Renewables Obligation Certificate Scheme

Jim Shannon Excerpts

Wednesday 5th March 2025 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Dr Murrison. I thank the hon. Member for South West Norfolk (Terry Jermy) for setting the scene so well. He said he hoped his first debate would be more exciting, but this a practical debate. It is a debate that his constituents want him to focus on, and the reason he has secured it is because he is working on their behalf. I always found that I enjoy this particular type of debate because they really matter to people, and they can relate to them. There has been a focus on constitutional issues, war across the world, and all those things, in this last week—or 10 days, or two weeks, or even the last three years—but people back home in the hon. Member’s constituency will want him to pursue debates such as this one, so well done to him.

The hon. Member outlined the case for the renewables obligation in his introductory speech. I want to give a perspective from Northern Ireland. I am pleased to see the Minister in her place; before the election, she and I often sat on the Opposition Benches, and would have been alongside each other when it comes to asking for things. Today, I will be asking the Minister about some things in relation to discussions about the renewables scheme and the contracts for difference scheme, which we do not have in Northern Ireland.

There is a willingness in the Government approach to renewables, as there should be. It is important to do this as collectively as we can, to ensure that people can get the best value for money in their energy costs, so it is a pleasure to discuss these vital matters, and to consider the whole of the United Kingdom of Great Britain and Northern Ireland in this conversation.

The renewables obligation scheme was introduced in 2002 to incentivise large-scale renewable electricity generation in the United Kingdom. It was phased out or closed in 2017, in favour of the contracts for difference scheme. For me, that is the key issue, because currently the CfD scheme does not apply to Northern Ireland, although before the election I tried to encourage the previous Government to extend it. I know that this is a devolved matter, but will the Minister please initiate some conversations with the relevant Minister in Northern Ireland—I think it is Gordon Lyons—to see how we can work together to progress the CfD scheme and include Northern Ireland? There is some work for us to do here at Westminster to get this over the line, so it would be helpful if the Minister did that.

In the past, I have worked closely alongside colleagues on this issue and I hope to do so again in the future, particularly with the inspiration and help of the Minister, because it is important that Northern Ireland has the same opportunities as the rest of the United Kingdom in relation to renewable energy.

Renewable energy is a path that we must pursue, and there need to be targets for us to achieve—the hon. Member for South West Norfolk outlined that as well. Policy direction for Northern Ireland is important and there have been movements to ensure that companies there can benefit from renewable energy incentives. Agencies such as Invest Northern Ireland or the Department of Agriculture, Environment and Rural Affairs, and local councils, including my own, can apply for some smaller grants and loans. However, it is important to note that these grants and loans are not on the same scale as the renewables obligation certificates scheme. If we were part of that scheme, we would be in a much better position.

My constituency of Strangford has an important and, I believe, sustainable poultry sector. Throughout my life, there have been poultry houses all the way down the Ards peninsula, where I live, and indeed around Newtownards town as well. In his opening speech, the hon. Member for South West Norfolk focused on a project that could play a role for poultry farmers in Northern Ireland.

To be fair, at this moment in time avian flu has once again cast its shadow all across Northern Ireland. In every part of Northern Ireland, there is a shutdown; there is no movement of poultry, and poultry farms have to keep all their birds indoors as a result of the avian flu scare. That is the right thing to do. At the same time, if we are to look beyond the avian flu crisis in Northern Ireland, which is fairly acute, we have to consider using the hon. Member’s idea in Northern Ireland. Such projects have been discussed in the past, but never really got anywhere, so maybe it is time to encourage Northern Ireland’s Department for the Economy to do a wee bit more.

In 2023, the Department for the Economy consulted on a new energy strategy action plan, but nothing formal has come from that. I know that the Assembly has only just got up and running again—it is good that it is up and running again—but it is time to focus on the renewables obligation certificates scheme and on green energy, and on the potential benefits that we can achieve in the future.

