support from this Government, and we will support those coming into use when time allows.
Mr Gregory Campbell (East Londonderry) (DUP)
A more rapid escalation towards net zero could be achieved by a significant increase in electric vehicle charging points, particularly in areas where there are very few, such as Portstewart and East Londonderry in my constituency. What meetings will the Minister have, and what pressure will he apply, to try to ensure that there is a significant increase between now and 2030?
Grant Shapps
As a former Transport Secretary, I can inform the hon. Gentleman that the UK has more fast charging per mile of road than any other major European economy, but we are always pushing to go further. In particular, we have a very large programme working with local authorities to install more capacity, particularly for the harder-to-reach roads.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
At the moment, many people receive their domestic energy on a commercial contract, either via a landlord or because they live above a shop. This Government put in protections to support them, but they have now been lifted, and those people are of course ineligible for the Ofgem energy price cap. Will the Government review this situation to ensure those residential customers are treated with the residential protections they deserve?
Grant Shapps
The hon. Lady makes a very good point: where charge points are blocked, they become useless for EVs. The LEVI scheme that she references is designed to try to help as many people as possible, and I will certainly ask my right hon. Friend the Transport Secretary to take a closer look at the specific point she raises about those blockages.
Deidre Brock (Edinburgh North and Leith) (SNP)
Private jets, described as “incredibly carbon-intensive”, have been in the headlines. The recent Department for Transport-commissioned report suggests that the carbon footprint of private jets in the UK is on par with 200,000 people taking a return flight to Hong Kong, and calls for the number of private jet flights to be halved. Will the Secretary of State be having a word with his colleague the Foreign Secretary about that?
Grant Shapps
Private jets are in the headlines almost as much as motorhomes. The reality is that to solve this problem, we need sustainable aviation fuel in the shorter term, which is why the UK has one of the world’s leading targets: 10% of SAF in our energy mix for jets in just six and a half years’ time.
Alison Thewliss (Glasgow Central) (SNP)
Some 13,450 energy bills support scheme vouchers have gone unclaimed in my constituency. Given the delays that many of my constituents have experienced in obtaining those vouchers and arguing the case with their energy companies, will the Minister push back the date by which they have to be redeemed, which is currently 30 June?
Energy Bill [Lords]
Grant Shapps ExcerptsTuesday 9th May 2023
(1 year, 7 months ago)
Commons ChamberRead Full debate Energy Act 2023 View all Energy Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 86-II Second marshalled list for Report - (13 Apr 2023)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I beg to move, That the Bill be now read a Second time.
For much of the past 50 years since the oil shock and energy crisis in the 1970s, Britain has enjoyed abundant and reliable electricity. Over these years, some may have traded in their teasmades for barista coffee machines, swapped their electric fondue sets for air fryers or replaced cassette players with Spotify—I do not know why I am looking at the right hon. Member for Doncaster North (Edward Miliband)—but energy has remained largely plentiful for the best part of half a century. In the past 15 months, that secure foundation has been fundamentally shaken, with Vladimir Putin’s brutal invasion of Ukraine and his subsequent attempts to weaponise energy forcing up bills for millions of families.
This Government have stepped in and paid half the typical energy bill this winter, but frankly, those are just stopgap measures. Putin’s war marks a fundamental turning point for Britain and the world’s energy security. After years of growing reliance on fossil fuel imports around the world, this is a moment when the globe has woken up and needs to apply changes to its energy supplies for the future.
Sir Desmond Swayne (New Forest West) (Con)
I know it is early, but will my right hon. Friend allow me to intervene?
Grant Shapps
If my right hon. Friend will give me a moment, I will make a little progress first, and he can be sure that I will give way shortly.
We will replace those oil and gas imports with home-grown renewables and, critically, nuclear power to deliver resilient and reliable energy, powering Britain from Britain. We will reduce wholesale electricity prices to among the cheapest in Europe by 2035, protecting the British consumer from volatile international energy markets.
John Redwood (Wokingham) (Con)
I agree with the Secretary of State that we need more energy independence and more domestic energy, so why does the Bill propose a 140% increase in imported energy through interconnectors, which will make us more dependent and very vulnerable?
Grant Shapps
My right hon. Friend makes an excellent comment, as ever, on interconnectors, but I would point out that with the growing number of interconnectors, particularly electricity interconnectors, last winter, for example, we were able to export 10 TW to France through interconnectors, providing us with income. The answer is that they work in both directions, and in some cases, they provide the reliability of, for example, France’s vast nuclear fleet of 56 reactors. When whose reactors were down last winter—because even nuclear power sometimes has to come offline—we have been able to export our power to France, and it has been a net export. Our mission is to secure the clean and inexpensive energy that Britain needs to prosper.
Sir Desmond Swayne
On clean energy, I am very enthusiastic to see the hydroelectric generator that we used to have on the Avon at Ringwood generating electricity once again. Will my right hon. Friend use the powers afforded to him in clause 273 to take on the huge barriers to entry that prevent community energy generators from selling to customers?
Grant Shapps
My right hon. Friend is absolutely right about the importance of hydroelectricity in the overall energy mix. It is something that we are working on, he will be pleased to know, and I am happy to offer him a meeting with the Bill Minister, the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), to discuss his constituency case in more detail.
Several hon. Members rose—
Grant Shapps
I will give way in a few moments; let me just make a few lines of progress.
All of this is why, earlier this year, I was appointed to lead the new Department for Energy Security and Net Zero. It is why, just 50 days later, we published our ambitious “Powering Up Britain” blueprint for the future of energy security in this country. We are bringing all that work together in the Bill before the House.
Alex Cunningham (Stockton North) (Lab)
We all celebrated the Government’s decision to move the Teesside carbon capture, usage and storage and power project to the next stage. Today in a written ministerial statement, a Government Minister, the hon. Member for Derby North (Amanda Solloway), said that she was delaying by another four months a decision on whether those plans will get planning permission. Can the Secretary of State understand why this delay will set alarm bells ringing on Teesside and how it will impact the project, and can he explain why the delay is necessary?
Grant Shapps
As the hon. Gentleman will know, Ministers must be quite careful when commenting on the quasi-judicial planning decisions that his question goes into, but he should not mistake—nor should anyone in this House—this Government’s determination to get on with things like CCUS and hydrogen. That is why we have announced a £20 billion programme for CCUS, the largest of any country in Europe. As I say, though, and as he well knows, specific planning decisions are matters that the planning inspector advises Ministers on.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Secretary of State talks about powering up Britain, but perhaps he could take some lessons from how the Welsh Labour Government and Welsh Labour councils are powering up Wales. The other week, I visited a very important development in Rumney in my constituency, where there is a new mixed housing development. Every single one of those properties has a ground source heat pump, photovoltaics on the roof and an electric vehicle charger on the drive. They are well insulated, they are using sustainable materials, and they are bringing down costs for consumers now, but also contributing to net zero. Is that not the example we should follow across the UK?
Grant Shapps
I am pleased to report that on what is, I think, a largely uncontroversial Bill, we are working very closely with the devolved Administrations and trying to learn lessons from each other, in order to support the whole country in this energy security move. This Bill is the longest and most significant piece of energy legislation to ever come before the House; it is a critical part of making Britain an energy-secure nation. On that point, I thank colleagues across the House for their positive engagement with me and with the Bill Minister, my hon. Friend the Member for West Aberdeenshire and Kincardine, in the lead-up to this debate. I know there is much in the Bill that already has cross-party support.
Sir Alok Sharma (Reading West) (Con)
I commend the Secretary of State for the Bill, and I welcome its key objectives, as I think everyone in this House does. However, a number of amendments were made in the other place, particularly one relating to a net zero duty for Ofgem. Those amendments are now in the Bill. Could the Secretary of State clarify whether the Government will support all of them, particularly the one on Ofgem?
