Eastern Link Undersea Cable Electricity Generation
Debate between James Cartlidge and Graham Stuart
Graham Stuart
I have a lot of offshore wind off my constituency as well. What we have done with the contracts for difference, and leading the world in the deployment of offshore wind, has been tremendous for increasing renewables and for transforming the economics of offshore wind. There are benefits not only domestically but globally, and there have been many jobs.
Given our global leadership, I share with the hon. Member for East Lothian the question of whether we have created as many jobs and as much of the industrial capability and community benefit as we would like; I leave that question in the air. My feeling is that in the expansion of offshore wind and the coming technologies, such as hydrogen and carbon capture, we must not just deploy at the lowest cost, but capture their wider value in the right way that balances and gives the best possible value for our constituents.
Scotland is home to Hywind Scotland and Kincardine—the world’s first and largest commercial floating wind farms, respectively—and Scotland’s plentiful supply of stormy skies holds vast promise. The Scotland Crown Estate’s recent ScotWind licensing round kick-started 20 new projects totalling around 28 GW of installed capacity—a frankly enormous figure. This is all sterling stuff, but increasing our renewable energy capacity is key for delivering on our net zero 2050 target, which I am sure the hon. Gentleman and the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey) would strongly support. It is also crucial for guaranteeing security of supply at a time when Putin’s appalling invasion of Ukraine threatens to drive up prices and drive down thermostats, because wind energy is not just renewable, but secure and increasingly affordable.
However, installed capacity is only one part of the story. One of the challenges we have to address is how to get the electricity we are generating to the households who need it. The stakes are high, because it is not just households; it is schools, hospitals and businesses too. Right now, there are significant network constraints between Scotland and England, and no matter how many kettles are boiling across Yorkshire, when the network is at full capacity, Scottish renewable energy generation, as the hon. Member for East Lothian laid out, has to be curtailed.
With more projects coming online each year, it is all the more vital that we transform our electricity network to unlock Scotland’s potential. That is why transmission links on the east coast joining our two countries are so crucial, particularly for projects such as Berwick Bank, off the coast of the hon. Gentleman’s East Lothian constituency, with connections in both England and Scotland. In July, Ofgem approved two of these links in their final needs case—one between Torness in East Lothian and Hawthorn Pit in County Durham, and the other between Peterhead in Aberdeenshire and Drax in north Yorkshire. These links will ensure that, before 2030, no Scottish renewable energy potential will go to waste, and they will reduce any potential constraint costs caused by limited capacity.
James Cartlidge
The fact is that these two connections —the Eastern Link—will cost £3.4 billion and carry 4 GW. At the same time, National Grid is insisting on going ahead with pylons from Norwich to Tilbury, which will despoil our countryside. It refused to consider offshore alternatives. We had to force it, kicking and screaming, to look at such options, and it finally came up with a cost assessment that is for 6 GW—not the 4 GW on the Eastern link, but for 6 GW—that would cost £3.1 billion undersea, which is less than the Eastern Link. Why are we not going to get the same sort of investment in East Anglia, given the huge delivery we are giving, from offshore wind?
Graham Stuart
My hon. Friend is truly an expert in this area and, working with colleagues, is working very hard to ensure that these arguments are heard and that the case is made to ensure that minimum disruption for the maximum facility and benefit is brought to his constituency and those around it.
The Government are working closely with Ofgem, the independent regulator, and industry to ensure our electricity network is ready to harness the power of renewables to deliver for consumers. Our approach is threefold. First, we are working to ensure that transmission infrastructure is planned in a co-ordinated way. In July, the National Grid Electricity System Operator published the holistic network design. This is the first ever strategic plan for the infrastructure needed to bring energy from offshore wind onshore. This streamlined approach will reduce the cost of construction for networks, which also means lower bills for families, including in Scotland. Consumers will save £5.5 billion in costs from 2030 over the network lifetime. By reducing the amount of infrastructure required, it will minimise disruption to communities and the environment too.
We are not just changing the way we build; we are also speeding things up. The Government have committed to reducing end-to-end timescales for the construction of transmission infrastructure by three years. To get to this goal, we have appointed Nick Winser as the Electricity Networks Commissioner to review the development process and identify where it can be made faster. Ofgem recently consulted on speeding up regulatory approvals of network projects, and we expect it to publish a decision later this year. Officials in my Department are working with those in the Department for Levelling Up, Housing and Communities to reduce planning timeframes as well. We will consult on how communities should best benefit from hosting grid infrastructure in their local area.
