UK Hydrogen Economy

Kwasi Kwarteng Excerpts

Thursday 17th December 2020 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

It is a real pleasure to conduct this debate with you in the Chair, Ms McDonagh. I am very pleased to be taking part. I am conscious that we have to revert back to my hon. Friend the Member for Rother Valley (Alexander Stafford) at the end, so I have only about eight minutes—that shows how full of content and well informed the speeches were. It is a real pleasure, as Energy Minister, to take part in a debate in the House of Commons with so many right hon. and hon. Members participating at such a high level. It is the House of Commons at its best.

We heard a range of opinion, but we broadly agree about the way forward and the potential dynamism of the hydrogen economy. I pay special tribute to my hon. Friend for the tireless, indefatigable way in which he pushes hydrogen at every opportunity. Even though my officials might not agree, I hope he continues to do so, because it is absolutely necessary for Members of this House to hold the Government to account. I am very happy to take part in these debates and express the Government’s point of view, share some of our thinking and respond to points that Members of the Opposition parties make.

The first thing I want to talk about is investment. One hears all the time about the German strategy—I have read the German strategy and the EU strategy this year. Ours will be different because we are looking at blue hydrogen, which the hon. Member for Southampton, Test (Dr Whitehead) alluded to, and green hydrogen. The EU and German strategies talk almost exclusively about the production of renewable hydrogen. We in this country, given our North sea heritage and the assets there, want to do both. Ours will be a very interesting strategy. It is the first ever hydrogen strategy that the Government have produced. When it is published in the first half of next year, I look forward to having more debates and answering more questions about it.

This has been an extremely busy time for the energy industry. The Government have had the Prime Minister’s 10-point plan, the second point of which was all about hydrogen. It outlined our ambition for a 5 GW capacity. Subsequent points in the 10-point plan referred to the use of renewables and decarbonised sources of fuel in jet propulsion and marine transport. A number of Members mentioned the role of hydrogen in transportation. It is absolutely right that we should be focusing on HGVs, for which it is particularly suited.

I can say to my hon. Friend the Member for Warrington South (Andy Carter) that I have been in a hydrogen car. I was not driving it—I was there in a ministerial capacity, so someone else was driving—but I look forward to taking that step in the imminent future.

My hon. Friend the Member for Rother Valley and the hon. Member for City of Chester (Christian Matheson) have done a great job in this debate of highlighting the strengths of the HyNet industrial cluster. Everyone has said, “Let there not be a beauty contest,” yet they have been very good at presenting the particular attractions of their areas. They have done a very good job on that. I am on the record as having pledged to visit HyNet, hopefully in the next few months. I have spoken to representatives of the cluster on Zoom and in various other forums, and they are doing a fantastic job in pushing this agenda.

On deployment, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said that we should be going faster. We can always be going faster, and he is absolutely right to be holding the Government’s feet to the fire. We should seek to deploy a lot of these business and financial incentives earlier, and I am working closely with officials to do that. However, I cannot stress enough that the success of the hydrogen deployment will involve a substantial degree of private capital and private investment. If we look at the deployment—the success—in making the offshore wind industry in this country the biggest installed capacity of any country in the world, we see that the reason it happened was that something like £94 billion has been spent since 2010—the vast majority of which was private capital. It was not merely a function of the Government writing cheques; it was a function of the Government creating a framework and creating a CfD process, which private capital could participate in and spend and deploy the resources to develop the capacity. So I have to stress—it always comes up, and it is quite right for Opposition Members to push the Government on it—that ultimately the strength of the investment and the vast majority of the capital that will be deployed will come from private sources, which is a recipe for success.

I should mention the fact that we have hydrogen trials and that the Prime Minister announced in his 10-point plan that we want to see a hydrogen town. The hon. Member for Kilmarnock and Loudoun rightly raised the issue of the gas standards needing to catch up with the potential of hydrogen deployment. I have a conversation on that subject with colleagues in the Department of Health and Social Care on a regular basis, because ultimately that is their responsibility, given the health impact and the relevance to health and safety.

There are so many other points that I want to raise. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who is no longer in her place, made a very good point about how we should try to bring the public with us. Even today, there is not much knowledge or engagement from our constituents or from people across the country with regard to hydrogen issues. It is quite legitimately a job of Government to improve that situation. However, it is also the job of all of us as MPs to try to get that message out, because it is not simply the Government who have the platform—the bully pulpit. Each and every one of us here, as individual MPs, can also make the case.

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

The right hon. Gentleman has wonderful timing; I was just coming to the points that he made. He made some very good points, particularly—if I may say so—about town gas. He is quite right, and the hon. Member for Southampton, Test made this point as well, that the transition from town gas to natural gas that happened in the 1960s and 1970s was a whole-country endeavour. He is also right to point out, as I think the hon. Member for Southampton, Test also did, that town gas was largely composed of hydrogen. So in a way, having hydrogen in the gas network is not so novel an idea; it has happened before. Of course it was a much dirtier gas then, but hydrogen as the basis of a heating system is something that we can certainly achieve.

The last thing I will say before I conclude—

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

We can discuss that issue at another time; I am afraid that I am limited by time constraints today.

The last thing that I will say in conclusion is that this is not a beauty contest; there is huge opportunity for every part of the country to benefit from the hydrogen revolution. I look forward to speaking to right hon. and hon. Members about how we can best deploy capital in the levelling-up agenda. The fact that HyNet is represented by Members on both sides of the aisle, and also other areas, is a really good sign. We can work together to bring about the hydrogen revolution.