Our renewables projects in Northern Ireland relied on funding and schemes in order to succeed. However, I find it very disheartening that Northern Ireland has not been able to adopt a new scheme since the closure of the prior one. We need a new emphasis and there is a real need for Ministers back home and for Departments back home to co-ordinate their strategy and the way forward with the Minister here in Westminster.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

In rural Britain, particularly rural Scotland, the cost per kilowatt to heat a house is about 24p, whereas those on mains gas in the city pay about 6p, so those using renewable electricity to heat their houses pay four times as much as those using mains gas. The renewables obligation certificate scheme is an important part of all this. Basically, rural Britain is getting absolutely stuffed on the cost of energy, so anything we can do to help those in rural areas is important. Does the hon. Gentleman agree?

[Jim Shannon]

I certainly do, and I thank the hon. Gentleman for his intervention. I represent the rural constituency of Strangford; indeed, most of Northern Ireland is rural, although there are large population groups in the major towns across the Province. In terms of the price of energy in Northern Ireland, the price oil is the highest it has been for some time, although they said on the news this morning that it would drop. But 68% of households in Northern Ireland have oil as their major source of energy for heating and cooking, so when oil prices rise, energy prices rise—as I suspect they do in the hon. Gentleman’s constituency—which puts us under a bit more pressure than most.

Energy is devolved in Northern Ireland, unlike in Scotland. However, Northern Ireland is an integral part of the United Kingdom, so there must be greater discussion between Westminster and the Northern Ireland Assembly to ensure that we are able to contribute to the net zero 2050 goals. I am reminded by the hon. Gentleman’s intervention of the SeaGen project in my constituency about 20 or 25 years ago, which tried to harness the tidal flows of the narrows of Portaferry and Strangford. At that time, it was not sustainable because of the price of energy, but today it would be. There are many projects we could look towards when it comes to contracts for difference.

To conclude, I look forward to working with colleagues to find a way forward that can benefit us all. The world is progressing, and climate change is a huge issue of major importance to many. The hon. Member for South West Norfolk referred to a project that is critically important for his constituency and that could be replicated across this great United Kingdom. Ensuring that we have a replacement strategy that we can take advantage of would be a positive step forward in achieving our goals. I look forward to the Minister’s contribution and hearing about her commitment. Through further discussion and integration and by working better together, Northern Ireland will not be left behind. Thank you so much, Sir Andrew.

[Dr Andrew Murrison (in the Chair)]

I am grateful to the hon. Member for Strangford for the accolade. Maybe he knows something that I do not.

--- Later in debate ---

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

It is a pleasure to see you in the Chair, Dr Murrison, as always. I thank my hon. Friend the Member for South West Norfolk (Terry Jermy) for securing this important debate. I think it is a marker of an MP who is going to achieve things for their constituents that they show persistence and an imaginative approach to lobbying on issues that are important to their constituents. The fact that he has already had the farming Minister down to visit the site and that, having dealt with one Government Department, he has now also secured this 90-minute debate in Parliament, his first Westminster Hall debate, is a sign of somebody who I know will be persistent in all the right ways. I pay tribute to him for that.

I will deal with some of the contributions from hon. Members before I address the more general questions. Some of the issues raised today are the responsibility of the Department for Environment, Food and Rural Affairs, as shown by the farming Minister’s visit, but it is important to look at that circularity and my hon. Friend the Member for South West Norfolk spoke very eloquently about the co-benefits of the site: it is not just about energy production. I can tell him and my hon. Friend the Member for Suffolk Coastal (Jenny Riddell-Carpenter) that we are acting at pace to try to deal with issues such as pollution of our waterways, and agricultural run-off, protection of our chalk streams and so on are very much part of that. While that is not a matter for me directly, when we look at energy projects we always look at the co-benefits.

