Energy Bill [Lords]

Debate between Henry Smith and Andrew Bowie

2nd reading
Tuesday 9th May 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

I begin by thanking Members for their considered contributions to the debate. It has been encouraging to hear broad support for the Bill—I hope it sets a precedent—and that reflects the meetings I have had with Members of this House and the other place and with the devolved Administrations over the past few months. I will try to address as many of the questions and issues raised as possible.

Let me remind the House why the Bill matters: it is a critical part of securing the clean, inexpensive energy that Britain needs to prosper. It will do that by leveraging investment in new technologies and by securing clean home-grown industries that can reduce our exposure to volatile gas prices in the long term. We are already world leaders. We have reduced emissions more than any other country in the G7, but this Bill will allow us to go further. It will enable reform of our energy system. It will protect consumers from unfair pricing, and it will make Britain an energy-secure net zero nation.

I turn to the points raised in the debate. Several Members asked how the Government are increasing investment in the grid and supporting grid capacity. I will make no bones about it—this is one of the biggest challenges our country faces. I get it; we get it. That is why, following the British energy security strategy, the Government worked with Ofgem on its work to accelerate strategic transmission investment. Following Ofgem’s decision on that in December, approximately £20 billion of investment across Britain has been accelerated by regulatory efficiencies. On grid capacity, increasing competition in networks is expected to encourage greater inward investment into those networks, ensuring sufficient network capacity for demand needs in Great Britain. Further work on that issue is ongoing as we speak.

My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) and others raised issues about the independent system operator, or the future system operator. To be clear, the independent system operator and planner will be an expert, impartial body with responsibilities across both the electricity and gas systems to drive progress towards net zero while maintaining energy security and minimising costs for consumers. We are confident that we have struck the right balance on that issue.

The hon. Member for Ellesmere Port and Neston (Justin Madders) raised the issue of the hydrogen village trials—I was pleased to meet with him recently to discuss those trials. The Government have always been clear that the gas network delivering the trial must engage with residents to develop an attractive consumer offer for everyone in the trial area. This must include alternative options for consumers who do not wish to connect to hydrogen or cannot do so, such as for electric cookers and heating systems. We will not go ahead with a trial without demonstrable, strong, local support.

The hon. Member for Kilmarnock and Loudoun (Alan Brown), who I am sorry to see is not in his place just now, raised the issue of forced disconnections. All consumers will have the right to refuse trialling hydrogen. The powers of entry cannot be used to forcibly change the meter type for a consumer. Gas distribution networks will only ever use their extended powers of entry as a last resort—to ensure consumer safety, for example.

The right hon. Member for Doncaster North (Edward Miliband) and the hon. Member for Llanelli (Dame Nia Griffith) raised issues surrounding onshore wind. The UK already has almost 15 GW of onshore wind, the most of any renewable technology, with a strong pipeline of future projects incoming. The Government have consulted on making changes to the national policy planning framework in England so that local authorities can better respond to their communities when they wish to host onshore wind infrastructure. The Government will, of course, respond in due course.

My right hon. Friend the Member for Camborne and Redruth (George Eustice) raised the issue of renewable liquid heating fuel. Decarbonising off-gas-grid properties is a key priority for this Government. I was pleased to meet with my right hon. Friend recently to discuss this issue, and I look forward to working with him and others on ways to ensure that the transition to clean heat will be fair and affordable for all. As we must acknowledge, however, sustainable biomass is a limited resource. Policy decisions on the role of biomass in heat will need to reflect the outcomes of the forthcoming biomass strategy, which is due to launch later in 2023.

My right hon. Friend the Member for Basingstoke (Dame Maria Miller), as well as touching on the role of fusion—which will be critical in the decades ahead, and we are leading the world in that technology—raised concerns surrounding the planning, health and safety, and environmental issues involved in the development of lithium-ion battery storage. I was pleased to meet with her recently, along with colleagues from the Department for Levelling Up, Housing and Communities, and would like to reassure her that the Government are committed to working with her, the fire services and ministerial colleagues towards a suitable way forward on this important issue, which I know many people are concerned about.

My right hon. Friend the Member for Epsom and Ewell (Chris Grayling) raised the issue of sustainable aviation fuel. In October 2022, the Department for Transport commissioned Philip New to lead an independent evaluation to identify the conditions necessary to create a successful UK SAF industry. Last month, we published that report, alongside a Government response setting out what actions are already being taken to address many of the report’s recommendations. We are keen to continue making progress, and I would be delighted to meet with my right hon. Friend on that point as we move forward.

[Henry Smith (Crawley) (Con)]

May I have an assurance that the five sustainable aviation fuel plants that our right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) previously announced will be going ahead in time for 2025? It is critical that the UK is in the forefront and leading in the SAF industry, because otherwise, we face being left behind by Europe and the United States.

[Andrew Bowie]

I will write to my hon. Friend on that specific issue immediately following the debate, once I have the answer from both the Department for Transport and the Department for Energy Security and Net Zero. However, we are committed to implementing the recommendations in the report. It is a policy of the Department for Transport, but I will discuss the matter with officials in that Department.

A number of Members raised the issue of the hydrogen levy. The purpose of the hydrogen levy is to provide long-term funding for the hydrogen production business model. I reiterate that the provisions in this Bill will not immediately introduce a levy. We will consult on the detailed levy design, and the decision to introduce a levy will take into account the affordability of energy bills.

Many Members raised community energy schemes, which I strongly agree have a role to play in tackling climate change. While it would not be appropriate to mandate suppliers to offer local tariffs, and this should not be a commercial decision for suppliers, I reassure the House that my officials are actively looking into what further support we can offer the sector. I have already met, and I am sure will meet again, my hon. Friend the Member for Wantage (David Johnston) to discuss how we can work together to move that forward.