Grant Shapps
I thank my right hon. Friend for his intervention. We will be looking very closely at the proposed amendments—the Bill Minister himself will be addressing those in detail, which is the right way to do it—and of course, the regulator is already very largely focused in that direction. As I often point out, of everybody in this place I have a particular interest in making sure we achieve what we have set out to do, because this House has kindly legislated to send the Secretary of State for Energy to prison if they do not meet the net zero commitments, potentially through contempt of court. We take these things seriously, but my right hon. Friend will wish to hear more on that issue from my hon. Friend the Energy Minister.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is fair to say that the amendment about putting a statutory net zero duty on Ofgem does not need much studying. On the issue of clean, inexpensive energy, Hinkley Point C is now going to cost £33 billion. We know that Sizewell C will cost in the order of £35 billion if that follows, and the existing clean-up for nuclear radioactive waste is in the order of £230 billion, so where on earth does nuclear fit into the definition of clean and inexpensive?
Grant Shapps
We are talking about energy security, and about a tyrant costing all our constituents a fortune, and SNP Members do not want to fix it. They do not want to have reliable nuclear power—they stand against it. They stand against oil and gas. I do not know where they expect all this energy to come from in a reliable way in the future. However, where there are differences, I want to be constructive with the hon. Gentleman and, of course, the devolved Administration. By and large, that is the way in which this Bill has progressed, so on the other issues—the amendments—we will of course try to find ways to work with the House in considering all of them.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Secretary of State give way?
Grant Shapps
I will make a little progress, and then I will give way again. I just want to say a big thank you to a lot of Members for their work on energy and on considering this Bill, such as the net zero review led by my right hon. Friend the Member for Kingswood (Chris Skidmore); the pre-legislative scrutiny that the Business, Energy and Industrial Strategy Committee carried out on parts of the Bill; the 1922 BEIS Back-Bench committee’s ongoing consideration of the issues we face; and many others in this House.
Caroline Lucas
Will the Secretary of State say a little about hydrogen? As he will know, there is real concern about putting a hydrogen levy on household bills at a time when so many people are already struggling to pay those bills. Will he look again at where to put the funding for hydrogen? Secondly, will he accept that using hydrogen for households—for home heating—is very inefficient? It is expensive, and it brings safety risks. We do need hydrogen for hard-to-decarbonise sectors, but will the Secretary of State rule out using it in homes?
Grant Shapps
It is certainly the case that hydrogen comes with complications when it comes to home heating, which is why we have a couple of different trials ongoing to understand some of the impacts. We will know more once those trials have been carried out. However, the hon. Lady asked specifically about a levy, so I should point out that the Bill will not itself introduce a levy. She is right that we need to see the results of trials before we understand how that should operate, so we will wait a little while.
Several hon. Members rose—
Grant Shapps
I will make a little progress before I give way again.
Turning to the contents of the Bill, I think it is helpful to consider them in three themes. The first is about liberating private investment in clean technologies, helping reduce our exposure to the very volatile gas prices in the long term. For example, the Bill will help us to exploit our absolutely extraordinary potential for carbon capture, usage and storage, as well as low-carbon hydrogen, potentially for industrial use. This country has a vast storage reservoir beneath the North sea, much of it once filled with oil and gas. There could be enough capacity to store up to 78 billion tonnes of carbon. I appreciate that people have difficulty imagining what that would look like—I know I did. The answer is that it is the equivalent weight of 15 billion elephants, if people are better able to imagine that, or to put it another way, an atmospheric pressure roughly the space of 200 million St Paul’s cathedrals. In short, our geology provides us with a lot of space under the North sea, and if we are able to fill the UK’s theoretical potential carbon dioxide storage capacity with CO2, the avoided costs at today’s emission trading prices could be in the region of £5 trillion. We have the potential for a geological gold mine under the sea, and the Bill helps us to access it.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
CCUS is very important to me and to my constituency. EnQuest, the operator at the Sullom Voe terminal, sees the next generation of the use of that terminal involving CCUS, but does that not reinforce the point made by the right hon. Member for Reading West (Sir Alok Sharma), in relation to Ofgem’s remit? Does it not sit very nicely with the recommendations that the Secretary of State has received from Tim Pick, his offshore wind champion, who has also made the point that Ofgem’s mandate must be reshaped to bring it into the appropriate framework for net zero challenges? That remit has not been touched since 2010.
Grant Shapps
The reality is that the Government have committed to those targets, as has the whole House, because the law has already been passed. We have the carbon budgets, one to six; I think we exceeded one, two, three and four, but we are on track for five, and a few weeks ago, I set out in “Powering Up Britain” how we plan to meet carbon budget six as well. The conversation about whether the regulator has an individual duty is an interesting one, but the reality is that in truth, we are all headed towards that cleaner energy system.
Dame Andrea Leadsom (South Northamptonshire) (Con)
My right hon. Friend will recognise that, to keep costs down, to get electricity to the places where it is needed and to avoid us having to pay offshore wind producers to switch off when there is no capacity, we need something like 600 km of electricity wires between now and 2031. Over the past eight years, we have built only about 32 km. Can I press him on the proposal in the 1922 Business, Energy and Industrial Strategy committee report that there should be a new planning allowance to have those cables going down the side of transport corridors such as motorways and train lines?
Grant Shapps
I met my right hon. Friend to discuss some of the ideas in the report and I am grateful for all of them, including the idea of cables running along existing transport routes. I am pleased to let her know that we are taking forward many of the suggestions from that particular committee, as well as those from elsewhere in the House. There is much in the Bill to assist with organising and planning, but there is much more to do as well. I am grateful for her assistance in all this.
By introducing business models, we want to get the advantage of that long-term potential geological storage, with revenues and a potential CCUS industry that could support something like 50,000 jobs, with another 12,000 in hydrogen by 2030. We will also build the market for low-carbon heat pumps to 600,000 installations a year by 2028, and accelerate the transition to ultra-efficient electric heat pumps to reduce our reliance on the volatile global gas market and improve our own energy security in return.
We will also bring forward reforms to test new methods of decarbonising heating, which is where we come back to the hydrogen trials. We will have a first-of-its-kind hydrogen village trial that will convert up to 2,000 properties to hydrogen for heating, instead of natural gas, and repurpose the existing gas network infrastructure for 100% hydrogen. Through that, we can find out about the efficiency, or otherwise, of building a hydrogen heating network. I put on record that I understand there are challenges, which is why we want to test this first.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
There is a lot in the Bill that is commendable for improving energy security and decarbonising energy production, but where it is perhaps lacking some ambition is in reducing energy emissions, particularly for homes. We know that poorly insulated homes in particular are expensive, at a time of a rising cost of living, to heat, but we also know that we can do a lot more in this area. Will my right hon. Friend accept amendments as the Bill progresses to improve on the loss of energy and heat and on home energy efficiency?
Grant Shapps
My hon. Friend is absolutely right that it is always easier not to expend the energy in the first place, but to save it. That is why we have been pleased to get from something like only 14% of homes having a decent energy rating in 2010 to 47% now, and we will get to more than 50% this year. We have invested more than £12 billion in this work in the last spending period and going forward to 2025-28. We are serious about securing the energy efficiency of homes and he is right to highlight that as a key concern.
Justin Madders (Ellesmere Port and Neston) (Lab)
I hope the Secretary of State will be able to stay on to have the benefit of my constituents’ experience of the hydrogen village trial so far. Can he confirm, as per previous correspondence with Ministers, that the Government will still expect to see strong public support before agreeing to proceed with any trials?
Grant Shapps
I have been following the discussions in Whitby in the hon. Gentleman’s constituency and I want to be clear: we have no desire to trial hydrogen with communities that do not want to see disruption. On the other hand, I know that other communities are keen on it. For the reasons already discussed in this debate, there are clearly pros and cons in switching to hydrogen for household heating and it will not be appropriate everywhere. That is why we want to learn from those trials, but it is also important to recognise that hydrogen for industrial use is a different matter. We are feeling our way into all this. Together with what we learn from the H100 neighbourhood trial in Fife, the village trial will provide critical evidence to inform decisions on hydrogen in heat decarbonisation, which will not be taken until 2026.