We have had a number of debates on this issue. When I was shadow Minister I replied to a debate—I am sure the hon. Member for Strangford (Jim Shannon) was there, because he always is—led by a Lib Dem colleague of the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald), on consumer energy prices in the highlands and islands. Point were made then about the difference in pricing and how expensive it can be to heat homes there. I am pretty sure that the Minister for Energy has replied to debates on similar subjects since we got into Government, but the hon. Member raises a valid point.

I can give the hon. Member for Strangford, who has raised the question of the CfD regime before, the assurance that the Lords Minister from the Department for Energy Security and Net Zero met his Northern Ireland counterpart before Christmas to discuss it; I am told that that dialogue continues. The hon. Gentleman will also, I am sure, be pleased to know that the Minister for Energy will be in Belfast tomorrow—we have an inter-ministerial group from the devolved Administrations that moves around. I discussed the agenda with the Minister for Energy last week and the Department of Agriculture, Environment and Rural Affairs will be very much involved in those discussions. I can assure the hon. Gentleman that we are not ignoring Northern Ireland; it is very much on our radar.

[Jim Shannon]

Not for one second did I think the Minister was ignoring Northern Ireland—that was never the case. I just wanted to ensure that the relationship we have within this great United Kingdom of Great Britain and Northern Ireland played a clear part. I was aware that the Minister for Energy is coming to Northern Ireland tomorrow and that he has regular discussions with the regional Administration, and that tells me why we are better off as part of this great United Kingdom of Great Britain and Northern Ireland—always better together.

[Kerry McCarthy]

I should have known the hon. Gentleman would be on top of things and would be aware of the Minister for Energy’s visit, but it is important that we have that continual dialogue and that the hon. Gentleman comes along to these debates to ensure that the Northern Ireland voice is heard.

I do not want to go too far off piste from the subject of the debate, but to respond to what the Lib Dem spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), had to say, I am an MP from Bristol, so the Severn estuary, the Severn barrage, the Severn tidal lagoons or whatever are very much on my radar. I went up to the Orkneys last summer to look at what they are doing on harnessing wave energy there, and it was very interesting.

On grid capacity, we know that grid capacity is a real issue, in terms of both our ambition for clean power by 2030 and our wider industrial decarbonisation. The Secretary of State likes to talk about the “four horsemen” standing in the way of us getting there, and grid is very much one of those. We have brought in Chris Stark, the former chief executive of the Climate Change Committee, to head up mission control on that issue, and he is working daily on how we can unblock and accelerate projects within the grid.

To the hon. Member’s point on farmers, I agree with giving farmers support to diversify, and energy from waste or anaerobic digestion and so on is part of that. I met two of the DEFRA Ministers earlier this week—although it might have been last week; it all becomes a bit of a blur—and I am in constant conversation with them about how we can work together on that and on our local power plan, which will be part of GB Energy. Hopefully there will be pots of money available for some of those community projects in rural areas, possibly on farms that he has talked about.

I understand that the company that my hon. Friend the Member for Stafford (Leigh Ingham) mentioned, GE Vernova, is doing innovative things on grid solutions. That is the sort of high-tech new approach that we need if we are to solve the problems that we have talked about, and I congratulate her on speaking up on behalf of a company in her constituency.

Turning to the actual debate, the experience of recent years has reinforced what we already knew: we cannot rely on fossil fuels. We need clean power to reduce vulnerability to volatile global fossil fuel markets, to give us energy security and reduce the cost of energy, and to tackle the climate crisis. That is why one of the Prime Minister’s five missions is to make Britain a clean energy superpower by delivering clean power by 2030 and accelerating to net zero. Electricity generated by renewables and nuclear power will be the backbone of a clean electricity system by 2030.

I have told the hon. Member for West Suffolk (Nick Timothy) how disappointed I am with the Opposition’s U-turn on this issue. I understand the position they are coming from and that there has been a change from the stance that they adopted in Government, but I have not heard from him what the answer is for our future energy security. What is the answer to dealing with the global fossil fuel markets? What is the answer to tackling the climate crisis? What is the answer to bringing down bills in the long term?