We are making the way we do things smarter and faster, but we are also exploring new solutions to storage, which the hon. Member for East Lothian mentioned, that promise to alleviate capacity constraints.
Off-grid Homes: Energy Support
Debate between James Cartlidge and Graham Stuart(2 years, 2 months ago)
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The Minister for Climate (Graham Stuart)
It is a great pleasure and privilege to serve under your chairmanship, Mrs Murray—for the first time, I think. I congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on securing the debate. We can see how motivated rural colleagues are across the House; we have the Liberal Democrats here, we have Plaid Cymru, the SNP, the SDLP and of course a large mass of Conservative Members. It is pretty shocking, given the importance and topicality of the issue, that His Majesty’s Opposition did not even bother to turn up. I thank everyone else for doing so, and for taking this issue seriously.
Colleagues will know that I have long been involved in this issue. My constituency has a lot of people who are off grid; I have spent a lot of time fighting the inequities of Government systems of support, which too often are shaped around urban needs and ignore or try to fit the rural into some urban pattern. That does not work, and too often the system, under successive Governments, has failed properly to recognise the needs of rural areas that, because of their natural grittiness, put up with it more than they should.
James Cartlidge (South Suffolk) (Con)
I welcome the Minister to his position, and congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on a brilliant debate. The Minister talked about the equity between off grid and those who have access to the grid. For people in South Suffolk on heating oil who have contacted me, one of the key issues is that it is not regulated; there is no cap and so on. Is it not the case that in practice that may be difficult because of the size of the producers, and therefore the issue is competition? Can he assure us that he keeps the competitiveness of the market under review? The worry I have is that as it gets tougher, we get more agglomeration, and that is how we get higher prices in the long run.
Graham Stuart
As ever, my hon. Friend is absolutely right, and has gone to the heart of the issue. The Government recognise and understand the pressures that people are facing with the cost of living. This is a deeply worrying time for many of our constituents, and we will continue to listen to their concerns, which have been well expressed by many colleagues today.
Wholesale energy prices have been rising due to global pressures, and the UK is hardly alone in feeling the pinch. It is important to recognise how significantly this Government have stepped in. Back in May, £37 billion of support was announced, which altogether means that the most vulnerable households are receiving £1,200 a year—£100 a month—before we get to the energy price guarantee and the alternative fuel payments. It is important to put that on the record. There is a lot of support for all of our more vulnerable and rural constituents. The hare that is running—and this has been repeated by my hon. Friend the Member for Brecon and Radnorshire today—is that it is inequitable. On the face of it, that £100 intuitively does not feel right. However, I will take colleagues through the numbers and explain why there is equity, while also recognising the issue of monitoring. That is important, and the Government are going to monitor the situation going forward.
Heating oil prices have risen more than prices for other alternative fuels such as coal, biomass and others. The Government have picked a point in time; we looked at what the situation was going into winter last year and compared it with this year—then we have sought to provide protection. We have looked at the numbers for September last year to September this year. LPG, coal and biomass have risen less than heating oil. The average price of heating oil in September 2021 was 40.6p per litre in Great Britain. A year later, that average price is 100.3p. For those colleagues who have talked about a 60% rise, it actually comes to a 147% rise. The average use of heating oil over a year is 1,514 litres; that used to cost £615, but has gone up to £1,415. That has a serious impact on those with the least. I have already talked through the £37 billion package. The difference in the current bill is around £100—that has been the rise.
The cost of heating for the average on-grid home would have increased by approximately 220% in that same year to October. The energy price guarantee lowers that increase, through unparalleled Government intervention to support people, which I think we can be proud of and should do a better job of trumpeting. Over the same period the price of heating oil rose by 150%. It has been dampened by the EPG for on-grid homes to 130%. Probably due to market competition and lack of Government intervention—I am not saying that that is the only explanation—heating oil rose by 150%. That is where the £100 comes in. I beg colleagues on all side of the House to stop the hare running; there is comparable support. I can say that as someone with many oil-heated and LPG homes in my constituency; it is comparable.
The question is about going forward—what if prices spike? That is why, quite rightly, colleagues have pressed me and the Government to monitor the situation and to be prepared to intervene if necessary. I cannot pledge precisely that that intervention would happen, but we are going to monitor the situation with a view to being able to intervene if necessary and maintain the equity that I assure colleagues is in place.