Energy Trilemma

Jo Gideon Excerpts

Thursday 23rd March 2023 Commons Chamber

[Jo Gideon (Stoke-on-Trent Central) (Con)]

First, I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for securing this debate and for being a fantastic chair of the 1922 Back-Bench business committee. It has been an honour to be her vice-chair. As she mentioned, the committee has looked in detail at the challenges of the energy trilemma over the past year. Like her, I am delighted that the Government have agreed with our analysis that energy issues have moved up the agenda so far that they merit a stand-alone Department.

The trilemma of the cost of energy, energy security and achieving our net zero ambitions affects every household and every business in every corner of the globe. Policy changes have emerged in reaction to the impact on energy costs of Russia’s war on Ukraine. The price of gas and electricity has spiralled, and much of our thinking has been dominated by the challenges of cost and energy security. Renewable energy created here in the UK, as a domestic source of energy, will not only reduce our reliance on international fossil fuel markets that can be influenced by bad faith actors, but offer great opportunities for green jobs and growth right across the UK. There is potential to revitalise UK manufacturing to support the growing supply chain in pursuing energy sovereignty.

Offshore wind will be the backbone of the UK’s future electricity system. In 2020, solar and wind produced nearly 30% of the UK’s electricity, which represents a nearly tenfold increase on the level in 2010. However, we know the wind does not always blow and the sun does not always shine. As renewables become a bigger share of the market, this intermittency problem will become a bigger issue, particularly when we are trying to get above 80% to 90% low-carbon generation. In part, onshore wind and solar have a role to play in this. Despite it being one of the cheapest sources of power, onshore wind still faces barriers to development. Therefore, it is a welcome shift in Government policy to consult on devolving planning decisions on new onshore wind in England to local authorities, to enable onshore wind to be installed where communities want it and with their benefiting.

Intermittency can also be mitigated by changing the design of the UK’s electricity market. Today, there is a single national price for electricity across the whole of the UK. Moving to a system of local pricing in the electricity market would also incentivise building production capacity closer to demand, thus reducing the overall amount of infrastructure. Other solutions to intermittency exist. We can do more to encourage investment in short- term storage such as batteries, and long-term, inter-seasonal storage, for instance, hydrogen storage and hydropower.

The recent inquiry by the 1922 Back-Bench business committee heard from witnesses on barriers to deploying energy projects in the UK, which include the planning system and delays in connecting to the electricity grid. Members will forgive me, but being from Stoke-on-Trent I have to give the ceramics industry as an example here. Many UK ceramics businesses could make the switch from gas to electricity for the firing of the kilns, but several hurdles block that, one being that the cost and time delays for connection through distribution network operators make it prohibitive. Whether the energy is gas, electricity or perhaps, in future, hydrogen, security of supply is critical. Kilns are designed to slowly warm up and cool down. If the energy is suddenly cut off, the damage to the kilns can be irreparable. That means that a method of storing renewably generated energy must be found that enables us to deliver a consistent and continuous supply.

To address the energy trilemma, we also need to think seriously about how to transition effectively to clean energy, and about sustainability and our net zero goals. To achieve net zero, the UK needs to decarbonise its power sector by 2035. While emissions from electricity generation have fallen by 69% since 2010, we still have a long way to go to achieve that goal. That is why the first part of our Back-Bench report looked at ways to unblock renewables. My neighbour, my hon. Friend the Member for Crewe and Nantwich (Dr Mullan), mentioned deep geothermal, which uses the high temperatures and pressure deep inside the Earth. There are no fully operational deep geothermal plants in the United Kingdom, but there are two close to completion in Cornwall, and I am delighted that my constituency of Stoke-on-Trent Central is also destined to be an early adopter. As the city of pits and pots, we have a long history of energy-intensive industries, which also means a history of innovation in energy efficiency. Just as our potteries will move from being coal-fired to gas-fired, so we must be at the forefront of the next energy revolution and embrace geothermal energy, which has great potential.

Another recent project in which I have been involved is the Commission for Carbon Competitiveness, an effort to explore how the UK can reach net zero without undermining the competitiveness of British industry. Our industries can play a key role in the transition to net zero by investing in new technologies that are vital to decarbonisation. However, we are not operating on a level playing field; they face international rivals who can dominate supply chains without having to worry about net zero regulations or environmental targets. It is important that the challenge be addressed, so that we can transform our energy-intensive industries and industrial communities, and so that they become the nexus for green growth, and not the victims of an inevitable decline.

My final issue is the cost of energy. I have lobbied the Government on behalf of local energy-intensive industries in Stoke-on-Trent Central, and on behalf of small businesses and charities that are struggling with their bills, and I welcomed Government support for families faced with a choice between heating and eating. However, the need to choose between energy and food extends to food production, too. Horticulture businesses decided to postpone early crop production where the cost of heating the growing environment was unaffordable. That, combined with crop failure due to extreme weather conditions in continental Europe and north Africa, led to UK supermarkets having gaps in their fruit and vegetable sections. Given that we are looking to reduce the air miles in our food system in support of our ambitions to decarbonise and move towards net zero, we need to produce more in the UK, and British farmers need support with energy costs. We need to rebalance our food production and accept that the UK’s cheap food culture is unsustainable.

As a result of the rise in the cost of production, the percentage of household income spent on food and non-alcoholic drinks has risen from 10% in 2021 to 16% this year. Before the cost of living increases, Britain spent less on food and non-alcoholic drinks than any other country in Europe, and our diet has remained the highest in fat, salt and sugar. We need a fundamental recalibration of the value that we place on a healthy diet, and we need to accept that growth in local food production comes at a price worth paying.

If we get it right, the energy trilemma will create new opportunities to grow the economy, achieve our net zero ambitions, and guarantee affordable, reliable and sustainable energy for the future. This is the moment to embrace a green industrial revolution.