Alan Brown
I appreciate the Secretary of State giving way on this matter. Just on the point of hydrogen trials and effectively doing it with consent, one of the clauses in the Bill allows companies to go in and disconnect people from the gas grid to facilitate trials. Surely that is the polar opposite of doing it by consent.
Grant Shapps
That is a misreading of what the Bill does. I absolutely agree with the hon. Gentleman: I refer to the answer I just gave. Given my record of campaigning against what happened with prepayment meters, he will know that that would never be the intention. The element in the Bill is to enable those trials to take place where they would not be able to otherwise, but as I just indicated to the hon. Member for Ellesmere Port and Neston (Justin Madders), that certainly would not be forced.
The second pillar in the Bill will help to strengthen our energy security and minimise cost to consumers. It will pave the way for an independent system operator and planner, or ISOP, whose focus will be on building a better, more reliable energy system. The ISOP will maintain our energy security, operate at the cutting edge of net zero with long-term ambitious plans and bring electricity and gas systems together into a single institution, enhancing our ability to plan for our energy system in the future and to reduce costs.
Andrew Selous (South West Bedfordshire) (Con)
May I bring up the question of clean energy for aviation? In terms of sustainable aviation fuels, can the Secretary of State give us some assurance that we will have a home-grown UK sustainable aviation fuel industry, so that it is something we do here and do not import from overseas?
Grant Shapps
My hon. Friend may know that I helped to establish the Jet Zero Council, which has been working for nearly four years to answer exactly this problem, bringing together academia, industry and government. The upshot of that is that this morning I was honoured to be with His Majesty the King, in his first public engagement since the coronation, at the Whittle Laboratory, where he was turning the first sod to build a new £50 million building that will work primarily on sustainable aviation, including fuels. As Transport Secretary, I also set a 10% requirement for sustainable aviation fuel by 2030, ensuring that we lead the world in the production of this new industry, too.
Several hon. Members rose—
Grant Shapps
I will come back to colleagues, but I will make a bit of progress first. We will also enable a competition in onshore electricity networks, which could see consumers save £1 billion by 2050, and we will protect almost half a million heat network customers, ensuring that smart energy systems are both safe and secure.
The third pillar of the Bill is to deliver a safe, secure and resilient UK energy system. We will not allow malicious actors to affect that. Sometimes that could be dangerous protesters or those using energy as a weapon, as we have seen with the recent disruption, and the Bill helps to address that point.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Secretary of State is being incredibly generous with his time. On this point about vital fuel resilience, is he aware there is significant concern among refiners and other companies in this space about the breadth of the provisions in the Bill and the powers of direction that the Secretary of State could have over these companies? They have concerns around the commercial and competitive position that puts them in. Will he give a commitment that the Government will continue to look at the phrasing of those provisions in the Bill in Committee?
Grant Shapps
To answer my right hon. Friend directly, I do not have concerns about the provisions, but I hear his concerns, and I will ask my hon. Friend the Member for West Aberdeenshire and Kincardine to meet him to address them.
Several hon. Members rose—
Grant Shapps
Again, I will make a little progress before I take the next set of interventions.
Offshore wind provides a secure and resilient source of energy, and we are already global leaders in offshore wind, with the world’s largest wind farm in the North sea. We also have the world’s second largest wind farm and the third largest. The fourth largest is being constructed now at Dogger Bank, and that will become the largest in the world. In other words, we have become global experts in delivering offshore wind, and that is why this country is now selling that technology and expertise elsewhere in the world. It is also why we have a leadership role in offshore floating platforms; we have both the first and the largest such platform in the world. We are also introducing reforms to assist with security at civil nuclear sites, and we are ensuring that offshore oil and gas regulatory regimes protect habitats as new technologies are developed.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I want to bring my right hon. Friend back to his comments about energy security. The Bill outlines lots of ways in which that will be achieved, but he will be aware that the vast majority of materials needed for renewable energy are processed in China. Are we not therefore in danger of creating the same situation with renewables as we had with fossil fuels and Russia, and what assessment has he made of energy security in those particular areas?
Grant Shapps
I very much share my right hon. Friend’s concerns. I was recently at the G7 in Japan, where we signed an agreement with other nuclear powers from the G7 on exactly this issue of energy security. Of course, we have Urenco—a third owned by the British Government—which is in many ways very advanced on the production, fabrication and other elements of uranium. It is part of the mix and we must ensure we are able to do that, so I thank him for his question.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I am grateful to the Secretary of State for giving way. This goes back—I was standing up a few minutes ago—to the question from the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) and it is on energy efficiency. I have 14,000 households in Oldham that are fuel poor. They have seen their gas bills double, their electricity is up nearly two thirds, and some of them have said to me, “Why are we going through this, and when can we have our houses made more efficient so we’re not having to spend so much on this?” Why could that not be funded by a windfall tax on energy producers, given that, for example, BP said last week that it is making £60 million a day in profits? [Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Just a little reminder that, if colleagues intervene on the Secretary of State, it is customary for them to stay until the end of his speech.
Grant Shapps
Thank you, Madam Deputy Speaker. This does go back a little way, so it is worth reminding the House that we have gone from 14% of homes being A to C—energy secure, essentially—to 47%. Energy company obligation plans were put in place and plans 1, 2, 3 and 4—[Interruption.] The shadow Secretary of State is chuntering along, saying they are not going very well, but I have just explained that nearly half of homes have now been greened up. Primarily, it is social homes that have been taken to that level, so I am very interested and concerned to understand why her own local authority has yet to follow some of those plans, and I look forward to its getting on with the job with all the money being made available to do that. She is absolutely right—I actually agree with her—about the energy producers. That is why we have taxed them at a punitive 75%, and we have handed those billions of pounds to her constituents and businesses, paying roughly half of the typical energy bill in this country.
In addition to the measures already contained in the Bill, we will go even further. Following on from the “Powering up Britain” plan, we will table four sets of amendments to achieve these goals. First, we will amend the Bill to provide Great British Nuclear, a new flagship body, with the power to enable nuclear projects and support the UK’s nuclear industry with a specific role to support Government in rebuilding our civil nuclear industry. I am delighted that my hon. Friend the Member for West Aberdeenshire and Kincardine is our country’s first Minister for nuclear in relation to that plan.
John Penrose (Weston-super-Mare) (Con)
I compliment the Secretary of State on bringing forward this huge, much-needed and excellent Bill. I want to take him back to his point about the Secretary of State’s and other Ministers’ powers of intervention. The scale of investment that these plans will rightly require in whole swathes of the new technologies to be introduced will be vast; a vast amount of cash will be required to be invested not only in the UK, but internationally. Reducing the cost of that investment is essential, and reducing the uncertainty and risk of political intervention will make a dramatic difference to both the efficiency of that investment and the productivity of our economy. Will he please commit to making sure that we improve the regulatory certainty—the legal certainty—in which all those investments will be made by reducing the opportunity for politicians to meddle, be they on our side of the House or those, I hope at some very distant future date, on the other side of the House?
Grant Shapps
My hon. Friend is absolutely right. Yes, I provide that commitment—the Bill attempts to do exactly that in some of the ways I am about to describe—and he is absolutely right about lowering the costs by lowering the uncertainty for investors as well.
Several hon. Members rose—
Grant Shapps
Again, I will just make a bit of progress. I am concerned that others want to speak in the debate.
Unlike wind power, nuclear energy is not dependent on the weather, so by ramping up capacity, we will help a lot. It is worth the House knowing that every single one of the operational reactors in this country was actually commissioned by a Conservative Government. I am delighted that Labour Members are now joining us on this, and I know that they also agree—although not all Opposition Members—that small modular reactors are an important part of our nuclear future. They will boost energy security, unlock thousands of jobs and play a crucial role in stabilising electricity prices in the long term.
Christine Jardine (Edinburgh West) (LD)
The Secretary of State mentioned jobs, and research by Robert Gordon University in Aberdeen has shown that 90% of the highly skilled professionals in oil and gas have skills that could be transferred to adjacent energies. However, there is currently a shortage of people going through higher education. What are the Government going to do to address the skills gap, but also to ensure that we do not lose employment in existing energy sectors in the way that we have in other industries, such as shipbuilding and steel, over the decades?
