Energy Security Strategy

Greg Hands Excerpts

Tuesday 5th July 2022 Westminster Hall

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

Thank you, Mr Davies. I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing this important debate. I do not have much time to respond, but to start I would like to briefly recap the context in which the British energy security strategy—the BESS, as I might call it—came about.

For years, of course, the UK has been dramatically reducing our dependence on fossil fuels and building up home-grown, low-carbon energy. Just 10 years ago, nearly half of our electricity came from coal—the most polluting fossil fuel. Now, that is down to under 2%. Our hugely successful offshore wind sector is the largest in Europe and second only to China in the world in terms of deployed volume. All those policies are the result of decisions made by this Government over the past 12 years. Russia’s illegal war in Ukraine has given this work new impetus, as Putin’s weaponisation of the global energy supply makes clear. Energy security is a matter of not only decarbonisation—as vital as that is—but national security. The UK is not dependent on Russian hydrocarbons, but the war’s impact on the global market has been severe and affects us all.

Turning to the debate, the BESS sets out the steps we will take to generate more clean energy in the UK for the UK in the longer term to protect our national security, reduce our emissions, create new jobs for our people, revitalise industrial heartlands and drive down bills for consumers.

I will deal with a few points raised by the hon. Member for Birkenhead. He said the Government refuse to support new onshore wind. That is not the case. We will be consulting on developing partnerships with supportive communities that wish to host new onshore wind infrastructure in return for benefits, which could include lower energy bills. He talked about tidal energy, which cropped up in a few Members’ contributions. Actually, this Government were the first to commit a dedicated pot—in contract for difference allocation round 4, which is taking place right now—of £20 million for tidal energy projects. If people have a specific tidal energy project they wish to show us, will they please get in contact with my Department? I have been shown a number of tidal energy projects in recent times in areas near the constituency of the hon. Member for Birkenhead, such as Colwyn bay and Deeside.

The hon. Member talked about our so-called reliance on Russian oil and gas. No, less than 4% of our gas last year was imported from Russia. That will be down massively this year. We are phasing out Russian oil, which will not be more than about 10% of our oil by the end of the year. Russian coal will also be prevented by the end of the year. There is no dependence on Russian hydrocarbons in this country in the same way there is in many of our European neighbours. The hon. Member also attacked the new round of licences, but he will know that the new round later this year will take into account the climate compatibility checkpoint, which we have been consulting on, and we will release the results of that consultation in due course.

Remarkably, the hon. Member then said there will be no forgiveness for this Government because of our record on renewables and energy efficiency. I found that extraordinary. On energy efficiency, we have gone from 14% of properties in bands A to C being energy-efficient in 2010 to 46%. That still means there is work to be done; 54% do not yet meet the standards we would like them to. The hon. Member says there will be no forgiveness for this Government, but I do not know what he thinks the last Government will be given for their performance. Our figure is 46%, but we lifted it from 14% when we took power. Similarly, on renewables, 43% of our electricity is now generated through renewables. That is a very good figure, but it was 7% when we took power. If there is no forgiveness for a Government that achieve 43% through renewables, what hope is there for a Government that only produced 7%?

My hon. Friend the Member for Wantage (David Johnston) made an excellent speech on, again, the importance of energy efficiency. We are spending £6.6 billion in this Parliament to ensure we get more energy-efficient homes, and £450 million has been committed to the boiler upgrade scheme. My hon. Friend has been a consistent and dedicated promoter of the Local Electricity Bill. He is right that there is good consensus on this. The Government support local electricity generation. I have also met the campaign groups. There are funds available, such as the levelling-up fund, which is used quite frequently. There is the example of a local community energy scheme in Glastonbury, which has benefited from that levelling-up fund. I have reintroduced the community energy contact group to ensure we are talking to the sector. The group had its first meeting on 10 June.

The hon. Member for Bath (Wera Hobhouse) made the good point that there is plenty of wind in the UK, as we benefit from all the waters around us. We have 15 times the waters that Germany does, and UK waters are two and a half times the land mass of Germany. None the less, my right hon. Friend the Member for Wokingham (John Redwood) made a good point about the intermittency of wind. Of course, we can get greater diversity if we have more seas involved, but that will not entirely obscure the issue of intermittency. That is why he is right that we need nuclear as well. I am forever hopeful that the Liberal Democrats will change their ideological anti-nuclear stance, which they have had at least since they were in coalition with us. In coalition, they were warming to the idea of nuclear power. Unfortunately, that has been lost.

My hon. Friend the Member for Weston-super-Mare (John Penrose) made an excellent speech with some probing points. REMA is referenced in the British energy security strategy, and work is moving at pace. How can we get from a low-capital cost, high-generation cost energy system that is not particularly intermittent to a high-capital cost, low-generation cost system with intermittency? He is right to raise the point about the implications for our energy system going way beyond generation targets.

On green levies, as we set out in the heat and buildings strategy and in the net zero strategy, we will launch a fairness and affordability call for evidence on options for energy levies and obligations to help to rebalance electricity and gas prices, and to support green choices, with a view to making a decision later this year.

The price cap will remain in place until at least the end of 2022 to protect millions of customers. My hon. Friend the Member for Weston-super-Mare will keep an eye out for the energy security Bill to see how we might take that further. As he will know, this year we are delivering a total of £37 billion in cost of living support to customers, including a £400 non-repayable grant

The speech from the hon. Member for Bootle (Peter Dowd) was well put together but fundamentally anti-free market. I can see why the right hon. Member for Islington North (Jeremy Corbyn) decided that he would be a suitable shadow Chief Secretary to the Treasury—to not make sure that control was kept over the public finances. I have already addressed the points about community energy.

My right hon. Friend the Member for Wokingham made a strong and probing speech, as he always does on energy matters. He is right that it is our patriotic duty to ensure not only that we get off Russian gas, but that our European friends and neighbours do as well. That is why National Grid tells me that this summer, the UK is playing a major role in filling European energy storage. About 15% is coming either from the UK or via the UK, using our liquified natural gas capabilities.

My right hon. Friend made a strong point about intermittency. Nuclear is the answer; it is the only proven way for reliable, non-intermittent electricity to be produced at scale. He is also right about hydrogen, but he is not quite right to say that we are not bringing forward more fields. Licensed fields that have been consented and have come on stream include Blyth, Elgood, Tolmount, South Hook, and Alwyn East—I can give him a longer list. Other fields are coming on stream.

The hon. Member for Strangford (Jim Shannon) made important points. I will have to write to him about the Strangford tidal scheme. He is definitely right to say that nuclear, and Northern Ireland, are part of it. Gordon Lyons and I meet regularly, including to discuss hydrogen.

The SNP spokesperson, the hon. Member for Midlothian (Owen Thompson), gave a familiar list of complaints. He said that he wants tidal schemes. As I mentioned, we have funded £20 million of dedicated support. He wants ringfenced and guaranteed money every year. Well, that is a typical SNP position. If there were a separate Scotland running a 9% budget deficit, which is what it would be doing, I do not think that ringfenced and guaranteed money would be available for anything—the hon. Gentleman perhaps needs to go back and have a look at the finances in the event of separation. Grid charges are a matter of Ofgem, but it is worth recognising that Scottish consumers benefit from lower charges, which is important. I cannot understand, in the light of Scotland’s incredible nuclear tradition, why the hon. Gentleman is so opposed to nuclear.

The hon. Member for Southampton, Test (Dr Whitehead) is right about constraints. That is why we are looking at hydrogen batteries and storage. He is quite right about biomass, and on blue and green hydrogen we are doing both. I had better leave some time for the hon. Member for Birkenhead to reply.