Grant Shapps
The hon. Lady is absolutely right about skills, and the skills gap is very important. I recently had a summit with our French counterparts that was specific to skills in the nuclear sector, where there are very similar issues. We are working with our colleagues in the Department for Work and Pensions, the Ministry of Defence and the Department for Education on exactly the subject of skills that she raises. My hon. Friend the Member for West Aberdeenshire and Kincardine is working actively with them on this Bill, and I know he would be delighted to discuss that with the hon. Lady.
Chris Grayling (Epsom and Ewell) (Con)
Will the Secretary of State give way?
Grant Shapps
I will just make a small bit of progress, and then I will give way again.
Secondly, we will amend the Bill to deliver on the support package for energy-intensive industries, protecting them from high electricity prices. This will bring prices for UK businesses in line with global competitors, preserving jobs and investment in the strategic foundation industries—steel and chemicals, for example. Bringing down prices will also remove a barrier to those traditional carbon-intensive industries decarbonising, in some cases by switching to electrification.
Several hon. Members rose—
Grant Shapps
I will give way in just a moment. Let me make a little bit more progress.
Thirdly, we will table amendments on hydrogen transport and storage, alongside the hydrogen production measures already in the Bill. Finally, we will propose further amendments related to carbon dioxide storage licensing to help us maximise the extraordinary potential—I talked about it before—under the UK continental shelf, which is so important.
Chris Grayling
My right hon. Friend knows my views on sustainable aviation fuel, and I will come back to that should I catch your eye, Madam Deputy Speaker. On the issue of small modular reactors, there is no way that a country such as France would allow a non-French firm to be the backbone of its nuclear industry. We do not want to take such an isolationist view, but it would be a travesty if the work in this field did not bring jobs, expertise and industrial success to this country. Can my right hon. Friend give me an assurance that he will make sure we do not make the mistakes of the last Labour Government, who sold off our nuclear industry, and will he encourage the development of a domestic nuclear industry?
Grant Shapps
My right hon. Friend will know that the world’s very first civil nuclear reactor was Calder Hall in Cumbria, and we led the world, but, as he said, we switched off or stopped investing in nuclear power. That was a great shame, because we are now having to work to get back to 25%, which is our objective. He is right in another way as well, because for several decades one company has been responsible for running what are essentially small modular reactors in the nuclear Trident fleet under the water, and successfully refuelling once every 25 years. We have a certain lead in this area, and it is very important that we get on with small modular reactors. That is why we are having a very brief competition, with the results coming by October.
Wera Hobhouse (Bath) (LD)
The Secretary of State rightly addresses the need to decarbonise and support industries that have been high users of carbon. The Bill as currently amended includes a ban on opening new coalmines, thanks to the Liberal Democrats in the other place. What possible reason could there be for the Government not to support that?
Grant Shapps
Conservative Members believe in getting on and doing things, which is how we have ended up going from nearly 40% of our electricity coming from coal just 10 or 11 years ago to the position this year, when I expect that to drop to about zero. The Liberal Democrats are still fighting the battles of yesterday. They are still concerned about building more power stations for coal, but no one is doing that. The issue is already in the distant past.
Several hon. Members rose—
Grant Shapps
I want to finish my speech so that other Members can speak, which is only fair. As you will know, Madam Deputy Speaker, the entire UK will benefit from measures in the Bill, bringing jobs, economic growth and clean energy to the whole country. From the outset the Government worked closely with the devolved Administrations and with Members across the House, and I hope they will continue to do so.
Anna McMorrin
I thank the Secretary of State. The Bill is sending mixed messages across the world, issuing 100 oil and gas licences while not ensuring that renewable energy projects are connected to the grid. On the devolved Administrations, when will the Secretary of State speak to and learn from Wales and the Welsh Government about the project I am proud to have introduced, Arbed, and about upgrading our insulation in homes, creating new skills and tackling the urgent climate crisis?
Grant Shapps
As I mentioned before, we are working constructively across the whole UK on energy security. I am not sure I follow the hon. Lady’s first point. She seemed to be saying that we should import oil and gas from elsewhere, using about twice as much carbon, rather than exploiting our own. I want to work as closely as possible on those issues with Members across the House.
Bim Afolami (Hitchin and Harpenden) (Con)
Let me bring the Secretary of State back to the independent system operator and planner. We in this House should always be wary of creating new regulators, and we must be clear about their exact purpose. Will he explain in a bit more detail how the ISOP will operate with Ofgem, and the relationship between the two? Clause 123 states that the ISOP will
“have regard to the strategic priorities set out”
by the Department. We must be clearer about whether Members of the House and the Government will be able to direct the ISOP to do what we want it to do and deliver on the ambitious plans in the Bill, which we hope will be successful.
Grant Shapps
My hon. Friend is right to raise that concern, but he will be pleased to hear that that is exactly the purpose of this structure. The ISOP should be able to take instruction and guidance about its policy, to ensure that we do something that is not really possible at the moment, which is to combine oil and gas input into our network in a much more strategic way. That is required more now than ever, given the extraordinary mix of energy that goes into our network.
Several hon. Members rose—
Grant Shapps
I will make a little more progress, as I am coming to a conclusion.
I started by describing some of the changes of the past 50 years. Who knows what futuristic gadgets will be in the home of the right hon. Member for Doncaster North in the decades to come? Perhaps AI coffee machines that produce the perfect cuppa before he even realises he needs a brew, or intelligent music hubs that decide what he will listen to before he decides himself. There may even be personalised music, invented on the fly. I do not know what those developments will be, but I know that the energy we use to run those services will be far cleaner and much more secure, and that will be thanks in part to measures in the Bill. Just as we once bounced back from the crisis of the ’70s, the Bill will ensure that we never again allow British consumers to be held hostage to the likes of a tyrant such as Putin.
Apsana Begum (Poplar and Limehouse) (Lab)
Will the Secretary of State give way?
Grant Shapps
I will conclude, if the hon. Lady does not mind.
I hope Members across the House will recognise the opportunity that the Bill represents, with the massively increased investment in jobs and economic growth, to support our long-term ambition to lower energy bills and ensure that in future, we power Britain from Britain. I commend the Bill to the House.
Several hon. Members rose—
Oral Answers to Questions
Grant Shapps Excerpts(1 year, 8 months ago)
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Chris Clarkson (Heywood and Middleton) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The energy price guarantee has been extended at the same level for a further three months until the end of June. By then, the Government will have covered nearly half of a typical household’s energy bills during this winter, and a third to a half of business bills as well.
Chris Clarkson
I welcome the Secretary of State and his entire team to their places in this important new Department. I thank him for his response, but does he agree that the best way to ensure the stability of energy prices long term is to develop our own sovereign supply, with technology such as small modular reactors, hydrogen and nuclear?
Grant Shapps
My hon. Friend is absolutely right. That is why we put £200 million into funding new hydrogen in the “Powering up Britain” document just a few weeks ago. He will know about Great British Nuclear. I intend that we launch a competition, pick a winner for that by the autumn and get on with it.
Dan Carden (Liverpool, Walton) (Lab)
If the energy price guarantee is to come to an end in June, surely the logical next step is a social tariff. People have become used to social tariffs from their mobile phone providers and broadband. What is the Secretary of State doing to make sure energy companies introduce a social tariff to target support at the most vulnerable in society?
Grant Shapps
Just to correct the record, it comes to an end in April 2024, so that guarantee remains in place. Wholesale prices in the meantime, fortunately, have been falling—I noticed that they are £98 per therm this morning. We do think that things like a social tariff could be very helpful and the Chancellor has undertaken to look at that as well.
Theresa Villiers (Chipping Barnet) (Con)
It has made a huge difference to millions of families that the Government have been paying over a third of people’s energy bills, as part of a bigger package that is one of the most generous in Europe, but can the Minister assure us that the Government are doing everything possible to get inflation down and ensure that we have more sustainably priced energy in future?
Grant Shapps
My right hon. Friend is absolutely right. She mentions a third; in fact, we have been paying around a half of the typical household energy bill this winter, at huge cost. Fortunately, we have seen the wholesale prices fall, and we will start to see that reflected in the energy prices, although we have extended the guarantee—the £2,500. But she is absolutely right in her wider point: it is essential that we get to the cheapest, most plentiful electricity in Europe, and the “Powering up Britain” document aims to do precisely that.
Caroline Lucas (Brighton, Pavilion) (Green)
One of the most effective and long-term ways of getting people’s energy bills down would be to invest in a comprehensive, street-by-street home insulation programme, which this Government are still failing to do. Research by the Energy and Climate Intelligence Unit shows that delays to legislating for minimum energy efficiency standards for the private rented sector could cost renters in the leakiest homes an additional £1 billion in higher bills, so with the Energy Bill making its way through the Commons later this year, will the Minister finally end the delay and ensure that those proposals, which the Government first started consulting about three years ago, are legislated for in that Bill?
Grant Shapps
Sometimes, we speak in this House as if we have not actually greened up any of our Victorian housing stock. In fact, back in 2010, only about 14% of houses in this country had A to C on their energy performance certificate; today, that figure is 47%. This year, we will have over half of our homes greened up. We are putting £12.5 billion-plus into it. So we are making rapid progress, which is sometimes not entirely reflected by Opposition parties.
Ms Lyn Brown (West Ham) (Lab)
Jack Brereton (Stoke-on-Trent South) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
Since we last met, the Department has been active in, for instance, publishing the “Powering up Britain” document. In the last week, I have been in South Korea and Japan, where we negotiated with the G7 an update to the climate energy security plan, and a large number of our partner G7 countries expressed the view—not always recognised throughout the House—that this country leads when it comes to the green transition in energy.
Jack Brereton
Energy costs remain a major concern for many businesses. In particular, as has been recognised, the tying of electricity prices to the price of gas is raising energy prices to unnecessarily high levels, which is deterring investment in electrical technologies and forcing businesses to continue to invest in gas-powered technology. Will my right hon. Friend tell us when the decoupling of electricity and gas prices will actually happen?
Grant Shapps
This decoupling is a particularly complex matter, but we are absolutely into the detail of it. As my hon. Friend knows, the connection between electricity and gas prices is to do with the way in which the contracts have been written. We are conducting a review of the electricity market, and we are also looking at the way in which some of the existing standing costs are allocated between gas and electricity, with the aim of achieving precisely what my hon. Friend is after.
Grant Shapps
I think the House recognises that we have moved very fast on prepayment meters—[Interruption.] The same rules were in place when Labour was in power for 13 years. We are the ones—[Interruption.] I am reminded that the right hon. Gentleman probably set the rules in the first place, but I will have to fact check that for the record. We have taken a number of steps to relieve that pressure and I am pleased to see the Ofgem announcement today. We will keep this matter under review and go further if required.
Edward Miliband
What a completely hopeless answer. There is a high-risk group for whom a ban is being put in place and a medium-risk group for whom the Government are leaving this at the discretion of the energy companies, which is simply not good enough. Will the Secretary of State now instruct the regulator to keep the forced installation ban in place until he meets the promise he made—which is being broken today—to protect all vulnerable customers?
Grant Shapps
It is an Ofgem announcement today, which I welcome because I asked Ofgem to go away and come to a voluntary agreement. It is actual action that makes a difference. What the right hon. Gentleman needs to explain is how, if we did not have some sort of measure in place to allow people to install meters to manage those finances, he would deal with all the additional cases that would end up in court. As ever, he gives simplistic answers in a complex world that I would not expect him to even start to address.
Sir James Duddridge (Rochford and Southend East) (Con)
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Grant Shapps
Just to correct the record, Ofgem is in charge. The measures it put out today, with industry agreement, will help to protect people. When a person’s payments are in deficit, they have to find a way out. The hon. Lady appears to favour a system in which, rather than installing a prepayment meter, people are immediately taken to court, which I do not think is a good solution. We will carry on working with Ofgem to make sure we put the best solutions in place.
Martin Vickers (Cleethorpes) (Con)
Ministers will be aware that the Humber region has attracted £15 billion of private sector investment in carbon capture projects. Needless to say, there was widespread disappointment when none of those projects was included in track 1. Is the Minister able to give the clarity that the private sector needs?
Grant Shapps
My hon. Friend is right about the possibilities for CCUS. The £20 billion fund was competitive, and others, including HyNet on the east coast, won. When it comes to the Humber cluster, both the track 1 expansion and track 2 will happen later this year.
John Spellar (Warley) (Lab)
Grant Shapps
That is a brilliant question. What happened during all those years when the Labour party was against civil nuclear power? This Government are moving ahead, and we have set up Great British Nuclear and funded Rolls-Royce with £210 million and counting. I have already said from this Dispatch Box that we are starting a competition now to select a winner in the autumn. Where were Labour Members when we were doing all this?
Dame Maria Miller (Basingstoke) (Con)
I have already met the Minister for Energy Security and Net Zero to discuss the National Fire Chiefs Council’s concerns about the use of lithium-ion storage facilities to get renewable energy to the grid. Will the Government review existing fire and environment regulations to ensure they reflect these deep concerns and risks, and help to ensure that renewable energy can get to the grid smoothly and in a timely manner?
Christine Jardine (Edinburgh West) (LD)
More than once this morning those on the Government Benches have congratulated themselves on the home insulation figures, but those figures could and should have been so much more impressive, if, after 2015, this Government had not abandoned Liberal Democrat policies to invest in renewables and insulate homes. The impact of that on my constituents has been fuel poverty. This winter, they are struggling to heat their homes, with still expensive carbon fuels, and there is a growing incidence of mould. When will the Government recognise that emergency insulation is needed?
Grant Shapps
We have worked very hard on making sure that homes are insulated. We have just announced another £1 billion for the Great British insulation campaign, which makes £12.5 billion over this Parliament and into the next one for insulation. That is one reason why nearly half of homes are now insulated, whereas the figure when Labour was in power was only 14%.
Peter Gibson (Darlington) (Con)
I welcome the £12 million from the social housing decarbonisation fund and the home upgrade grant for Darlington, which will help cut heating costs and carbon emissions, and reduce fuel poverty for my constituents. May I invite the Minister to visit the fantastic Darlington economic campus, where some of his team are situated?
Dame Diana Johnson (Kingston upon Hull North) (Lab)
With the Humber estuary responsible for 40% of all industrial emissions in this country, it beggars belief that it was not included in the track 1 for carbon capture. Will the Minister now guarantee that the Humber cluster will be included in the expansion that he just talked about, as it brings £15 billion-worth of private investment with it?
Grant Shapps
The right hon. Lady is absolutely right about the potential of the Humber cluster. I want to put that on the record, as well as the fact that track 1 and track 2 announcements will be made later this year. It is perhaps a testament to the amount of competition for carbon capture, usage and storage that this country has sufficient space to store 78 billion tonnes of carbon, which is the equivalent of about 200 years of all Europe’s carbon being stored in the North sea. There is just heavy competition for where it goes.
Energy Bill Discount Scheme
Grant Shapps Excerpts(1 year, 8 months ago)
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The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The Government provided an unprecedented package of support for non-domestic users through the winter in the shape of the energy bill relief scheme (EBRS), with a total amount of support of £7.3 billion, shielding businesses and saving some around half of their wholesale energy cost. The Government have taken difficult but right and considered decisions when necessary, following an unprecedented rise in energy prices, to support our essential British businesses and public sector services.
The Government have been clear that such levels of support were time-limited and intended as a bridge to allow business to adapt. The latest data shows wholesale gas prices have fallen to levels before Putin’s invasion of Ukraine and have significantly decreased since the EBRS was announced. The energy bill discount scheme (EBDS), announced on 9 January and which comes into force on 26 April, with support backdated to the start of April, strikes a balance between supporting businesses between 1 April 2023 and 31 March 2024 and limiting taxpayers’ exposure to volatile energy markets. The scheme provides long-term certainty for businesses and reflects how the scale of the challenge has changed since September last year.
The EBDS will provide all eligible businesses and other non-domestic energy customers with a discount on high gas and electricity bills until 31 March 2024, following the end of the EBRS. It will also provide businesses in sectors with particularly high levels of energy use and trade intensity with a higher level of support as they are less able to pass these higher costs on to customers due to international competition. The price reduction will be linked to the wholesale element of a non-domestic customer’s gas and electricity bill and Government will reimburse suppliers in accordance with the scheme.
Further support will be available to domestic end users on heat networks, who fall under the EBDS due to the heat network operators having commercial energy contracts, to ensure they do not face disproportionately higher energy bills than consumers under the EPG from April 2023.
The EBDS will be established under powers conferred by the Energy Prices Act 2022 and Government intend to pass enabling legislation. Subject to the will of Parliament, it is intended to run for one year and cover energy consumed from 1 April 2023 until 31 March 2024.
Funding for the EBDS will be sought through the estimates process. Any future costs for the delivery of the EBDS can only be projections and will depend upon energy usage levels and changes to the wholesale price of energy. As a result, the EBDS will give rise to a contingent liability.
I have laid before Parliament a departmental minute describing contingent liabilities arising from the energy bill discount scheme (EBDS). It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances. If the liability is called, provision for any payment will be sought through the normal supply procedure.
I regret that due to the urgency of this scheme, I have not been able to follow the usual timelines for issuing notice at least 14 parliamentary sitting days before the liability begins to be incurred.
The Treasury has approved this proposal. If, during the period of 10 parliamentary sitting days beginning on the date on which this minute was laid before Parliament, a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
[HCWS672]
Oral Answers to Questions
Grant Shapps Excerpts(1 year, 9 months ago)
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Peter Gibson (Darlington) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The Government have made good progress, with 47% of homes in England now having reached the Government’s 2035 target of achieving energy performance certificate level C and above, which is up from 14% in 2010.
Siobhan Baillie
I want to talk about radiator sludge, as I went to see ADEY Innovation Ltd, a company in my constituency, where I learned that dirty radiators increase energy bills by 7% and people may be getting 47% less heat through poor water quality. Yet in the Government’s £25 million energy efficiency advice campaign there is nowt about the benefits of magnetic filtration and other affordable things that companies such as ADEY Innovation offer households. Will my right hon. Friend agree to work with me to include this advice and meet to discuss this?
Grant Shapps
My hon. Friend is right to worry about radiator sludge, and I fully support her in her concerns. I am pleased to tell her that in this Parliament and into the next we have committed £12.6 billion to campaigns to ensure not just that we tackle the radiator sludge, but that we do things throughout homes to improve their insulation and other technologies. I would be happy to meet her.
Peter Gibson
Retrofitting older homes can reduce carbon emissions, cut energy bills, make homes warmer, reduce reliance on gas and bring new green jobs to the north. However, the costs associated with retrofitting are currently prohibitive to achieving it on a large scale. What more can my right hon. Friend do to ensure that we bring down the cost of retrofitting homes?
Grant Shapps
My hon. Friend is right about the cost of doing this. I have described how we are getting towards half of homes having been improved, but he will be pleased to hear about the £4 billion extension of the energy company obligation through its fourth phase, ECO4, along with ECO+, which involves another £1 billion to assist with some of the economics of ensuring that all homes can be improved.
Derek Twigg (Halton) (Lab)
Of course we all welcome as many energy efficiency measures as possible and encourage households to put them in place, but the fact remains that many middle-income and low-income constituents in my constituency are still struggling to pay their energy bills and are under great financial pressure. They are looking at how energy companies are making vast profits and now talking about giving vast bonuses to their chief executives and managers. People want something doing about that, and they want the Government and the energy companies to play their part more to ensure that an equal share is paid. We should have a windfall tax as well.
Grant Shapps
We have a windfall tax; it is at 75%, as opposed to just 19% for corporation tax elsewhere. It is worth explaining to the hon. Gentleman and to the House that the Government are currently paying about 50% of a typical household energy bill. Where are we getting that money from? We are largely getting it from taxing the gas and oil companies.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Labour has a plan to upgrade our homes and eradicate fuel poverty with a warm homes plan to insulate 19 million homes over a decade. Does the Secretary of State regret the decision of the Liberal Democrat and Conservative coalition Government to cut the “green crap”, as a previous Prime Minister put it? That left people in poorly insulated homes and with expensive homes.
Grant Shapps
I explained in an earlier answer that we have gone from having just 14% of homes in 2010 with an energy rating of A to C to having 46% today. So it is clear that these plans have been working, and I have just talked about another £12.6 billion to finish off the job.
Bim Afolami (Hitchin and Harpenden) (Con)
There are people in my constituency and across the country who need a lot of advice on how to retrofit older homes in an affordable way. The issue is not just the cost of retrofitting, but good advice on how to do that. I declare an interest: I happen to live in an older home where such advice may be needed. How will the Government help many people in my constituency, and indeed across the country, get that sort of advice on retrofitting older homes?
Grant Shapps
My hon. Friend, who is in a neighbouring constituency to mine, will be delighted to hear that the ECO+ scheme—another £1 billion—is specifically aimed at trying to get to homes in the private and commercial sector that are sometimes harder to decarbonise. It is one scheme that he will want to consider, but, without wishing to give too much away, he should watch this space.
Bill Esterson (Sefton Central) (Lab)
We were insulating 10 times as many homes in 2010 as this Government are doing now. Everyone knows what has happened since the Secretary of State’s Government decided to get rid of the “green crap”. Will he adopt Labour’s plan to insulate 19 million homes over the next 10 years? It has the support of the Construction Leadership Council, the Federation of Master Builders and the building trade as a whole. It will create new jobs, cut bills and play its part in reducing carbon emissions. Will he do it?
Grant Shapps
This is one of those slightly odd parallel universes: we are saying that we have gone from just 14% to 46% of homes with A to C ratings—[Interruption.] My right hon. Friend the Minister of State suggests we might even be hitting 47%. I have also stood at this Dispatch Box and talked about £12.6 billion of investment to go even further, yet the Labour party will not just say, “That is very good, and we’ll support you.”
Kerry McCarthy (Bristol East) (Lab)
The fact is that, in the last Tory manifesto, the Government promised to spend £9.2 billion on energy efficiency, but they have allocated only £6.6 billion of that, over £2 billion of which has still not be spent. The Lords have just described take-up of the boiler upgrade scheme as “disappointingly low” and Government promotion of the scheme as “inadequate”. Does the Minister at least acknowledge that, at current insulation rates, it will take 92 years to retrofit the 19 million homes that need it and that if we are to bring down energy costs for people who are struggling with sky-high bills now, he needs to do a whole lot better?
Grant Shapps
There is still a considerable chunk of this Parliament left to run. As I have explained several times—I will say it again for the hon. Lady, who may have missed the point—we have already got pretty close to half the homes in this country being rated A to C —up from just 14%. We are well on our way to getting this job done. I appreciate her encouragement, but we will finish this off ourselves.
Olivia Blake (Sheffield, Hallam) (Lab)
Paula Barker (Liverpool, Wavertree) (Lab)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I wrote to suppliers in January calling on them to halt the inappropriate use of prepayment meters and to provide transparency on the use of warrants in people’s homes. Along with a number of other steps, that has led to the cessation of that practice.
Dan Carden
The Secretary of State will know that I wrote to all energy companies before the practice was suspended. The mixed bag of responses showed that a voluntary approach simply will not work. Utilita chief executive officer Bill Bullen said:
“We will not commit to ending the forcible use of prepay. That course of action is simply not sustainable.”
There is a suspension until 31 March, and compensation has been talked about. However, all that is about is Ofgem asking companies to look at whether the forced instalment was appropriate. Companies know that Ofgem is toothless. It is down to the Secretary of State to ban this practice and to set out how compensation will be given out.
Grant Shapps
I welcome the hon. Gentleman’s moves in this sphere. To be clear to the House, I wrote to the suppliers and received reassurances that they would end the practice. I asked Ofgem—I have to say that I thought the wool had been pulled over its eyes—to not just take energy companies’ word for it but go to the customers, which it is doing. I queried the fact that the courts were issuing mass warrants, which they have agreed to end. He talks about what happens next; he is right that Ofgem is looking at what further protections will be in place. Its work will conclude shortly with further announcements.
Ruth Jones
I thank the Secretary of State for his initial response, but constituents in Newport West will be disappointed by it. This Government are ducking their responsibilities on the control of energy bills, and are relying on the regulator to do the right thing. How can it be right that the installation of prepayment meters will recommence at the end of March? Why should those with the least have to pay the most to heat their homes and keep the lights on?
Grant Shapps
I take issue with the idea that the Government are somehow ducking our responsibility. As I mentioned, we are paying around half of household energy bills this winter. We took action—I will not repeat what it was—that brought the prepayment meter scandal to a conclusion. That work, and what happens next, is being looked at very carefully. Ofgem will look at what happens if there is no fall-back solution when energy bills are not being paid. That is a complex issue, but more will be said about it soon.
Paula Barker
The news that British Gas broke into the homes of vulnerable people to force-fit prepayment meters is shocking, but bears little surprise to anyone who has had to interact with that company. The Government seem to cower from taking on the big energy companies as they continue to rip off the British people. Will those on the Conservative Benches finally act to protect such households and force energy firms to pay out and compensate now rather than at the end of the Ofgem review?
Grant Shapps
I do not think I could have been any more vocal about this issue. Indeed, we brought that practice, which the hon. Lady rightly describes as abhorrent, to a close. We are also not soft on the energy providers, particularly given the 75% taxation, which is at a level designed to ensure that we have been able to support, in part, the 50% reduction in people’s household bills. As I said in answer to the previous two questions, we will return with more on this shortly.
Richard Fuller (North East Bedfordshire) (Con)
Many on the Conservative Benches will be wondering what on earth Ofgem has been doing. It is supposed to be a regulator and to look after consumer interests, but it blunders around. It blundered around with the price gap, and it blundered around with its market entry strategy, meaning that energy companies could essentially put all bill payers’ money on red in a casino. It has ended up with billions of pounds taxpayers’ money being put into bailouts. Please can we have something more than the efforts by the Government to look at new non-executive directors—surely it is time to ask why the chief executive remains in post—and can we have better oversight of this regulator and regulators in general? They are getting away with ripping off consumers and allowing companies to do exactly the same.
Grant Shapps
I think it is always right that we keep what our regulators do under very close watch. My right hon. Friend the Minister of State has met the chief executive officer of Ofgem regularly, and I am meeting him shortly as well. We will continue to do that. I have called Ofgem out when I have been concerned and thought that it had had the wool pulled over its eyes by the energy companies, and I will continue to ensure that whatever happens will be appropriate for the future of this market. As my hon. Friend knows, we are undertaking a review of the way in which the energy markets operate at the moment.
Andrew Bridgen (North West Leicestershire) (Ind)
What assessment has my right hon. Friend made of the potential for the Government’s new five-point plan to tackle bad behaviour by energy suppliers?
Grant Shapps
There is no space for the sort of approach that we have seen from energy suppliers, and I am grateful to my hon. Friend for mentioning this. We have to have a situation where they respect their customers. Where there has not been the case, I am afraid that suppliers need to ensure, as one or two Labour Members have mentioned, that they recompense their customers for the way they have behaved—outrageously, in many cases, including entering people’s homes without their permission.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Secretary of State says that he has brought the scandal of prepayment meters to an end, but it certainly is not at an end. Indeed, the Government were repeatedly warned about this scandal but were effectively paralysed while thousands of vulnerable householders were disconnected by the back door. Customers now face more uncertainty as the moratorium on forced installations ends in just four weeks’ time, with nothing in its place. Can the Secretary of State confirm that there will be no lifting of the ban until this rotten system has been reformed and that there will be a proper compensation scheme managed by the Government for every customer affected?
Grant Shapps
As I mentioned previously, there is a role for prepayment meters. For example, my son lives in a shared flat, and they find a prepayment meter a very good way to pay the energy bill. I do not think that an outright ban is the right way to go, but the hon. Gentleman and others have rightly pointed out the level of concern across the House, which I absolutely share, about prepayment meters being forced on customers. We will ensure that we do not go back to those bad old days that I was pleased to play an important part in stopping.
Sammy Wilson (East Antrim) (DUP)
Tom Hunt (Ipswich) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I mentioned before that we are paying around half of the household energy bill. We are also paying around one third of business energy bills right now through the energy bill relief scheme.
Tom Hunt
A few weeks ago I went to St Nicholas Street in Ipswich to talk to some of the local businesses, including Bar Twenty One and Hopsters. Bar Twenty One has made a fantastic start to business, despite the difficult climate. Those who run Bar Twenty One talked about pedestrianising the street, which I support. They also raised the issue of energy bills and their frustration at seeing a decline in wholesale prices but still not feeling the benefit of that. Will my right hon. Friend outline to me and to those businesses what steps he believes the energy suppliers should be taking to support businesses and get them on to fair contracts?
Grant Shapps
I really want to see a well-functioning energy market, and I have written to Ofgem about this. There is a request for information about the challenges facing non-domestic customers. As we see energy prices fall like a feather, having rocketed up, it is frustrating not to see those prices pass through. It is not the only frustration I have about the energy market—for example, it is 10 times cheaper to produce offshore wind than it is to buy gas right now, but we do not see that reflected in the prices. That is why we are looking at the entire operation of this marketplace.
Tim Farron (Westmorland and Lonsdale) (LD)
For the purposes of energy bill support, hospices are treated as businesses. They have seen a rise in their energy costs of 350%. They support some of the most vulnerable and needy people in our society, and the majority of their funding comes from private and charitable donations. Will the Secretary of State consider a special support fund for our hospices, so that they can keep caring for those who need it the most?
Grant Shapps
The hon. Gentleman is absolutely right to highlight the case of hospices. In my constituency, there is the Isabel Hospice, of which I am a regular patron, so I hear its concerns about issues such as energy prices. We have had a generous scheme in place and we have a further scheme that will continue to run. I will look at his specific concerns.
Lia Nici (Great Grimsby) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
The Government continued to make good progress on our pathway to net zero in 2021. The UK’s net territorial greenhouse gas emissions were estimated to be 427 million tonnes. That is 48% lower than they were in 1990.
Lia Nici
I know that the Secretary of State and Ministers know the importance of carbon capture, usage and storage, not only to be able to reach our net zero targets, but for the huge job opportunities available in my constituency of Great Grimsby. Can my right hon. Friend please tell me when track 2 of the CCUS cluster sequencing programme will be launched?
Grant Shapps
My hon. Friend did a terrific job, I recall, as a Department for Business, Energy and Industrial Strategy Whip briefly in the past year. She is absolutely right about carbon capture, utilisation and storage. We have the potential for 78 billion tonnes of CO2 to be stored. The answer to her track 2 question is: very shortly.
Hilary Benn (Leeds Central) (Lab)
While I welcome the grants of up to £5,000 that the Government are making available for boiler replacement, as the Secretary of State will know, a heat pump will cost £8,000 to £15,000, so many of our constituents would not be able to afford it even with that grant, and 90,000 such grants do not constitute a plan to decarbonise the 23 million homes in this country that have gas boilers. When do the Government intend to come forward with such a plan?
Grant Shapps
I think heat pumps are rather like the solar panels we were just discussing in previous questions. When I had my solar panels installed 12 years ago, they were extremely expensive and had a very long return, although they have finally returned on that; they are now much cheaper. I think we are seeing the same process with air source heat pumps. I note that two suppliers, Octopus and British Gas, have announced £3,000 and £2,500 air source heat pumps—after the Government £5,000, I should say—which means they start to become within reach of ordinary boilers. There is clearly much more to do, but I absolutely share the right hon. Member’s enthusiasm for them.
Afzal Khan (Manchester, Gorton) (Lab)
Boris Johnson (Uxbridge and South Ruislip) (Con)
The Secretary of State for Energy Security and Net Zero (Grant Shapps)
I know my right hon. Friend is new to this House. This winter, as I mentioned, the Government have been paying half the energy bills of most British households. In these difficult times, that has been an extraordinary intervention that we are all very proud of. But it has taught us a valuable lesson—we can never again be held to ransom by energy tyranny. That is why we want to have the cheapest wholesale electricity in Europe, to be on a path to net zero, and to put Putin and his ilk in a position where they can no longer have any sway over our energy security.
Mr Speaker
Order. I have the greatest respect, but these are Topicals and I want to get everybody else in as well. And I agree—nuclear reactors from Lancashire could be fantastic.
Grant Shapps
My right hon. Friend is absolutely right. He will know, as will the whole House, that every single nuclear reactor currently operational in the UK was given permission under the Conservative party. He is right to champion Great British Nuclear and we will get the nuclear industry going again. Indeed, I was the first Energy Secretary to put money—£700 million—into nuclear power since 1986. I have appointed our first ever—
Mr Speaker
Order. It is the same for the Secretary of State. It is everybody’s questions, not just yours and the former Prime Minister’s. Let’s go to Ed Miliband for a good example of a quick question.
Edward Miliband (Doncaster North) (Lab)
It is important to welcome ex-party leaders to their place, Mr Speaker. My only advice is that it is important to not want your old job back.
Can I ask the Secretary of State to tell the House which member of the new Department’s ministerial team in April last year described onshore wind farms as “an eyesore” on the hills?
Grant Shapps
I was just having a debate about whether it was me or my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), the Under-Secretary of State for Energy Security and Net Zero. The point is that they have to be done with local consent. That is why a proper energy mix that includes not just wind farms but nuclear for about a quarter of our energy production is so important and why we have just appointed the first ever nuclear Minister, who some are calling “Atomic Bowie”.
Edward Miliband
The problem is that the right hon. Gentleman is not the cheerleader for clean energy; he is the roadblock. We have had three wind farms in the last eight years. His own Department says 79% of the public support onshore wind. Let me ask him, plan and simple: will he bring the local planning regime for onshore wind in line with all other infrastructure—yes or no?
Grant Shapps
The right hon. Gentleman calls me the roadblock, but perhaps he missed me saying that I was installing solar before it was fashionable to do so. I absolutely want more onshore and offshore wind in this country. We are ensuring that we are helping with that process, but it has to be with local consent.
Mrs Flick Drummond (Meon Valley) (Con)
Grant Shapps
My hon. Friend will be interested to hear that the Jet Zero Council, which I helped to co-establish, has already taken place since the departmental change. Indeed, on the first day in this job, I co-chaired the Jet Zero Council. We want to get to guilt-free flying that includes widescale use of sustainable aviation fuel.
Jeff Smith (Manchester, Withington) (Lab)
Grant Shapps
As I was trying to explain earlier, it is a work in progress. We will make sure that those who suffered are recompensed. What happened was indeed a scandal. I could not have acted faster in this job to fix it and I described the three different parts of activity I undertook, which brought it under control.
Peter Aldous (Waveney) (Con)
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Grant Shapps
There has been a long-term difference in the price of prepayment meters, which I specifically asked Ofgem to look at. I am meeting the Ofgem CEO to discuss its response shortly.
Kevin Foster (Torbay) (Con)
The Minister will be aware that aspects of the tourism and hospitality industry, such as catering and leisure, are intensive energy users. Therefore, can he confirm that they will qualify for support under the energy and trade-intensive industries scheme due to be in place from April?
Helen Hayes (Dulwich and West Norwood) (Lab)
Grant Shapps
I sometimes worry that some Opposition Members do not properly set the context. The reason that we are paying sky-high bills is that Putin invaded a democratic neighbour, which pushed up energy bills. This Government have stood by the public by paying half of everyone’s energy bills. Judge us by our record. We will say more shortly.
Simon Baynes (Clwyd South) (Con)
Could my right hon. Friend include fertiliser manufacturers, such as Neatcrown Corwen Ltd in my constituency, in the Government’s support for high, intensive energy businesses?
Selaine Saxby (North Devon) (Con)
Contracts for difference have been successful in driving down the cost of renewable energies. However, industry bodies and developers are warning that the draft strike prices for allocation round 5 are too low. Can my right hon. Friend commit to a review of strike prices to ensure that the allocation round is a success for renewable energy technologies such as floating offshore wind?
Grant Shapps
It is worth reminding the House that contracts for difference has been a world-beating way of creating the world’s second, third and fourth largest offshore wind farms. There have been some pressures on the previous round, due to inflation because of the war. We will keep the next round in mind.
Darren Jones (Bristol North West) (Lab)
Can the Secretary of State confirm whether the responsibility for industrial decarbonisation rests with his Department or the Department for Business and Trade?
Grant Shapps
As with everything in government, we share responsibilities. The clue is in the name—the Department for Energy Security and Net Zero.
David Duguid (Banff and Buchan) (Con)
I welcome the Government’s inclusion of seafood processing in the energy bills discount scheme, which replaces the EBRS at the end of this month. Before the energy crisis, there was the energy-intensive industries extension scheme, which included poultry, pork and milled grain processing, but not seafood. Would my right hon. Friend or one of his Ministers agree to meet me and representatives from the sector to help to address the shortfall?
Grant Shapps
My hon. Friend will know that the energy-intensive industries discount of 80% has helped many very energy-intensive industries this winter. We have consulted on raising it to 100%, along with other amendments. I will be pleased to ensure that my hon. Friend has the appropriate meeting to discuss the matter.
Mr Gregory Campbell (East Londonderry) (DUP)
The Secretary of State will be aware of the additional tax revenues that have come to the Treasury in recent months. Will he have discussions with the Chancellor to ensure that small businesses in particular, which face very high energy costs, remain as competitive as possible in the current environment?
Grant Shapps
It is absolutely right that our businesses need to compete globally. Again, Putin is the reason for these high energy costs. We have stepped in to support families. The money has to come from somewhere; our answer has been the oil and gas companies, but of course we need to make sure that the balance is right with the taxpayer as well. The hon. Gentleman can be assured that we are working on it with the Chancellor all the time.
Martin Vickers (Cleethorpes) (Con)
Knauf, a major manufacturer based in Immingham, seeks to build a hydrogen-ready combined heat and power plant to reduce its emissions. The project may stall, however, because Northern Powergrid has told Knauf that it cannot provide a connection until 2031. Could the Minister intervene and try to overcome the problem?
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Analysis by E3G has found that a third of the funding pledged for this Parliament to make buildings energy-efficient and to decarbonise heat has not been spent by the Government. What steps are the Government taking to ensure that that money is allocated and spent, and that leaky buildings are addressed swiftly?
Grant Shapps
As I said at the beginning of questions, we are working continuously to try to upgrade all buildings in this country, both domestic and non-domestic. We have a range of programmes; I will write to the hon. Lady with the full set of programmes that apply in non-domestic situations.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State, and do the Government, agree that leisure centres are critical to all our communities, and especially to young people? I understand that the cost of the energy for heating pools is hitting even the Prime Minister, with his very large pool in north Yorkshire. May we have some emergency action to help communities with energy bills that are likely to bankrupt them?
Grant Shapps
The energy support that we have been providing, including through the energy bills discount scheme, is designed to do exactly that, but we will keep a close eye on it to make sure that it helps in the right places. We are all suffering as a result of high energy costs. The reason is Putin, and we should never forget that while we build our own energy security in this country, with the cheapest wholesale electricity prices by the middle of the next decade.